David Nicholson, director of D&D Consultants, contacted Mortgage Introducer after a client nearly lost their buy-to-let new build house because the build completion was delayed and, due to changes in lending criteria, he could not source a product to meet his client’s needs.
The case was eventually resolved after talking to the original lender, but Nicholson warned that many brokers could find themselves in a similar situation.
He said: “It was horrendous as they had exchanged contracts and paid the fees but we were left with either finding a huge extra sum to make up the difference, which the client couldn’t do, or walk away and lose the deposit. It wasn’t the client’s fault and I’m sure it will be a problem for other people as things have moved on because of the credit crunch.”
One lender, who spoke on condition of anonymity, admitted this would be a problem for a number of brokers as lenders reined in their criteria.
“If you’ve got a product out there and other lenders pull back, you can quickly find yourself left on your own, so you have to pull it too. I can see there will be people losing out because of this, especially if the mortgage offer was approved, say, five months before. But no one is winning in this situation; the broker looks bad in front of the client; the borrower doesn’t get the property and the lender wants to lend, but can no longer justify it.”
Clare Mortimer, senior media relations officer at BM Solutions, said that it was in this type of situation that intermediaries could really come into their own to assist borrowers.
She commented: “This isn’t a new phenomenon but in the current climate where everything is moving so fast, it does make things much harder.
"There is no kind of magic solution but this is where the mortgage intermediary can come into his own by helping the client understand and helping to solve the problem.”
