Mortgage declined due to default placed by Halifax for £38! -** Satisfactorily Resolved**

[deales82]

Hi All,

 

I am in dire need of assistance! I have recently been applying for a Mortgage which has been declined last week due to a default being placed onto our credit files (Me & my wife) by Halifax for an old basic current account which we have not used since 2009. A brief timeline of the events so far....

 

17/07/2015 - Applied for mortgage via broker, lender credit checked and issued DIP the same day.

 

31/07/2015 - Unknown to us until yesterday a new entry for "Halifax" added to both my Wife's and my credit files.

 

17/08/2015 - Formal mortgage application sent to lender. Lender conducts another credit check and obviously discovers that a default has been added on since the initial credit check they carried out in order to issue the DIP.

 

We had already chosen the property, had the offer accepted etc. The solicitor has ordered the searches as well so we could be considerably out of pocket.

 

I have not had an adverse mark placed on my credit file in over 4 years so to have a default placed 2 weeks before a formal mortgage application is just about the worst thing that could possibly happen timing wise!! What is even worse is that the default is for £39!!

 

The entry on our credit files is as follows:

 

[ATTACH=CONFIG]59110[/ATTACH]

 

As above this account has not been used at all since 2009, we have zero communications from Halifax no statements, letters nothing whatsoever.

 

I managed to find some old paperwork with the account number on it so called into a branch today to en quire as to what had happened to cause a default to be placed suddenly after so many years of inactivity. The chap I spoke to in branch trawled his computer to find the last transaction and issued me with a mini statement which reads as follows.....

 

Sheet: 1 Of 1

Date Issued: 13/02/2010

 

Date Activity Paid Out Paid In Balance

13Feb10 0.00

13Feb10 CHG ACCOUNT CHARGE 15.00 0.00 15.00 DR

TOTAL PAYMENTS/RECEIPTS: 15.00

 

So as you can see the balance on the account was zero, then for some unknown reason Halifax applied a charge of 15.00. Presumably this has been incurring interest for the past 5 and a bit years hence the default of £39.00. There are no other transactions recorded for this account after Feb 2010.

 

I appreciate the correct approach to this would be a SAR etc.. however as explained above I have just had my mortgage declined. Our existing tenancy agreement terminates in October with no change to renew. And I dare say we will struggle passing the stringent credit checks carried out in the current rental market. So I need to fix this problem as quickly as possible, we also have an appeal in progress with the lender which I am pretty sure will not succeed whilst these marks remain on our file.

 

In summary Halifax have put us into a dire position by registering defaults based solely on a single bank charge some 5 and a bit years down the line!! Without any notification whatsoever.

 

Obviously I need to send a letter asap but my head is a shed at the moment and would appreciate someone giving me some starting points..

 

Many thanks in advance for any assistance offered.

[citizenB]

For £38.00 ?

 

I think an urgent complaint to Halifax Head/Registered office needs to be sent. You want an explanation of why this charge was applied in the first place and why so long before they have placed a default on your file.

 

I doubt this will help you in the short term with your current application

 

Will flag for others on the site team for their input as well.

[deales82]

Thank you,

 

 

I am so stressed out at the moment to say Halifax have thrown a spanner in the works is an understatement!

 

 

I am completely puzzled as to why Halifax have entered a date of default as being 21/07/15

when the last transaction as proven by the statement obtained in branch today took place in Feb 2010!

 

 

I have a feeling Halifax are having a clear out and selling old debts to a DCA which is why this entry has suddenly appeared.

 

 

Just to confirm this is a brand new entry I had no entries relating to Halifax prior to this default being placed.

[dx100uk]

default is 21/7/2015 I wonder if is them defaulting the account before selling the debt on?

 

 

I cant see why a pleading email to the CEO dept wont work.

 

 

its unusual for a mortgage to be declined on one default?

they are typically allowing one now.

 

 

dx

[dx100uk]

we came to the same conclusions.

[deales82]

default is 21/7/2015 I wonder if is them defaulting the account before selling the debt on?

 

 

I cant see why a pleading email to the CEO dept wont work.

 

 

its unusual for a mortgage to be declined on one default?

they are typically allowing one now.

 

 

dx

 

The lender will consider all defaults registered over 3 years ago, default within the last 12 months is an instant no go.

 

 

These Halifax defaults were placed a mere 2 weeks before the lender carried out a 2nd credit check as part of the formal application

underwriting process so obviously it looks about as bad is it can get from the lenders perspective,

 

 

which I fully understand and I too would be extremely concerned loaning money to a person who 2 weeks prior to asking had a default registered.

[deales82]

Also just in case I wasn't clear in my initial post, I am married so this is a joint mortgage application and also it was a joint Halifax account. So we have both been hit with a default marker.

[fkofilee]

Some help for you;

 

[email protected] - LBG CEO

[email protected] - Halifax MD

 

Drop them an email. This is awful!

A Default for such a small amount.

 

Just be aware that Most of Lloyds Departments are one and the same, but the MD Departments are different ones, they have access to both sides of the bank.

