Can a bank lose a property valuation report ?

A friend of mine requested the original property valuation report from a bank from which he obtained a mortgage. He got a written reply from the bank stating they cannot locate same. The valuation report dates back to 2004. The question I am asking is, are the bank telling the truth or are they just not bothered enough to locate it ? Surely, the bank would have to scan the valuation report onto their computer system for internal audit purposes, in case external audit wanted to track the mortgage application from start to finish. Anyone have any views or experience of this ?

Not sure if scanning was being used back then, the file may just be in storage and it's possible for a document to get lost. Your friend would have got a copy of the valuation report with their own loan offer, where is it, surely not lost!

No, he never got the valuation report, I believe the only bank that gave the valuation report with the loan offer as a matter of course at this time, was, would you believe, PTSB.

However I did find this legislation under the Consumer Credit Act 1995.

Valuation reports.

123.—(1) Where a mortgage lender—

(a) gives approval to the making of a housing loan; or

(b) refuses to make a housing loan,

the applicant for the loan shall, at the time he is notified of the approval of the loan or of the refusal to give such approval, be furnished by the mortgage lender with a copy of the report (“valuation report”) made to the mortgage lender on the value of the security.

(2) The mortgage lender shall attach to or include in every valuation report furnished to an applicant in accordance with subsection (1) a note stating clearly the nature and purpose of the report.

(3) There shall be no charge made to the applicant for a valuation report if the loan application is refused.


Therefore, it would seem to me, that the Bank must have a copy of the valuation report as they would not send the original to the borrower.

Of course they should have a copy but documents do get lost, mortgage files can be big folders of stuff and they are cleared out and packed up and sent off to storage, sometimes things go astray.

I don't agree that lenders were not sending out copies of the valuation report in 2004, the piece you have quoted clearly states they must send out one.

As a courier,I shifted hundreds of boxes of mortgage application files from head office,where they were running out of room,to a branch which had an empty stockroom.
There was no cataloguing or inventory and the boxes weren't sealed,with papers spilling out of the boxes in my van.Obviously, I scooped them up into the emptiest box before delivering them .
The boxes were then rammed in this too small stockroom in no order.
So,do I believe that stuff could get lost-of course!

Monbrieta,

No, at this time, many banks did not send out valuation reports with the loan agreement, this will probably be backed up by other posters. My friend still has the mortgage with the bank. I just find it unusual that the bank cannot lay their hand on the document in question.

Vandriver,

What bank's head office was that ?

But what you are saying then is that banks were ignoring in 2004 legislation that was there since 1995 telling them send out copy reports?

I left banking in 2009 and for a long long time before that valuation reports were sent out, it was definitely not just a few years.

Out of curiosity I just checked my own loan offer from 2001 and the copy valuation is with it.

Now this doesn't excuse the bank losing it but it does happen as poster above says, files are brown folders and not sealed so things can fall out and end up in another file or even be misfiled in the first place, similar names etc. What is your friend trying to check on the valuation? The info may be on the bank system in another format if it is insurance values/property value/comments.

Banks regularly request back boxes of files from storage, it's no big deal, there is no reason to believe the bank just can't be bothered to look, they probably have got back the relevant box of files covering your friends name and the valuation is not in it, it happens.

For many years, the banks had an embargo on the destruction of paper records due to various tribunals. That has now been lifted and all of the banks are going through a destruction phase and it is possible that the report has gone as part of that. In many cases, the banks are only obliged to hold records for 6-7 years, depending on the record. Storing all that paper was a massive cost, for example, most banks were holding almost every cheque and piece of paper that had come across their counter for the last 15 years. That ran to 100s of millions of items.

Banks are only now starting to invest in digital archives, but much of it is for new records without any bank scanning. I've been in the store rooms of banks and branches in the past, usually they can be a bit of a mess. I wouldn't say it is deliberate in this case that they can't find the item in question, more a case of human error or it may have been destroyed

Monbretia said:

But what you are saying then is that banks were ignoring in 2004 legislation that was there since 1995 telling them send out copy reports?

I left banking in 2009 and for a long long time before that valuation reports were sent out, it was definitely not just a few years.

Out of curiosity I just checked my own loan offer from 2001 and the copy valuation is with it.

Now this doesn't excuse the bank losing it but it does happen as poster above says, files are brown folders and not sealed so things can fall out and end up in another file or even be misfiled in the first place, similar names etc. What is your friend trying to check on the valuation? The info may be on the bank system in another format if it is insurance values/property value/comments.

