Has my mortgage broker been negligent?

user1977

propertyrental said:

coles88 said:

propertyrental said:

coles88 said:

user1977 said:

coles88 said:

My actual mortgage offer came through on 30th October and is valid until mid-March 2023. 

And what does it say about this 21 January end date for the valuation? I doubt the lender can rely on an unwritten expiry date for their valuation, unless that was clearly flagged up in the offer as being a condition.

The mortgage offer doesn't mention the 21st January valuation date anywhere. It says,

'This document was produced on the basis of the information that you have provided so far and on the current financial market conditions. The information below remains valid until 19th March 2023. After that date, it may change in line with market conditions.'

That seems at odds with

 

coles88 said:

Hi there........On Tuesday my solicitor forwarded on an email from my lender saying that the valuation they had was only valid until 21st January.

So unless there is something else in the original offer that time-limits it, I would go back to the lender and contest this.

And if necessary also query why the solicitor acting for the lender allowed you to exchange.

When you say the solicitor acting for the lender - is that my solicitor? 

Yes usually, bit not always.

I deliberately worded it like that, even though it's probably the same solicitor, because he's wearing two hats, acting for two different clients, with separate obligations to each of you.

Though it is your solicitor who advises you on whether it's a good idea to exchange contracts, not the lender's solicitor.

user1977

GDB2222 said:

user1977 said:

coles88 said:

user1977 said:

AskAsk said:

coles88 said:

AskAsk said:

i would think it is your solicitor that is at fault for allowing you to exchange without checking that you will have the mortgage money.  solicitors check that the money is available before they exchange.  sounds like something has gone wrong, so you should go back to your solicitor.

Thanks - I hadn't considered that. My solicitor has said a few times that he's never come across this happening before. Either way, I assume there's nothing I can do until I hear back on the valuation - at which point if it's bad news and I have to pull out, I can then pursue a complaint?

your claim would be against your solicitor and they in turn would sue the broker if he told them that the money was available and it wasn't, if he acted for the bank.

No, if the solicitor wanted anything else confirmed they'd be contacting the bank, not the broker.

There was some added paranoia during Covid times with solicitors asking lenders if they were really really sure they'd definitely issue the funds...but none of that ought to be necessary, in principle everybody ought to be able to rely on the mortgage offer, and not anticipate the lender pulling it because it's reached an arbitrary date when they need a new valuation.

But am I right in thinking that they can pull it because of this arbitrary date, even if it's no fault of mine? 

In a strict legal sense, yes they can. But they shouldn't be doing it and it would be worthy of a complaint if they do.

Really? In a strict legal sense the mortgage offer is not binding?

It’s 25 years since I last applied for a mortgage, but I thought the mortgage offer was binding unless there were material changes in the borrower’s circumstances. Otherwise, how could anyone possibly exchange binding contracts to purchase without a binding mortgage agreement?

Put it this way - I can't recall seeing a case where a borrower (successfully) claimed that they were contractually entitled to get the loan funds on the basis of a (residential) mortgage offer. In practice you'd be complaining about being treated unfairly etc under the banking regulatory process (which is easier and gives you greater scope for sitautions which deserve compensation).

peterhjohnson

GDB2222 said:

It’s 25 years since I last applied for a mortgage, but I thought the mortgage offer was binding unless there were material changes in the borrower’s circumstances. Otherwise, how could anyone possibly exchange binding contracts to purchase without a binding mortgage agreement?

I remember when I first bought a house about 40 years ago, my mortgage offer said that they reserved the right to withdraw it at any time up until completion. I raised the issue with my solicitor who said not to worry!

AskAsk

peterhjohnson said:

GDB2222 said:

It’s 25 years since I last applied for a mortgage, but I thought the mortgage offer was binding unless there were material changes in the borrower’s circumstances. Otherwise, how could anyone possibly exchange binding contracts to purchase without a binding mortgage agreement?