[fkofilee]

You could also make a claim against them for this! Well potentially... As it has cost you a mortgage...

ESPECIALLY if the Default was placed incorrectly.

 

I believe that Halifax will be reasonable with this so hopefully it wont derail your dreams of a Mortgage...

[caro]

I'd show the lender the info and plead your case too.

[deales82]

Hi All,

 

Many thanks for the replies so far,

I am inclined as suggested to drop an urgent email/letter to Halifax senior management

and hope that they see sense and remove the marks immediately.

 

As I see it whether or not the bank charge applied to our account back in 2010 was fair or not is a separate argument.

What I believe is undisputable is the fact that the account went into an unauthorised overdraft solely because of this charge in Feb 2010

no payments were made to service the account from 2010 onwards

 

 

my understanding according to the ICO guidance is that our account should have been marked as a default absolutely no later than July/August 2010.

 

Placing a default more than 5 years after it should have been placed

and also stating on it that the default occurred in July 2015 is completely unacceptable

and that will be my primary complaint.

 

Regards

[citizenB]

that sounds the right way to go. Please do keep your thread updated with any outcome

[deales82]

Just sent email as suggested, will keep the thread updated as soon as I hear anything back from them.

 

Thanks all.

[tony3x]

There are lenders that will consider a default that has been issued within the last 2 years. Your broker should have access to these deals. Rates may not be as good as high st but not as bad as you think.

[deales82]

Hi All,

 

Received a letter from the executive complaints team yesterday. And the news is good!!

As expected Halifax did not agree with most of my points but have agreed to remove the entries in the next few days

and have offered £100 in compensation.

 

Although I have got the result I wanted, there are a few dubious explanations given in the letter.

 

 

For example and I quote...

 

"As an aside I would mention that the timescales you have referred to in respect of the default dates

do not apply here as this was a current account without any contractual payments to be behind on, unlike a loan"

 

essentially Halifax claim that the ICO's guidance on placing defaults goes out of the window when it comes to current accounts!!

 

 

I have read the guidance notes and there is a particular section regarding current accounts

but I can personally see no mention that you can be ignorant of the leading principles

contained within the guidance on the basis that it is a current account.

 

Interested to hear your thoughts on the above.

[fkofilee]

Im so happy for you!

 

Glad I could help. Click the star below and give me some Rep

Just messing, your choice. Im glad that Halifax saw sense. Its unproductive doing that to you.

 

The ICOs rules are a gray area. Current Accounts are still subject to the same rules as loans etc. The information is added all the same to your CRA...

[deales82]

Im so happy for you!

 

Glad I could help. Click the star below and give me some Rep

Just messing, your choice. Im glad that Halifax saw sense. Its unproductive doing that to you.

 

The ICOs rules are a gray area. Current Accounts are still subject to the same rules as loans etc. The information is added all the same to your CRA...

 

Thanks I am in a good mood so rep given ... I think in my response back to Halifax I am going to ask for further clarification on this point... namely highlight the line within the guidance notes which say the leading principles do not apply in the case of current accounts!

[renegadeimp]

Woah there. dont accept the 100 compensation. You were declined a mortage for their failings and errors. You could be entitled to 1000 or more. The 100 is because they hope you dont know your rights.

[fkofilee]

Woah there. dont accept the 100 compensation. You were declined a mortage for their failings and errors. You could be entitled to 1000 or more. The 100 is because they hope you dont know your rights.

 

Its up to you whether you want to go further. I would say just leave it. You only wanted to get the default removed right?

[deales82]

Woah there. dont accept the 100 compensation. You were declined a mortage for their failings and errors. You could be entitled to 1000 or more. The 100 is because they hope you dont know your rights.

 

After the decline my broker got on the phone to the business development manager, and from what I understand to be a rather lengthy conversation the lender has agreed to reassess the case so we are not out of the woods yet but not flat on our faces as we were a few days ago either.

 

It was explicitly mentioned within my letter to Halifax that our mortgage had been declined and that we were seeking to appeal it with the lender. I made it clear that any compensation claim would follow and be determined based upon the success or failure of that appeal. I stated that if the lender still determines after appeal that they are unable to provide the mortgage and it can be demonstrated that it was solely due to Halifax's default placement then the compensation claim would likely be substantial.

 

I won't be issuing a full response / acceptance of compensation until I know where I am with the mortgage lender.

[fkofilee]

Good Move

[deales82]

Its up to you whether you want to go further. I would say just leave it. You only wanted to get the default removed right?

 

Yes that was the primary goal and it has been achieved. But obviously if my mortgage is still declined after appeal and it is solely due to what Halifax has done, then I will be taking the matter further as I would be considerably out of pocket if this house sale falls through.

[deales82]

How can I change the title of the thread, or will a mod do it? to indicate success.

[fkofilee]

Mod will do it But dont update it yet until you got advice on the Mortgage.

[citizenB]

Just hit the report button under any of your posts and ask for Site team to amend your thread title for you.

 

Report post = Black triangle withwhite ! mark, under posts

 

I agree with fkofilee - let us know after you know what is going on with the mortgage application