Mortgage offer retracted during house sale due to Santander error

Thrugelmir

rachello13 said:

Somerset_La_La_La said:

Wow, this is terrible - I'd hope given what's gone on, the complaints team would take a sensible view and override the new decline - but it depends on the defaults of the default etc - how far outside of policy is it (or if it's due to low score, just how far short are you - 1%, they might consider... 70% short, probably not). I think getting the process moving elsewhere is probably preferable to waiting around to see what Santander do though.

I can see how it was missed - I've picked up a few instances before where somebody has keyed the wrong number/postcode (and some of them I'm certain have been done deliberately - as you say, it is a loophole to try and hide credit). There are various systems and checks in place (manual and automated), but they aren't foolproof.

Underwriters may also check, but a lot of the time it wouldn't occur to them to check each address 1 by 1. If you've got a pass credit score, then you've got a pass..... Presumably there was plenty of credit at current address, which means they were happy they did have an accurate picture and didn't probe too deeply - if, for example, they reviewed your case and you only had 1 x current account and a water bill, they'd check everything a hell of a lot more carefully and the error would come to light.

The only thing I would ask is were you given a copy of the application to check and sign? Although they shouldn't have made the error, they could argue you are at fault for not picking it up if the error was visible on any documentation they've sent you.

I do hope you get it sorted elsewhere though, sounds like you've made a good start with the new broker - if the broker is so informed about your adverse, when it gets to a new lender they'll be able to push it through in the best possible way for you

No we were not given anything to sign that had any previous address detail on. 

Then the information on file was incorrectly reported by the creditor concerned. Santander are in no way at fault.  

[Deleted User]

Thrugelmir said:

rachello13 said:

Somerset_La_La_La said:

Wow, this is terrible - I'd hope given what's gone on, the complaints team would take a sensible view and override the new decline - but it depends on the defaults of the default etc - how far outside of policy is it (or if it's due to low score, just how far short are you - 1%, they might consider... 70% short, probably not). I think getting the process moving elsewhere is probably preferable to waiting around to see what Santander do though.

I can see how it was missed - I've picked up a few instances before where somebody has keyed the wrong number/postcode (and some of them I'm certain have been done deliberately - as you say, it is a loophole to try and hide credit). There are various systems and checks in place (manual and automated), but they aren't foolproof.

Underwriters may also check, but a lot of the time it wouldn't occur to them to check each address 1 by 1. If you've got a pass credit score, then you've got a pass..... Presumably there was plenty of credit at current address, which means they were happy they did have an accurate picture and didn't probe too deeply - if, for example, they reviewed your case and you only had 1 x current account and a water bill, they'd check everything a hell of a lot more carefully and the error would come to light.

The only thing I would ask is were you given a copy of the application to check and sign? Although they shouldn't have made the error, they could argue you are at fault for not picking it up if the error was visible on any documentation they've sent you.

I do hope you get it sorted elsewhere though, sounds like you've made a good start with the new broker - if the broker is so informed about your adverse, when it gets to a new lender they'll be able to push it through in the best possible way for you

No we were not given anything to sign that had any previous address detail on. 

Then the information on file was incorrectly reported by the creditor concerned. Santander are in no way at fault.  

My understanding was that applicant previously lived at (say) number 6. During sales process Santander have typed previous address as number 7.

System hasn't picked up correct prior address (uncommon, but not impossible) during credit search and so hasn't found the adverse data and the initial score was artificially high. If face to face sale, it will be more difficult to 'prove' what was said (either way) - but as OP has actively contacted Santander to advise of the mistake, I'd hope FOS would rule with OP.

[Deleted User]

I suspect FOS would rule with OP to have a payment made on distress and inconvenience. 
However, FOS stance is always to put people back to the position they would have been in had the mistake not happened. 
In this case, had the address been keyed correctly then it would have declined. I very highly doubt they would force santander to lend

So any payment above D&I would be limited to costs incurred as a direct result of believing OP had a valid mortgage offer.
If a new lender picks the case up then realistically there is no additional loss 

So if it was me I would probably just take whatever apology payment was offered. Maybe decline the first offer and take the 2nd.
I can't see FOS offering more than D&I

NewShadow

Deleted_User said:

So any payment above D&I would be limited to costs incurred as a direct result of believing OP had a valid mortgage offer.
If a new lender picks the case up then realistically there is no additional loss 

I agree costs would likely be minimal, but there's potential to argue for more than a token amount, depending on how the specifics as they play out over the next few weeks. 

I would think it reasonable to claim the cost of a second valuation report/broker/application fee, if required. 

Plus, worst case, a number of costs could be quantified if the sale were now to fall through due to the seller objecting to the time taken/loss of upto seven weeks... and there's an argument, if not a strong argument, to be made in similar situations, if the process had progressed beyond exchange, should any alternative offer be at a significantly worse rate/the OP could evidence/argue they would not have offered/exchanged without the mistake made by the lender. 

Retired_Mortgage_Adviser

Deleted_User said:

So if it was me I would probably just take whatever apology payment was offered. Maybe decline the first offer and take the 2nd.

I fully agree than the FOS will not order Santander to lend. I don't know the exact contents of OP's complaint to Santander but I don't think they are asking for that remedy.

However, I respectfully disagree that the OP should walk away with whatever Santander offers. OP has literally nothing to lose by taking it to the FOS, any token offer of compensation from Santander will still be there.

Additionally, Santander will pay £550 for the case if it is ruled upon by the FOS, irrespective of which side it comes down on.

Imho, there must be consequences for the very poor way that this was handled by Santander, and this requires very little effort on the OP's end, with no cost.

twilightzone

I don't understand how they can get away with this.
Mortage offers are binding, and according to the FCA handbook the lender cannot cancel or re-underwrite unless the borrower has given false information, or there has been a “material change to the facts and circumstances” of the offer..
Why aren't they held to account for breaching the MCD?  the FCA have government powers, i would report it to them also although i believe they are unable to take on personal cases they will still log this breach.