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It seems that I could be in serious trouble

(66 Posts)
mamafridi Tue 20-Aug-13 21:09:22

My husband came back from the solicitors and was informed that we could lose the deposit for the flat we are in the process of buying.
We are 1st time buyers and have lived abroad for nearly 20 years so we were sometimes lost in the terminology in the mortgage contract and terms used by the solicitor, but At the same time I don't believe it is all down to our stupidity and that perhaps our solicitor could have explained specific terms especially as my husband is Italian.
The solicitor says the reason why we could lose the money we put down for the exchange is because as my husband's name is on the mortgage (as he is the only one working at the moment) that I would have to agree to be the "occupier" and it is this word which holds so much importance in the problems we are now facing. We thought occupier simply meant that I would be occupying the flat together with my husband and dd - nothing else. Instead, days after the exchange I received a letter from what was now my husband's solicitor that I had absolutely no say over the property and I was to sign an occupier's consent form more or less relinquishing all existence of where the equity was coming from, ie me and my husband equally. In that same letter I was advised to seek my own solicitor which I did and as a consequence of my wanting to have my name as part of the contributor of the flat we are buying we may lose our deposit, worse still lose the mortgage agreement altogether and the lose the flat. Then we could be sued by the people we are buying from and end up losing every penny we have worked our socks off for the last 18years.
I am at my wits end, we are awaiting the bank's opinion but completion is meant to be this Friday. Is there anything I can do?

flow4 Wed 21-Aug-13 06:02:06

Unfortunately, I think this has arisen because you didn't understand your mortgage terms. Your solicitor deals with the house purchase for you, but she doesn't arrange the mortgage - she checks you have one arranged, and then completes the legal paperwork the mortgage company requires to lend you money for the purchase.

If you had used a broker, s/he would have talked you through the terms of various mortgages, and highlighted conditions like this. There are other products that would have allowed you to have a joint mortgage with just one salary, as others suggest, but you didn't pick one of those. With hindsight, it probably wasn't appropriate for you and your dh to pick one in your dh's sole name... But it isn't your solicitor's role to help you understand or choose a mortgage: if you don't use a broker, you take on this responsibility yourselves.

Once you have chosen a mortgage, you are bound by its terms and conditions. Refusing to sign the occupier's consent form wasn't a viable option - the mortgage company wants to ensure that they can force a sale if your husband fails to pay the mortgage in his sole name and insists that you sign a doc agreeing to leave in those circumstances.

By refusing, you put your solicitor in an awkward position. She has no choice but to inform the mortgage co, because signing that form isn't optional - it's a key condition of the mortgage you chose, and of every mortgage in a sole name.

It maybe would have been kind for her to explain this to you better. But it sounds like you have been blaming her for something that wasn't her fault, so she perhaps isn't feeling kind, and I imagine communication between you isn't very good.

As far as I can see, if you don't want to lose your deposit and want to try to keep this sale, your options are as follows:

1a. Go to your solicitor and apologise. Explain you had misunderstood her role and now realise it wasn't her responsibility to help you understand your mortgage, and that with hindsight, you think you maybe should have used a broker. Ask her if she is prepared to help you try to save this house purchase now. If so, go to step 2.

1b. Find another solicitor who is prepared to help you try to save the purchase.

2. Decide whether you are going to (a) stick with this mortgage - in which case you must sign the form - or (b) switch to a new mortgage in joint names.

If (2a) you may be able to protect yourself with a signed agreement between you and your dh, but you need legal advice, because this wouldn't undo the fact that you will still have to promise the mortgage co that you have no claim on the house if the mortgage isn't paid.

If (2b) get a broker to help you find a new mortgage that suits your requirements. You will have to pay fees again, get another valuation, and perhaps borrow less or pay a higher rate. A broker may be able to help you negotiate and get a new joint mortgage with the same provider, which would save you time and money.

If you can't borrow enough via a joint mortgage, then you really have no option but to sign the form or lose the purchase.

