HSBC Declined Mortgage

TheSpectator

MoodyAboutMortgages said:

MWT said:

MoodyAboutMortgages said:

HSBC have straight declined the application and will not even put it in front of an underwriter. The reason they have stated is something on our credit report doesn't meet their criteria - we have checked our reports, both are 999 not even a late payment, they are spotless, our affordability isn't the issue either. They say they cannot tell us anymore, so we have had to raise a complaint.

Use somewhere like checkmyfile.com to check all the important credit agencies, not just Experian. Do look through all the details and especially the associations and fraud alerts.

MoodyAboutMortgages said:

My only thought on why this may be is that my income has been unstable the last 12m due to maternity leave, bonus months, and redundancy (I have a new job and have proved this). But they won't let me explain and evidence the reason for income fluctuation, if that's even the problem.

Are you already working at the new job and is the new salary reflected in your HMRC records?

If there are differences between what you have told them about your current salary and what HMRC are showing that might cause issues.

I am still on paid gardening leave until the end of Dec, start the new job at the beginning of Jan so no gap in employment or pay, I have based everything off my new salary as it's slightly less as I am dropping a day, but affordability is still ok and I have provided my last payslip and my new contract which they were happy with and met their criteria so I don't think it's specifically that.

So not actually started the job......that changes everything tbh. Will also concern other lenders.

ian1246

MoodyAboutMortgages said:

movilogo said:

can we take this to the ombudsman and what are the chances of claiming any of this back?

Almost no chance. I went to Ombudsman for a car loan related complaint. They were useless. They simply check if lender followed their process. 

If HSBC won't lend you just go to a different lender. 

That's what I expected to be honest, whilst we appreciate HSBC has the right to lend to who they wish, as we have an existing fixed rate mortgage in place to send a further borrowing application for a house move straight to decline with no explanation given is poor conduct. They have us over a barrel because we now either, can't move or have to pay an early redemption charge and higher interest with a new lender – the total of these costs is C.£15000.00 and either way HSBC get paid so I guess they don't care. If they could give a legit reason I would swallow my pride and accept it, but they haven't.

What do the terms and conditions say on your existing mortgage with regards to porting the mortgage? See if by not providing a reasonable explanation for the decline they are in breach of those conditions which set out your right to port? 

Hoenir

ian1246 said:

MoodyAboutMortgages said:

movilogo said:

can we take this to the ombudsman and what are the chances of claiming any of this back?

Almost no chance. I went to Ombudsman for a car loan related complaint. They were useless. They simply check if lender followed their process. 

If HSBC won't lend you just go to a different lender. 

That's what I expected to be honest, whilst we appreciate HSBC has the right to lend to who they wish, as we have an existing fixed rate mortgage in place to send a further borrowing application for a house move straight to decline with no explanation given is poor conduct. They have us over a barrel because we now either, can't move or have to pay an early redemption charge and higher interest with a new lender – the total of these costs is C.£15000.00 and either way HSBC get paid so I guess they don't care. If they could give a legit reason I would swallow my pride and accept it, but they haven't.

What do the terms and conditions say on your existing mortgage with regards to porting the mortgage? See if by not providing a reasonable explanation for the decline they are in breach of those conditions which set out your right to port? 

It's new mortgage application subject to the lending criteria at the time. There's no enshrined contractual right in the old contract for an existing customer to be granted a new mortgage and the product currently held to be transferred. 

kingstreet

"HSBC criteria;-

Basic income - Proof required

The latest one months' worth of payslips for all customers.

Where a customer is unable to evidence their basic income in accordance with these requirements, the application will not be able to proceed."

Did you have a broker establish your circumstances would be acceptable prior to the submission of an application?

MoodyAboutMortgages

kingstreet said:

"HSBC criteria;-

Basic income - Proof required

The latest one months' worth of payslips for all customers.

Where a customer is unable to evidence their basic income in accordance with these requirements, the application will not be able to proceed."

Did you have a broker establish your circumstances would be acceptable prior to the submission of an application?

I went direct with a HSBC mortgage advisor who advised my contract was fine, however I have since spoken with a broker who said HSBC won't lend without a payslip - so it sounds like they should have never have let the application proceed and that they gave incorrect advice. I'm still waiting on confirmation on whether this is the issue with the application though.          

MoodyAboutMortgages

Update that may help others in the future: Our complaint is ongoing and the case is now with an underwriter, which is what we wanted, for a person to have a look. 
I only got to this stage because I quoted the following regulation - HSBC were absolutely not forthcoming with this.

