Lender refusing to remove a default after payment error

Deloria87

I have a question on behalf of my Dad because dear of him he’s had a stressful couple of years trying to arrange a mortgage.
Basically he’s looking to buy his council house with the ‘right-to-buy’ scheme, I think the total he’d need to pay would be circa £40k. He was approved by Lloyds on a ‘promise’ mortgage twice but was delayed for lengths of times due to the local housing authority having a long wait for people looking to take part in the scheme and when eventually they had gotten around to my Dad’s application and he went to confirm his mortgage he was then declined on the 3rd application, I think this has been over the course of about 2 years so not a particularly close time together.

He’s found out due to his obsession with picking apart his credit file that the reason he’s been declined to his knowledge is a default on his file from Capital One, which he chased up because as far as he was aware he’s always made the monthly payment on time. It turns out that in March 2012 he paid his monthly instalment to one of his closed Capital One accounts and not the existing one but he wasn’t informed of this and he then provided proof that he’d paid the monthly instalment and he wanted to know where it had gone. I’m not sure how it got around to finding out that it was paid to the old account because he gets quite frustrated explaining it, but he’s admitted fault and said that it was just genuine human error and they can see a payment was made could they please take this default off the account, he’s written to them and even paid off his existing account but they are saying that it was a breach of his terms and conditions and they are not happy to take the default off his file. He’s gone forward and spoken to a financial ombudsman, explained this situation and said that this is the only part of his file holding up his mortgage and why can’t it be taken off, but the ombudsman has agreed with capital one that it was a breach and for it not to be taken off. Is this actually how it should be managed? A payment was made on the correct date which he provided proof of so surely this default should be removed?

How else can he move forward? He’s 56 and was looking at a 10 year mortgage, so retirement age but if this carries on being dragged I can’t see him being approved where he’ll be retiring, however he does have 3 military pensions which would more than cover any repayments.

I think I've explained this the best I can, he's kind of talked to me about it but I don't know a massive amount about credit reports or what to do with anything on them which I admit is bad at my age haha

CherlokHomes

As he's admitted fault I'm afraid they don't have to remove the default as Capital one were entitled to put this on his credit files.

I can see it was an honest mistake but it's not just your Dad who it will happen to it happens all the while and it's wise to always check everything's in order with direct debits etc.

What did his statements say then?

Deloria87

I'm not sure he pays by direct debit I think it's with the giro slip at the bottom of his letters or something as he said he went into the bank but if it was a direct debit it would automatically go to the correct account I assume.

I haven't asked about his statements, will he get them monthly then? I imagine they'll show missed or late payments so I'll ask him if he'd spotted it on them and his file as he hadn't mentioned statements to me just that he was angry that it made him look like he can't afford his mortgage.

He can be frustrating to speak to because he thinks the bank should just go on him as a person and not 'just what a computer tells them' and I've had several arguments explaining that that just won't happen, especially for a mortgage. Is it best for him to just give up on the mortgage then if he can't get this default taken off? Like I said, I'm concerned if he has to wait 6 years as he'll be over 60 by the time the default would have been knocked off his file so he probably wouldn't be able to get a mortgage then.

CherlokHomes

Deloria87 wrote: »

I'm not sure he pays by direct debit I think it's with the giro slip at the bottom of his letters or something as he said he went into the bank but if it was a direct debit it would automatically go to the correct account I assume.

I haven't asked about his statements, will he get them monthly then? I imagine they'll show missed or late payments so I'll ask him if he'd spotted it on them and his file as he hadn't mentioned statements to me just that he was angry that it made him look like he can't afford his mortgage.

He can be frustrating to speak to because he thinks the bank should just go on him as a person and not 'just what a computer tells them' and I've had several arguments explaining that that just won't happen, especially for a mortgage. Is it best for him to just give up on the mortgage then if he can't get this default taken off? Like I said, I'm concerned if he has to wait 6 years as he'll be over 60 by the time the default would have been knocked off his file so he probably wouldn't be able to get a mortgage then.

Has he tried different lenders or brokers as some will give him a mortgage dependant on rate of course but I suppose it's another option.



Can

Deloria87

Not that I know of, I think he was just looking at Lloyds as they had offered it to him before he'd thought of buying the house, then he got quite obsessed with the idea!

I will mention trying other lenders, would a building society be more 'lenient'? I know that's not the right word, but I can't quite think of the right one