Lenders pulling mortgages at last minute

Goldiegirl

kingstreet wrote: »

I haven't had an offer withdrawn in thirty years.

Deal with an issue when it happens. There's no point stressing over something that might not take place.

^^
This


I worked for a big lender for 28 years, and it was so rare for mortgage offers to be 'pulled' that I can't even remember it ever happening.


I know people are anxious when they move house, but I must admit I don't understand the level of angst about the withdrawal of mortgage offers.


I think people have somehow got the idea that offers are withdrawn on a regular basis. But this isn't the case at all. You've propably got more chance of winning big on the lottery than having your mortgage offer withdrawn!

Thrugelmir

Goldiegirl wrote: »

You've propably got more chance of winning big on the lottery than having your mortgage offer withdrawn!

At over 13 million to one highly unlikely.

The greater publicity is likely to be down to borrowers attempting to let's say "circumnavigate" the lenders rules more frequently. The culture has changed in the credit boom years. Obtaining Debt is viewed almost as a right by a section of society.

GingerBob_3

amnblog wrote: »

'It's their money they can do what they like.'

Particularly if they perceive a change to their risk.

Let's get the terminology right here. Generally speaking it's not their money. They are lending other people's money. A small point, but worthy of note. It's a bit like when people talk of the government's money. The government hasn't got any money. It's the taxpayers'.

mrginge

GingerBob wrote: »

Let's get the terminology right here. Generally speaking it's not their money. They are lending other people's money. A small point, but worthy of note. It's a bit like when people talk of the government's money. The government hasn't got any money. It's the taxpayers'.

Generally (and specifically) speaking it IS the bank's (or government's) money. Just because the source of it is Fred Bloggs' paycheck doesn't mean that Fred retains any ownership or control over that money.
Fred does have a contractual agreement to be repaid the value of his deposit (plus interest) on demand.
If Fred demands 'his' money back and the bank says it is skint, what does Fred do?

GingerBob_3

mrginge wrote: »

Generally (and specifically) speaking it IS the bank's (or government's) money. Just because the source of it is Fred Bloggs' paycheck doesn't mean that Fred retains any ownership or control over that money.
Fred does have a contractual agreement to be repaid the value of his deposit (plus interest) on demand.
If Fred demands 'his' money back and the bank says it is skint, what does Fred do?

Quite wrong. Listen to the news, for example. "When will the taxpayer get HIS money back [from RBS]" etc, etc. The banks manage YOUR money by, in some cases, lending it to other people.

kingstreet

What the taxpayer is owed by being a RBS shareholder is not the money being loaned to RBS customers. This is typically raised in the money markets where the lender makes a "turn," the difference between the funding rate from the third party providing the funds and the rate the money is offered to customers.

Although retail deposits may underpin long-term mortgage lending, Fred's savings are multiplied several times along the way.

Thrugelmir

Ltd_Company_advice wrote: »

last night me and my wife went to open a joint bank account and they refused it because they said there was a notice of correction on one of our credit reports.

There'll be other factors in the decision as well. Is this your current bank that declined?

mrginge

GingerBob wrote: »

Quite wrong. Listen to the news, for example. "When will the taxpayer get HIS money back [from RBS]" etc, etc. The banks manage YOUR money by, in some cases, lending it to other people.

Sorry, are you trying to disagree with my post on the basis of some quotes you've made up?

None of the above bears any relation to, nor invalidates any of my previous post.

jamesd

rmtuk wrote: »

Does any law exists, which prevents moneylenders and banks to withdraw mortgages at the last minute. i.e after an offer is accepted

There's no such law and it would not be fair to lenders to have such a law.

The last minute is not after an offer is accepted. It's between exchange of contracts and completion, a time interval that can be anything from hours to a few days or longer. If it has been some times since the mortgage was originally agreed the lender will sometimes ask for more recent versions of things like bank statements that they asked for originally, just to check that nothing has changed.

Some things that might cause an offer to be withdrawn could include:

1. Discovery of lots of gambling transactions on statements.
2. Substantial increase in borrowing that invalidates the affordability check result. Do this after completion, not before, if you're going to do it! or verify with the lender that the amount contemplated is acceptable to them.
3. New IVA or bankruptcy.
4. Problems with the property that is security for the loan, such as damage that might reduce its value, or even destruction in a fire, where the buyer's insurance would be expected to cover the rebuilding cost and the lender wouldn't be willing to lend the whole original amount.

Assume that the lender will ask for updated documents and don't do anything that is more negative than what the lender would have seen in the original checks. It's not likely to be a big deal if they ask unless the borrower has done something silly. Just the lender being prudent.

jamesd

Ltd_Company_advice wrote: »

we exchanged contracts about 4 weeks ago but last night me and my wife went to open a joint bank account and they refused it because they said there was a notice of correction on one of our credit reports.

It's certain that the mortgage lender saw this before agreeing to lend.

A notice of correction means that a human has to look at the application and it can't be decided using just automated rules. The bank may just have had a rule that says notice of correction means no for the automated decision-making. You have a legal right to ask for a human to review a decision that was made using only automated rules.

Ltd_Company_advice wrote: »

Now we are nervous that the bank lending us for our mortgage are going to run another credit check before we complete and then it all falls apart?

They might but they should already have seen it. You can also just ask them whether they saw it and if they had any concerns, also letting them know that it's in the process of being removed. No need to do this and I suggest that you don't, it's just if you want certainty rather than wondering.

Ltd_Company_advice wrote: »

I assume that all credit checks are done long before you even exchange contracts.

They would have been done first but sometimes a lender will do more between exchange and completion just to be diligent.