Held up at Mortgage Redemption Certificate Stage.

Colin_Glover

My wife and I are ready to complete on a house purchase for over a week. We're cash buyers. The hold up is the vendors mortgage redemption certificate. The conveyancing solicitors information told us the mortgage is with the major bank I work for. On Saturday I rang our bank's pre completion team to ask a few generic questions as I'm not allowed to ask specifics on a product that isn't mine. 
I asked three main questions. 1) Length of time to send out a redemption certificate 2) what would stop the bank from giving out a certificate 3) What types of mortgages were the bank selling in the year the mortgage was taken out, and 4) what would stop the bank giving permission to sell a property. Answers are as follows. 1) It varies. If the vendors lawyer was on our bank's approved panel, 2-3 hrs, if not and straightforward up to a day, usually by fax, possibly letter. If it was "Complex" (arrears, legal dispute or possible negative equity) it's up to 10 working days. The advisor I spoke to was surprised it hadn't been completed, though I've no idea when or if this has been asked for yet, or at what part of the process it's asked for. 2) Normal repayment or buy to let (house was rented and has been empty for a year or more-vendors are property dealers/landlords) 3&4) Virtually nothing, provided sale price was more than amount owing, or if it less and the bank can see an acceptable (to the bank) guarantee in place the remaining outstanding balance above sale bank can be paid it's fine. If negative equity and no guarantee in place then the bank could refuse to issue a certificate/refuse a sale until a guarantee the shortfall will be repaid is forthcoming. 
So where does that leave us? I know the vendor can't sell without one. My worry is that the censor's either in arrears, or is in negative equity without a guarantee of repayment. If so, where does that leave us? I know that this situation came to light sometime last week (beginning of last week I think), and if there wasn't a problem it should have been sorted by now. Am I jumping to the wrong conclusion or not? Any advice is greatly appreciated.
Regards,
Col.

davidmcn

My experience from the solicitors' side of the fence is that requests for redemption statements (or the statements themselves) often mysteriously disappear into a black hole on the bank's side. I'm sure your colleagues are wonderfully efficient etc etc but I would take their service standards with a pinch of salt.

Otherwise, if your vendor is in arrears or there's some other complication with putting together the statement, that's not a problem from your point of view as long as they're not also in negative equity (and even that's not a problem unless there also isn't a solution, such as them finding funds from elsewhere or agreeing to convert the balance to an unsecured loan). And there's nothing you can do about any of it anyway, other than wait.