HSBC nightmare - avoid avoid!

capwhitt

So I got an agreement in principle, found a house, got the price down so I needed less than my agreement in principle by some distance so really should be simple.

Applied in branch, seemingly nice mortgage adviser was more than happy to put my app in, put my appointment in to sign everything there was no indication there would be any chance of rejection.

Before that I had to sign up for an account with them to get a cheaper sign on fee - no problem I thought, you've given no indication of any chance of failure.

Then yes he phones and says I have been rejected by the underwriters due to failed scoring. How have I failed the scoring? Apparently he isn't allowed to know. I push and push and he says he will ask his manager. In the meantime I apply to the underwriter for a credit score.

He gets back to me later and says they are trying again with his managers and his managers manager's names on the application - this one also got rejected but took some time to - the reason - still none but NOT adverse credit - well what the fluff else could it be? I had a rather rude girl on the phone try and dissuade me to NOT cancel my bank account move but I ignored her. Then I checked my credit score - 996!

So I went to a broker - he got me approved with TSB on the same day - he said most of his clients have been rejected by either HSBC or Santander.

Its disgusting they can treat people like this. Rejection with no reason. Trying to cheat me into a bank account. Risking me losing a house wasting weeks of my time (and theirs).

I am a first time buyer asking for an 85% mortgage with a 996 credit rating - this is better than the average first time buyer so if they rejected me surely they will reject most first time buyers. With that in mind it should be illegal for them to advertise being able to give first time buyers mortgages. They treated me like a bunch of numbers and I felt the need to share this because it will be worth it for anyone who doesn't apply to them as a result of reading this. I would LOVE to know why I was rejected though.

redpete

HSBC will take into account more information than the credit scoring agency uses to come up with the number they give you.

They don't offer AIPs just to get people to sign on for new current accounts (it would be an inefficient marketing tool and annoy more potential customers than they would gain).

I do agree that it is annoying that they don't explain why an AIP is rejected on closer scrutiny.

dunstonh

HSBC cherry pick. If you are pushing limits, you dont really want to be looking at HSBC.

How have I failed the scoring? Apparently he isn't allowed to know.

Yes, that is quite common.

Then I checked my credit score - 996!

Which means diddlely squat. Its a marketing score that Experian use themselves. No-one else uses it. Plus, its not as detailed as HSBC use.

I am a first time buyer asking for an 85% mortgage with a 996 credit rating - this is better than the average first time buyer

So, first time buyer means no track record. So, increased risk. 15% deposit is ok but nothing special (if its new-build then 85% is their limit). The marketing score means nothing.

You dont mention one of the key things. Earnings. How close are you pushing things on income?

so if they rejected me surely they will reject most first time buyers.

They probably do.

With that in mind it should be illegal for them to advertise being able to give first time buyers mortgages.

That is silly as they do FTB mortgages. You just didnt meet their criteria.

They treated me like a bunch of numbers

In effect, that is how a mortgage decision is made. Every application has pros and cons. So, a negative point could drag you down a certain amount but positive things could pull you up. If you fall below the threshold then you get a reject.

I would LOVE to know why I was rejected though.

The fact they are not releasing the reason suggests it is something on your credit file that is going negative on you. it is generally that data that is not passed on as they are not allowed to. It may not be a large negative but coupled with other things, it may just be enough to drag you down.

capwhitt

Thanks to both for your replies.

I have to disagree on the marketing - the market should NOT be able to target a type of buyer that they simply barely give mortgages to - they should at least have to quote their rejection rate or ask more questions to give an agreement in principle AND put an application in.

My earnings were given at the time of AIP and the application so if that was a barrier then they shouldn't have been able to give me an offer. My earnings are significantly above average for my age.

You say there is a potential negative on my file but they did say it is NOT adverse credit. So what on earth could it be?

capwhitt

redpete wrote: »

They don't offer AIPs just to get people to sign on for new current accounts (it would be an inefficient marketing tool and annoy more potential customers than they would gain).

This was post AIP during the application - he told me to sign up for an advance account as I would get a cheaper sign on fee - I had to wait for it to be set up before he could continue, it set up fine but was rejected when he continued. He sold the account purely on the basis that I would get my mortgage for cheaper. - I didn't get ANY mortgage from them!

