Completion Money Lost From Mortgage Lender

dteezle

Looking for advice on what to do and who is liable.

My mum was due to complete on a house on Monday 15th April. This has still not occurred as of today Wednesday 17th April. As you would gather this is a huge issue causing immense stress to her and her partner, they are currently hopeless and are being told by their solicitor are racking up costs including interest and compensation from the upward chain and that they are liable for all the costs!

They were porting their mortgage across as well as reducing the size of their mortgage. Their lender essentially treats this as ending one product and starting a new one.

They are second in the chain, their house has been sold on Monday and the solicitors have this money (as well as the redemption from the mortgage redemption from this). 

Now the hold up is the new mortgage money has not been received by the solicitor and therefore they cannot complete on their purchase.

The lender has said funds were issued 2pm on Monday and as far as their concerned the mortgage is active, as of yesterday they said they traced the money and as far as they were concerned it was with the solicitor's bank. 

The solicitor initially blamed their mortgage broker, due to using an outdated "branch" number for an older branch for the solicitor that was closed.

Exchange happened on the 27th March, yet the solicitor on Friday 12th April at 5pm contacted my mum asking to speak to the broker urgently. We think they noticed the error then. Surely the solicitor should have requested funds as soon as exchange occurs?

The solicitor also admitted to noticing an error in the detail and updating these with the lender in the morning of Monday 15th April. However the lender is still still insisting that the funds have been sent to the correct location. They have given my mum a reference number but that's all the proof they say they can provide.

The solicitor's bank is saying the funds are not received and the reference number is not enough to prove the funds are sent and they need physical proof like a screen shot or similar. Lender is saying they can't provide.

Surely the solicitor is liable in this situation, they clearly left it to late to sort the transfer regardless of whether the broker initially put the incorrect details. 

The problem is they have their sale funds and know the solicitor can just deduct the costs from this.

Please help with any advice on how to get the banks to find the funds and what rights my mum has.

user1977

dteezle said:

Surely the solicitor should have requested funds as soon as exchange occurs?

You haven't told us when they requested the funds, but I don't see that's relevant anyway. The funds would not be arriving until immediately before completion - they don't sit in the solicitors' account for weeks in advance.

propertyrental

On the face of it it sounds like the solicitor's error, so their liability. Raise a formal complaint using the published complaints procedure.

dteezle

user1977 said:

dteezle said:

Surely the solicitor should have requested funds as soon as exchange occurs?

You haven't told us when they requested the funds, but I don't see that's relevant anyway. The funds would not be arriving until immediately before completion - they don't sit in the solicitors' account for weeks in advance.

Thanks for responding. Does this not usually occur as soon as exchange occurs? Would this be considered malpractice? I can find this out but like you say Santander said funds were transferred at 2pm on Monday.

tooldle

Funds tend to arrive for completion and from what you say above, the funds were sent for completion to occur on 15th so not a solicitor error.  What does the receiving bank branch say? There are really only two things that could happen, either the funds are with the receiving bank or the monies have been returned / on the way back to the lender. In our last but one move our funds got ‘lost’ in the system for a couple of hours. 

user1977

dteezle said:

user1977 said:

dteezle said:

Surely the solicitor should have requested funds as soon as exchange occurs?

You haven't told us when they requested the funds, but I don't see that's relevant anyway. The funds would not be arriving until immediately before completion - they don't sit in the solicitors' account for weeks in advance.

Does this not usually occur as soon as exchange occurs?

What do you mean by "this"? As I said, the funds wouldn't be sent until shortly before completion. It's not clear that the solicitors were aware the bank had the wrong account details for them.

lika_86

Funds aren't allowed to sit with solicitors for more than a few days. However with a chain I'd expect them to be received in advance of the afternoon of completion. 

dteezle

user1977 said:

dteezle said:

user1977 said:

dteezle said:

Surely the solicitor should have requested funds as soon as exchange occurs?

You haven't told us when they requested the funds, but I don't see that's relevant anyway. The funds would not be arriving until immediately before completion - they don't sit in the solicitors' account for weeks in advance.

Does this not usually occur as soon as exchange occurs?

What do you mean by "this"? As I said, the funds wouldn't be sent until shortly before completion. It's not clear that the solicitors were aware the bank had the wrong account details for them.

As in usually a solicitor will make the request with the lender for the completion funds to be transferred on the proposed completion date once exchange has occurred? Surely this request is not made on the day under normal circumstances or is it? I understand the funds aren't transferred until day of completion

loubel

The solicitor's bank details would have been on the funds request they sent to the lender. When they submitted this is not relevant as you say that funds were released on time, just to the wrong account. The pertinent question is whether the solicitor put the correct bank details on the funds request?

However, regardless as to whether it is the lender or the solicitor in error, the lender needs to speak with their bank to establish when the funds will be returned. If the account they were sent to is closed then this should happen automatically.

housebuyer143

If the bank sent it to the wrong bank details then it will bounce back and at that point they can send the money again. Solicitors can only hold the money for 24-48 hours so they can't have it on exchange. 
Something similar happened to my friend, the money was sent but the solicitor had a banking error and the money wasn't recieved and it was returned to the bank. Their completion was about 3 days delayed over the bank holiday weekend. 

Money isn't lost, so if the solicitor definitely doesn't have it, it's likely on its way back to the bank assuming the details they sent it to are incorrect. 

Who is responsible for the compensation to the other parties all comes down to the issue and who caused it. It's not going to be you though.

user1977

dteezle said:

user1977 said:

dteezle said:

user1977 said:

dteezle said:

Surely the solicitor should have requested funds as soon as exchange occurs?

You haven't told us when they requested the funds, but I don't see that's relevant anyway. The funds would not be arriving until immediately before completion - they don't sit in the solicitors' account for weeks in advance.

Does this not usually occur as soon as exchange occurs?

What do you mean by "this"? As I said, the funds wouldn't be sent until shortly before completion. It's not clear that the solicitors were aware the bank had the wrong account details for them.

As in usually a solicitor will make the request with the lender for the completion funds to be transferred on the proposed completion date once exchange has occurred? Surely this request is not made on the day under normal circumstances or is it? I understand the funds aren't transferred until day of completion

Like I said, I don't see what difference that makes here, if the error wouldn't be spotted until the day when the funds were meant to arrive.