Banks regularly request back boxes of files from storage, it's no big deal, there is no reason to believe the bank just can't be bothered to look, they probably have got back the relevant box of files covering your friends name and the valuation is not in it, it happens.

Click to expand...

Monbrieta,

He is suing the bank for fraudulent misrepresentation, the bank are aware of the legal action and the various valuation reports form part of the evidence against the bank. In all, the bank cannot lay their hand on any of the 9 valuations reports for 9 separate mortgages that this man has with the bank. I think the word convenient springs to mind.

Monbrieta,

The bank however can produce scanned copies of the various loan agreements. Strange that.

Well that puts a different kind of slant on it! Would the valuers have copies on file?

Yes, they do, but they do not have the physical valuation report for three of the properties as they destroyed the physical records, ( entitled to do same, due to passage of time and the fact that they ran out of physical storage space ). The values only has skeletal records on computer in relation to these three properties. However, I believe the valuer is willing to give direct evidence before a court. He is of the belief that the bank has to have the valuation reports, especially since they were able to furnish my friend with the mortgage agreements. ( seemingly the valuation report is attached to mortgage agreement ).

Depending on the bank of course but I don't think you can say they should have them just because they would be attached to the mortgage agreement. The valuation would actually be with the mortgage application file which would (should) also contain the original valuation report and a copy of the mortgage offer. The actual signed agreement usually goes back through the solicitors office so ends up in the same file, definitely not necessarily attached to a valuation though.

I know where I worked the original valuation would be sent to HO with the mortgage application with a copy kept in the office file. HO would send out the loan offer with a copy of valuation to customer. The HO files were usually scanned but there was still a physical copy in branch. The branch files would then be cleaned out periodically and irrelevant documentation removed and the rest sent off to storage, not sure how long they kept it there for.

Daddyman,

I will now refer you to Distant Marketing of Consumer Financial Services Regulations, in particular to section 6, please note the highlighted field.


PART 2

PRE-CONTRACT REQUIREMENTS FOR DISTANCE CONTRACTS FOR THE SUPPLY OF FINANCIAL SERVICES

Supplier to give consumer certain pre-contract information

6. (1) Within a reasonable time before a consumer is bound by a distance contract for the supply of a financial service, the supplier shall give the consumer the information specified in Schedule 1.

(2) The supplier shall—

(a) make known to the consumer the commercial purpose of the contract, and

(b) give that information in a way that is clear and comprehensible, taking into account the means of communication used, and

(c) in giving that information, comply with all enactments and rules of law that—

(i) require good faith in commercial transactions, or

(ii) provide protection to those who are unable to give their consent, such as minors.

(3) For the purposes of paragraph (2)(b), information is given in a clear way only if it—

(a) is easily, directly and at all times accessible to the consumer of the financial service concerned, and

(b) can be stored by the consumer in a durable medium.

(4) In giving information about the contractual obligations that would arise under a proposed distance contract for the supply of a financial service, a supplier shall ensure that, as far as reasonably practicable, the information accurately reflects the contractual obligations that would arise under the law presumed to be applicable to the contract assuming it were to be entered into.

(5) A supplier shall keep in a durable and tamper-proof form a copy of all information that has been given to a consumer in relation to a distance contract or proposed distance contract for the supply of a financial service.

(6) A distance contract for the supply of a financial service to a consumer is not enforceable against the consumer unless this Regulation is complied with.

Now, referring back to section 123 of the Consumer Credit Act 1995, about the requirement to supply the consumer with the valuation document, and the fact that most mortgage agreements that I am aware of, contain a contractual clause to state that the application must be accompanied by a valid valuation report which is acceptable to the bank and which will form part of the terms and conditions of obtaining the loan approval. Then it possible for a Judge to find that the failure of a bank to furnish a consumer with this valuation report is a breach of this regulation 6(5) and therefore the mortgage agreement is unenforceable as per regulation 6(6).

Interesting, isn't it.

Was this distance marketing? Did he never deal with an actual person?

Look up SI 853/2004, it applies to all consumer mortgage applications, unless the bank's CEO and yourself signed the mortgage agreement at the same time, in the same room. Arthur cox and Matheson refer to same as regulations that must be complied with, when enforcing securities ( see legal issues with Irish residential mortgages )

Sure you're sorted so, they can't find the valuation, he doesn't have to pay!

Monbrieta,

I' m not sorted at all, but maybe my friend will be. It's a little bit more complicated than what your last post implies. For a Judge to deem the mortgage contract unenforceable under these regulations, he/she has to deem the failure to supply the information as deliberate and that such failure did prejudice the consumer.