Was Mortgage Advisor Negligent ? Stand To loose ££££

nottslass_2

Hopefully some lovely MSE'ers will be able to offer advise as I stand to loose just under 6k !

I purchased My home 2.5 years ago under the 'right to buy' and paid cash (inheritance). As per the rules if I sell the property before 5 years of ownership I have to pay back the discount .

I now wish to move to a larger property to accomadate my growing DC's and as there is nothing in the rules that says I can't let the property,My intention was to raise capital by taking out a "let to Buy" mortgage on my current home and use a repayment mortgage for the balance.

I visited an independent firm of mortgage advisers (as recommended by estate agent)

I was quite clear as to what I wanted to achieve and and asked if this was possible given my circumstances. I was assured by said adviser that it was indeed possible so I paid the fees and duly put an offer in on my dream home whilst he proceeded with the two Mortgage application.

Both Mortgages were approved and I proceed with getting surveys done,finding a solicitor etc My current home was also valued (at a cost) and so far so good.

Out of the blue (six weeks down the line) I receive a letter from the Solicitor acting on behalf of the re mortgage /let to buy company stating That I could not proceed due to the 'Deed of Postponement' on my current home and that the Council would not allow me to raised funds using my current home for this purpose - they would allow me to remortgage for home improvements or an extension,but not to purchase another property.

Now I understand the rules and the purchase of my dream home is now off

I am now left over 5k out of pocket,which I feel Is due to the Mortgage adviser not taking the full circumstances into consideration (ie deed of postponement) To be fair he has tried other options to make the shortfall up but cannot come up with a viable solution .

The long and the short of it is do I have any come back on the Mortgage adviser ?

mrginge

Mortgage advisors generally arrange mortgages, did you contract with your advisor to offer legal advice?

nottslass_2

mrginge wrote: »

Mortgage advisors generally arrange mortgages, did you contract with your advisor to offer legal advice?

I contacted my mortgae adviser to give the right advice, and sell me the product that suited my requirements ,financial position and was indeed 'fit for purpose'.

mrginge

nottslass wrote: »

I contacted my mortgae adviser to give the right advice, and sell me the product that suited my requirements ,financial position and was indeed 'fit for purpose'.

I think you'll struggle with this one tbh.

DandelionPatrol

Where it goes wrong for you is that you represented to the Mortgage Advisor that you had a property of a certain value with a restriction on selling for 5 years. You did not tell the advisor that you were subject to a deed of postponement, although legally you would be deemed to know about it, because you signed it. Although I can see that you might have been unaware of the implications.

Senior_Paper_Monitor

This will be extremely difficult (if not impossible) to place.


Whether it can be done will be totally dependent upon a number of factors not covered by the original post - and the attitude of the council (in terms of deferment of charge - deed of postponement - and their interpretation of the Housing Act is very unclear to say the least) and individual lenders (and only 2 or 3 that I can think of will even consider this)


As to whether you have a comeback on the mortgage adviser is questionable ...
- firstly I fail to comprehend how you can be £6K out of pocket at this stage
- this is a complex area (and I speak as one who did several weeks of detailed research back in '12 when we moved into the revitalised BTL market + a fair amount of update research when the issue of remortgage/BTL use became active for our initial clients - and those from other advisers who hadn't necessarily considered this, and associated, issues at all at the time of arranging easy RTBs back in 2012). The unforeseen impact of MMR has also rather moved the goal posts in the mean time !
- If you paid specific fees for applications and associated costs on the advice from an adviser that it would be fine (but who failed to investigate the criteria) you might have recourse (but I stress might - as would they have reason to believe this to be the case) ?


If you still wish to pursue this option you will need to engage a mortgage adviser who fully understands the RTB market and associated legislation - and they may well charge a fee for investigating the case even if the answer is cannot be done.








