Paralegal delays completion: gifted deposit issue

msauk

Deposit for the house we are trying to buy comprises savings of both mortgage applicants and a gift from mother of one the applicants. The mother has no wish to reside in the property being purchased.

Lender, Nationwide, offered the mortgage once they received a form signed by mother stating that some of the deposit money is a gift. Mortgage offered in May this year. Nationwide is paying the conveyancing fees as part of the mortgage offer.

The lender released the mortgage funds yesterday and I organised a CHAPS payment to the conveyancing solicitor (appointed by Nationwide) for the deposit and other fees, stamp duty,etc last week.

About 2pm yesterday, I received a call from paralegal asking for a bank statement concerning the deposit. On my direct questioning, the paralegal confirmed they had not already received copies of statements that we, the two mortgage applicants, submitted to Nationwide for the underwriters' scrutiny. I therefore went to my bank online and emailed a PDF statement to the paralegal. The statement of the mortgage applicant's bank account (my bank account) shows that the gift was credited to the account in May.

Three hours later, the paralegal called to say the completion date will have to be delayed, and then put the following in an email:

Further to our telephone conversation I confirm that we require contact details for [mother] so that we can write to her in relation to the gift. As you are receiving a gift this will need to be reported to Nationwide and unfortunately will delay completion.

We are required to ensure that all money has come from yourself and [the other mortgage applicant] as any gifts will need to be reported to Nationwide.

I look forward to hearing from you.

1. I have emailed Nationwide to ask them to confirm they do know about the gift, and that they received a signed form from mother stating she wishes to make no claim on the property. I struggle to understand why the lender has not already told the conveyancing solicitor about this.
2. I am concerned what the paralegal will demand from mother. The paralegal talked about signed ID. Mother has previously stated that the lender need not see her bank statements and that she generally does not trust these sorts of processes, nor will she want to appoint her own solicitor to be involved (she is the kind of person who will feel obliged to do so, even if she need not).

Thanks for reading this. So very disappointed that completion is being stalled...(unreasonably, in my view).

bouicca21

When I gifted money for a deposit to DD, the conveyancers wrote to me, at my address, requesting just such a statement. I don't remember jumping through the money laundering hoops, other than explaining where the money came from, but I can quite see that producing a signed statement without any kind of provenance, creates an opportunity for creativity.

Why not talk to the paralegal and to his/her manager if needs be, to find out exactly what they want.

davidmcn

msauk wrote: »

I struggle to understand why the lender has not already told the conveyancing solicitor about this.

In my experience it is typical for lenders not to mention gifted deposits in their instructions to solicitors, even where they were made fully aware during the application process. The solicitors then need to get separate written confirmation that the lender has approved it.

I am concerned what the paralegal will demand from mother. The paralegal talked about signed ID.

It would be helpful if they could tell you now what they need, and policies vary from firm to firm, but I would expect them to need ID and evidence that the funds actually belonged to your mother (e.g. her bank statements going back x months).

Mother has previously stated that the lender need not see her bank statements and that she generally does not trust these sorts of processes

Well, you'll need to do your best to persuade her to be compliant, otherwise you don't get to buy your house! You have the catch 22 that if you appear to be obstructive in providing the anti-money laundering evidence, that will in itself be seen as grounds for suspicion.

kingstreet

Lender requirements and solicitor requirements are two separate things.

You have satisfied the lender's requirements for the issue of the offer but you still need to satisfy the solicitor's requirements which may be based on lender requirements, or may be their own.

They can request ID/PoA and evidence of source of gift from donor and are more likely to do so if the donor isn't UK-based.

Solicitor should have established all this a lot earlier by asking you about source of deposit at outset.

silvercar

Further to our telephone conversation I confirm that we require contact details for [mother] so that we can write to her in relation to the gift. As you are receiving a gift this will need to be reported to Nationwide and unfortunately will delay completion.

We are required to ensure that all money has come from yourself and [the other mortgage applicant] as any gifts will need to be reported to Nationwide.

I look forward to hearing from you.

"I confirm that Nationwide are already aware of the gift from my mother and have satisfied themselves that this is in order. Further I understand that Nationwide have already released funds to you in preparation for completion.

I fail to understand why you are imposing new requirements so near to completion date. If there were issues that required further information, these should have been raised early on in the process. If these issues that you are now raising are going to impact on my completion date then I would consider raising a complaint on the way I have been treated as a client, to this end I would be grateful if you could send me details of your internal complaints procedure.

I look forward to hearing from you."

Should focus minds nicely.