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Santander ‘puts borrowers at risk’ by pulling mortgage offers

Brokers have accused Santander of putting borrowers at  “massive financial risk” by withdrawing mortgage offers at the last minute due to an internal error.

Clients have had their mortgage offers withdrawn after a routine check of Santander’s systems found the lender was not asking borrowers for details of all external mortgages. Santander calls these “retained properties”.

Start Financial Services manager Tom Cleary says his client had a mortgage offer withdrawn one working day before completion because he owned a buy-to-let property – the details of which were never requested.

Cleary says: “We all make mistakes but where a case has exchanged and is due to complete, they have put clients at massive financial risk under the guise of treating customers fairly.”

A Santander for Intermediaries spokeswoman says: “We request all applicants for purchase or remortgage applications inform us of any retained properties.

“Following a routine check of our IT systems, we found some offer letters were not detailing customers’ intentions correctly and had been produced without this specific clause.

“We have reissued offers to those customers whose situation may have changed post application. This has been done to ensure we continue to treat customers fairly and ensure ongoing affordability.”

Your Mortgage Decisions director Dominik Lipnicki says: “I find it shocking Santander can take action on a mortgage offer after it has been made, especially at such short notice before completion.”


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There are 7 comments at the moment, we would love to hear your opinion too.

  1. This appalling maladministration and total lack of compassion was one of the main reasons why I dropped them back in 2012.

    Their standard defence is “we are a responsible lender”. I believe that the letters ‘ir’ are missing somewhere.

  2. Cant agree with you Alan, if the brokers in question had done their jobs properly they would know that this was part of Santanders criteria and disclosed the relevant information or placed their clients with a more suitable lender.

    Whilst I would never totally dismiss a Lender, I do consider very carefully if I want to take the risk of dealing with their way of lending and attitude towards the introducer and their clients.

    Santander have made a huge amount of noise over the quality of business submitted to them without considering the service they offer us, their customers in return. With the market competing for business again I fail to understand why they would currently be a lender of choice for anything other than interest only lending.

  3. Mr 11.11am You dropped them in 2012 ! So given in the time since then they have had some of the best clients deals on the market you still think thats giving best advice to your clinets or maybe you just haven’t done a mortgage since 2012 more like ! I’m glad you don’t work for my company! Yes they have messed up and I think “retained” needs a better explanation but to site maladministration and lack of compassion is bizarre to say the least.

  4. I agree with the fury of this article and that it is entirely unreasonable that lenders can put buyers at risk like this.
    It is not just Santander, I believe that all lenders have done this on many occasions to buyers, both residential and buy to let.
    I have been saying since 2008 (when lenders really started pulling offers post exchange for all sorts of ludicrous reasons) that by the time a mortgage is offered, that offer must be binding on the lender.
    After all the buyer is expected to rely on this to enable them to exchange contracts.
    Such as reliance is to the buyers detriment because they can be served notice to complete and sued for substantial losses.
    In any other industry a contract is a contract and a clause that allows one party to withdraw from the contract unilaterally before it’s fulfillment must be an unfair term.
    An offer shouldn’t be sent until everything necessary has been checked, it is not a DIP or AIP, it is an offer, it is designed to be relied upon.
    I hope and wait for the day that the FCA rules that mortgage offers must be binding upon a lender, subject to the reasonable clauses therein (completion timescales etc) and then people can contract to buy a home in the knowledge that the rug will not be pulled from under them.

  5. The FSA as was made it clear that a unilateral right to withdraw an offer may be a breach of the Unfair Terms in Consumer Contracts and published a notice against the Chesham Building Society in 2010 –

    This includes the comment – ‘While the exercise of the discretion to withdraw a mortgage offer in some of the circumstances outlined may have been fair, we were concerned that the discretion in some of the other circumstances may have been unfair. For example, we considered that the power for the firm to withdraw a mortgage offer due to ‘any question’ or ‘any event’ occurring since the mortgage offer was made may have been too broad.’

    On ths basis you would have to consider if the Santander contract allowed them the right to withdraw for their failure to ask a question, in which case that may well be an Unfair Term.

    If they are withdrawing for non-disclosure then that may challengable if they have not made clear they required the information in the first place.

    No doubt the FCA will be asking for an explanation of the terms of their contracts in addition to considering whether their system failure mean that they had inadequate systems and controls in place to ensure they treat their customers fairly etc.

    As usual, the FCA will not comment on individual circumstances and if they do take supervisory action you can expect to wait for 2 years or so before an outcome appears.

  6. What an excellent post I am sure that this will be very helpful to others, thank you 🙂

  7. I’ve heard of these guys!!

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