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Sub-prime lender sues E.Surv over ‘negligent’ valuation

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Sub-prime lender Rooftop Mortgages is suing E.Surv for more than £145,000 for valuing a property that later had to be abandoned following a landslide.

According to papers filed at the High Court in December and recently made public, Rooftop offered a £175,000 10-year remortgage in December 2005 on a Torquay house belonging to William and Alice Watson.

Rooftop’s agent, Mortgage Choice, asked E.Surv to carry out a valuation.

Rooftop claims E.Surv valued the property at £450,000 and failed to take enough notice of a landslide risk with the house located near a clifftop.

In February 2013 the neighbouring house was damaged in a landslide. Geologists Frederick Sherrell advised the Watsons to move out immediately. The local council blocked off their house and the Watsons stopped mortgage payments to Rooftop in March 2013.

Rooftop claims E.Surv was negligent for not mentioning that the house was near a cliff, failing to spot the significance of telltale cracking in the walls and not recommending a geological survey.

The lender also says E.Surv was negligent for not properly taking into account the Watsons’ claim that the property had been worth £500,000 in 2005 despite having been bought for £189,000 in 2003.

According to Rooftop, E.Surv “failed to consider the significant potential for the low price to have been associated with a risk factor connected with the property’s close proximity to the cliff”.

Rooftop argues the house was worth only £50,000 to £100,000 in 2005 and following the landslide “is now unsaleable and of no realistic or substantive value at all”.

The lender bundled and sold the remortgage but is still responsible for the property because the sale was not “legally perfected”.

E.Surv director Richard Sexton says: “Proceedings are stayed at this point in time. I cannot add further comment because it’s a current court matter.”

Rooftop’s lawyers, Dentons, were unavailable for comment.

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Comments

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  1. Philip Milton 6th June 2016 at 3:42 pm

    Curious! You can imagine the chase to the bottom – who was/is the biggest idiot…. and thus should contribute to the losses incurred.

    Wanna buy a house on a cliff top? Yes… one which has subsided in value considerably over the years as the fears have grown… Sad if the people there had been there for decades but it’s not lenders’ fault.

    And you’ll lend money on it – yes and your security is… yes you’ve guessed!

    And the surveyor didn’t mention things – even to protect his own back (he could still have said the value was what a willing buyer and a willing seller would accept at the time). But – the valuation was for the purposes of relying on the asset as security if things go wrong….

    Then there is the small uncommented upon point, excuse me but where is the solicitor in all this! He has a responsibility to indicate the obvious to his client and the mortgage company for which he acted as well. Did he do a local search and to check the proximity of the property to a clear hazard? Again, very easy to have covered himself by saying ‘by the way’ you need to be aware that….

    Really though, the customers took the risk – they owe the money. It is their stupidity or unfortunate circumstances if they had been there for years. They should then sue their lawyer unless of course they were advised not to be so stupid or the problem arose later. The lender – did it really have a concern over the reason the purchaser wanted to take the debt? No. They would only sue the surveyor if the Wilsons don’t have the money to honour their debt.

    Clearly though the lender should change its name to Clifftop Mortgages. A subprime lender doing a remortgage in such circumstances indeed….

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