Mortgage denied with 1 week before the closing date

vicky33

Hi guys,

I am looking for a bit of advice if it is possible, we were final approved for a mortgage and close to the closing date the financial institution advised that they cannot grand our mortgage anymore until we don't provide a structural survey of the apartment as there were identified some fire and safety issues in the complex where it is located. We are now in the situation where all the contracts are signed and maybe we can loose our deposit and even worse be sued for the whole amount of the mortgage if we cannot close the sale. Can you please tell me if the financial institution are allowed to request a survey witch wasn't part of the terms and condition to get the mortgage for that apartment initially and to deny the mortgage ?

Thanks,

liam7831

I thought all mortgages needed a survey ?

vicky33

hi,

They need a valuation survey but not a structural survey

4ensic15

Are you seriously saying that your solicitor allowed you sign a contract that was not subject to loan?

vicky33

I don't know if the contract was subject to loan, the only thing that I know now is that if we cannot close the sale I can loose my deposit. The solicitor said that once we sign the contracts we cannot back down!

4ensic15

Did you have a survey carried out before you signed the contract?

vicky33

Only the Valuation Survey not a structural one , I had a structural survey done now and it is relatively ok, only some minor issues that they can be fixed, but it seems that the issue with the block is in the attic and not in the apartment, and just to mention this apartment is at floor 1 out of 2. The vendor is saying that he wants to close the sale and he is expecting his money but at this stage no bank will probably grand a mortgage for that apartment.

L1011

I would suggest you urgently go talk to *another* solicitor if your own one is not coming up with very solid suggestions.

You don't want to buy it now, I assume/hope? It could easily be basically valueless.

goz83

L1011 wrote: »

I would suggest you urgently go talk to *another* solicitor if your own one is not coming up with very solid suggestions.

You don't want to buy it now, I assume/hope? It could easily be basically valueless.

Looks like the OP does want to buy...mentioning "minor" things

A2LUE42

Are there fire and safety risks? If there are, why would you want to go ahead with the purchase?

vicky33

We want to buy it, as we are aware of what work needs to be done as is not a big thing even on the work that needs to be carried out in the attic but we cannot get a mortgage and if we back down we are loosing our deposit so then there will be no buying at all involved for the next 4 years. and the reason why the financial institution won't grans a mortgage is because they were aware of this situation and never mentioned anything until an article didn't appear in the newspaper in regards this complex

Senna

Sounds like the bank is working in their own interest and yours.

godtabh

and why wouldnt you have done a condition survey before hand? Isnt it standard practice to have one after going sale agreed?

vicky33

@godtabh we didn't do it because it wasn't a condition to do it
@Senna we want to buy the apartment but what happens if we can't get a mortgage for it! A win for us will be to close the sale and as I said the issues that they were identified are not major, only small things that weren't done at the point when the block was build. The surveyor was fully aware of the situation of the apartment since 5 years ago and he knows exactly what needs to be done

4ensic15

vicky33 wrote: »

@godtabh we didn't do it because it wasn't a condition to do it

It would be advised by any competent solicitor. Nobody in their right mind would sign a contract to buy a property without at least a basic structural survey.

L1011

vicky33 wrote: »

We want to buy it, as we are aware of what work needs to be done as is not a big thing even on the work that needs to be carried out in the attic but we cannot get a mortgage and if we back down we are loosing our deposit so then there will be no buying at all involved for the next 4 years. and the reason why the financial institution won't grans a mortgage is because they were aware of this situation and never mentioned anything until an article didn't appear in the newspaper in regards this complex

What you may consider "minor things" are sufficient to stop the bank lending to you and will be sufficient to stop them lending to anyone else. The property is worth only what a cash buyer will pay now, if even.

You need to rapidly emotionally de-invest yourself from this and look at this as trying to minimise your losses. You'll be far better off getting out and buying elsewhere than buying a badly built apartment that will likely have issues surface for years to come.

godtabh

4ensic15 wrote: »

It would be advised by any competent solicitor. Nobody in their right mind would sign a contract to buy a property without at least a basic structural survey.

That's what I thought.

I am going through the process (early doors) and every one from the bank to the solicitors to the vendors to the estatagents have either advised on a survey been done or are requesting a survey been done on ours.

vicky33

@4ensic15 thanks dude but not helpful, I am not looking for people to judge just to help

Smondie

vicky33 wrote: »

I don't know if the contract was subject to loan, the only thing that I know now is that if we cannot close the sale I can loose my deposit. The solicitor said that once we sign the contracts we cannot back down!

