Mortgage still appearing on credit report after failed completion

everyfallingcurl

Hi there, wondered if anyone has any advice on how to proceed in getting a new mortgage account 'opening' removed from my credit file asap.

We were due to complete on our house purchase on 27th Sep but unfortunately our buyer pulled out a few days before. Our solicitor had already drawn down our mortgage funds and they were sent back to HSBC a few days later when completion failed to happen.

HSBC have reported the new mortgage account to the credit reference agencies as open, along with the change of address (for all my HSBC products). I've been in touch with HSBC and their response was don't worry it will show as closed next month / if you have an issue raise it with the credit reference agencies.

We've since found a new buyer and now need to apply for a new mortgage. What impact could this phantom mortgage account and address change have on the approval process? I know failed completion is rare but has anyone else suffered the same issue? 

MorningcoffeeIV

It may well no longer be on your files. Lenders see a daily view, not the more common monthly view that consumers have.

everyfallingcurl

In due course it will appear as a closed account, my issue is that I don't think it should show as an opened account in the first place. Having it recorded as an 'account open' misrepresents the situation and therefore gives any future provider an inaccurate picture of our financial conduct.

KittenChops

everyfallingcurl said:

Hi there, wondered if anyone has any advice on how to proceed in getting a new mortgage account 'opening' removed from my credit file asap.

We were due to complete on our house purchase on 27th Sep but unfortunately our buyer pulled out a few days before. Our solicitor had already drawn down our mortgage funds and they were sent back to HSBC a few days later when completion failed to happen.

HSBC have reported the new mortgage account to the credit reference agencies as open, along with the change of address (for all my HSBC products). I've been in touch with HSBC and their response was don't worry it will show as closed next month / if you have an issue raise it with the credit reference agencies.

We've since found a new buyer and now need to apply for a new mortgage. What impact could this phantom mortgage account and address change have on the approval process? I know failed completion is rare but has anyone else suffered the same issue? 

My bolding above - won't this cause you issues as you haven't actually moved?

everyfallingcurl

Yes it will cause issues

HSBC say nothing they can do as the have to report the ‘transaction’. Even though they’ve now fixed the address, the address we never moved to will still always show as a linked address. Potentially could fail future checks based on address history. It seems so wrong and unfair…

eskbanker

everyfallingcurl said:

Yes it will cause issues

HSBC say nothing they can do as the have to report the ‘transaction’. Even though they’ve now fixed the address, the address we never moved to will still always show as a linked address. Potentially could fail future checks based on address history. It seems so wrong and unfair…

I can understand why they'd need to report one transaction (the drawing down of the funds) as that did happen but recording a change of address that didn't happen seems like something to be corrected, not just internally but with the credit agencies too, so perhaps worth logging a formal complaint....

everyfallingcurl

Just to update, here’s the response from HSBC after I asked for escalation beyond their standard complaints team… happy with the outcome:

“We drew down the funds in line with your solicitors request and once funds are released, the mortgage is opened, and we change the address over to the new property. However, I understand from our conversation, that the purchase of the property fell through, and the funds were returned to ourselves.

As I explained, when a mortgage is opened, this does show on your credit file along with the change of address, but as the mortgage funds were returned and your address was changed back, this would also be updated going forward.

I appreciate your frustration that you didn’t benefit from the release of the mortgage funds. While we have a duty to report transactions to the credit reference agencies and haven’t made an error in doing so, I referred this matter to our credit helpdesk for special consideration.

Following a review by them, I’m happy to tell you that it has been exceptionally agreed to update the credit files for both yourself and Mr Xxxxxx, to remove the entries relating to the release and return of the mortgage funds. We’ll also update the files to remove the change of address, but I must make you aware that the timescale for this to be updated by the credit reference agencies is 6-8 weeks, although hopefully they may complete this sooner.”