I remember when I first bought a house about 40 years ago, my mortgage offer said that they reserved the right to withdraw it at any time up until completion. I raised the issue with my solicitor who said not to worry!

that's all very well for them to say!  it's not them that loses the deposit if things go wrong!!

Sarah1Mitty2

coles88 said:

Hi there. 

Writing this in a world of panic so please be kind... 

I exchanged on my first house purchase on Monday but on Tuesday received an email which has turned into chaos. 

I had the offer on the house accepted in June 2022, my mortgage application was started on 30th June and the valuation for the mortgage was done on 25th July. There was then a long delay in proceeding because the valuation was lower than my offer, and while the seller was happy to negotiate, she was still looking for a place to purchase so felt like she couldn't agree on a price without knowing how much she was going to spend. This delay went on until the end of September, when my lender said that if the application was not progressed within 7 days they'd be closing it which, lo and behold, spurred the seller into agreeing a price with me. My actual mortgage offer came through on 30th October and is valid until mid-March 2023. 

Exchange happened on Monday just gone; again, there's been long delays because of the seller looking for her next home but we agreed a completion date of 24th February. On Tuesday my solicitor forwarded on an email from my lender saying that the valuation they had was only valid until 21st January. They'd seek an extension but if that wasn't possible I'd need to pay £75 for a new valuation. Today I was told that the valuation extension has been declined due to the market not being the same. I've paid the money and now await the re-valuation. I'm obviously petrified that if the house is valued any lower than it originally was, I'm committed to the purchase price and will have to find the money from somewhere. 

I was 100% unaware that the valuation for my house had an expiration. I've checked the valuation report itself and there is no mention of it only being valid for a certain duration and equally my broker didn't make me aware. I've been through our email chain with a fine tooth comb and I asked about deadlines several times, being told we had 'plenty of time'. In fact, in December I spoke to my broker and said we were looking at a February completion. Their reply was:

 'It would be great to exchange before Christmas, wouldn’t it? Yes, your offer expires on 19th March so completion needs to have taken place before then.'

Clearly they ought to have known that a February completion would have been impossible based on the valuation expiring in January and should have advised me as such; not telling me that I needed to exchange by 19th March. 

I'm now hoping that the valuation matches the previous valuation and if not, that the drop is minor. If not I'll have to pull out of the sale and forfeit my deposit which would be devastating. Should that happen, and based on the above, I'd be looking for compensation from my broker for allowing me to exchange when they ought to have known that completion couldn't take place as planned - but am keen to hear other opinions. Have they been negligent? 

Thank you

Here it sounds like there are crossed wires somewhere, missed communication?

coles88

Sarah1Mitty2 said:

coles88 said:

Hi there. 

Writing this in a world of panic so please be kind... 

I exchanged on my first house purchase on Monday but on Tuesday received an email which has turned into chaos. 

I had the offer on the house accepted in June 2022, my mortgage application was started on 30th June and the valuation for the mortgage was done on 25th July. There was then a long delay in proceeding because the valuation was lower than my offer, and while the seller was happy to negotiate, she was still looking for a place to purchase so felt like she couldn't agree on a price without knowing how much she was going to spend. This delay went on until the end of September, when my lender said that if the application was not progressed within 7 days they'd be closing it which, lo and behold, spurred the seller into agreeing a price with me. My actual mortgage offer came through on 30th October and is valid until mid-March 2023. 

Exchange happened on Monday just gone; again, there's been long delays because of the seller looking for her next home but we agreed a completion date of 24th February. On Tuesday my solicitor forwarded on an email from my lender saying that the valuation they had was only valid until 21st January. They'd seek an extension but if that wasn't possible I'd need to pay £75 for a new valuation. Today I was told that the valuation extension has been declined due to the market not being the same. I've paid the money and now await the re-valuation. I'm obviously petrified that if the house is valued any lower than it originally was, I'm committed to the purchase price and will have to find the money from somewhere. 