"The UK GDPR gives people the right not to be subject to solely automated decisions, including profiling, which have a legal or similarly significant effect on them.  These provisions restrict when you can carry out this type of processing and give individuals specific rights in those cases." One of the examples it gives is a declined loan application, further info here.
What does the UK GDPR say about automated decision-making and profiling? | ICO

Hoenir

MoodyAboutMortgages said:

Update that may help others in the future: Our complaint is ongoing and the case is now with an underwriter, which is what we wanted, for a person to have a look. 
I only got to this stage because I quoted the following regulation - HSBC were absolutely not forthcoming with this.

"The UK GDPR gives people the right not to be subject to solely automated decisions, including profiling, which have a legal or similarly significant effect on them.  These provisions restrict when you can carry out this type of processing and give individuals specific rights in those cases." One of the examples it gives is a declined loan application, further info here.
What does the UK GDPR say about automated decision-making and profiling? | ICO

You are barking up the wrong tree. In effect you are suggesting that HSBC cannot decide upon their commercial lending criteria and programme this into a computer to stream line their application process. In your instance at least a minimum of one month's payslips. Instead someone has to manually look at the application before declining it. Makes no sense at all.  

Nailer99

I'll share my own experience. This was 15 years ago so hopefully processes have improved by then but...

I was gobsmacked when Nationwide (who I already had a mortgage with) rejected my application for a new mortgage to staircase a shared ownership flat to full ownership, on the basis of a failed credit check. Like you, I had a spotless credit history.

Nationwide gave me no helpful information ("computer says no") but I was able to work out that they were using Experian as their credit rating agency. On downloading my Experian report I found it was massively incomplete, and didn't even include my current Nationwide mortgage. In effect, it looked like I had never borrowed any money in my life! I got on the phone to Experian to query this and to their credit they spotted the error almost immediately. My information had been split between multiple different files on their system, all with my name but with different variants of my address. They unified the files and the very next day, my Experian file had all of my information.

Fortunately, the next mortgage I applied for was accepted, and the happy ending is that the rate was much lower than the mortgage I had originally applied for with Nationwide.

My advice to you is to look carefully at your credit files, and not just for missed payments, also look for missing information. Also, don't assume that another bank will treat you like HSBC has.

MoodyAboutMortgages

Hoenir said:

MoodyAboutMortgages said:

Update that may help others in the future: Our complaint is ongoing and the case is now with an underwriter, which is what we wanted, for a person to have a look. 
I only got to this stage because I quoted the following regulation - HSBC were absolutely not forthcoming with this.

"The UK GDPR gives people the right not to be subject to solely automated decisions, including profiling, which have a legal or similarly significant effect on them.  These provisions restrict when you can carry out this type of processing and give individuals specific rights in those cases." One of the examples it gives is a declined loan application, further info here.
What does the UK GDPR say about automated decision-making and profiling? | ICO

You are barking up the wrong tree. In effect you are suggesting that HSBC cannot decide upon their commercial lending criteria and programme this into a computer to stream line their application process. In your instance at least a minimum of one month's payslips. Instead someone has to manually look at the application before declining it. Makes no sense at all.  

Not barking up the wrong tree at all, of course they have the right to decide their own lending criteria, but under GDPR article 22 the customer has the right to human intervention and to have an automated decision reviewed by a person. In my case it was absolutely worth the fight because having had it reviewed by a person the mortgage has been agreed and we have the offer. I am not encouraging people to appeal everything, but it's important to know your rights as a customer and to fight for it where you really believe you have a case.

MoodyAboutMortgages

Nailer99 said:

I'll share my own experience. This was 15 years ago so hopefully processes have improved by then but...

I was gobsmacked when Nationwide (who I already had a mortgage with) rejected my application for a new mortgage to staircase a shared ownership flat to full ownership, on the basis of a failed credit check. Like you, I had a spotless credit history.

Nationwide gave me no helpful information ("computer says no") but I was able to work out that they were using Experian as their credit rating agency. On downloading my Experian report I found it was massively incomplete, and didn't even include my current Nationwide mortgage. In effect, it looked like I had never borrowed any money in my life! I got on the phone to Experian to query this and to their credit they spotted the error almost immediately. My information had been split between multiple different files on their system, all with my name but with different variants of my address. They unified the files and the very next day, my Experian file had all of my information.

Fortunately, the next mortgage I applied for was accepted, and the happy ending is that the rate was much lower than the mortgage I had originally applied for with Nationwide.

My advice to you is to look carefully at your credit files, and not just for missed payments, also look for missing information. Also, don't assume that another bank will treat you like HSBC has.

This was one of our first thoughts, we checked our reports with the three main credit report providers and all spotless, which made me more determined to appeal the decision - you'll see my last comment we've finally had some success!