Gifted deposit not accepted by Leeds Building Society

Hi all,

I was wondering if anyone had any similar experience to mine: after 7 weeks since the application process with LBS, so documents sent, valuation done, lawyers have been arranged etc, it seems that my deposit coming from an Italian bank (from my parents) is not going to be accepted.

The broker didn't tell me about this probably because he didn't know, and now what?

It looks like the only way I could get round this is by asking the vendor to pay cashback on the deposit, as per only alternative LSB's rules.

Has anyone had the same issue??


Many thanks,
Sonia
«13

Comments

  • Leeds are not the easiest lender to deal with if 'less than vanilla' case - 'inflexible' would be a fair description.


    We certainly wouldn't take a foreign source of deposit case there (indeed, we don't take many cases there at all) - BUT its a case of working with what you have now.


    Ensure your broker asks a specific question, in writing, about 'what would be acceptable proof/source of gifted deposit from Italy' and then set about getting it - a bundle of certified documents will certainly be needed if they are even going to consider it (and my recollection of Italian quasi-judicial paperwork is best described as 'horrific').
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  • TCA
    TCA Posts: 1,563 Forumite
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    Why don't your parents send the money to your UK account and you pay the deposit yourself? Or is it too late for that?
  • stator
    stator Posts: 7,441 Forumite
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    TCA wrote: »
    Why don't your parents send the money to your UK account and you pay the deposit yourself? Or is it too late for that?
    That would still have the same problem as you would have to show where the money came from into your bank account
    Changing the world, one sarcastic comment at a time.
  • TCA
    TCA Posts: 1,563 Forumite
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    edited 15 June 2015 at 11:11PM
    stator wrote: »
    That would still have the same problem as you would have to show where the money came from into your bank account

    Would a lender necessarily have sight of a borrower's latest bank statement? Even if they did, what would stop someone from using a different bank account to pay their deposit?

    Or is this more about making a declaration as to the source of the money?
  • stator
    stator Posts: 7,441 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    The solicitor will want to see where the money has come from, so if it was paid into your bank account last month they will want to see last months statement and they will want to see the statement of the bank account that transferred the money too.
    Changing the world, one sarcastic comment at a time.
  • audigex
    audigex Posts: 557 Forumite
    We're talking about two different things here

    1) The lender's policy regarding foreign-source gifted deposits

    2) Money laundering laws, which your solicitor will need to confirm you're complying with

    You can get around #1 without contravening #2. Whoever is giving the gift sends you the money as a gift. That money is now legally yours (barring relevant taxes). For the purposes of the lender, that's your money, your deposit, and complies with their policy. This isn't even dodgy, as it is a true gift: you're just splitting it into two separate transactions of "1: You get given money, 2: You use money for a deposit" rather than a single transaction of "You are given some money as your deposit"

    For the purposes of your solicitor, that's still your money... but they have to be able to trace it etc and show it's a legitimate gift. This may involve a bit of running around and legwork, but it shouldn't be a huge problem to prove it's a real gift.

    Note I'm not a legal or financial professional, so please seek professional advice! But I don't see why you can't comply with the LBS policy by simply doing the same basic things in a slightly different way.
    "You did not pull yourself up by your bootstraps. You were lucky enough to come of age at a time when housing was cheap, welfare was generous, and inflation was high enough to wipe out any debts you acquired. I’m pleased for you, but please stop being so unbearably smug about it."
  • usefulmale
    usefulmale Posts: 2,627 Forumite
    It's probably too late for you now but my advice, after dealing with Leeds would be to walk away. Nay, run. Run fast and don't look back.
  • amnblog
    amnblog Posts: 12,695 Forumite
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    This is a problem for your Broker to solve.


    Over the past 12 months, I have seen increasing restrictions from Lenders regarding deposits coming from overseas.


    Did your Broker put the case in before you had provided the proof of the deposit?
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • soniamaz1
    soniamaz1 Posts: 7 Forumite
    Yesterday I asked the broker who is in charge of my case (since the one who I dealt with in first place is on paternity leave) to kindly ask the lender about what options could be taken into consideration (what documents could I bring, etc).
    But she was quite tough in saying that LBS wouldn't consider it in any form. I requested the same thing to another broker within the same company who is also looking at my case and she seems more helpful.

    As last case scenario though, I do have some cash that I can use for deposit. I said that I can pay it into my account, but how would that be considered from LBS?

    Sonia
  • soniamaz1
    soniamaz1 Posts: 7 Forumite
    Thank you all for your replies by the way, I really appreciate them! :)
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