Financial advisers must be on their mettle to protect the thousands of property buyers being forced to jump last minute hurdles by nervous mortgage lenders.
There is now a significant incidence of mortgage providers claiming they have not seen the necessary documentation for a mortgage to complete.
This is despite the fact it has been sent in good time and nothing has been mentioned until the twelfth hour.
It is not only paperwork that seems to be causing problems, but also issues surrounding lenders getting confirmation that the title of the property is sufficient security for the loan in question.
Lenders need to ensure all of the corners are squared for each and every application, but it seems strange that these problems have never arisen before now.
There are now a significant number of borrowers who are encountering real problems in the run up to completion and given this has never previously been an issue. Sometimes it seems as if lenders do not want to advance the money after all!
The problems that we have experienced with getting the advance was re-enforced for me by anecdotal evidence in several conversations that I had with brokers at Mortgage Expo about the difficulty in getting offers issued that they had been assured were on their way.
This would seem to be particularly prevalent in the sub-prime market.
We have not yet had an advance refused or a transaction fall through because of this, but it is a fact that our clients have only not suffered loss because of increased vigilance on our part.
One is left with the overwhelming impression that some lenders are looking for a way to get out of cases they have already given their commitment on in an attempt to tighten up the quality of their book in the face of wider problems in the credit markets.
The lending fraternity may say they are doing nothing more than is required to ensure everything is in place to make the loan.
But so many “administrative” queries that we have not seen before are now being raised by lenders at 4.30pm on the day before completion, notwithstanding that they have had the certificate of title for seven days.
To help prevent borrowers losing their deposit or paying contractual interest or being sued for breach of contract in cases where barriers are put up, it is essential that advisers make sure everything required for the mortgage application is sent well ahead of schedule and that any paperwork is either sent by fax or recorded delivery, providing clear proof that it is in the lender’s hands.
The coming months are going to be difficult for everyone in the mortgage market, but it is important that borrowers do not suffer unnecessarily. Fastidious attention to detail by advisers and conveyancers alike will help in this battle.
Duncan Samuel is managing director at Convex Conveyancing
The views expressed in this article of those of its author and do not necessarily represent those of IFAonline or any other Incisive Media affiliated organisation.IFAonline
Regtech or fintech
Underperformance still present – for now
15% increase in number of claims paid
Open architecture philosophy
Inflation above 2% for first this this year