Solicitor exchanged without a mortgage offer in place

Irishpearce26

kcot22 said:

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aren’t. We were set to complete on this transaction on 30th June but it fell through due to our buyers mortgage being withdrawn, so our mortgage funds were returned to the lender (Barclays) while our buyer got a new mortgage in place.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date your buyer did so in retrospect they are liable for any knock on costs as a result of their mortgage being withdrawn and not completing.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

So have you actually exchanged then? If it was simultaneous then you would have completed! Check with your solicitor to determine if you have definitely exchanged.

Thrugelmir

Irishpearce26 said:

kcot22 said:

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aren’t. We were set to complete on this transaction on 30th June but it fell through due to our buyers mortgage being withdrawn, so our mortgage funds were returned to the lender (Barclays) while our buyer got a new mortgage in place.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

So have you actually exchanged then? If it was simultaneous then you would have completed! Check with your solicitor to determine if you have definitely exchanged.

Sounds as if the transaction was aborted at the 11th hour by the buyers solicitor.  

Irishpearce26

Thrugelmir said:

Irishpearce26 said:

kcot22 said:

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

So have you actually exchanged then? If it was simultaneous then you would have completed! Check with your solicitor to determine if you have definitely exchanged.

Sounds as if the transaction was aborted at the 11th hour by the buyers solicitor.  

If they exchanged then my point on the buyers mortgage falling through would mitigate them from losing the deposit?

user1977

kcot22 said:

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.

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

I don't see any need for them to have checked given it's an unusual practice, unless it was in fact the case that Barclays had made it clear to them at the point of returning the funds. There isn't for example any reference to this being their policy in the UK Lenders' Handbook (which is the standard set of solicitors instructions) - see paras 10.7 and 10.9:

https://lendershandbook.ukfinance.org.uk/lenders-handbook/englandandwales/barclays-bank-uk-plc/#C8781

I'd be tempted to say you may have just as much of (or better) a case against Barclays for arbitrarily withdrawing their mortgage offer on those grounds. I take it they hadn't communicated any of this directly to you at the time?

kcot22

Irishpearce26 said:

Thrugelmir said:

Irishpearce26 said:

kcot22 said:

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

So have you actually exchanged then? If it was simultaneous then you would have completed! Check with your solicitor to determine if you have definitely exchanged.

Sounds as if the transaction was aborted at the 11th hour by the buyers solicitor.  

If they exchanged then my point on the buyers mortgage falling through would mitigate them from losing the deposit?

We did not exchange until Friday just gone. We were due to exchange and complete on the 30th June which didn’t happen so we neither exchanged nor completed then. 

It was aborted by the buyers solicitor correct, as no one had read in Barclays terms for their mortgage that they don’t allow for capped stair-casing, but as I said this is by the by and not relevant to the current situation 

fiveacre

Have you reapplied for the Barclays mortgage? There's still time to get it in place.