Clients’ stress levels going through the roof
Over recent weeks, The Partnership, one of the fastest growing residential conveyancing law firms, has found mortgage lenders reassessing their clients’ mortgage application after they have exchanged contracts, leading to delays in completion, introducing high levels of stress and significant additional costs.
Since the introduction of the Mortgage Market Review (MMR), The Partnership has a number of clients who have already exchanged contracts but their mortgage lender has subsequently insisted on reassessing their financial position. As Peter Ambrose, Director of The Partnership explains; “we have been absolutely shocked to learn that our clients, who had already received their mortgage offer and exchanged contracts based on them, are now being told that they cannot move into their house because their lender is reassessing their finances”.
“In one case this week, we have a client who was due to complete on Monday but has not been able to do so, whilst they wait for the Halifax to confirm that they are willing to lend them the money. Our client has told us that her stress levels are going through the roof, and that she is currently paying a removal company £300 per day to hold all her belongings. Moving house is extremely stressful at the best of times, so this added problem is last thing our clients need.”
Although mortgage lenders have been known to pull mortgage offers after they have been made, Ambrose feels that post exchange is a totally different and much more worrying issue“We have worked on thousands of conveyancing cases and this is the first time we have experienced a situation where the client’s purchase has been put at risk after exchange. Whilst we are currently seeing increasing issues with lenders, these are primarily around restrictive behaviours concerning legal representation and quality control problems with incorrect offers being rejected, but pulling mortgages after exchange is highly unusual. We were genuinely shocked to learn of our client’s plight, and this is not the first time that this has happened over the past few weeks”
One of the direct implications is that the client may be required to pay interest to the seller along with notice fees, in addition to the inconvenience of not being able to move. Ambrose concludes; “it makes us question what we can do to protect our clients in future from such extraordinary behaviour by lenders. This cannot be right.”[email protected]