Hsbc porting nightmare!!!

Pateman1987

Me and my partner are looking to move property and we currently have a mortgage with HSBC. We have agreed a price on our house and an offer accepted on a new proeprty which is £70,000 more expensive.

My partner and I changed from PAYE to self employed this year, and being a mortgage broker I knew we wouldn't be accepted for any further borrowing until we can evidence our self employed income. So the plan was to borrow money off my parents to complete the purchase and port on the same terms accross to the new secuirty.

Here lies the issue, It seems HSBC are one of the few lenders on the high street who didnt fancy adopting the MMR guidelines around like for like ports / downszing and although no affordability check is necessary HSBC insist on one. So with no evidence to support our income we failed the affordability test and are now mortgage prisoners.

I made a complaint to HSBC and even quoted the FCA's guidelines and eventually they told me they would consider the application. Happy days! ( or so i thought ) After dealing with one of their mortgage advisers over the phone for more than an hour, I was asked to povide HSBC with bank statements, 2 years P60's, andall of our invoices since becoming self employed which we did.

Around a week later they come back to me asking for a projected turnover for our first year provided from a chartered accountant. I explained that we were both sole traders and didnt have an accountant (HSBC knew this from the start of the application so I found it an odd request ) and i was told wihtout one we couldnt progress the application becasue we could not prove affordability.

So now we are back to square one with HSBC telling me they are unwilling to port out mortgage ( to a security which is worth more than our current property) as we can not afford the repayments!!

I've spoken to 4 high street lenders this week and they all allow like for like ports with no affordability tests necessary.

I'm at the end of my tether with this now. I'm absolutely exhuasted!!! The utter ludicruis decision making from HSBC boggles the mind, In their eyes because we can not afford our mortgage they wont move the loan to a move valuable assest! Its caused my partner huge amounts of stress, upset and anexiety so i have finally logged a case with the ombudsman however given their 12 week timeframe we are pretty much guaranteed to lose the house we had set out hearts on.

Whats more frustrating is every year as a broker i have to take an online assessment around transitional rules and mortgage prisoners only to find myself as one!!!

:mad::mad::mad::mad::mad::mad::mad:

Thrugelmir

Pateman1987 wrote: »

although no affordability check is necessary HSBC insist on one.:

Of course they would. No lender is going to grant a new mortgage without undergoing a full application process. HSBC didn't suffer in the GFC for the very reason that they didn't go lax with their internal lending criteria. Instead maintaining a prudent conservative approach.

Pateman1987

Thrugelmir wrote: »

Of course they would. No lender is going to grant a new mortgage without undergoing a full application process. HSBC didn't suffer in the GFC for the very reason that they didn't go lax with their internal lending criteria. Instead maintaining a prudent conservative approach.

It's the same mortgage secured against a different property, exactly the same terms with no material change. So the debt remains the same but the secruity is worth more and you're absolutely wrong nearly all lenders will grant a like for like port without undergoing a new affordability check if the new sceuirty is suitable. HSBC are the exception to the rule


Theres 0 risk involved for the lender and the port would only strengthen their position given the decrease in the LTV.

csgohan4

Pateman1987 wrote: »

It's the same mortgage secured against a different property, exactly the same terms with no material change. So the debt remains the same but the secruity is worth more and you're absolutely wrong nearly all lenders will grant a like for like port without undergoing a new affordability check if the new sceuirty is suitable. HSBC are the exception to the rule


Theres 0 risk involved for the lender and the port would only strengthen their position given the decrease in the LTV.

Their money their rules I'm afraid no matter how conservative or different their approach is. If you don't like it, you can always go somewhere else, reality.

Caz3121

https://www.moneysavingexpert.com/mortgages/porting-your-mortgage/
"Porting is a great flexible feature but there are no guarantees your lender will actually permit you to to do it – and you could end up borrowing at an uncompetitive rate to boot. Here's why...