You need to find out pronto if your contract was subject to loan

Del2005

vicky33 wrote: »

We want to buy it, as we are aware of what work needs to be done as is not a big thing even on the work that needs to be carried out in the attic but we cannot get a mortgage and if we back down we are loosing our deposit so then there will be no buying at all involved for the next 4 years. and the reason why the financial institution won't grans a mortgage is because they were aware of this situation and never mentioned anything until an article didn't appear in the newspaper in regards this complex

You'll need the management company to do any work in the attic. The catch 22 is that you can't get them to do the remedial work till you own a share in the company and you can't buy without a mortgage , which you can't get until the remedial work is completed to banks satisfaction.

With Priory Hall and who knows how many other death traps were built during the boom banks aren't going to lend unless they are 100% sure that the building meets all required safety standards.

vicky33

@Del2005 I know it is catch 22 ... I know that the management company is in the process to fix the issues but don't know how long is going to take nd in the mean time I will be paying penalties on the whole mortgage amount and is not cheap. The Surveyor advised that the work can be completed in 1 day on the whole block but you know yourself how this things work.

vicky33

vicky33 wrote: »

it seems that the issue with the block is in the attic and not in the apartment, and just to mention this apartment is at floor 1 out of 2.

You are also buying a share of the overall structure, including the attic. If there are genuine fire safety risks such that nobody would lend on the block, then you can count yourself lucky that you havent closed.

Pull out now and get your deposit back. Your solicitor should have inserted enough caveats that getting the deposit back from the other solicitor, in these circumstances, should be no problem.

godtabh

vicky33 wrote: »

@Del2005 I know it is catch 22 ... I know that the management company is in the process to fix the issues but don't know how long is going to take nd in the mean time I will be paying penalties on the whole mortgage amount and is not cheap. The Surveyor advised that the work can be completed in 1 day on the whole block but you know yourself how this things work.

Did you employ a surveyor? That might be sufficient for the bank

Senna

So the problem is known for 5 years, but it's going to get "fixed" as soon as you buy it.
Losing the deposit only will probably be the best outcome.

vicky33

@godtabh - yes I did and the survey looks good , as I said only minor things like automatic door closing devices to be mounted and couple of small things like a pipe to be isolated, so hopefully after the owner fixes those will be good to go.

My question was how come a financial institution can ask for a survey and deny a mortgage after the approve it initially and give us the go ?

whippet

vicky33 wrote: »

@godtabh - yes I did and the survey looks good , as I said only minor things like automatic door closing devices to be mounted and couple of small things like a pipe to be isolated, so hopefully after the owner fixes those will be good to go.

My question was how come a financial institution can ask for a survey and deny a mortgage after the approve it initially and give us the go ?

Why they can do that is simple ... Until the remedial work is done the property the bank can't loan out the money as the property will not be worth what the purchase price, meaning there money is at risk. Banks can't lend based on proposed work or promises of work to be done.

There are so many red flags here I can't believe you are not running a mile from it.

Btw ... You are paying a solicitor money to figure all this out .. Look for answers there not from randomers on a website.

I'll echo what others have said ... Your solicitor should not have let you contract to a sale without funds

vicky33

@whippet - I think you are right - I will chat with the solicitor based on the survey
Thanks for the help guys!

vicky33

vicky33 wrote: »

the survey looks good , as I said only minor things like automatic door closing devices to be mounted and couple of small things like a pipe to be isolated, so hopefully after the owner fixes those will be good to go.

These items are irrelevancies, appropriate to a snag list for a new build, but not for a structural survey. The vendor would be under no obligation to fix these things but he likely might, if asked, as they wouldnt cost much to do.
A survey on an apartment should cover the whole block as what you are actually buying is a share of the block - and for this the fire safety structures are highly relevant.

Kings Inns or bust

Senna wrote: »

Sounds like the bank is working in their own interest and yours.

Of course they are, why would anyone assume otherwise?

4ensic15 wrote: »

It would be advised by any competent solicitor. Nobody in their right mind would sign a contract to buy a property without at least a basic structural survey.

