Completion Money Lost From Mortgage Lender

user1977

dteezle said:

user1977 said:

dteezle said:

user1977 said:

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.

I think the error should have been picked up by the solicitor ahead of the completion date is my point. 

How would they pick it up? You haven't said the solicitors were told about the incorrect bank details in advance. Were they?

Thanks for you responses. Well who is responsible for providing the lender with these details? And who is responsible for checking the details are correct with the lender? I would assume this is part of the solicitor's role, to check all details and documents are correct ahead of the transfer taking place?

It sounds like the lender used whatever bank details they had "on file" for that solicitor. I don't know whether the lender gave the solicitor prior warning of the (wrong) account details, whether the solicitor gave the lender the correct details (and the lender then ignored them), or what. You may wish to find all of this out before assuming anything further.

housebuyer143

dteezle said:

user1977 said:

dteezle said:

user1977 said:

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.

I think the error should have been picked up by the solicitor ahead of the completion date is my point. 

How would they pick it up? You haven't said the solicitors were told about the incorrect bank details in advance. Were they?

Thanks for you responses. Well who is responsible for providing the lender with these details? And who is responsible for checking the details are correct with the lender? I would assume this is part of the solicitor's role, to check all details and documents are correct ahead of the transfer taking place?

It has transpired that on the 5th April, Santander notified the solicitor of the details being incorrect and they were still not updated on the 12th April. They were only updated on the 15th April.

Do you know if the money was sent to the old details or the new ones? Sounds like they didn't update it in time and it was sent to what was on file, but it seems strange to tell them they are wrong and then continue to send it there. That might be why the money was sent on the 15th and not the 12th, because the solicitor realised they hadn't had the money through as expected and looked into it. It's unusual to have the money requested for completion day.

EssexHebridean

It's extremely unusual for a Solicitor to change bank details as it comes with all sorts of issues, not least having to provide new details to all mortgage lenders who the firm is on the panel for! Even if a change was made, I would expect that in much the same way as any other "account switch" money received in error to the old account would be automatically forwarded to the new one for a period of time. 

Santander send their COTs with bank details pre-filled with what they have on file, if those details had changed, you would expect the solicitor completing it to be very aware that this was something they needed to check, and correct if needed!

sheramber

EssexHebridean 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.

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.

When the funds would be requested depends on the timescale between exchange and completion- if there is a clear week, the certificate of title would usually be submitted immediately on exchange. More than that, and it might be done sooner. If there is only a small gap between exchange and completion (for example, thanks to delays with our buyer's solicitors, we ended up with only two days gap) then it would normally be done ahead of completion. 

As a rule, when requesting funds, they would be requested for the day prior to completion - so in the case of your Mum's matter, I would have expected the solicitor to request the funds to be sent on Friday 12th. This also helps to avoid any risk of issues like this arising.  

2pm on completion day would be unusually late for funds to be sent - as a rule the expectation is that funds should be in place first thing so that completion can take place during the morning, through to lunchtime.  I take it Santander are refusing to answer a question from your Mum along the line of "Please confirm when the certificate of title was received you your organisation"? If they won't answer that from her, get her broker to ask the same question. That will help to work through the question of when the request for funds was made. Only once you know that will you be able to establish whether there is any error on the part of the solicitors.

See OP's post 9

It has transpired that on the 5th April, Santander notified the solicitor of the details being incorrect and they were still not updated on the 12th April. They were only updated on the 15th April.

dteezle

@EssexHebridean There was over 2 weeks, exchange occurred on 27th March. 

Santander claim they contacted the solicitor on 5th April to highlight the details were not correct. And that by the 12th they still hadn't received updated details. This was not updated until the morning of the 15th April. 

I think the telling part is the solicitor trying to speak to our broker at 5pm on the 12th.

Who issues COTs? The bank or solicitor? The solicitor did they say they noticed the COT was using the old details and they contacted santander last week to amend it, I don't know if we have the exact date they aren't being forthcoming about that detail.

The bank details are very old, 2015, they should not have been used on the COT. How they got on there I do not know.

The reason I thought it's the solicitors fault is because they should be checking the COT, regardless of whether it's them who issued it or not and they had plenty of time to rectify the issued. 2+ weeks after exchange. 

The money still hasn't been found on either side, Santander are insisting they still sent to the updated details on 15th April at 2pm regardless of the original incorrect details on the COT.

Obviously we just want to get the purchase complete first and foremost and then we want to know what rights we have.

There's been a mix up somewhere and we pay these people; the broker, solicitor and the lender to handle this on our behalf. How can we be liable for these costs? We can't afford them, it's going to cripple us.

We've been on the phone to santander, our solicitor and independent legal advice all day and are still not much further to be completing. 

dteezle

user1977 said:

dteezle said:

user1977 said:

dteezle said:

user1977 said:

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.

I think the error should have been picked up by the solicitor ahead of the completion date is my point. 

