Confirmed Mortgage Offer Withdrew - Section 106

ellmo

Hello,

Just wondering if anyone has any information or guidance on this.

I began my remortgage late August knowing that the mortgage rates will be increasing. I used Fluent money as my broker who were really helpful and got my offer confirmed by 27th September with Natwest. At the time of the offer, the rate was 3.59%.

After the offer was signed and confirmed, Enact who were acting on behalf of Natwest requested details on Section 106. I bought my house on affordable housing which this relates too. I sent all the information over within the week but has taken until the 24th November to email the below.

'In regard to the S106 agreement, we regret to advise that it is our position that we do not accept these restrictions on resale , therefore unfortunately we will be unable to proceed with this in place.'

In this time, the rates have gone up twice and the only offer I can get from a different mortgage provider is a rate of 5.04%.

Im not sure where to go with this or if anyone has any advise?

Thanks

JMA74

was your broker aware that there was a s106 on the property? Or that there were any restrictions in any way? 

Natwest havent done s106 for years

ellmo

Im not sure? I didn't even know there was something called a section 106.

They was aware of affordable housing though!

JMA74

what kind of affordable housing is it?  Whats the restriction? 

I am erring on the side of saying that this is a mess caused by the broker using the wrong lender.   If i had an inkling that a property was affordable housing then Natwest would not be on my radar at all. 

ellmo

20% Discount on purchase, has to be sold on affordable market with 20% discount.

There's literally nothing I can do if caused by Broker is there?

ellmo

Is it something Natwest will not budge on?

JMA74

Ask the broker why they recommended Natwest if they knew it was affordable housing.  

If you were my client and I had recommended a lender who doesnt do restricted resale cases for a restricted resale property then I would be desperately trying to find a fix as it could be quite costly.  In theory you need compensating for the difference in what deal you can get now and the best deal that you could have had at the time. 

Even if you didnt give the specific details you could argue that they should have asked as its a very important detail when it comes to what lender to approach

Has the broker responded regarding this yet?   You should have a complaints procedure outlined in the initial documents you were given.   It wont cost you anything to complain

ellmo

They have advised they are trying to speak to Natwest but since then I've heard nothing. Ive left a message and tried calling.

I vaguely remember me mentioning affordable housing during the initial questions. Regardless, I used Fluent for my remortgage 2 years ago and didn't have a problem.  

Is there anything I need to specifically say/outline in my complaint? 
What is the likelihood of receiving compensation in this instance?

ellmo

Thanks by the way!

JMA74

If i was a client I would simply be asking why they chose a lender who wouldnt do the case and say that I want to be compensated for the increased payments you are likely to now be on. 
Fluent Money appear to be a representative of a company called Mortgage Advice Bureau so they will pass your complaint to them.   The initial disclosure should have a point of contact for complaints noted there.    Might be easier to deal with a 3rd party really. 

The goal (if a complaint is upheld) would be to put you back in the position you would have been in had the error not occurred.   Whether thats paying you the difference each month or offering you a lump sum in compensation.   You might find they will try duck out of it and offer less but if the situation is as you describe then I dont see what the defence could be. 

Thats assuming they dont just claim you never told them but i would then argue back that its their job to establish appropriate facts in order to recommend a mortgage.  And if they have done business for you in the past on the same property it makes it harder to defend   

ACG

I think this is a little trickier than JMA seems to suggest. 

If you did not mention it was a S106 or that there were restrictions on the property, I could see them trying to defend the complaint. 

There is plenty in your favour - they have an old file (but relying on them to check an old file is shaky ground in my opinion), briefly mentioning something is going to go in your favour, they should have delved deeper. But I think a lot depends on that conversation. If for example it was with a receptionist who said "you probably need to mention it to the broker for them to look into" then they could potentially argue that they put the onus back on you as the person you spoke to was not qualified.  

I think you might "win" in the complaint, but I am not sure it is 100% cut and dry. 

You need to open the dialogue with Fluent and see what they say. There are times on here where I say the broker is 100% wrong, but I think this could be a little messier and really will depend on the details.