Meh, not so sure on that score in relation to apartments. It's certainly sensible, advisable and best practice - do though three things describe the typical Irish property market transaction? :pac:

vicky33 wrote: »

Hi guys,

I am looking for a bit of advice if it is possible, we were final approved for a mortgage and close to the closing date the financial institution advised that they cannot grand our mortgage anymore until we don't provide a structural survey of the apartment as there were identified some fire and safety issues in the complex where it is located. We are now in the situation where all the contracts are signed and maybe we can loose our deposit and even worse be sued for the whole amount of the mortgage if we cannot close the sale. Can you please tell me if the financial institution are allowed to request a survey witch wasn't part of the terms and condition to get the mortgage for that apartment initially and to deny the mortgage ?

Thanks,

I wouldn't be too worried about the full amount, telling you why would amount to offering legal advice so I'm not going there, I'd also suggest that unless this is a very expensive apartment OR the sellers know know one else is going to touch it I wouldn't be too worried about an order for specific performance either. Again not legal advice just something to hopefully steady the nerves a bit.

4ensic15 wrote: »

Are you seriously saying that your solicitor allowed you sign a contract that was not subject to loan?

There are issues there in that some vendors won't allow that stipulation.

4ensic15

Kings Inns or bust wrote: »

Of course they are, why would anyone assume otherwise?



Meh, not so sure on that score in relation to apartments. It's certainly sensible, advisable and best practice - do though three things describe the typical Irish property market transaction? :pac:

Solicitors have been successfully sued for not advising a survey. After Priory hall, Longboat Quay , pyrite et al, it is utterly negligent not to advise a survey. there is no reason why a house should be surveyed and not an apartment.

Kings Inns or bust

Something else to note, there are certain 'engineers' out there that have become professional trolls in relation to fire safety issues and apartments. It's very easy to fall foul of one of these people when purchasing an apartment hence why 4ensic15 while perhaps being a bit harsh is being extremely helpful!

vicky33

@Kings Inns or bust thanks for the reply, if you want you can PM me if you have some legal advice

Kings Inns or bust

4ensic15 wrote: »

Solicitors have been successfully sued for not advising a survey. After Priory hall, Longboat Quay , pyrite et al, it is utterly negligent not to advise a survey. there is no reason why a house should be surveyed and not an apartment.

Fair enough but I suspect each case of the turns very much on it's own facts - I assume it's not a part of any code of practice or anything with blanket legal effect - I'm very happy to be corrected there please.

Kings Inns or bust

vicky33 wrote: »

@Kings Inns or bust thanks for the reply, if you want you can PM me if you have some legal advice

Sorry that was not my intent to advise that I wanted to give legal advice. Taking legal advise from me would be akin to taking patio laying advice from Fred West.

4ensic15

Kings Inns or bust wrote: »

Fair enough but I suspect each case of the turns very much on it's own facts - I assume it's not a part of any code of practice or anything with blanket legal effect - I'm very happy to be corrected there please.

If it has been found by the courts that solicitor x must pay compensation to her client for not advising a survey then you can take it that it is part of a solicitors duty in a conveyance to advise a survey. Some solicitors refuse to act in a conveyance unless a copy of the survey is on their desk.

mirrorwall14

How exactly did this transpire? Our bank would not issue a loan offer until we did a structural survey as their valuer pointed out it was a pyrite estate. As it happens we had done our own immediately we were not taking any chances but there is no way our solicitor or broker would have let us get to that point without the survey

Kings Inns or bust

4ensic15 wrote: »

If it has been found by the courts that solicitor x must pay compensation to her client for not advising a survey then you can take it that it is part of a solicitors duty in a conveyance to advise a survey. Some solicitors refuse to act in a conveyance unless a copy of the survey is on their desk.

I'm afraid absent breaking with my tradition thus far and actually reading the cases I'm not sure that particular statement can be said to be completely reliable.

4ensic15

Kings Inns or bust wrote: »

I'm afraid absent breaking with my tradition thus far and actually reading the cases I'm not sure that particular statement can be said to be completely reliable.

You are correct. If you actually studied law ( which does not mean reading Nutshells) you might act
ually know something about the law of tort.

