Exactly why you don’t want a long gap between exchange and completion!

Sibbers123

https://www.financialreporter.co.uk/features/couple-lose-life-savings-as-buyers-lender-withdraws-post-contract.html?fbclid=IwAR2LKYUTtzjnn7u07s5uSQIGmulSVsrkTn8WX00pKtCvnHXdA1z_42XvS4o

What a nightmare!

Aranyani

Buyer's been naughty, lender has found out, and of course Santander aren't going to tell anybody why they withdrew the offer, the seller has absolutely no right to know! 

Devastating for the rest of the chain. 

strawb_shortcake

I hope the government don't start picking up the tab for cases like this

AdrianC

They could, of course, pursue their buyer for all costs arising from their pull-out.

But there has to be a VERY big question as to why the buyer's lender pulled out post-exchange. That is an extraordinary decision, and suggests something very severe indeed was discovered about the buyer's application.

The article also contradicts itself. First it states (with seemingly no justification) that it's due to Covid. Then it goes on to say...
"Nor does this predicament appear to be a one-off. Research earlier this year by Butterfield Mortgages suggested that as many as three in 10 buyers whose chains had collapsed, had ended up losing their deposits as mortgage offers were withdrawn post-contract. The Saboors’ case indicates that this is still happening, leaving families’ finances in ruins along with their dreams of home ownership."

It's an odd website to be raising this issue, too. What appears to be an IFA trade journal, and nowhere else quickly located via google?

Imelda

This happened on a case in the firm I worked in over 5 years ago - we submitted the certificate of title on exchange and a day later a one line fax saying the offer had been withdrawn. No further discussions. Santander again.
Fortunately, they were not in a chain and their sellers were kind enough to give them longer than the usual 10 working days to find alternative funding, which they did with another high street lender.
It has given me the willies ever since though!

nyermen

If they had another mortgage somewhere else (eg. BTL) there was a bug with Santanders systems that it didnt check that until completion (which was a material change in their eyes).  Doubt it any more, that was 6 years ago.
Apparently this is their criteria (from: https://www.samconveyancing.co.uk/news/mortgage/can-a-mortgage-offer-be-withdrawn-after-exchange-of-contracts-6262)

How can a mortgage offer be withdrawn? (Source: Santander Uk Plc Mortgage Offer)
We have offered you this mortgage based on the information that:

• You (or your intermediary) told us in your mortgage application;
• You authorised us to obtain about you; and
• We have reasonably assumed about the property.

We may withdraw this offer if any of the following circumstances apply and, had we been aware of the true circumstances, we would not have provided the offer to you, or we would have provided an offer of a lower amount or on different terms:

• There is a material change to the facts and circumstances relating to your loan application;

• There has been a material change in your circumstances since you applied for the mortgage which is likely to have a material impact on your ability to afford the loan;

• Where we have instructed a conveyancer they are unable to certify the title to the property in accordance with our instructions;

• There is a change to the condition, value or title to the property or we revalue the property after the date of this offer and such change or the revaluation has a material impact on the suitability of the property as security for the loan;

• We discover that you have intentionally provided us with false, inaccurate or incomplete information as part of your application for the loan or omitted information which we have requested from you as part of your application for the loan;

• We reasonably suspect you are involved in any criminal or fraudulent activity or you are convicted of a serious criminal offence;

• Completion of the offer does not take place by the deadline given at the beginning of this offer; or

• We are no longer permitted to lend the money to you due to our regulator removing or restricting our permission to lend.

Assuming no changes / non-disclosures, I would guess they've triggered the last item.  Maybe it was a high LTV.

scottishblondie

Calling it "an alarming new pitfall in the house buying process, which has arisen seemingly due to the Covid pandemic" is outright wrong.  This has always been a possibility and I've seen people post about it on this very forum several times.  The person in question has done something they shouldn't have and been found out by Santander, banks aren't in the habit of pulling offers from people for no reason at all.  It's very sad for the other people in the chain who have to suffer because of it, but it's pretty unlikely it's down to Covid and I really don't think that it's the responsibility of the public purse to reimburse them.

MaryNB

scottishblondie said:

Calling it "an alarming new pitfall in the house buying process, which has arisen seemingly due to the Covid pandemic" is outright wrong.  This has always been a possibility and I've seen people post about it on this very forum several times.  The person in question has done something they shouldn't have and been found out by Santander, banks aren't in the habit of pulling offers from people for no reason at all.  It's very sad for the other people in the chain who have to suffer because of it, but it's pretty unlikely it's down to Covid and I really don't think that it's the responsibility of the public purse to reimburse them.

Some of the brokers on the forum have a thread discussing the frustrations they face as part of their job. One of the big issues was people being less than honest about their financial history. Chancing their arm in the hope that banks won't find out about a significant black mark on their credit file. So many people seem to think they'll get away with it. 

Also, (while I wasn't intending to take out any credit while my mortgage application was in process) I didn't cop how careful you have to be until I read some posts on this forum. I've read about people buying cars or furniture on finance before completion and then having their offer pulled. After that I was scared to renew my phone contract until after completion.
I have a friend who remortgaged and then tried to take out a loan (loan repayments would have match the reduction in mortgage payments) but couldn't and was really annoyed at his bank. I pointed out that he was lucky it wasn't the other way around.

numbercruncher8

Seems to me the crucial details are missing, but if it was provided it'd make it a non-story.
I would wager that there are more sob stories caused by the opposite - ie exchanging and completing at the same time.

Sibbers123

numbercruncher8 said:

Seems to me the crucial details are missing, but if it was provided it'd make it a non-story.
I would wager that there are more sob stories caused by the opposite - ie exchanging and completing at the same time.

If you exchange and complete on the same day you are not going to lose your 10% deposit (life changing). You'll just have some wasted costs such as solicitor fees etc (not life changing).

MovingForwards

This is partly the reason why exchange and complete on the same day is a very good thing, uncertainty until it's done, but no risk to losing everything.

There will be something that buyer did, which caused the offer to be withdrawn as lenders don't do it for fun.

I also don't see why the government should step in financially, they already spend enough; not always in the right areas.