You have to reapply so may not qualify

When you ask your lender to 'port' your mortgage, you effectively have to re-apply for that deal. So, you may not qualify as it is much tougher to get a mortgage now than it used to be. You may struggle if circumstances have changed, eg, you're now self-employed, you earn less or you have more debt and/or outgoings.

Or you might not have changed at all but your lender's criteria has, so even though you got your first mortgage without hassle, it doesn't mean the same will happen again. And if you haven't made all your mortgage payments on time, chances are the lender will refuse in the hope you leave them"

Pateman1987

csgohan4 wrote: »

Their money their rules I'm afraid no matter how conservative or different their approach is. If you don't like it, you can always go somewhere else, reality.

Well i cant go elsewhere, That's the problem. Plus there are rules brought in by the FCA which HSBC are completely ignoring. The FCA have said no affordability checks are required for a like for like port / downsizing, but thanks for completely ignoring everything i've said and replying with an unelpful response.

csgohan4

Pateman1987 wrote: »

Well i cant go elsewhere, That's the problem. Plus there are rules brought in by the FCA which HSBC are completely ignoring. The FCA have said no affordability checks are required for a like for like port / downsizing, but thanks for completely ignoring everything i've said and replying with an unelpful response.

mmr are a minimum guideline, HSBC/ lenders are free to add more stricter checks and as you know now, HSBC are one of the more stricter lenders.

You can raise a complaint if you so wish to HSBC citing the FCA but I doubt you will get anywhere as it is their discretion in their criteria above the FCA

Pateman1987

csgohan4 wrote: »

mmr are a minimum guideline, HSBC/ lenders are free to add more stricter checks and as you know now, HSBC are one of the more stricter lenders.

You can raise a complaint if you so wish to HSBC citing the FCA but I doubt you will get anywhere as it is their discretion in their criteria above the FCA

I'm hoping the Ombudsman will put some pressure on HSBC to allow the port, but by the time the complaint has been investigated it's likely we will lose the property. Correct it is a minimum guideline but it's also there to ensure the lender doesn't treat customers unfairly. I've spoken to 10+ lenders this week all high street lenders who would be happy to port. Extremely frustrating. I'll take it as far as i can before we lose the property and update this thread.

We are also in the process of completing out tax returns this weekend, even though we have been self emplyed for little over half a year i've run the affordability calculator and we meet the current affordability criteria.

Fingers crossed we will get the mortgage agreed one way or another.

robatwork

Pateman1987 wrote: »

Well i cant go elsewhere, That's the problem. Plus there are rules brought in by the FCA which HSBC are completely ignoring. The FCA have said no affordability checks are required for a like for like port / downsizing

Can you link to the exact rules that you refer to?

If you can hang on, it looks like further "remedies" for mortgage prisoners will be implemented. But I suspect HSBC will still be free to apply their own criteria.

https://www.fca.org.uk/news/press-releases/fca-acts-help-mortgage-prisoners

Thrugelmir

Pateman1987 wrote: »

It's the same mortgage secured against a different property, exactly the same terms with no material change.

No it's the not the same mortgage. Porting merely refers to the terms and conditions of the product being transferred, i.e. they remain the same. The mortgage, the legal charge placed on the property to secure the debt is new.

The fact that you've switched from full time employment to self is a material change of circumstances. Without any doubt you'll fail on their internal lending criteria alone.


Nor is it anything to do with stricter rules. Some lenders may have been laxer in the past. That was a commercial lending decision. Which ultimately resulted in the demise of a number of mortgage lenders. As their business models were ultimately found to be flawed. Mortgage lending is a high value low margin business. Basic underlying lending principles have to be adhered too. Otherwise like a house built of cards, it simply topples over.

No point in complaining. The rules aren't going to change just for you because you don't like them.

haras_nosirrah

Porting has always been subject to meeting the current lenders terms and conditions. I don't know of any lenders who don't treat a porting application as a new application