View more on these topics

A bizarre case of ‘computer says no’

I’m amazed by some lenders’ inflexibility. A rich client wanted to borrow a bit extra but Nationwide rejected him. Thankfully Coventry showed more sense, says a relieved Sue Read

It always surprises me that some lenders are more flexible than others. Since I started my new job I’ve been involved with a case for an important client of our firm, whose business can certainly be considered to be high net worth.

He wanted to borrow a significant extra amount on top of his mortgage to do home improvements (you know, tennis court, swimming pool, that sort of thing).

There are various complications to this story, which I won’t bore you with, but the bottom line is that he planned to combine his large existing mortgage (one soon to be on a standard variable rate) with the new borrowing on a competitive fixed rate.

Enter Nationwide. To be fair, the case was not completely packaged when submitted in January, so it ended up being bounced back and forth between its local processing unit and our office for a while.

My new colleague Paul, who is less experienced than me but no less tenacious, had struggled valiantly with the lender. Eventually the valuation was done and we understood everything had been received. We held our breath for an offer.

Nationwide sent its apologies, but the answer was no. Because of the case’s size it had to go back to its specialist underwriting unit at head office.

But there were compelling reasons to lend to this client. He has an ample investment portfolio with which to cover any possible shortfall, and the LTV will be low when compared with his property’s future value – well over 1.1m.

Nationwide does not have business development managers or head office support units and I could only speak to its local staff. But I couldn’t even obtain a phone number for the head office from them.

In frustration I fired off a plaintive email to Philip Williamson, the lender’s outgoing chief executive. I guessed his address.

One of his assistants called me and I put my case to him. I know that underwriting criteria are there for a reason but sometimes you have to be flexible.

To cut an even longer story short, the answer was still no. Sadly, Nationwide even got one of its local staff members to ring me to break the news, which was unfair. Some discussions continued, but the lender remained resolute. So the end result was an angry Jobson James and a furious client.

I went back to Coventry, the client’s existing lender, to see what could be done there. No problem, it said. He can do everything he wants. The lender even put the combined loan on a rate with no early repayment charges so it could review it again when the client’s work was done. Excellent news.

The client agreed and we went back to Coventry to get the forms only to be told that it had got it wrong. My patience was wearing thin.

But then a girl at Coventry called Mandip persuaded the underwriters to stick with their previous offer. Now that’s what I call underwriting. Nationwide nil, Coventry won.

Recommended

Football clubs get richer with Britannia

Borrowers and savers with Britannia are helping to shape the Rooneys and Lampards of the future through the lender’s football accounts. The society’s range of save and support accounts and mortgages return annual bo-nuses to football clubs including Chelsea (pictured). In the past eight years, more than £20m has been presented to 13 Premiership, Championship […]

Couple hit by IHT for dying in the wrong order

Thousands of families could be liable for Inheritance Tax after a ruling last week put a legal loophole in jeopardy.Around 500,000 UK families have signed ‘tenants in common’ agreements, which involve splitting the value of the property between husband and wife to avoid paying the tax, charged at 40% on estates worth over £300,000.An oxford […]

More smart thinking from GMAC-RFC

New products are always welcome and the UK market is known as one that is happy to embrace innovation in product design. And innovation has also been prevalent in other areas such as online applications and automated decisioning, which have rapidly become the norm.

Exclusive: European bank sets sights on British brokerages

Simon Burgess, managing director of Britishinsurance.com, says he has been approached by a large European investment bank to buy one of his dormant subsidiaries, British Money.Apparently, the bank has a war chest of over £100m to consolidate UK mortgage brokerages, but it is not looking to buy any that are part of networks.Burgess says: “The […]

Newsletter

News and expert analysis straight to your inbox

Sign up