delayed completion and drawdown

nigelpm

Any conveyancing and/or mortgage experts here? A friend is having a total nightmare.

Basically he was all due to exchange (17th feb) and complete on 19th feb but at last minute his buyer's buyer had an issue. He still hasn't got to the bottom of why.

Anyway. His solicitor drew the mortgage monies down on the 17th and then immediately sent them back because of the delay. The bank then told them they had 28 days and counting to complete because of the drawdown. The mortgage expires in June.

He is livid as its looking highly likely it won't happen in the next two weeks so he'll need to reapply for a mortgage and go through the whole process again.

Any thoughts on whether solicitors have acted improperly and/or the banks policy is wrong or its just a highly unusual situation and he'll have to accept it.

kingstreet

They ordered the money two days before completion.

That seems completely reasonable. No way he can hold the solicitor responsible for this. In many cases, lenders ask for five working days' notice, so they've left it until about as late as they could.

A mortgage lender can set whatever rules it likes around such an issue, so there's no-one to blame here, other than the problem/person further down the chain.

nigelpm

And is it OK that these rules were nowhere to be seen in any documentation including the mortgage offer, lender website or cml website?

kingstreet

If this had been published, would it have made a difference to the choice of lender several months ago when the chance of this happening would have seemed virtually impossible?

He can make a formal complaint to the lender and if unhappy with the response can escalate to the FOS. I'd expect the outcome to be an inconvenience payment of upto £250.

nigelpm

Have you heard of this situation before? Do all lenders act in the same way?

It seems particularly idiotic to me when his mortgage offer still has three months to run.

The bank fwiw are are claiming this is the first time they have ever seen this situation and are asking why the solicitor didn't cancel request for funds.

anselld

If he is looking for someone to blame it is the person who agreed to exchange and complete in two days.

nigelpm

Its not about apportioning blame but checking that they've acted reasonably.

kingstreet

I have heard of funds being returned as completion didn't happen, yes.

I've never come across the circumstances you are describing as it's never happened on one of our cases.

Why didn't the solicitor cancel the funds request? All we know is the funds were drawndown 17th. We're assuming the problem didn't manifest itself until 17th. Does your friend know when this problem surfaced?

If the money was requested (eg) on 12th for 17th and the problem appeared on 13th, cancelling the funds request may have been an option. If the problem arose on 17th when the money was already there, cancellation would not be possible.

The solicitor may also have thought until very late that exchange and completion were still possible. Cancelling or returning the funds would then have ended that hope completely. Sometimes you are damned whatever action you take.

I suggest your friend speaks to his solicitor, asking relevant questions about dates and tries to establish what happened, when and why.

nigelpm

Thanks for your comments Kingstreet.

Really appreciate the thoughts.

I have heard of funds being returned as completion didn't happen, yes.

I've never come across the circumstances you are describing as it's never happened on one of our cases.

So... in everyone one of those cases did the bank send a letter to say they now had 28 days left to complete?

The cynical me wonders if this a relatively new policy by the banks to get more in mortgage application fees.

Ultimately, all my friend wants is to complete the transaction and not have to delay the whole process another month by him having to re-apply for a mortgage.

What would you suggest the best thing to do is assuming it can't be done in the next two weeks?

kingstreet

nigelpm wrote: »

So... in everyone one of those cases did the bank send a letter to say they now had 28 days left to complete?

It's never happened on one of our cases, so I've no idea.

The cynical me wonders if this a relatively new policy by the banks to get more in mortgage application fees

I have no idea if this is confined to one lender, or several. It isn't likely to yield enough to make such a policy worthwhile. There's also the chance you'll go elsewhere in annoyance and they've spent thousands to process the case through to completion in return for a hundred quid(ish) fee? Doesn't make sense. More likely a lender has found some kind of weird system problem and can't do anything about it because it will cost more to fix than it will save.

What would you suggest the best thing to do is assuming it can't be done in the next two weeks?

I can see nothing but a new application, to this or another lender I'm afraid. He should consider a complaint on policy issue, but first canvass other lenders and see what they would do. Use to reinforce "Treating Customers Fairly" complaint.

nigelpm

It's never happened on one of our cases, so I've no idea.

Sorry, confusion there.

I meant had you heard this being any bank's policy in the situations where you had heard of funds being returned as completion didn't happen - and how rare is this?

Great idea to canvas other lenders - although how would you go about that? This isn't the easiest thing to get across particularly to a call centre!

FWIW, I'm happy to name and shame - it's the Woolwich (Barclays)