Two brokers have made applications which got a decision-in-principle (DIP) but subsequently failed after credit scoring. In both instances, the clients had accepted the offer but when the broker went to complete the offer had been refused.
Jonathan Barnett, of All Mortgage Matters, claimed that he did an application and received a DIP on a mortgage and unsecured loan with ‘satisfactory conditions pending’ detailed on the offer.
Barnett said: “I printed off the DIP certificate, which the client then presented to the estate agent. Meanwhile, I went back to the lender’s online system and went to convert the DIP to a completion. When I went to case-tracking, I had a message saying that the underwriter wanted to see the full details before he submitted the full application as it had gone from an approval to a refusal.
“I contacted the lender with the DIP and asked why it had become a refusal, and it simply said ‘no answer’. I can’t understand how it managed to decline the offer after issuing a DIP. The client has not done anything wrong, but could lose out on the house they want.”
Tom Marinan, of Easypay Mortgages, had a similar experience with a different lender.
He explained: “The problem was that my client paid a valuation fee and the case was pulled from under their feet. I’m sure the lender will agree to pay back the valuation fee, but the biggest problem is that the mortgages that were available then are not available now, and interest rates have gone up since the application was made.”
Commenting on the issue, Andrew Strange, policy analyst at the Association of Mortgage Intermediaries, said: “If this is down to lenders tightening criteria then we feel that the lenders in question should be refunding any monies paid, especially with the second case.”
