Couple lose life savings in housing transaction horror
In an article recently published by the Financial Reporter, it outlined the shocking reality which resulted in one couple losing their life savings, as their housing chain collapsed as a result of a mortgage broker withdrawing their offer.
Abdus Saboor and his wife are faced with a bill of at least £33,000 plus ‘damages’ after their chain collapsed following the exchange of contracts.
Mr Saboor and his wife had a mortgage secured. However, their buyer had their mortgage offer withdrawn by financial institution Santander.
Once contracts have been exchanged the housing transaction is legally binding. This meant the Saboor’s were liable for their 10% deposit to their sellers.
Mr Saboor commented:
“The problems started due to the Covid situation, when my buyer’s lender Santander withdrew their mortgage offer on completion day – while we were loading the removal van! We were willing not to ask our buyer to pau their deposit, but our seller insisted on us still paying our deposit. This money is all our savings from the past seven years. Our account’s empty. We are devastated by this – we have an eight-month old baby.”
The issue that this transaction has brought to the fore, is the fact that mortgage lenders can remove their mortgage offer even after the exchange of contracts.
In the article in the Financial Reporter it states:
“Nor does this predicament appear to be a one-off. Research earlier this year by Butterfield Mortgages suggested that as many as three in 10 buyers whose chains had collapsed, had ended up losing their deposits as mortgage offers were withdrawn post-contract. The Saboors’ case indicates that this is still happening, leaving families’ finances in ruins along with their dreams of home ownership.
“It is widely assumed by mortgage brokers and homebuyers alike that a mortgage deal in place at exchange cannot be withdrawn before completion. It appears in practice that this is not the case. This means that, for a period of between one and two weeks, all buyers in the chain are entirely at the mercy of every lender involved – any one of whom might theoretically pull out.”