One thing we ask from our customers is to be open and upfront with us.
Earlier this year we had a couple who did not give us everything which caused problems and upset when trying to obtain a mortgage.
This was the situation
A couple got in touch to discuss their ability to get a mortgage. We ask customers to provide us with a copy of their credit report and to complete a factfind with their information including details regarding any adverse.
The credit report we received shown us that one of the applicants had a default and a CCJ, they were over a year old. The customers confirmed this was the limit of their adverse in the factfind also.
When we discussed products and options we advised best case scenario would be normal rates but if it fails on the credit score we might have to go to a small not scoring building society whose rates are slightly higher (but not as high as the adverse lender). .
What happened
The clients found a property pretty soon after as they were happy with best case and worst case options.
We submitted a DIP with a high street lender which failed. OK, we thought that might happen so we tried again with a more specialist lender – this too failed! We were completely stumped by this and so we spoke to our account manager to discuss why. Our account manager advised that their system picked up “a lot more than has been declared”.
A little confused as we had a credit report advising of 1 Default and 1 CCJ and confirmation from the clients that this was everything, we suggested we get another credit report from the agency that the mortgage lender used rather than the one we have – which we did…
On that credit report it picked up 7 CCJs and 9 Defaults, which is obviously significantly more than was declared.
The outcome
We spoke to the clients and they denied knowing anything about the extra adverse.
This is frustrating as it is difficult to accuse someone of hiding adverse when it could be a genuine mistake. But at the same time, only knowing about 1 of 16 adverse markers is unusual.
The research stage especially with adverse can take a good few hours, checking the products, checking criteria, discussing with account managers before then making a recommendation. In this case we put aside about 5-6 hours, plus another 2 hours submitting the DIPs and discussing with our account manager and the clients the reasons for it being declined.
It must also be frustrating and upsetting for the clients too. They must have set their heart on a property and potentially told friends and family they were looking at moving so to then have to put everything on hold for 6-12 months cant be nice.
Summary
This sort of thing used to happen a lot. In the end we had no option put to put something in our contract that states where a customer withholds material information, we reserve the right to charge an admin fee to cover the time we have spent.
This part of the contract is put in bold and underlined. It is one part of the contract we hope we never have to charge, which is why we make it stand out. Mistakes happen and thats fine. But in examples like this where there was so much missed off, it is hard to believe it was a mistake.
The one thing we ask from customers is to be open and upfront with us. We are on your side, if you are completely open with us and we make a mistake, your covered. If you withold information or try to hide it, then your not covered and if you incur costs whether that be legal fees, valuation or our fees, they are your costs to bare.
Talk to us, give us the good, the bad and the ugly and we will do our upmost to help you. But most importantly, we will not waste your time. If we cant help, we will tell you and we can try to plan a way forward.