How would they pick it up? You haven't said the solicitors were told about the incorrect bank details in advance. Were they?

Thanks for you responses. Well who is responsible for providing the lender with these details? And who is responsible for checking the details are correct with the lender? I would assume this is part of the solicitor's role, to check all details and documents are correct ahead of the transfer taking place?

It sounds like the lender used whatever bank details they had "on file" for that solicitor. I don't know whether the lender gave the solicitor prior warning of the (wrong) account details, whether the solicitor gave the lender the correct details (and the lender then ignored them), or what. You may wish to find all of this out before assuming anything further.

Sorry I wasn't trying to assume, I am just going off the information we have from the relevant parties.

See my post above about timescales santander noticed the error and notified the solicitor

EssexHebridean

The CoT usually gets issued to the solicitor with their copy of the mortgage offer. Checking that the correct bank details are shown should be second nature - along with checking that all other details pre-filled are correct. It sounds like in this case some complacency has crept in and the bank details were not checked. 

I would ask the broker to contact Santander and get them to confirm the precise details that the funds were sent to, and the day and time they were sent. Also that the funds have definitely eft them. If that comes up with the new (correct) solicitor account, I would be telling the solicitor that they needed to instruct their bank to work out where the funds have gone. In either event, your Mum should not be liable for any penalties or interest here - as the error does not in any way seem to be hers,

Have the sellers issued a notice to complete yet, do you know? 

dteezle

EssexHebridean said:

The CoT usually gets issued to the solicitor with their copy of the mortgage offer. Checking that the correct bank details are shown should be second nature - along with checking that all other details pre-filled are correct. It sounds like in this case some complacency has crept in and the bank details were not checked. 

I would ask the broker to contact Santander and get them to confirm the precise details that the funds were sent to, and the day and time they were sent. Also that the funds have definitely eft them. If that comes up with the new (correct) solicitor account, I would be telling the solicitor that they needed to instruct their bank to work out where the funds have gone. In either event, your Mum should not be liable for any penalties or interest here - as the error does not in any way seem to be hers,

Have the sellers issued a notice to complete yet, do you know? 

Thanks for all these response, very helpful.

My mum has contacted Santander and got all this information. They are saying the funds have definitely left them and the fax they sent through (to the solicitor) with the information regarding the transfer had the correct account details. Santander said they have traced the funds and with the solicitor's bank. Although they backtracked on this a little last night and said they are still tracing.
The solicitor has been contacting their bank too (although they have just been speaking to their account manager who does not seem to be very quick on it) however they have been adamant they need more proof from Santander first and the fax isn't good enough. They have now asked for copy of the trace. 
Santander will provide this but only if requested by the solicitor. Anyway solicitor has requested this so hopefully we get this this morning. I can't see how the funds will be missing for much longer.

Yes, sellers issued notice to complete yesterday. The exchange deposit had to be sent to their solicitor by 5pm otherwise further breaches of contract would be incurred. My mum agreed to send this (on advice of solicitor) given she was liable to pay it anyway if the house didn't go through.

kingstreet

dteezle said:

kingstreet said:

If you try to enter inactive solicitor details in the Santander system, it rejects them and you have to establish the correct details before being able to proceed. If Santander has acceptable details in its system and those were the details on the reservation or memorandum of sale, the application would be "submittable."

How do you know this is the case? So even previously valid details would be not pass this check? Do you think it's therefore more likely solicitor's bank that has it but failed to route it?

I've been doing this for a living for 40 years in August. Lenders are expected to keep their solicitor panels up to date. It's an FCA requirement. If the broker can use out of date details, that isn't the broker's fault as they shouldn't be available on the Santander system. In addition, surely the mortgage offer would have gone to the wrong solicitor/branch if there was such an error. Sorry, I'm not going to speculate on where the funds might have gone. Only Santander has the sort code and account number to which it sent the money.

GDB2222

kingstreet said:

dteezle said:

kingstreet said:

If you try to enter inactive solicitor details in the Santander system, it rejects them and you have to establish the correct details before being able to proceed. If Santander has acceptable details in its system and those were the details on the reservation or memorandum of sale, the application would be "submittable."

How do you know this is the case? So even previously valid details would be not pass this check? Do you think it's therefore more likely solicitor's bank that has it but failed to route it?

I've been doing this for a living for 40 years in August. Lenders are expected to keep their solicitor panels up to date. It's an FCA requirement. If the broker can use out of date details, that isn't the broker's fault as they shouldn't be available on the Santander system. In addition, surely the mortgage offer would have gone to the wrong solicitor/branch if there was such an error. Sorry, I'm not going to speculate on where the funds might have gone. Only Santander has the sort code and account number to which it sent the money.

I take it that this sort of thing doesn't happen often?  

I'm hopeful that someone's PI insurance will eventually pick up the tab for this, rather than the OP's mum, but it must be pretty worrying. 


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