Is a bank compelled to honour an unconditional approval?

[Puppeteer]

I'm just going through the final stages of setting up a mortgage, and the bank have detailed different rates on the loan document than what they agreed to in the unconditional approval.

Apparently they changed their rates 2 days before the application was lodged but failed to advice anyone (myself or my broker) that the interest rates had changed. The lower rate was written into the application.

The application (that they conditionally approved and later unconditionally approved) was based on the lower interest rate and was one of the main reasons for choosing this product. It's now too late to change lenders (due to the impending settlement date).

We have approached the bank and they refuse to honour their offer at the lower rate.

At this stage I am intending to enter into the loan as it stands (due to the settlement date being tomorrow) and complaining to the bank and the ombudsmen if necessary.

I'm wondering if the bank are compelled to honour their unconditional approval.

Thanks in advance.

 

[Jas]

Them that have the gold make the rules.


You could get your solictor to write a nasty letter, but seeing as how you have time constraints... don't expect it to go far.

Sorry to be the bearer of bad news.

Jas

 

[Rolf Latham]

Hiya

Not uncommon amongst the smaller mortgage managers.

They tend to get you not just with its too late to change, but then theres the pain of a deffered establishment fee as well.

In many cases unless you buy rate risk insurance on fixed rate loans, they can do what they like. Applies to big banks too !

Commercial reality sees these people being sufering though

Ta'

rolf

 

[Puppeteer]

Thanks for the reply's. I still think that bank is in the wrong, both legally and morally.

Me thinks it's time to start annoying customer service and the complaints department...

 

[Rolf Latham]

So Pupps,

Which lender is it, give us a clue ? - one way to get something back is to ensure that other people dont get stuck with the same thing

Ta
rolf

 

[Puppeteer]

Not wanting to mention any names, but if you asked if the lending institutions name sake was famous for slaying a dragon then I'd be lying if I said no!

 

[Rolf Latham]

There you go

They are rather poor on service levels at the moment anyway.

I would almost bet you got done on their pro pack restructure which they didnt communiacte too well.

I have a couple of those, and have insisted that that loan went on b4 their reversion date, so I expect the rate as at date of appln.

If this is the case, and your app went in at the right time stick to your guns, you will win long term

ta

rolf

 

[Puppeteer]

It's a good bet.

It is the pro pack. The rate changed on the 10th of June, my application was received by them on the 12th with the pre-10th interest rates, which they unconditionally approved.

The first we knew that the rate had changed was when we got the mortgage docs on the 8th of July. Settlement was scheduled for the 15th (today) which didn't give us much time.

As it turns out settlement will be delayed (by the vendor) but I've already signed the docs, so I don't have the option of shopping around again.

I wouldn't automatically count on them agreeing to the lower rate for your clients. My brokers have spent the last week on the phone to no avail. We are going to take this further through the complaints avenue. Maybe you'll have more luck if your applications were received before the 10th.

If not, then I'm sure their complaints dept will be kept busy by more than just me.