HELP - contiguous land issue - Santander

Devon_Sailor

Hello all

Long time since last on here but after a complete bombshell I don't know where else to turn.

Back in Summer 2019 I secured a 5 year residential mortgage on my house.

It is a converted barn, which was part of the family farm. It is a separate legal entity, properly registered the the Land Registry, and has all the correct easements for access in perpetuity, etc. 

It sits at the top of a courtyard, with main farmhouse to one side and other barns to the other (unconverted, storage space). They are not physically linked (IE no touching shared walls).

Current mortgage inds in September. Started process in March and all went fine, valuer came out, etc. Then nothing heard despite lots of chasing. Two weeks ago they finally came back and said there was an issue with it being contiguous land (IE surrounded by land owned by another family member) and as such they wouldn't lend.

It was referred to a senior underwriter, who has now come back and stated in effect "we never knew that; if we had known, we never would have lent first time, and we are definitely not lending now". 

B*gger...! 

Put aside the fact that they damn well DID know, can anyone recommend or advise a broker or company that will lend???? 

I have no idea what happens now if September roles up and they just pull lending. 

I have checked the Lending Guide which should help shape decisions, and it clearly states that underwriters can, based on risk, chose to lend if all correct legal protections are in place ...which they very much are in this instance. 

I have raised a complaint against Santander for their service, but that's not going to affect this. 

Any advice???

Thanks

D_S

(Location near Plymouth, Devon, if that helps with any recommendations for lender assistance!!!)

MWT

Devon_Sailor said:

I have no idea what happens now if September roles up and they just pull lending. 

Just to frame the urgency of the situation, was this actually a mortgage with a 5 year term, or was this, say, a 20 year mortgage with a 5 year fixed rate period?

If it is the first then they will not 'pull lending' as the term has ended, they are just declining to lend again which is their right.

If it is the 2nd then they may well decline to change the term or offer additional lending, but they would not normally 'pull lending' at the end of the initial 5 year fixed rate period...

Hoenir

Devon_Sailor said:

I have checked the Lending Guide which should help shape decisions, and it clearly states that underwriters can, based on risk, chose to lend if all correct legal protections are in place ...which they very much are in this instance. 

Borrowers cannot dictate to lenders what their internal policies are. If underwriters decide not to lend then it's  a comercial decision. 

Is there something missing from your story. A 5 year mortgage term is extremely unusual. Normally mortgage terms are far longer. With borrowers selecting to take different products over that time frame.  

Devon_Sailor

Hello both - apologies for the imprecise language you're correct in that it's the 5 year fixed element coming to an end. 

I suppose the follow-on questions would therefore be:

- if they are of a view that they "wouldn't lend if they'd have known" can they withdraw a product already signed and agreed (though @MWR it sounds as if that is unlikely)

- I assume that would see me stuck on their extortionate follow-on rate of 8+% forever?!

@Heonir, I agree and I wasn't attempting to dictate to them. I understand it's a commercial decision within their right, merely pointing out that it doesn't seem like any actual assessment has been done for context household income has almost doubled since first signed. We have 5 years of payment history with them, and 2 x secure jobs (military, in effect guaranteed until 55 at least, with death benefits, retirement lump sum payment and military pension ...). 

Kind regards 

D_S

MWT

Devon_Sailor said:

Hello both - apologies for the imprecise language you're correct in that it's the 5 year fixed element coming to an end. 

I suppose the follow-on questions would therefore be:

- if they are of a view that they "wouldn't lend if they'd have known" can they withdraw a product already signed and agreed (though @MWT it sounds as if that is unlikely)

- I assume that would see me stuck on their extortionate follow-on rate of 8+% forever?!

The better question first, is why were they doing a valuation? Were you trying to get an additional advance or were you just hoping to get the LTV down a bit?

I don't see them calling in the loan unless they can reasonably claim they were deliberately misled about the land situation.

I also wouldn't expect this to affect the availability of new products, you should be able to see what is available online : https://www.santander.co.uk/personal/mortgages/existing-customers/change-your-mortgage

ACG

Can you not just log on to your mortgage account and switch products? I dont believe they are allowed to stop without good reason (I dont think this would class as a good reason as ultimately there is no greater risk to them). 

Obviously the bigger issue is whether this will become a problem down the line should you wish to sell. I have no idea as it is not something I have come across before. 

Devon_Sailor

@mwc and @acg - again thank you for replying.

We were looking to take out some additional borrowing, which is why the valuation was involved.

Honest truth, they didn't even discuss, mention, and in fairness we didn't notice (because we were always looking at some additional) the "just swap product" way of doing it .....!

Something I'll go and have a discussion with them about.

MWT

Devon_Sailor said:

@MWT and @acg - again thank you for replying.

We were looking to take out some additional borrowing, which is why the valuation was involved.

Honest truth, they didn't even discuss, mention, and in fairness we didn't notice (because we were always looking at some additional) the "just swap product" way of doing it .....!

Something I'll go and have a discussion with them about.

I would just check online first, you should be able to see the renewal products available to you without needing to talk to them again.

silvercar

ACG said:

Can you not just log on to your mortgage account and switch products? I dont believe they are allowed to stop without good reason (I dont think this would class as a good reason as ultimately there is no greater risk to them). 

Obviously the bigger issue is whether this will become a problem down the line should you wish to sell. I have no idea as it is not something I have come across before. 

It shouldn't be a problem on sale, as there won't be adjoining land owned by family members of the new buyers.

silvercar

MWT said:

Devon_Sailor said:

@MWT and @acg - again thank you for replying.

We were looking to take out some additional borrowing, which is why the valuation was involved.

Honest truth, they didn't even discuss, mention, and in fairness we didn't notice (because we were always looking at some additional) the "just swap product" way of doing it .....!

Something I'll go and have a discussion with them about.

I would just check online first, you should be able to see the renewal products available to you without needing to talk to them again.

But that wouldn't give any additional lending.

Hoenir

Devon_Sailor said:

I suppose the follow-on questions would therefore be:

- if they are of a view that they "wouldn't lend if they'd have known" can they withdraw a product already signed and agreed (though @MWR it sounds as if that is unlikely)

They'll continue to honour the existing mortgage contract. Also new product options as and when they fall due. Nothing beyond that.