Your newly qualified mortgage consultant contributor, with previous experience in a both a solicitor’s and chartered surveyor’s office, has clearly missed out on his/her basic training somewhere along the line. The current Bank and Building Society Acts provide for the lender being required to commission a valuation report (even though the applicant may have to pay for it) for the purpose of assessing the suitability, condition and marketability of any proposed security for the protection of their shareholders and investors respectively, and a copy is customarily made available to the mortgage applicant/s.
I have seen no comment about the repealing of the specific sections of either Act, so I assume they still apply and thus your correspondent need not worry about being able to access a valuation/survey commissioned on his/her behalf, as this would still be a requirement even if Home Information Packs (HIPs) became compulsory always assuming he/she needed a mortgage (hence the previous informed debate about the increase in costs through duplication of effort driven by the planned introduction of HIPs).
Under the heading of ‘Industry inflation’, your other contributor with ‘35 years experience in estate agency’ would do well to buy him/herself a new fangled aide called a calculator as he/she would then quickly see that the stated ‘25 per cent increase’ between an asking price of £119,995 and £124,995 was in fact an increase marginally over 4.1 per cent. Please don’t misunderstand me – I am not condoning any increase driven by a change in the threshold of Stamp Duty – but ironically it is down to the estate agent, not the government, to guide the vendor regarding the market value of the security.
Name and address supplied
A bone to pick
Dear Sir,
I've got a bone to pick with lenders. I’m singling out Northern Rock as an example of how bad this industry is getting, however I believe most lenders have the same stance.
I have a client who is purchasing his first property. The house is nearly 100 years old and in a traditional mining area. I recommended that he considered a full structural survey, which, after explaining the three different survey reports, he agreed it would be his preferred option. As it happened he knew a local surveyor. We were deliberating over lenders, the favourite of which, was Northern Rock.
On contacting this firm of local surveyors, it confirmed it would charge £400.00 for the full structural survey including a basic mortgage valuation report. It would then charge £25.00 to type a basic mortgage report on Northern Rock paper and send this to the lender. It appears on the panel of Northern Rock and could well be the company instructed to do the basic report by the lender anyway.
On contacting Northern Rock I was told the lender must instruct the valuation itself, and not my client. I explained that, on a full structural survey, the surveyor would be in fact acting on behalf of my client and as he knew the surveyors he would get a reasonable price. It again insisted that it would have to instruct the surveyors itself, albeit, it may be able to instruct the surveyors of our choice. However it would not accept the report from any surveyor unless they had provided the instruction in the first place. This, I subsequently found out, is so it can charge my client a fee of £380 for the basic valuation for mortgage purposes, on top of whatever the additional cost for the full report my client wanted.
Isn’t this tantamount to daylight robbery? How can this be allowed? To have a policy where you are effectively taking £380 off a first-time buyer, just so you have the privilege of pressing a button?
In the market where we are being constantly reminded about ‘Treating Customers Fairly’, I’d like to ask Northern Rock and all other policy makers at lenders out there: how can it be fair that my client could be forced into paying extortionate and inflated charges just for the lender to press a button? We are supposed to be protecting our buyers more than we should be protecting your profit margins. On detailing Northern Rock’s response to my client, he is undecided what to do. He’s got legal fees to pay, furniture to buy and needs to decorate the place if he decides to carry on with the purchase. He’s already mentioned he may just settle for a basic mortgage survey.
Isn’t this all just a little scary? With policies like the one that Northern Rock uses, it’s not surprising over 80 per cent of all properties are bought by people relying on what in most cases is an eight minute trip to the property of choice and an at best two-page report. First-time buyers need protecting, and should not be getting ripped off.
As a lender which charges a mortgage review fee to existing customers of £295.00, which entails sending a letter out to the client asking them to tick a box for the mortgage of their choice, at the end of their current deal. What sort of a review is that? If I did that to my clients, wouldn’t the Financial Services Authority (FSA) have a right to seriously question my ethics?
More and more lenders are announcing massive profits every month. It’s my opinion that they treat every customer with absolute contempt, and try and get as much money as possible out of every one of us.
All of this money grabbing must be stamped out. The FSA should have the balls to start hitting these lenders with big sticks and start getting some of lenders’ short arms digging a little deeper into their enormous pockets. They are taking from the poor and not giving anything back. Look at the evidence since ‘Mortgage Day’; exit fees have increased, as have arrangement and valuation costs. It is completely scandalous and something we brokers should push as much as possible down the throats of these greedy lenders. Anyone for a boycott?
Ian Crampton
Ferndown Ltd
Ongoing service issues
Dear Sir,
I have been involved in an ongoing saga with Nationwide’s Rayleigh Mortgage Centre. I finally got my client’s mortgage offer last week after submitting a quite straightforward application to them on the 14 June.
For my sins, I took a chance and submitted yet another case to it and had occasion to call Rayleigh to check it had received the application. I was then told that the case was being dealt with by the Swindon Centre. On phoning Swindon, I was informed it was unlikely but it would get the case up on its screens. It could not access it as it was still on the screen of the person I had spoken to at Rayleigh.
A further call was made to Rayleigh – same person, who, bear in mind had the case in front of her, asked me to spell out the name of the first applicant. She then apologised for still having the case on her screen and told me that Rayleigh was in fact dealing with it but the valuation fee had been passed to Swindon.
Yesterday I received a call from Rayleigh and was given the names of the people dealing with the application. A further call was received when I was told the proc fee arrangements were incorrect and that I would have to re-register with Nationwide. At this time, a completely different FSA number to mine was quoted. I then explained I had just received an offer on another case without experiencing this problem. The lady from Rayleigh said she would take another look and if I did not hear from her, it was OK. I heard nothing back.
The amount of time wasted in dealing with Rayleigh is excessive to say the least and despite protestations from Nationwide BS, it is still a shambles.
James Town
Mortgage Decisions
Tim Hughes, head of intermediary mortgages at Nationwide Building Society, responded: “
We apologise for the problems Mr Town is experiencing with our Rayleigh Mortgage Centre. We are working to resolve the issues he mentions in order to provide the service standards that he should expect when dealing with Nationwide. In the meantime, we will be speaking to Mr Town and ensuring he has a direct point of contact to speak to at all times.”
An unecessary decision
Dear Sir,
The Bank of England Base Rate increase seems unnecessary – the only reason that inflation is increasing is energy costs. To increase corporate and individual borrowing costs seems illogical when there is already spending capacity being removed from the economy by the above increases.
John
via e-mail