Having thought about your particular case there is possibly another channel to consider (all depends on your overall figures) - get a specialist on the case and you may well have an answer

nottslass_2

Where it goes wrong for you is that you represented to the Mortgage Advisor that you had a property of a certain value with a restriction on selling for 5 years. You did not tell the advisor that you were subject to a deed of postponement,

I would have hoped and expected an experienced mortgage adviser to be aware of any restrictions which would render his products unsuitable to meet my needs and with all due respect I'm sure he's arranged many right to buy mortgages and would therefore have an over view of the restrictions involved.

Senior_Paper_Monitor

I'm afraid your last statement is not correct 'nottslass' ... the great majority of mortgage brokers have only done a handful of such mortgages - and will not have spent the hours that a specialist has (and learnt my mistakes !!) researching the minutia of what is 1) very complex 2) open to change by individual council policy core legislation. Nor do they need to do so.

nottslass_2

As to whether you have a comeback on the mortgage adviser is questionable ...
- firstly I fail to comprehend how you can be £6K out of pocket at this stage
- this is a complex area (and I speak as one who did several weeks of detailed research back in '12 when we moved into the revitalised BTL market + a fair amount of update research when the issue of remortgage/BTL use became active for our initial clients - and those from other advisers who hadn't necessarily considered this, and associated, issues at all at the time of arranging easy RTBs back in 2012). The unforeseen impact of MMR has also rather moved the goal posts in the mean time !
- If you paid specific fees for applications and associated costs on the advice from an adviser that it would be fine (but who failed to investigate the criteria) you might have recourse (but I stress might - as would they have reason to believe this to be the case) ?

Thank you for taking time to reply - I'm sure you can appreciate I'm absolutely gutted as I cannot afford to write off this amount of money.

The costs I have incurred so far are £400 x 2 for each mortage (advisers fee)
£390 valuation fee (on current property)
£470 home buyers report . I'm also instructed a conveyancing solicitor at another £1950 . I'm also assuming that I'll still be liable for the mortgage arrangement fees of a further £2300.

I do appreciate that the RTB market is specialist but surely he had an obligation to inform me that this wasn't his speciality and was therefore unable to advise me of a suitable product but I feel instead he decided to take my fee and sell me something that is worse than useless (to me)

The thing is I went to an established company recommended by the estate agent and his opening spiel was all about how experienced they were in dealing with all situations and his legal obligations re giving correct advise and finding a product to suit my needs.

nottslass_2

I'm afraid your last statement is not correct 'nottslass' ... the great majority of mortgage brokers have only done a handful of such mortgages - and will not have spent the hours that a specialist has (and learnt my mistakes !!) researching the minutia of what is 1) very complex 2) open to change by individual council policy core legislation. Nor do they need to do so.

Wouldn't it have been more ethical for him to simply send me on my way stating that this is a specialized area and he was therefore unable to act on my behalf ?

Senior_Paper_Monitor

nottslass wrote: »

The costs I have incurred so far are £400 x 2 for each mortage (advisers fee)
£390 valuation fee (on current property)
£470 home buyers report . I'm also instructed a conveyancing solicitor at another £1950 . I'm also assuming that I'll still be liable for the mortgage arrangement fees of a further £2300.

I .

2 x £400 advisers fee - what were his terms (certainly not cheap but neither are they ridiculous) regarding refund etc - the second fee is not yet wasted if you can sort out the capital raising from the first transaction.


£390 valuation fee - probably wasted


£1,950 - not yet wasted if you can sort out the capital raising from the first transaction. Certainly seems high to me (unless these properties are worth much more than I expect) - and you must have authorised the conveyance to proceed before your funding is confirmed. I can't believe all of it has bee spent at this stage anyway.


£2,300 mortgage arrangements fees will probably not be due - and seem extreme if this are reasonably low value properties (my apologies if I am reading too much into the user name).




My guess is that you are probably c £790 out of pocket rather than £6K if you recover the situation and maybe £2,500 if the whole thing goes Pete Tong. Certainly not good news - but probably not as bad as you paint.