HappyMJ

capwhitt wrote: »

Thanks to both for your replies.

I have to disagree on the marketing - the market should NOT be able to target a type of buyer that they simply barely give mortgages to - they should at least have to quote their rejection rate or ask more questions to give an agreement in principle AND put an application in.

My earnings were given at the time of AIP and the application so if that was a barrier then they shouldn't have been able to give me an offer. My earnings are significantly above average for my age.

You say there is a potential negative on my file but they did say it is NOT adverse credit. So what on earth could it be?

It could be anything..It could be your earnings. Could even be your age. Just find another mortgage provider and apply to them instead. HSBC are picky...very very picky. I had a chat with a member of staff in branch regarding my partners account and if they find ANY evidence of gambling it's a decline. You may have a footprint from an identity check made on you from a gambling company f you've ever placed a bet or played a game of bingo online. I was saying that's rubbish and she said yes I know it's legal and all but sorry we don't allow it. I wanted my partner to have an account set up just for gambling transactions so they wouldn't appear on her current account and they declined to set one up for her. I've since encouraged her to move to the TSB who have been very welcoming and are not bothered where she spends her money as long as she spends less than she earns she'll be fine.

capwhitt

HappyMJ wrote: »

It could be anything..It could be your earnings. Could even be your age. Just find another mortgage provider and apply to them instead. HSBC are picky...very very picky. I had a chat with a member of staff in branch regarding my partners account and if they find ANY evidence of gambling it's a decline. You may have a footprint from an identity check made on you from a gambling company f you've ever placed a bet or played a game of bingo online. I was saying that's rubbish and she said yes I know it's legal and all but sorry we don't allow it. I wanted my partner to have an account set up just for gambling transactions so they wouldn't appear on her current account and they declined to set one up for her. I've since encouraged her to move to the TSB who have been very welcoming and are not bothered where she spends her money as long as she spends less than she earns she'll be fine.

Very interesting, again goes to my point, if this is true they should know at branch stage about age and earnings. The gambling thing if it is a factor - they should ask you this at branch. I set up an account to put a bet on the national and not used it for anything else so if that is the reason oh boy I'm glad they are leaving the country!

Glad to hear things went well with TSB as that's who I am hoping to be with - just waiting for survey results on the house now. Its been super quick and smooth so far. HSBC were super slow and full of BS. They shouldn't be allowed to act like they have.

roje

No experience of HSBC but it's true about Santander in my experience. They would have offered me £70k on an income of £45k with a high credit score and 15 years with them, never missing a payment. Their affordability criteria is absolutely bonkers. They refused my brother too, he applied for a joint mortgage with his wife, joint income of £52k, good credit, 2 kids, wanting to borrow £110k. Turned down on affordability. He went to a broker the same day and within two weeks had a full offer from Natwest, virtually no questions asked.

dunstonh

the market should NOT be able to target a type of buyer that they simply barely give mortgages to

Every single retailer has a target market.

they should at least have to quote their rejection rate or ask more questions to give an agreement in principle AND put an application in.

An agreement in principle does come with some warnings. I dont agree with quoting rejection rates as the bank is not responsible for the quality of borrower that walks through their doors. It is not something within their control.

My earnings were given at the time of AIP and the application so if that was a barrier then they shouldn't have been able to give me an offer. My earnings are significantly above average for my age.

The earnings may have been fine in isolation of other facts. As I mentioned, there are things that go for you and against you and whatever it was that went against you, your earnings were not enough.

Size of earnings is not actually a positive. Affordability is. Someone earning a lot less than you can be a better risk.

You say there is a potential negative on my file but they did say it is NOT adverse credit. So what on earth could it be?

I have seen people get 999 scores when going to experian but fail when a mortgage adviser gets a credit risk. I have seen outcomes that score badly and we tell people to contact experian to look at it and experian then check and deny any issues but then find the next score works fine (on more than one occasion). And then never find out what the problem was as Experian deny there was an issue but we have the printout that shows the failure (but not what was causing the failure as that info was not supplied).

The gambling thing if it is a factor - they should ask you this at branch.