Mod

Keep it civil guys

vicky33

@Kings Inns or bust

Kings Inns or bust

mirrorwall14 wrote: »

How exactly did this transpire? Our bank would not issue a loan offer until we did a structural survey as their valuer pointed out it was a pyrite estate. As it happens we had done our own immediately we were not taking any chances but there is no way our solicitor or broker would have let us get to that point without the survey

Given that solicitors, are getting sued over this, which I accept, then it would seem to indicate that not all of them have been giving this advice as they didn't know they needed to. I seem to remember a well respected barrister passing comment on a tenuously similar situation in relation to JR time limits.

I believe the technical legal term used was '<<abuse deleted>>'.

Kings Inns or bust

4ensic15 wrote: »

You are correct. If you actually studied law ( which does not mean reading Nutshells) you might actually know something about the law of tort.

SoHF?

4ensic15

Kings Inns or bust wrote: »

Given that solicitors, , are getting sued over this, which I accept, then it would seem to indicate that not all of them have been giving this advice as they didn't know they needed to. I seem to remember a well respected barrister passing comment on a tenuously similar situation in relation to JR time limits.

I believe the technical legal term used was.

They are under a duty to keep themselves informed. Conveyancing is a complicated area and some solicitors no longer engage in it. They get to pay much lower professional indemnity insurance premia as a result.

Mod
Pls keep it civil. Have had to delete some of this post

mirrorwall14

Kings Inns or bust wrote: »

Given that solicitors, , are getting sued over this, which I accept, then it would seem to indicate that not all of them have been giving this advice as they didn't know they needed to. I seem to remember a well respected barrister passing comment on a tenuously similar situation in relation to JR time limits.

I believe the technical legal term used was .

Yeah but the bank themselves demanded the structural survey before the loan offer so I'm honestly not sure how the OP got to full deposit paid without hitting the banks brick wall. This was very recent for me

Kings Inns or bust

4ensic15 wrote: »

They are under a duty to keep themselves informed. Conveyancing is a complicated area and some solicitors no longer engage in it. They get to pay much lower professional indemnity insurance premia as a result.

All granted - my issue here with your assertions is that it can't be a blanket issue or it would have gained more coverage. Now I'm absolutely willing to be pointed to such coverage, frankly this wouldn't be anywhere near my radar of current awareness.

Kings Inns or bust

mirrorwall14 wrote: »

Yeah but the bank themselves demanded the structural survey before the loan offer so I'm honestly not sure how the OP got to full deposit paid without hitting the banks brick wall. This was very recent for me

Love the pun!

It seems that the bank did not.

mirrorwall14

Kings Inns or bust wrote: »

Love the pun!

It seems that the bank did not.

Seems very odd to demand more information after the Loan offer stage. I'd definitely be querying the timeline with the bank too OP, if they needed the survey I'm not sure why they proceeded with a loan offer. And if they didn't proceed with a loan offer then I have no idea why your solicitor would have you sign contracts

vicky33

@mirrorwall14 - they never asked for a structural survey and they haven't sent their own surveyor either, they said if we want to do it is fine but they don't require it to approve the mortgage for that apartment because they are ok ! that's why I am a little bit confused how they can ask for one now, I know that once you agree to something is kinda of set in stone

mirrorwall14

vicky33 wrote: »

@mirrorwall14 - they never asked for a structural survey and they haven't sent their own surveyor either, they said if we want to do it is fine but they don't require it to approve the mortgage for that apartment because they are ok ! that's why I am a little bit confused how they can ask for one now, I know that once you agree to something is kinda of set in stone

The bank would have had a valuer surely?

Kings Inns or bust

mirrorwall14 wrote: »

Seems very odd to demand more information after the Loan offer stage. I'd definitely be querying the timeline with the bank too OP, if they needed the survey I'm not sure why they proceeded with a loan offer. And if they didn't proceed with a loan offer then I have no idea why your solicitor would have you sign contracts

They probably don't require one, but more than likely have a catch all 'get out of Priory Hall Free' clause somewhere in the paperwork. I wan't to be a fecking lawyer when I grow up and I didn't read my loan offer cover to cover and I doubt most do.

vicky33

so just to repeat, the solicitor asked them for the funds with 5 days before they asked me for the survey

Kings Inns or bust

vicky33 wrote: »

@mirrorwall14 - they never asked for a structural survey and they haven't sent their own surveyor either, they said if we want to do it is fine but they don't require it to approve the mortgage for that apartment because they are ok ! that's why I am a little bit confused how they can ask for one now, I know that once you agree to something is kinda of set in stone

See above - honest answer time - did you read every T&C of the loan offer?