Solicitor exchanged without a mortgage offer in place

kcot22

Hello,
We are going through a world of hell right now, as on Friday our solicitor exchanged on our purchase without checking our mortgage funds were readily available first, and it turns out they aren’t. We were set to complete on this transaction on 30th June but it fell through due to our buyers mortgage being withdrawn, so our mortgage funds were returned to the lender (Barclays) while our buyer got a new mortgage in place. 

However, it turns out that Barclays have a clause/term/policy whereby if funds are returned to them then you only have 28 days to reapply for the funds before a new application has to be made. So this is where we are.
As we have exchanged, we are liable for our 10% deposit, but surely this cost should sit with our solicitor if the worst does happen, as she exchanged without a mortgage offer technically being in place?
Any advice would be great, as this seems like quite a niche circumstance and I can’t seem to find much historical help to read from.

user1977

Did you know about the Barclays' requirement for a new application?

Did you give authority to your solicitor to exchange?

When is completion due?

kcot22

user1977 said:

Did you know about the Barclays' requirement for a new application?

Did you give authority to your solicitor to exchange?

When is completion due?

We didn’t know about the requirement, it is not in any of our mortgage offer terms that we received. We have spoken with Barclays though who have confirmed this is a term, and that it also would have been communicated to our solicitor when they confirmed our funds had been received back to them. I have requested proof of this comm, awaiting a reply from their delayed completions team.

The wording on the phone from our solicitor was “my aim is to complete on both today, as the sellers have now given us until Wednesday to exchange, so can you please transfer me XX amount as we have to put a deposit forward”. We gave authority in the way anyone would when being provided with conveyancer solicitors services, she is the one in control of checking funds etc etc, not us. 

Completion has now been set for 13th august 

AFF8879

kcot22 said:

user1977 said:

Did you know about the Barclays' requirement for a new application?

Did you give authority to your solicitor to exchange?

When is completion due?

We didn’t know about the requirement, it is not in any of our mortgage offer terms that we received. We have spoken with Barclays though who have confirmed this is a term, and that it also would have been communicated to our solicitor when they confirmed our funds had been received back to them. I have requested proof of this comm, awaiting a reply from their delayed completions team.

The wording on the phone from our solicitor was “my aim is to complete on both today, as the sellers have now given us until Wednesday to exchange, so can you please transfer me XX amount as we have to put a deposit forward”. We gave authority in the way anyone would when being provided with conveyancer solicitors services, she is the one in control of checking funds etc etc, not us. 

Completion has now been set for 13th august 

I’m not necessarily sure this is a legal requirement, but both times I have exchanged contracts in the past it has been VERY explicit. A telephone call and a formal email, on the day itself, giving the solicitor permission to exchange contracts

user1977

kcot22 said:

user1977 said:

Did you know about the Barclays' requirement for a new application?

Did you give authority to your solicitor to exchange?

When is completion due?

We didn’t know about the requirement, it is not in any of our mortgage offer terms that we received. We have spoken with Barclays though who have confirmed this is a term, and that it also would have been communicated to our solicitor when they confirmed our funds had been received back to them. I have requested proof of this comm, awaiting a reply from their delayed completions team.

It's not a policy I've ever heard of, or that makes much sense. I'd generally expect a mortgage offer to remain valid until its original expiry date irrespective of there having been an earlier drawdown/return of funds.

kcot22

user1977 said:

kcot22 said:

user1977 said:

Did you know about the Barclays' requirement for a new application?

Did you give authority to your solicitor to exchange?

When is completion due?

We didn’t know about the requirement, it is not in any of our mortgage offer terms that we received. We have spoken with Barclays though who have confirmed this is a term, and that it also would have been communicated to our solicitor when they confirmed our funds had been received back to them. I have requested proof of this comm, awaiting a reply from their delayed completions team.

It's not a policy I've ever heard of, or that makes much sense. I'd generally expect a mortgage offer to remain valid until its original expiry date irrespective of there having been an earlier drawdown/return of funds.

Yeah we don’t get it either. When I’ve spoken to Barclays though they were quite confident in the fact it’s a term and would have been communicated.

I suppose irrelevant of all that, our solicitor exchanged without checking this first, which surely is not the protocol?

Thrugelmir

kcot22 said:

However, it turns out that Barclays have a clause/term/policy whereby if funds are returned to them then you only have 28 days to reapply for the funds before a new application has to be made. So this is where we are.

