London-based sole broker Roy New claimed that he had received an agreement in principle from Preferred but that it was refused due to an underwriting error.
He had submitted an application for a £750,000 buy-to-let (BTL) mortgage for a light fix loan at 7.24 per cent which was then agreed on a near prime at 6.64 per cent. The client claimed that the offer was incorrect, and New claimed that an underwriter at Preferred told him that five per cent loading would apply due to the application being over £500,000 – to which New claimed that the loading was actually six per cent.
New then said that he went over the file and discovered that it had been underwritten on Light Fix and not Near Prime, to which the underwriter claimed that he would get it re-offered immediately.
However at the end of September New was contacted by another underwriter from Preferred who told him that the lender would not be reissuing the offer as the rental income was too high and therefore deemed as a commercial property, and that Preferred criteria does not entertain property a commercial or part-commercial status.
New said: “How many Preferred underwriters does it take to underwrite a mortgage? Is it possible for a lender to change its criteria during an application? If Preferred did not like the proposition, should they not say from the outset? What about treating customers fairly?”
Paul Hunt, director of marketing for SPML and Preferred, said: “Although we cannot comment on individual cases, on this occasion, due to an isolated error, we were regretfully unable to reissue the offer. We have however apologised to the broker and are currently discussing with him what we can offer him in recompense for the inconvenience caused.”
Get the daily news delivered to your inbox
Find the latest industry jobs
Register for the next forum
