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Homebuyers Left High & Dry As Lenders Cancel Mortgage Offers

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Homebuyers left high and dry as lenders cancel mortgage offers

Lenders are increasingly withdrawing written mortgage offers just before exchange, reports PPR, leaving chains in disarray and homebuyers and sellers in serious financial difficulties.

Buyers normally assume that a written mortgage offer means their finance is secured. But in fact, lenders are frequently making written offers and withdrawing them; which they are legally permitted to do within the small print. Prior to the credit crunch this was very rare and usually only occurred when the borrower's circumstances changed adversely after the mortgage application was submitted, increasing the risk to the lender.

Over the last few months, however, there has been a notable rise in the number of cases where lenders have withdrawn mortgage offers with no explanation, or attributed it to something as trivial as one missed credit card payment, resulting in the sale collapsing. Since March, Property Portfolio Rescue (PPR) has intervened to save over a dozen chains from collapsing, as desperate sellers urgently need to find a new buyer for their property after a mortgage offer has been withdrawn, causing their existing buyer to pull out of the sale.

Nick Hopkinson, Director of Property Portfolio Rescue, said: ?Frequently lenders are raising people's hopes with mortgage offers which, as far as I can see, they never have any intention of honouring. In fact, I?ve heard of several instances recently of mortgage offers being withdrawn at the eleventh hour after repeated credit checks by lenders have adversely affected a buyer?s credit rating, causing them to fail the loan criteria!

"Banks are simply not open for business apart from to the very best customers with the lowest loan to values, but they are disguising this unwillingness to lend by launching products to the market which have so many clauses and caveats that most ordinary people would have little hope of qualifying.?

PPR is regularly coming across buyers who have succeed in securing a mortgage offer, only to be informed that it has been withdrawn as they liaise with the lender approaching exchange with no explanation given. This is after the buyer has spent significant time, emotional effort and money proceeding with the sale in good faith. This behaviour is causing major stress for sellers who are losing agreed sales as chains collapse, often several months into the process.

?Don?t believe the adverts and rate charts publicised by mortgage lenders as these are mainly a smoke screen to make it look like they are open for business,? says Nick Hopkinson. ?Most banks are still in real financial trouble behind the scenes and are battling to build their reserves and reduce their bad debts as the recession worsens. The UK is effectively seeing mortgage rationing by banks as they cherry pick only the buyers with perfect credit ratings and huge deposits."

http://www.mortgageintroducer.com/mortgage...gage_offers.htm

Therein lies the real truth folks so don't believe a word of all this housing market green shoots nonsense.

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So what are we saying, that mortgage lenders are saying YES to get approval numbers up but have no intention of following it through?

Richard Donnell, director of research for Hometrack, said last week :

“Overall levels of market activity are well down on what would constitute normal market conditions. The willing purchasers that are returning are largely confined to the more wealthy areas of the country and limited to those buying with cash or who require low loan-to-value mortgages.â€

We need to couple this one with this thread :

HPC Link Surveyors Putting Realistic Values on Property

........Surveyors have been accused of undervaluing properties and stifling the property market recovery, according to a new analysis.

Research by the commercial law firm, McGrigors, suggests surveyors are valuing properties up to 20 per cent less than an agreed sales price. It means many buyers need to find a bigger deposit or see their purchase fall through. .......

Wow so much BEAR food in one night I am getting indigestion.

Edited by Sybil13

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"Banks are simply not open for business apart from to the very best customers with the lowest loan to values, but they are disguising this unwillingness to lend by launching products to the market which have so many clauses and caveats that most ordinary people would have little hope of qualifying.?

Lets launch a new 95%LTV mortgage, we'll just make sure no-one qualifies.# :lol::lol::lol:

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I've got a mortgage approved in principle and I'm having second thoughts about going ahead with the offer that was accepted today.

Maybe this will make my decision for me.

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also covered HERE with details of dirty tricks used...

Tax return from accountant? not good enough - we want the original from the tax office.

We're checking your credit rating constantly to make it look like something dodgy is going on so...that your credit rating goes down so you don't qualify for mortgage.

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Guest spp

But..But...But... I must get on the 'pwoperty laddder'!

ha ha the next 6months are going to be fun.

:ph34r:

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If the lenders keep fees or get any kickbacks from valuers or surveyors, it amounts to fraud in my book ... deception for monetary gain.

Certainly no laughing matter for the people who get stiffed with these fees and other moving expenses.

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I wonder how many people use mortgage offers as security to buy at auction? And out of those that do what % of offers are withdrawn after the hammer hits?

left with 30 days to find the full purchase amount.

eeek

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If the lenders keep fees or get any kickbacks from valuers or surveyors, it amounts to fraud in my book ... deception for monetary gain.

Certainly no laughing matter for the people who get stiffed with these fees and other moving expenses.

I know I am a bear of little brain but this is what I can't understand, what is the point of taking property on at peak prices, telling the seller to put the price up when it is not selling when EA's must know that deals are ONLY being done at 30% off peak, and then allowing people to go through the process of sale knowing the offer is going to be withdrawn or the valuer value 30% lower ?

I asked a Q about this last week:

Is Property Really Only Selling 30% off peak

But it was full of bullish responses that concluded I was mad to think that this was so! Nice to have it confirmed this week that property is selling 30% of peak if it is selling at all , and that approvals are only going up because the lenders are lying.

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