Mortgage Offer expired: new conditions unaffordable

[rmelly]

Me personally I think the banks have a lot to answer for and the legal profession who let people sign contracts with no get out clause or at least a clause that if the mortgage offer was not the same when drawdown took place as initially that the purchaser could get out of the contract. I really hope that this practice has changed.

I would have thought any builder (and their solicitor) would have strenuously objected to this at the time and even more so now? A purchasers solicitor can request all the clauses he wants, but the vendor must agree to it...

 

[mf1]

Indeed.

I think people are often confused about a solicitor's responsibilities and functions.

Many of my clients wish to do foolish things. I tell them I think they are being foolish ( which does not go down well), I advise them against their desired course of action and, sometimes I decide not to act for them if I think they are being foolish. However, in the end of the day, clients make their own decisions and, in the hot house that was the housing market until recently , decisions made then may now seem foolish.

People need to take responsibiilty for their own actions.

mf

 

[ClubMan]

Losing the deposit and not being sued is looking like the best potential outcome at the moment

You will also have to pay the solicitor for work done to date presumably?

 

[ClubMan]

Me personally I think the banks have a lot to answer for and the legal profession who let people sign contracts with no get out clause or at least a clause that if the mortgage offer was not the same when drawdown took place as initially that the purchaser could get out of the contract. I really hope that this practice has changed.

What about the client/borrower taking some responsibility for their own actions - e.g. by reading the documents that they sign before they sign them?

 

[aircobra19]

The house is fully built - the first phase of the development is almost ready. Out of the first phase they have sold about 7 out of 40 houses although they wouldnt admit that if you asked them.

Yeah Im not expecting that much of a reduction in the price I was just giving a ball park of where we are financially

Losing the deposit and not being sued is looking like the best potential outcome at the moment

If you house is already built, then you're locked in. No getting out of this. Your deposit is gone whatever happens. I think its a bit short sighted and even greedy to insist on the earlier sale price or pursue the OP for the difference if he sells it to some one at a lower price. Much cleaner to sell to the OP at a new price. Assuming the OP can get enough of a mortagage. That way the deposit isn't lost. I assume theres a healthy profit on the original sale price so there would be room to manoever.

That said the builder would be financially better off if does sell the house and keep the OP deposit and sue for the difference. Might take some time to sell though.

 

[Bronte]

I would have thought any builder (and their solicitor) would have strenuously objected to this at the time and even more so now? A purchasers solicitor can request all the clauses he wants, but the vendor must agree to it...

I've a feeling that buyers solicitors are nowadays insisting that buyers don't sign contracts unless there is a clause about the mortgage and builders desperate for a sale will agree to this, maybe I'm wrong but the wind has changed.
MF1 - I knew you'd show up, and yes people should take responsibility for their own actions but a lot of purchasers, even though they were not 'forced' to sign contracts should have really understood what they were getting into, which it seems many didn't. Aircobra, if the value of the house had gone up do you think the purchaser should have to pay more money?

 

[ClubMan]

MF1 - I knew you'd show up

Er - what's your point here?

a lot of purchasers, even though they were not 'forced' to sign contracts should have really understood what they were getting into, which it seems many didn't.

How is this sweeping generalisation relevant to this specific thread? I don't think that the original poster ever said that they were confused or misled. They don't seem to be moaning about the situation or trying to blame anybody else - just trying to figure out their options and the best/worse case scenarios as far as I can see.

 

[Bronte]

Er - what's your point here?

MF1 and others debated this point before with me on AAM when there was someone else with the same predicament, can't remember what the conclusion was, and I'm no good at finding things so I cannot link it. Sorry Clubman if you think my post is not relevant. You've got the power so delete if you will

 

[ClubMan]

I just didn't understand your comment.

 

[rmelly]

I've a feeling that buyers solicitors are nowadays insisting that buyers don't sign contracts unless there is a clause about the mortgage and builders desperate for a sale will agree to this, maybe I'm wrong but the wind has changed.

Wouldn't have thought this was the case. If the vendor can easily pull out then there may as well be no contract, so this clause is not on the vendors interest at all, regardless of the level of activity/inactivity.

Plus I doubt the builders banker would be too happy to see it.

Any solicitors care to comment on whether such clauses are now common practice?

 

[mf1]

"Any solicitors care to comment on whether such clauses are now common practice?"

I have not seen any - but then no-one is buying off plans so there is no long lead in time.
What is happening is that the clients are under no illusion that they should have their loan approval in place( and all conditions complied with) before signing contracts and that they should close as soon as possible after that .

"MF1 - I knew you'd show up, and yes people should take responsibility for their own actions but a lot of purchasers, even though they were not 'forced' to sign contracts should have really understood what they were getting into, which it seems many didn't."

No problem, Bronte! I don't agree with you - theres a surprise!
There is a big difference between not understanding and choosing not to think about/consider any downside. I have no doubt , at all, that anyone signing a contract knew that it was legally binding - it just did not occur to them that that would be the case if there was an economic downturn and their circumstances changed.

mf

 

[rmelly]

"Any solicitors care to comment on whether such clauses are now common practice?"

I have not seen any - but then no-one is buying off plans so there is no long lead in time.
What is happening is that the clients are under no illusion that they should have their loan approval in place( and all conditions complied with) before signing contracts and that they should close as soon as possible after that .

Sounds a bit more realistic.