3. If there is any delay at all, ask the solicitor to talk nicely to the sellers' solicitor and explain there has been a problem with the mortgage but that it will be resolved and you are still keen to proceed. If you have already exchanged contracts and set a completion date (and it sounds like you have) then you are legally obliged to complete by that date or lose your deposit... But if the sellers want to save their sale to you too, they might not hold you to that...

I hope you can resolve this. Good luck.

RCheshire Wed 21-Aug-13 06:16:08

Having been here with a close relative flow's advice is very good and thorough

Turnipinatutu Wed 21-Aug-13 07:20:44

Excellent advice Flow.
Hope you're able to get this sorted without any problems Op. Good luck.

mamafridi Wed 21-Aug-13 07:27:50

Thank you flow4.
I would say you have described our situation perfectly. I do feel though that she could've consulted with my husband and I first before racing ahead with telling the lenders that I wanted to opt out of being an occupier. Had she told me that it could lead to us losing everything I would have certainly chosen another option, of which there seem quite a few.
I just hope there is time to backtrack.

getoffthecoffeetable Wed 21-Aug-13 07:45:12

How much experience does the solicitor have?
I'd ask her supervising partner to deal with it.

alreadytaken Wed 21-Aug-13 08:00:10

I'm not a lawyer - if the sale falls through I'd be complaining to the Law Society about this woman and refusing to pay her fee until they ruled on the complaint. She is employed to help you with the legal aspects of your purchase and that includes work related to your mortgage, even if she didn't help you choose it. I think she is acting unprofessionally in not raising this with you before exchange.

I'd suggest a legal agreement with your husband that he owes you the amount of the deposit plus interest. As soon as possible remortgage and put the house in joint names in exchange for the debt owed you by your husband.

mamafridi Wed 21-Aug-13 08:27:24

She is a trainee, but they say it is normal for law firms to use juniors to do the easy jobs, which conveyancing is apparently!
Thank you for all the good luck because I really do need it. Let's see what today holds as I am going to see a different solicitor from another firm and get some objective views.

RCheshire Wed 21-Aug-13 11:03:13

Not to try and worry you further, but you are likely to find certain approaches suggested as unacceptable to the mortgage provider, e.g. you having first charge against the property.

The mortgage company are basically saying, "this is the person we've lent money to, therefore this is the person who must own the asset, therefore this is the person we can pursue and re-possess should he default".

In the case where join-earnings mean a lower mortgage offer then single higher earner, most people put both mortgage and full ownership in the name of the higher earner, or alternatively go for a smaller mortgage/cheaper house in both names.

audrey01 Wed 21-Aug-13 12:26:27

It will still be cheaper to see this transaction through (meeting your mortgage bank's conditions) now and then try to remortgage as soon as possible via a mortgage broker who can find you a good deal for joint ownership, than losing your 10% deposit, the house, more money spent on renting until you find a suitable house again, etc.

mamafridi Wed 21-Aug-13 12:36:10

I just hope the bank will agree to ignore the previous requested changes and carry on as before - but from what our original solicitor says it could be probable that they won't consider as viable customers any longer and pull out.
I have now my own solicitor who says he is going to try to sort out the situation. I hope he can because I am so on edge I can't think straight.

DolomitesDonkey Wed 21-Aug-13 12:39:27

Are you buying in Italy or UK? Reason I ask is that you're getting tons of advice and if you're buying in Italy then it's just lip-service.

Ladyflip Wed 21-Aug-13 12:49:23

Re read flow4's advice. Have you apologised and asked for help in getting it sorted? The solicitor has to act for the mortgage company as well in making sure that they are protected if you or your DH fail to pay the mortgage in the future. It is unlikely the mortgage company will agree to you being on the title to the property if you are not on the mortgage.

You would still have a legal right of action against your husband if you split and you still have matrimonial home rights. However, if he fails to pay the mortgage, you cannot exercise those rights against the mortgage company i.e. although your DH can't throw you out, if the mortgage company repossess the property then THEY can. If you have adult children living in the house and remortgage then they would also have to sign the same form.

