Mortgage sold to another lender during conveyancing...?

KartMan

Hello,
First, to give a bit of background to the question :

Person A has given Person B an amount of money over a period of 12 months, on the basis that Person B told Person A that they will repay the money when the sale of Person B's house goes through. The house was in joint names of Person B and Person C.
Person B and Person C received a Final Sale Completion Statement dated 10th April 2019, listing all of the costs (Mortgage Redemptions x 4, Fees, payment to a car finance company etc) and showing a balance payable to Person B and Person C.
Land Registry Entry confirms the amount paid by the buyer and the new registered charge (HSBC) dated 12th April 2019.

So, that would suggest that the sale was completed and all monies would have been paid on or around the 12th April to the respective recipients including the balance payable to Person B and Person C - I do not know what agreement there was between Person B and Person C regarding the share of the balance.

That was 5 months ago and Person A has still not received any money from Person B. Person B has said that there is an issue with getting the balance from the conveyancer because - Quote "one of the loans on the house was sold to another lender during the conveyancing process and they say that they haven't been paid" but Person B cannot give an indication of when (or how or if) this will be sorted out

I have told Person A that perhaps Person B isn't telling the truth (on the basis of 1. the vagueness of Person B's explanations and 2. the time passed since completion) and has no intention of repaying the money. Person A is adamant that Person B is telling the truth.

Given that (as far as I know) the conveyancer has to get a Redemption Statement from each lender with a charge on the property, and (again, as far as I know) this is usually towards the end of the sale process as Redemption Statements have expiry dates, is it remotely possible that the conveyancer could have paid the wrong lender, given the potentially short period of time involved between getting a Redemption Statement from the original lender and making the payment on completion...? Also, would a lender who has issued a Redemption Statement to a conveyancer then proceed to sell the loan to another lender in the interim period without informing the conveyancer...? And wouldn't there have been issues with the Land Registry if the charge had passed from one lender to another, but payment had not been received...?

If any of the above were possibilities, could (or would) the conveyancer withhold payment of the balance amount to Person B and Person C under those circumstances...?

Also listed on the Sale Completion Statement was a line stating "Dealing with Bankruptcy Entries (4 x £75.00)". Is it possible that has any relevance to the delay of 5 months in releasing the balance...?

I have my own views about what has happened (as I am sure readers of this may also have), but regardless of that, I am trying to keep an open mind on the situation, so would appreciate if someone more knowledgeable than I about conveyancing matters could confirm one way or the other...

Thanks

Thrugelmir

Search the individuals concerned in the Gazette.

https://www.thegazette.co.uk/

Something should show up if bankruptcy is concerned.

KartMan

Thanks Thrugelmir - the point about Bankruptcy was mentioned to ask if that potentially had any relevance to the possibility of the conveyancer withholding the balance payment from the sale. I'm not particularly looking to find out about Person B's situation, more concerned that Person A may not get their money back...

davidmcn

It's certainly not unknown for there to be post-completion issues where a lender says they haven't been sent sufficient funds to redeem an account (either because they've made an error in the redemption statement, or the solicitor has made an error) - in which case the solicitor may well hold on to any remaining funds until it's resolved.

And mortgage books can be sold at any time (they're not going to put one account aside just because redemption might be imminent), so potentially that could complicate matters.

In short, the explanations aren't completely implausible, though I would expect person B to be able to produce something in writing from their solicitor backing up their story.

KartMan

Thanks davidmcn - so Person B's explanation is possibly correct, but evenso, would it take 5 months to resolve those kind of issues...? In any, case, thanks for the explanation - time for Person A to ask Person B for that document...!

parkrunner

Ask person C if B is telling the truth and as davidmcn mentioned there should be something in writing to back up B's story.

Thrugelmir

KartMan wrote: »

Thanks Thrugelmir - the point about Bankruptcy was mentioned to ask if that potentially had any relevance to the possibility of the conveyancer withholding the balance payment from the sale. I'm not particularly looking to find out about Person B's situation, more concerned that Person A may not get their money back...

Unusual to have a payment to a car finance company listed on the redemption statement. There's far more to this tale. Than the conveyancer simply withholding funds.

KartMan

The line on the completion statement said 'Billing Finance Redemption' - so I searched 'Billing Finance' on the internet, and they are a Car Finance company who, according to their 'about us' section, "We focus on customers with non-standard credit profiles that may not fit the automated underwriting processes of other lenders". Maybe "Billing Finance Redemption" means something else, and it's just a coincidence that there happens to be a finance company with that name, but it was for a sizeable (5 figure) amount....