Has there been any change of circumstances if there hasn't then a new offer should be forthcoming. 

If the solicitor hadn't drawn the funds down. Then you would have missed the cut-off for the stamp duty holiday and failed to complete. (I assume that's the 30th June reference). 

AskAsk

AFF8879 said:

kcot22 said:

user1977 said:

Did you know about the Barclays' requirement for a new application?

Did you give authority to your solicitor to exchange?

When is completion due?

We didn’t know about the requirement, it is not in any of our mortgage offer terms that we received. We have spoken with Barclays though who have confirmed this is a term, and that it also would have been communicated to our solicitor when they confirmed our funds had been received back to them. I have requested proof of this comm, awaiting a reply from their delayed completions team.

The wording on the phone from our solicitor was “my aim is to complete on both today, as the sellers have now given us until Wednesday to exchange, so can you please transfer me XX amount as we have to put a deposit forward”. We gave authority in the way anyone would when being provided with conveyancer solicitors services, she is the one in control of checking funds etc etc, not us. 

Completion has now been set for 13th august 

I’m not necessarily sure this is a legal requirement, but both times I have exchanged contracts in the past it has been VERY explicit. A telephone call and a formal email, on the day itself, giving the solicitor permission to exchange contracts

yeah, from my experience, they always call and ask you to confirm that you are happy to exchange before doing so.  this is unusual that the OP's solicitors did not call to confirm.

however, i would think it is their job to make sure that the funds are in place or available for completion.

OP - did they also agree a completion date?

kcot22

Thrugelmir said:

kcot22 said:

However, it turns out that Barclays have a clause/term/policy whereby if funds are returned to them then you only have 28 days to reapply for the funds before a new application has to be made. So this is where we are.

Has there been any change of circumstances if there hasn't then a new offer should be forthcoming. 

If the solicitor hadn't drawn the funds down. Then you would have missed the cut-off for the stamp duty holiday and failed to complete. (I assume that's the 30th June reference). 

No, but as it is a new application there is still a chance it may get declined this time. Months have passed since our first offer was given, and as I said that’s by the by, she exchanged without an offer in place which is the issue.

The solicitor drawing down the funds for 30th June is not the reason for the reference, that was purely just to detail that the funds had been requested and sent back. Missing the deadline is not the issue.

Irishpearce26

kcot22 said:

Hello,
We are going through a world of hell right now, as on Friday our solicitor exchanged on our purchase without checking our mortgage funds were readily available first, and it turns out they aren’t. We were set to complete on this transaction on 30th June but it fell through due to our buyers mortgage being withdrawn, so our mortgage funds were returned to the lender (Barclays) while our buyer got a new mortgage in place. 

However, it turns out that Barclays have a clause/term/policy whereby if funds are returned to them then you only have 28 days to reapply for the funds before a new application has to be made. So this is where we are.
As we have exchanged, we are liable for our 10% deposit, but surely this cost should sit with our solicitor if the worst does happen, as she exchanged without a mortgage offer technically being in place?
Any advice would be great, as this seems like quite a niche circumstance and I can’t seem to find much historical help to read from.

Did you exchange before the 30th June? If so you didn't miss the completion date your buyer did so in retrospect they are liable for any knock on costs as a result of their mortgage being withdrawn and not completing.

kcot22

Irishpearce26 said:

kcot22 said:

Hello,
We are going through a world of hell right now, as on Friday our solicitor exchanged on our purchase without checking our mortgage funds were readily available first, and it turns out they aren’t. We were set to complete on this transaction on 30th June but it fell through due to our buyers mortgage being withdrawn, so our mortgage funds were returned to the lender (Barclays) while our buyer got a new mortgage in place. 

However, it turns out that Barclays have a clause/term/policy whereby if funds are returned to them then you only have 28 days to reapply for the funds before a new application has to be made. So this is where we are.
As we have exchanged, we are liable for our 10% deposit, but surely this cost should sit with our solicitor if the worst does happen, as she exchanged without a mortgage offer technically being in place?
Any advice would be great, as this seems like quite a niche circumstance and I can’t seem to find much historical help to read from.

Did you exchange before the 30th June? If so you didn't miss the completion date your buyer did so in retrospect they are liable for any knock on costs as a result of their mortgage being withdrawn and not completing.

No we were doing a simultaneous exchange and complete on the 30th as our buyers solicitor was not ready to exchange any earlier