What would you do if the Mortgage Company pulled out after exchange?

chriz1000

I’ve heard a lot of people mention mortgage companies withdrawing offers after exchanging. I’m surprised we haven’t heard a lot more from these people as I would scream to the high heavens if I lost over £20,000 because the lender changed its mind.
Are people worried about mortgage companies pulling out at the last second? I’m self employed and completing in 2 weeks time, it has certainly crossed my mind. Imagine you have given up your rented accommodation, plowed all your savings into your deposit, stamp duty and fees and are left with nothing. What could you do about it? Surely you are entitled to some compensation?

silvercar

Your solicitor shouldn't let you exchange without a definite mortgage offer.

AFAIK, it would only be withdrawn if further checks revealed false information in your application or a change in circumstances.

Jorgan_2

silvercar wrote: »

Your solicitor shouldn't let you exchange without a definite mortgage offer.

AFAIK, it would only be withdrawn if further checks revealed false information in your application or a change in circumstances.

Correct. Most lenders require solicitors to do a bankruptcy search within 28days of completion, I think thats the time frame, if new information comes to light they are within their rights to pull the offer. This will have been explained in the small print on the mortgage offer, which the buyer will have read, understood & signed. If the buyer hasn't been truthful with the lender, they can shout & scream all they want, but they have usually put themselves in this position.

chriz1000

That’s not what people are saying though, they are saying because of the credit crunch lenders are moving the goal posts and in some cases even after you have exchanged.
I don’t know if its just people panic rumoring of if this is actually happening to be honest.

I have nothing to hide, my income is good and my credit files immaculate. Its just always a worry being self employed as we are usually the first to be hit.

Jorgan_2

Can you post links to such threads?

People maybe getting confused between the mortgage agreement in principal no longer being valid, which is entirely different to the mortgage offer being withdrawn.

chriz1000

http://forums.moneysavingexpert.com/showthread.html?t=756631#10
I’ve read a few similar posts recently along with seeing a lot of lenders withdrawing mortgage packages.

Jorgan_2

chriz1000 wrote: »

http://forums.moneysavingexpert.com/showthread.html?t=756631#10
I’ve read a few similar posts recently along with seeing a lot of lenders withdrawing mortgage packages.

I read that post earlier & to me it looks like the agreement in principle has been withdrawn/altered, not a formal mortgage offer. The post talks of a a mortgage being offered & then an offer being put in on a property. Agreements in principal are not worth the paper they are written on, IMO, as no references have been taken & the borrower doesn't have to show wage slips to get an AIP offered.

UK007BullDog

Jorgan wrote: »

Can you post links to such threads?

People maybe getting confused between the mortgage agreement in principal no longer being valid, which is entirely different to the mortgage offer being withdrawn.

I would agree with that. They are probably getting things confused or they are just long nose storey tellers in a forum.

Jorgan_2

UK007BullDog wrote: »

I would agree with that. They are probably getting things confused or they are just long nose storey tellers in a forum.

Story tellers on the internet! Whatever next?:D

SouthCoast

I have heard of mortgage offers being withdrawn after exchange, but I guess that they were LIE-to-BUY mortgages.

Jorgan_2

I've handled two sales that have had the mortgage offers withdrawn after exchange, one buyer turned out to be bankrupt, the other hadn't disclosed numerous loans. In a perfect world the offers would never have been issued.