I have heard lots of stories about mortgage lenders withdrawing their mortgage offers on completion day in the last 6 months or so. There is also lots of speculation as to why this might be happening.
One conspiracy theory is that CIFAS departments of mortgage lenders are scouring the internet to build a comprehensive database of unregistered property sourcers, BMV agents etc. including personal names and business names which they then cross reference with mortgage applications.
Of course, if this is happening it never be admitted officially as CIFAS is to the UK mortgage industry what Area 51 is to the US military. We all know it’s there and we think we know what it does in terms of sharing confidential information between lenders but it will never be admitted.
The scary thing is that once you are on this secret database (if indeed it exists) you may not be aware and may not be able to get off it.
Gossip on the street is that if mortgage lenders get any whiff of a deal being associated with an unregulated property sourcer or the words Instant Equity, BMV etc. they are just pulling offers. Apparently some of the major lenders have the FSA all over them at the moment so that might have something to do with this too.
I have absolutely no sympathy with landlords and agents who are trying to pull the wool over the eyes of the lenders but the risk affects all purchasers. How would a landlord know about this secret database for example, never mind whether their agents, brokers or solicitors are on it?
The most logical strategy we can suggest to landlords who are purchasing at the moment is to exchange contracts and complete on the same day.
If your mortgage lender does pull your mortgage offer then take a good look in the mirror and if you know you have done nothing wrong yourself, chances are one of your associated professional contacts might well be to blame? Whatever the reason it’s important to note if you have exchanged and lose your mortgage offer before completion, you will also lose your 10% deposit and run the risk of being sued for breach of contract.
Top Tip – exchange and complete as a simultaneous transaction
If the existence of this secret list is ever officially uncovered then there may well be a lot of finger pointing and litigation flying around. However, if your name ends up on this list because you have been operating as an agent without complying with the Estate Agency Act 1979 or you have been dealing with such an agent then you might not have a very good claim.
This “secret database” may well be nothing but a myth of course but you have been warned.