Mistake made by Mortgage Broker

C

chico

Guest
My dad applied for a mortgage through a mortgage broker and it was approved and he received an offer letter. All his financial details were supplied to the mortgage broker early in the process and he has signed contracts with the seller based on the offer letter. The broker rang him yesterday to say they made a mistake and did not submit his maintenance payments as part of his outgoings. when they sent his details to the bank The bank noticed this when they got the separation agreement. There is no question that the broker knew of this information from the start but made a mistake and did not supply it to the bank. Now even though everything is ready to go, the bank now won't send the cheque to this solicitor because of this problem. Apparently the offer letter from the bank does not say that the loan is subject to receiving the separation agreement.

The solicitor is on his side but has advised that my dad may be open to being sued by the sellers because contracts have been signed and are legally binding. Not to mention the fact that he has ordered about €10k worth of furniture etc for the house.

My feeling is that this is a mistake of the mortgage broker's doing and they need to sort this out with the bank. Saying that I don't know anything about the legal situation here.

The mortgage broker is saying that they can still get the loan by applying to a sub-prime lender which of course is going to increase the repayments significantly so is not an option.

Has anyone been in a similar situation in the past or know what the legal position on this might be?
 
The mortgage broker is subject to investigation by the Financial Services Ombudsman. Taking a complaint is free, and the ombudsman can award up to €250,000 in compensation.

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Its all boils down to what your fater put on the application form, did he say he was seperated? If not then its his fault.If he did then he must have a case against the bank as thay did'nt look for further information, prior to loan offer, your comment suggests this is'nt the case.
 
He did say he was separated on the loan application which is why the bank came looking for a copy of the separation agreement.
 
K Look at the loan offer or was it just an approval in principal (AIP), If it was a full loan offer, I think you have a case against the bank.Surprised your broker hasnt done this or did he pass on the information to the bank? If not get your solicitors on to him//her.
 
What bank is it?

How did it get to this stage?
Seems strange that they issued the loan offer without requesting information re. the maintenance payments before.
And the fact that they didn't request it on the loan offer is also very odd.

What made them request it subsequently?

It does sound as if the broker did mess up, but the priority here is to get your father approved with either the same bank or a different one so he can close the deal asap.
 
The letter was definitely an Offer letter and not an AIP. The reason the bank looked for the separation agreement at this stage was to prove that he qualified as a first time buyer. Information about the maintenance payments was also on the letter and I guess they noticed that and started asking questions. The bank will probably say the Offer is void as they were not provided with full information on application. At this point the manager at the Mortgage Broker is due back from leave on Monday so he is going to wait until then to talk to him directly. Thanks for all the advice so far.
 
Sorry the only reasons the bank look for the seperation agreement is to confirm the party has a right to purchase on their own and to confirm if and what amount the maintenance payments are. This would normally be in the special conditions of the offer letter.By the way a bank can pull an offer letter at any time! Read the small print of general terms and conditions, although this is unusual. Maintenace payments do affect your ability to repay the mortgage, sorry.Still a lot of unanswered questions here.
 
I believe that if you have bought a house in the past but are separated and have left the family home then you qualify as a first time buyer. I assume the bank need to have proof of this at some point to show that you don't need to pay stamp duty. Obviously maintenance payments will affect ability to repay ... the point is that we thought this was taken into account already because the Mortgage Broker had been informed.
 
It's nothing to do with the bank whether stamp duty is payable or not. Who completed the mortgage application form? As well as declaring your marital status you must also declare any outgoings and all forms specifically ask about maintenance payments. Either there has been non-disclosure which would invalidate the loan offer or there has been an oversight by both the broker or more importantly the underwriter who makes the ultimate decision about how much of a mortgage is possible given stated income and outgoings.

Sarah

www.mortgagesoverseas.com
 
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