Be calm and listen to advice.

50shadesofmeh Wed 21-Aug-13 12:49:54

Sounds like your solicitor has made a bit of a mess of things , she should have advised you on what would happen if you refused to sign the occupier document.
You might still have time to chase another mortgage to stop house sale falling through if the company you have the offer with refuses to deal with you .

mamafridi Wed 21-Aug-13 12:58:09

It took us weeks to find this bank and it took a while before they agreed to offer us a mortgage. We are meant to be completing this Friday!
My husband and I have apologised. I completely took on board flow4's advice. But I still feel that some of the responsibility that we are in this mess is because she barged ahead and told the lenders without warning us of the consequences.
All I can do is wait and see. Apparently there will be an answer later on today from the bank. I feel sick.

SpecialJK Wed 21-Aug-13 13:09:26

Mamafridi. We got a deed of trust drafted the day before our completion. It's a very simple document and took our solicitor an hour to draft and details how the house is shared should it be sold, regardless of how many names are on the mortgage. The title deeds decides who owns the property, not who has the mortgage. There's absolutely no reason why they can't sort it this week prior to completion. Hope you set it sorted!

50shadesofmeh Wed 21-Aug-13 13:13:58

Good luck mama it's a nightmare of a situation I hope the mortgage company realises it was a mistake.

mamafridi Wed 21-Aug-13 13:17:47

I don't think I have ever felt this anxious in my life.

Erlack Wed 21-Aug-13 13:20:24

I think it would be pretty harsh of the bank to decline to proceed with the loan now, on the basis of what is more or less an misunderstanding of the terms! Good luck, I hope you get it sorted.

Boosiehs Wed 21-Aug-13 13:36:48

I think you are unfairly blaming the solicitor for you not understanding he terms of a mortgage you arranged.

Get a deed of trust drawn up (takes about an hour), or alternatively trust your husband an remortgage after completion.

Buying a house is complicated. You can't absolve all responsibility just because you think someone else should have told you something.

MooncupGoddess Wed 21-Aug-13 13:42:22

Ugh. Is your solicitor part of a bigger firm? If so, worth asking her for a copy of their complaints procedure so that she knows you have your eye on her. Might focus her mind.

flow4 Wed 21-Aug-13 14:46:51

Complaining would be a waste of time and energy imo. You need to put all your efforts into sorting out the problem, mama. After it is resolved, you can complain if you want - though I don't think the solicitor has actually done anything wrong - but if you try to do it now, you will have lost any chance of her helping you...

If the bank say 'no' today, don't despair. A good broker will probably be able to find you a new mortgage in hours, and you may be able to pay extra for a quick valuation. Brokers have access to deals that are not available to the public, and detailed knowledge of providers' conditions and flexibilities.

MooncupGoddess Wed 21-Aug-13 14:59:17

My point was that sometimes making (politely) clear that you are very unhappy with a solicitor's performance and are prepared to take things further can focus their mind on resolving the problem. You don't then have to go through with the formal complaint.

I just mentioned it because this strategy has worked for me in the past.

50shadesofmeh Wed 21-Aug-13 15:35:15

I agree don't waste time and mental energy complaining at the moment and focus on the task in hand to try close the deal on this house.
Our mortgage offer came through in a about 4 days via a mortgage broker.

50shadesofmeh Thu 22-Aug-13 14:23:10

Did you get things sorted mama?

mamafridi Thu 22-Aug-13 23:08:53

Hiya fifty shades, at 5pm this afternoon the solicitor came back to me to say that they would not agree with me being put on the mortgage contract as second charge, but if I agreed to the original terms they would go ahead with completion so of course I agreed.
We move tomorrow and I can't tell you how relieved we are.
I have learnt a lot of lessons as a first time buyer. One of them being that I should choose a solicitor that will sit down and explain in simple terms what I am agreeing to before I sign anything.
And I will also make sure that we get a deed of trust drawn up asap.
Thanks so much for your advice - it really helped me get through 3 Horrendous days. X

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