Proving source of funds

Mohald

Hi, I’m a first-time buyer in full-time employment, and I have a mortgage offer from a lender who is satisfied with everything. I’m currently in the process of purchasing a property, but my solicitor has been incredibly slow and, frankly, incompetent. After more than three and a half months, we’ve only just reached the contract exchange stage—at which point he surprisingly decided to carry out the money laundering checks.

Over the past two weeks, I’ve been supplying evidence and explanations for various transactions listed in my bank statements. Now, he’s asking for a bank statement from an old, closed savings account, which could take 10–15 days to obtain. I offered alternative evidence—such as extended payslips or P60s—but he refused to accept them and hasn’t suggested any acceptable alternatives.

I’d really appreciate any advice on how to resolve this situation or if there’s a way to speed things up.

Devongardener

Is it your solicitor or mortgage lender asking for this?   Solicitors normally want to see proof of your deposit and mortgage offer, not details of your banking history. The lender would need the more in depth information, to move on from a mortgage offer in principle to confirmed offer.

Mohald

Thank you. The lender is happy with everything and already gave me a confirmed offer; the solicitor is doing the check claiming that he needs to have a clear picture of the source of my money. 

grumpy_codger

Devongardener said:

Is it your solicitor or mortgage lender asking for this?   Solicitors normally want to see proof of your deposit and mortgage offer, not details of your banking history. The lender would need the more in depth information, to move on from a mortgage offer in principle to confirmed offer.

I dissagree. Based on my experience, banks mainly want a proof of (the existence of) the depost.
Solicitors are obsessed with AML checks (not their fault) but the degree of obsession varies as the rules are extremely vague and open to interpretation. That's why, based on my previous experience, my first question to a new solicitor was how many months worth of banking history they generally require. For me this was even more important than their total fees. And then, after choosing a solicitor, my first request was to start with AML checks.

Hoenir

Mohald said:

Thank you. The lender is happy with everything and already gave me a confirmed offer; the solicitor is doing the check claiming that he needs to have a clear picture of the source of my money. 

Solicitor performs the checks on behalf of the lender. Solicitor's themselves need to comply with AML rules. 

Three and half months isn't bad for a property transaction to reach the contract exchange stage. 

 

ACG

They need to be satisfied there is no money laundering going on. 
Difficult to say if the solicitor is being OTT or not with so little information. 

But if you have £20,000 coming from one account into another then its not surprising he wants to see something with that account in your name and potentially the build up of funds. Yes, it should have been picked up sooner, but transferring money around, closing the accounts and not keeping statements is just as much on you. Appreciate you may not know the ins and outs of money laundering rules but a solicitor cant pre-empt every eventuality and its not common for people to not have access to build up of funds in less than 2 weeks. 

Chances are the provider has quoted 2 weeks just to allow for post etc. 

If all of this is for £1,000 the the solicitor is probably being a bit OTT - but in any event, it is them who needs to be satsified there is nothing untoward. 

Mohald

ACG said:

They need to be satisfied there is no money laundering going on. 
Difficult to say if the solicitor is being OTT or not with so little information. 

But if you have £20,000 coming from one account into another then its not surprising he wants to see something with that account in your name and potentially the build up of funds. Yes, it should have been picked up sooner, but transferring money around, closing the accounts and not keeping statements is just as much on you. Appreciate you may not know the ins and outs of money laundering rules but a solicitor cant pre-empt every eventuality and its not common for people to not have access to build up of funds in less than 2 weeks. 

Chances are the provider has quoted 2 weeks just to allow for post etc. 

If all of this is for £1,000 the the solicitor is probably being a bit OTT - but in any event, it is them who needs to be satsified there is nothing untoward. 

 Detailed response, thanks.

Have seen people exchanging contracts in 2-3 months.

He has been pursuing me over small transactions like £1-2k. Based on your experience, what alternative forms of evidence can I provide to help resolve this situation?

ACG

I would not normally question £1,000 transactions. But if I seen 10 x £1,000 transactions over the course of a couple of months, I probably would. It is all subjective and the devil is in the detail. 

It is possible to exchange in 2-3 months - sooner in some cases. But with so many different aspects (you, your solicitor, the seller, the sellers solicitor, anyone else in the chain, management company if applicable and so on). Its impossible to commit to a timeframe until you progress.

I cant really answer your question though as the devil is in the detail. I suspect you will need the statements if we are talking about a significant amount of money. You could go in branch to get a copy I assume? Failing that, you need to speak to the solicitor and ask what they will accept. They are the one who you need to keep happy as they are putting their name against your conveyancing. If if goes wrong, they risk their license to trade. 

Hoenir

Mohald said:

ACG said:

They need to be satisfied there is no money laundering going on. 
Difficult to say if the solicitor is being OTT or not with so little information. 

But if you have £20,000 coming from one account into another then its not surprising he wants to see something with that account in your name and potentially the build up of funds. Yes, it should have been picked up sooner, but transferring money around, closing the accounts and not keeping statements is just as much on you. Appreciate you may not know the ins and outs of money laundering rules but a solicitor cant pre-empt every eventuality and its not common for people to not have access to build up of funds in less than 2 weeks. 

Chances are the provider has quoted 2 weeks just to allow for post etc. 

If all of this is for £1,000 the the solicitor is probably being a bit OTT - but in any event, it is them who needs to be satsified there is nothing untoward. 

 Have seen people exchanging contracts in 2-3 months.

That's hardly grounds for calling your conveyancer incompetent though.