I was 100% unaware that the valuation for my house had an expiration. I've checked the valuation report itself and there is no mention of it only being valid for a certain duration and equally my broker didn't make me aware. I've been through our email chain with a fine tooth comb and I asked about deadlines several times, being told we had 'plenty of time'. In fact, in December I spoke to my broker and said we were looking at a February completion. Their reply was:

 'It would be great to exchange before Christmas, wouldn’t it? Yes, your offer expires on 19th March so completion needs to have taken place before then.'

Clearly they ought to have known that a February completion would have been impossible based on the valuation expiring in January and should have advised me as such; not telling me that I needed to exchange by 19th March. 

I'm now hoping that the valuation matches the previous valuation and if not, that the drop is minor. If not I'll have to pull out of the sale and forfeit my deposit which would be devastating. Should that happen, and based on the above, I'd be looking for compensation from my broker for allowing me to exchange when they ought to have known that completion couldn't take place as planned - but am keen to hear other opinions. Have they been negligent? 

Thank you

Here it sounds like there are crossed wires somewhere, missed communication?

How/where do you mean? I’ve been through all communication with my broker (which has all been via email) and my solicitor (same, all via email) and there’s no mention. My solicitor says he’s never had this occur in 10 years of practice and my broker is escalating to his MD as he says the lender didn’t warn them of the impending valuation expiry… 

Sarah1Mitty2

coles88 said:

Sarah1Mitty2 said:

coles88 said:

Hi there. 

Writing this in a world of panic so please be kind... 

I exchanged on my first house purchase on Monday but on Tuesday received an email which has turned into chaos. 

I had the offer on the house accepted in June 2022, my mortgage application was started on 30th June and the valuation for the mortgage was done on 25th July. There was then a long delay in proceeding because the valuation was lower than my offer, and while the seller was happy to negotiate, she was still looking for a place to purchase so felt like she couldn't agree on a price without knowing how much she was going to spend. This delay went on until the end of September, when my lender said that if the application was not progressed within 7 days they'd be closing it which, lo and behold, spurred the seller into agreeing a price with me. My actual mortgage offer came through on 30th October and is valid until mid-March 2023. 

Exchange happened on Monday just gone; again, there's been long delays because of the seller looking for her next home but we agreed a completion date of 24th February. On Tuesday my solicitor forwarded on an email from my lender saying that the valuation they had was only valid until 21st January. They'd seek an extension but if that wasn't possible I'd need to pay £75 for a new valuation. Today I was told that the valuation extension has been declined due to the market not being the same. I've paid the money and now await the re-valuation. I'm obviously petrified that if the house is valued any lower than it originally was, I'm committed to the purchase price and will have to find the money from somewhere. 

I was 100% unaware that the valuation for my house had an expiration. I've checked the valuation report itself and there is no mention of it only being valid for a certain duration and equally my broker didn't make me aware. I've been through our email chain with a fine tooth comb and I asked about deadlines several times, being told we had 'plenty of time'. In fact, in December I spoke to my broker and said we were looking at a February completion. Their reply was:

 'It would be great to exchange before Christmas, wouldn’t it? Yes, your offer expires on 19th March so completion needs to have taken place before then.'

Clearly they ought to have known that a February completion would have been impossible based on the valuation expiring in January and should have advised me as such; not telling me that I needed to exchange by 19th March. 

I'm now hoping that the valuation matches the previous valuation and if not, that the drop is minor. If not I'll have to pull out of the sale and forfeit my deposit which would be devastating. Should that happen, and based on the above, I'd be looking for compensation from my broker for allowing me to exchange when they ought to have known that completion couldn't take place as planned - but am keen to hear other opinions. Have they been negligent? 

Thank you

Here it sounds like there are crossed wires somewhere, missed communication?

How/where do you mean? I’ve been through all communication with my broker (which has all been via email) and my solicitor (same, all via email) and there’s no mention. My solicitor says he’s never had this occur in 10 years of practice and my broker is escalating to his MD as he says the lender didn’t warn them of the impending valuation expiry… 

There will be something hidden away in the "terms and conditions" that says they can do more or less anything to protect themselves from market fluctuations, it is their money after all?