Confirmed Mortgage Offer Withdrew - Section 106

ellmo

Hello,

Thanks for all you help. 

I have messaged them informally for now to see what they say.

I will write a complaint on the back of that if I do not get a satisfactory response outlining all the issues and me mentioning the affordable housing to Mortgage Advisor.

E

ellmo

Hello,

Sorry to bump this... I have had a reply from Fluent admitting I advised about affordable housing for withdrawn mortgage and the previous mortgage they sorted for me.

There still refusing to admit any wrong doing though.

I have attached the pictures of the letter received, this only includes first names so hope it doesn't go against any forum policy.

Any help would be appreciated.

housebuyer143

ellmo said:

Hello,

Sorry to bump this... I have had a reply from Fluent admitting I advised about affordable housing for withdrawn mortgage and the previous mortgage they sorted for me.

There still refusing to admit any wrong doing though.

I have attached the pictures of the letter received, this only includes first names so hope it doesn't go against any forum policy.

Any help would be appreciated.

To me it sounds like NatWest will not lend on discounted property schemes full stop, I mean that seems to be the reason NatWest have given for declining it.
I would call NatWest completely anonymously and just pretend you are a new buyer and ask if they would accept discounted property schemes.. Do not mention section 106. 

If they say no, then that is your argument back as you told the broker you were on this scheme from the offset.
If the answer is yes then the error might be yours for not offering up enough information regarding this at the fact find.

ellmo

Thanks for the quick response.

I haven't even heard of the section 106 until it was requested by Enact. In the 2 remortgages complete by Fluent, I've only ever said I'm on affordable house scheme. First remortgage that was fine, but the second time they had had issues.

Should they have researched further into affordable housing? After all they are Mortgage advisors?

Do you believe I have a case with the Ombudsman?

kingstreet

On a Discounted Open Market Value (DOMV) property, the third party (eg local council) owns the share of the property which is never sold. Only the occupant owner's share changes hands. IMHO when Fluent asked if there was any third party ownership, the answer should have been yes. I don't know if describing the property as affordable housing should have alerted them further as this is also used to describe shared equity and shared ownership.

I wouldn't like to call this if the FOS adjudicates.

ellmo

Hello,

See below. This is on the Bury Council website I have just found.

Home Ownership / Discount Market Housing

Homeownership/Discount Market Housing allows you to buy a property on selected sites (subject to availability) with a discount off the full market value, usually ranging between 20% and 30%, e.g. a house worth £160,000 with a 25% discount will be offered to qualifying applicants for £120,000. This is not shared equity or shared ownership (there is no rent or equity loan to repay) and, even though you have been given a discount, you own the whole property. You do not have to repay the discount. However, there is a restriction on the title which means that when you want to sell the property you must sell it on to the next household with the same level of discount.

https://www.bury.gov.uk/index.aspx?articleid=14806

kingstreet

How is the discount secured to prevent the full value of the property being sold?

If Bury is the council concerned, send a copy to Fluent and explain this is the reason for your understanding and why you answered no to the third-party ownership question.

ellmo

I will be speaking to the council to get written confirmation.

On this basis, do they really have a leg to stand on? Surely being Mortgage brokers they should have taken more into consideration like they did in the first remortgage?

Do you think I should go straight to the ombudsman or explain further to Fluent?

kingstreet

Forward your justification to Fluent and ask them for a final outcome letter. Then you can escalate to FOS.

ACG

kingstreet said:

On a Discounted Open Market Value (DOMV) property, the third party (eg local council) owns the share of the property which is never sold. Only the occupant owner's share changes hands. IMHO when Fluent asked if there was any third party ownership, the answer should have been yes. I don't know if describing the property as affordable housing should have alerted them further as this is also used to describe shared equity and shared ownership.

I wouldn't like to call this if the FOS adjudicates.

This is for my benefit as this appears to be something I would learn from...
If there is a S106, does that mean the council own (or are likely to own) a portion of the property? I was always under the impression the owner owned 100%, but there was a restriction on the title deeds. Admittedly I have only ever done maybe 3-4 S106 mortgages. 

Assuming this is the case, I think even I would have been caught out by this.