Mortgage declined due to the warranty company - Who is at fault, if anyone at all?

mayihelpyou

Hi I'm hoping someone will be able to give me some direction.

In September I approached a mortgage broker and provided them with all information around the two buy to let properties that I put reservation fees on for him to source me a mortgage. We agreed how much deposit I had and off he went. He submitted an application to The Mortgage Works and then after I had credit checks against me etc, he had to apologise for not realising that they required a larger deposit on new builds (I didn't have a spare £20k to add to the pot) and so we agreed to go with another lender.

The process restarted for me getting a mortgage. However, 12 weeks later I've been advised that this mortgage company has now declined me as ABC+ are not on their panel for the warranty providers. I've lost out on £780 on the valuations. The broker advised its the builders fault and morally they should provide me with the refund. The builders are stating its not and have advised its the mortgage brokers fault.

I am annoyed that the application went so far without checks around the warranty company on the new builds which has resulted in my losing all this money and so was wondering if anyone else has had this issue and if so I'd appreciate some guidance. I am looking to obtain a refund from someone for the valuations that I have paid. I spoke to Precise (the second mortgage company) this morning who advised this was the only reason for the decline. 
Thanks in advance for any input you maybe able to give.

theartfullodger

Think it's the fault of whoever decided to spend that money without fully checking they'd be able to get a mortgage.  These things happen, it's part of life that surely we all expect & account for?

My experience of TMW was even more fun.  At the time on the application form they asked which bank account the mortgage monthly payments would come from: I put down my 2nd main account which I use for B2L matters, not my main account (so I don;t give eg tenants my bank details - identity theft etc etc..).  About a month later they came back very cross saying there was no evidence of my pension income (I've got 5 pensions into my main account).  Long-drawn out explanation & more evidence. Then they cam back stating as I didn't live at the address I'd given they were rejection me again.  The broker I was using had transposed one character in the post code & TMW had concluded I lived in a different street. Yawn yawn yawn.. Think it took 4 months... Eventually got mortgage, sold this tax year...

GDB2222

It’s not the builder's fault, as he’s entitled to get a warranty from wherever he likes, or even have none at all.

 Has the broker been negligent? Probably not, as he can’t check everything before submitting the application. Did you specifically draw the warranty to his attention?  Has he fallen below the standard you would expect from an ordinary competent broker?

 I don’t expect you to be happy with that answer, and hopefully someone else will give you an answer you prefer.

davidmcn

What Precise will accept as a warranty would have been apparent to anybody who knows to check here:
https://lendershandbook.ukfinance.org.uk/lenders-handbook/englandandwales/precise-mortgages-charter-court-financial-services-ltd/#C8922
- but I don't know at what stage the builder revealed who the warranty would be provided by.

AdrianC

Why is somebody "to blame"?

Did the broker know who the warranty provider was when the application went in?
Do the lender publish their panel of approved warranty providers?

As for the first application, this year of all years, lenders are constantly increasing their maximum LtV. A year ago, we were getting back towards 95% LtV being relatively straightforward. Now, 85% max is mainstream.

mayihelpyou

Hi, thanks for all your replies. I do appreciate it.

When I put in the reservation fee and got all the information from builder (reservation form, warranty information etc). I submitted this to the broker along with the reservation document for him to find me a mortgage for the two buildings. For me, I had hoped, as I had paid the broker a fee, he would have obtained a mortgage that was suitable for me.

I feel let down by this as he made an error once by doing an application to a mortgage company knowing I didn't have enough deposit for them so when the mortgage in principle came through he had to apologise for not realising they needed a bigger deposit and then this happened, when he had the information right at the start. The mortgage broker has said in all the mortgage applications he has done previously he's never had this issue around warranties before, so I'm guessing he didn't think to check the panel.

kingstreet

General brokers tend to treat newbuild as a minor issue, unless you are a specialist nthen  you understand the additional requirements and knowledge needed. Knowing the LTV limits and finding out lender restrictions on flats, warranties etc is part & parcel for a specialist, often overlooked by general brokers. Two mistakes which have cost you time and money warrants a complaint.