Default removal query

shad0w17

Hello,

I am looking into the feasibility of getting a default removed, as it appears to be the only issue blocking me from obtaining a mortgage (according to my advisor).

The default was on a private loan w/Nationwide (approx. £5,000) in Aug 2017. It was subsequently paid in full in Feb 2019. What was curious to me at the time was that I was two months in arrears, made a payment or two, but then defaulted.

At the time life was a bit of a whirlwind, so my recollection isn’t the greatest, but looking at my credit report, I have two missed payments in May and June, paid in July and the default in August. This aligns better with my memory, where I received one letter, made a payment right away, and then less than a week later had another letter to say I would be penalized (however, this did not say a default was imminent), so I made another payment – however, very quickly I had another notice to say I was in default. It was all a bit strange, and it was like the letters came and were issued so close together but weren’t up-to-date when they were sent (namely, the balances owed didn’t include the payments that had been made). I bank with Nationwide and the PL was through them, so it was quite easy for me to log on and make an immediate payment when the letter came – at the time I remember being so confused that the letters were so out of date in terms of the balances owed, but also felt guilty as I had never had an issue missing payments and just wanted to do what I could to get back on track.

From what I understand, defaults are usually issued when payments are missed for 3-6 months. I don’t even think this could have been more than two months, which is reflected on the credit report (checkmyfile shows this across the board). Unfortunately, I do not have a statement from that time that shows the payments I made or the old letters. But, with what is on my credit file, my mortgage advisor and others suggested I pursue it as the value of the default is high and is impacting my ability to be considered for a mortgage (I'm now self-employed). 

Nationwide have provided me an address to mail them a letter, but I wasn’t sure if there was any other information I should include in my letter, or if it might be better to call. 

Thank you.

finalfantasist

The default appears to be correct (although pretty much the bare minimum at 3 months.)

You would have needed to make up the missing payments and make the July payment on time to avoid the default.

You could ask them to get remove the default as a gesture of goodwill as they were a little quick to default you but they have no obligation to do this, and you have nothing to bargain with them (the loan was paid off in full already.)  It also seems likely you'll end up replacing it with 18 months of arrears which might not be any better.

You might be better off finding a broker who deals with subprime rather than trying to argue this with Nationwide.

shad0w17

finalfantasist said:

You would have needed to make up the missing payments and make the July payment on time to avoid the default.

Thanks for you response. Just to clarify: In July, I had made payments to meet the arrears of May/June, as well as pay the July amount. 
I am not sure there would be 18 months of arrears as I continued to make my payments (and overpayments) even when it was in default, before I decided just to pay off the balance. 

finalfantasist

shad0w17 said:

finalfantasist said:

You would have needed to make up the missing payments and make the July payment on time to avoid the default.

Thanks for you response. Just to clarify: In July, I had made payments to meet the arrears of May/June, as well as pay the July amount. 
I am not sure there would be 18 months of arrears as I continued to make my payments (and overpayments) even when it was in default, before I decided just to pay off the balance. 

If you made them on time  then I'd complain as that does appear to be jumping the gun somewhat.

sourcrates

Even if you make a complaint, and have it upheld, your account must be marked in some way to reflect the fact you missed payments, the default will be replaced with something else, most likley arrangement to pay markers, or just show as being in arrears.

These are marginally better than a default, but won`t improve your situation that much.

FYI circumstances where default removal can be concidered, are few and far between, usually only happens with payday loan complaints where the entire entry is stricken from your file.

MEM62

shad0w17 said:

I am looking into the feasibility of getting a default removed, as it appears to be the only issue blocking me from obtaining a mortgage (according to my advisor).

The default was on a private loan w/Nationwide (approx. £5,000) in Aug 2017. It was subsequently paid in full in Feb 2019. 

As an aside, I would be questioning your broker.  In normal circumstances, one settled default should not stand between you and a mortgage.  I would suggest that there are either other factors at play or he is not doing a very good job.

shad0w17

Thanks all - the issue is that I am a first-time buyer and self-employed with one year accounts. With my second year accounts coming up, I may be in a better position, even with the default. 

MEM62

To quote our broker this morning "mortgage underwriters are bring brutal with self-employed people at the moment".  My wife and I are re-mortgaging as our five year fixed rate has come to an end.  She is a Director of a company that her and her brother own and therefore considered self-employed.  We have actually been advised to declare that she is not working on the application as, such is the current level of documentation and hoop jumping needed in respect of her income, the application will be a lot simpler and a lot quicker if we make the application based on just my salary.  

badwidcash

Hello I wondered if anyone could offer me some advice. Back March 2014 I defaulted on a loan to which I have paid off on March 2018. Now my default should have been removed last year March as that would have been my 6 years financial jail time complete. However according to check my file, the default will remain until August 2022. I was horrified by this and called the company immediately who agreed it was a mistake and I would have to make a complaint via my credit reference agency who would contact them to remove it. Now for some stupid reason a person in the office has told my credit agency the default against my name is correct and therefore I cannot appeal. This happened on two occasions. I went mad, I called the company again and asked them why they were doing this I told them they have an obligation to remove it and again I was told it would be removed and it hasn’t. I’m so fed up, I’m not trying to get credit or anything but I have literally worked my behind off to clear the debt and they do this to me. Is there anyone I can complain to against this company for them to get rid of this smear against my name? Any advice is much appreciated. 

Kind regards 

shad0w17

MEM62 said:

To quote our broker this morning "mortgage underwriters are bring brutal with self-employed people at the moment".  My wife and I are re-mortgaging as our five year fixed rate has come to an end.  She is a Director of a company that her and her brother own and therefore considered self-employed.  We have actually been advised to declare that she is not working on the application as, such is the current level of documentation and hoop jumping needed in respect of her income, the application will be a lot simpler and a lot quicker if we make the application based on just my salary.  

Yes, and I can see why. Fortunately, my business has stayed afloat and my 2020 went much better than expected so every broker that looked at my books hasn't been concerned about that aspect. 

MEM62

shad0w17 said:

MEM62 said:

To quote our broker this morning "mortgage underwriters are bring brutal with self-employed people at the moment".  My wife and I are re-mortgaging as our five year fixed rate has come to an end.  She is a Director of a company that her and her brother own and therefore considered self-employed.  We have actually been advised to declare that she is not working on the application as, such is the current level of documentation and hoop jumping needed in respect of her income, the application will be a lot simpler and a lot quicker if we make the application based on just my salary.  

Yes, and I can see why. Fortunately, my business has stayed afloat and my 2020 went much better than expected so every broker that looked at my books hasn't been concerned about that aspect. 

My wife's business is surviving OK.  It is a high end bathroom supply and installation business.  Although business has not been a good as they usual, they are financially sound and have been fortunate that people are still spending with them. However, sales stop when we are in lockdown so the P&L will take a hit.