There is only so much you can ask. A scan of the statements is often what is looked at for issues. However, people have multiple accounts and it is not always obvious. A good mortgage broker/adviser will typically look in more detail but a bank clerk is less likely as they dont get to see the whole process in the way a broker/adviser would.

I set up an account to put a bet on the national and not used it for anything else so if that is the reason oh boy I'm glad they are leaving the country!

They are not leaving the country. The retail banking, whatever the outcome, will be staying in the UK.

Service is not something we can comment on as we were not there. However, in general, they do have a good reputation for service. They just have a stricter lending criteria than most.

billchecker1

I have had the complete opposite experience with HSBC. applied two years ago, my wife and i have decentish jobs. Wife had a few missed payments which at the time were around two years old. This was on a 90% mortgage so we knew they would be tough. We were worred after reading everything on here but their rates were the best.

The reality was the process was fine. We did our prep, had the right documents and knew exactly where our money was going. We had no debt and with public sector jobs, decent pensions.

Fast forward two years and they are great. Due to house price increases they believe our house is worth more, I have overpaid and due to these factors, the LTV has dropped.

What that means for us is a drop from 3.54% right down to 1.99 fixed for two years. Will still overpay most of the savings (£200) thereby paying off earlier.

Am pleased as punch with them.

capwhitt

dunstonh wrote: »

Every single retailer has a target market.

I have no problem with a target market but you shouldnt be allowed to have one that you barely approve anyone for.

dunstonh wrote: »

An agreement in principle does come with some warnings. I dont agree with quoting rejection rates as the bank is not responsible for the quality of borrower that walks through their doors. It is not something within their control.

My AIP came with no real warnings. Rejection rates for anyone that walks through the door will be high - fine don't quote those. If rates are high for people who get an AIP then it prove the AIP process is a huge waste of time and needs to be thought out again. I wasted so much time with HSBC but then again they must waste so much time with lots of people because their AIP process is highly flawed

dunstonh wrote: »

The earnings may have been fine in isolation of other facts. As I mentioned, there are things that go for you and against you and whatever it was that went against you, your earnings were not enough.

Size of earnings is not actually a positive. Affordability is. Someone earning a lot less than you can be a better risk.

I have no secret bank accounts I declared everything to them. They calculated affordability at my AIP appointment AND my application appointment and said I could afford a lot more than I needed to borrow. My repayments would have been much less than my rent and I can afford to live comfortably and have done for some time.

dunstonh wrote: »

I have seen people get 999 scores when going to experian but fail when a mortgage adviser gets a credit risk. I have seen outcomes that score badly and we tell people to contact experian to look at it and experian then check and deny any issues but then find the next score works fine (on more than one occasion). And then never find out what the problem was as Experian deny there was an issue but we have the printout that shows the failure (but not what was causing the failure as that info was not supplied).

Then they shouldn't use Experian.

dunstonh wrote: »

There is only so much you can ask. A scan of the statements is often what is looked at for issues. However, people have multiple accounts and it is not always obvious. A good mortgage broker/adviser will typically look in more detail but a bank clerk is less likely as they dont get to see the whole process in the way a broker/adviser would.

They knew about all of my accounts. My broker got me a mortgage approved an hour after my first appointment with him using the same documents as HSBC. He very much agreed that HSBC (and santader) are failing new customers and said that even he doesn't know who on earth HSBC in approving right now as their approval rates are so bad.

Why is the score card so secret? The gambling thing wasn't mentioned to me but can't there be a list online of things they check?

dunstonh wrote: »

They are not leaving the country. The retail banking, whatever the outcome, will be staying in the UK.

Well the retail banking will be answering to someone else - and hopefully someone better. If the retail is the problem then maybe they will just fail with a smaller bank behind them.

dunstonh wrote: »

Service is not something we can comment on as we were not there. However, in general, they do have a good reputation for service. They just have a stricter lending criteria than most.

If the lending criteria is stricter than most then the reasons for rejecions should be clear as they are applying things that most others are not. As for service, I have been treated appallingly and take no comfort whatsoever on any reputation they may or may not have. They gave no indication of failure and even had my appointment booked in to sign the final papers. They made me change account for a mortgage they would never give me.