Remedy for Wrong Mortgage advice

ulurujamman

Hi,

We've just had a mortgage application turned down by Woolwich. The property was an ex-local split level maisonette in a 4 storey building with deck access, but was in good condition in a resurgent area (Stratford).

We were advised when we applied that it would be dependent on valuer's comments whether the property was suitable or not, but that there was nothing in Woolwich's lending criteria that would disqualify it as such. We asked our mortgage adviser to call and confirm this with Woolwich directly, which he did. We decided to take the risk and pay for a £600 homebuyers survey, in addition to £300 in disbursements to our conveyancers.

Eserv (the valuers) put it at 266k, which was the amount we had offered, and we were trying to borrow with a 20% deposit. At this point we (naively) thought everything would be fine. However, a couple of days after getting the report, we were rejected on the basis that the property did "not represent sufficient security" and failed "desirability" criteria.

When we called to try and ascertain what exactly these criteria might have been, the Woolwich representative said that as the property was ex-LA deck access it would not have been considered for a loan. Obviously this directly contradicts the advice we were given going in.

So my question is this: given that the advice we received seems to have been wrong, is there a remedy that would allow us to (at the very least) recoup the costs of the valuation? If Woolwich don't lend on deck access then there's nothing we can do about that, but if we had known going in that there was a 0% chance of getting the mortgage, I doubt we'd have applied.

tl;dr Woolwich said they accept deck access, we paid £600 for a valuation, Woolwich now say they don't accept deck access. What do we do?

ACG

http://www.woolwichintermediaries.co.uk/Residentialcriteria/IP1242620533007

Click on P and then property type.

There appears to be nothing that specifically mentions what you have mentioned so it does not look like it would be an automatic decline?

For the record, I would never instruct searches to be done until you have a mortgage offer for precisely this reason.

kingstreet

Any Woolwich lending decision on high-rise flats is always subject to valuer's comments on future saleability.

There is no hard and fast criteria guide on this, so you take the risk of a decline if the valuer doesn't think the property suitable security on the day.

ulurujamman

Thanks for your replies, both.

This is what we were told in the first place - that properties of this type were subject to valuer's comments. We accept that, and accept that it's a risk. However, as I said, we are now being told quite explicitly that these factors are the reason why we've been rejected. This is despite a valuation that agrees with our offer of 266k.

Surely a valuation that turns up no new negative data beyond which we had already declared should not adversely affect our ability to get a mortgage? Woolwich is effectively saying that they don't think they could resell at 80% of its value - if ex-LA properties scare them to that extent, then I struggle to think of one that would pass their criteria in practice. It would be like saying we accept deck access, but only if the property comes with its own unicorn.

ACG: If there had been any other option under the circumstances, we would have taken it. However what I'm really annoyed about are not the legal costs, but the £600 survey which was apparently completely superfluous.

ACG

It may be that the factors individually are not an issue, when combined they are. So as standard they have no policy that kicks it out of bed so to speak.

The lender can only go off what their policy is and rely on the surveyor to advise them once he/she has seen the property.

Some lenders will view the property on google prior to submitting it, but not all offer that facility. It tends to be the smaller lenders who would do this.

Thrugelmir

ulurujamman wrote: »

This is what we were told in the first place - that properties of this type were subject to valuer's comments. We accept that, and accept that it's a risk. However, as I said, we are now being told quite explicitly that these factors are the reason why we've been rejected. This is despite a valuation that agrees with our offer of 266k.

Surely a valuation that turns up no new negative data beyond which we had already declared should not adversely affect our ability to get a mortgage? Woolwich is effectively saying that they don't think they could resell at 80% of its value - if ex-LA properties scare them to that extent, then I struggle to think of one that would pass their criteria in practice. It would be like saying we accept deck access, but only if the property comes with its own unicorn.

May be other issues from the lenders perspective. Such as level of exposure in the block / area / post code already. Lenders run mortgage books top down, not bottom up. So look at applications in the context of other criteria than the way a potential borrower does.

ulurujamman

ACG: Thanks for your input, I expect that will be their excuse in the long run. Though I must say it sounds borderline duplicitous on their part, given that any deck access maisonette almost by definition is going to fall into the other two categories as well.

Thrugelmir: Thanks, but like I said, these are all the issues they're citing.