All those little important bits of paper - birth certificate, exam results, marriage certificate - have a way of getting away from us. Unfortunately, even institutions entrusted to look after such documents may occasionally misplace them.
Family Money reader, Mr P, reports that he is in a very difficult situation following the loss of his property deed by First Active. The sale of the house to which the deeds were attached was agreed last autumn and is waiting for the completion of his new home before closing in a few weeks.
Our reader says the lender informed his solicitor late last month that the deed could not be found. Although the company has said it will reconstitute the deed it may take up to two months to complete this process, he says.
This is time he does not have as closing the deal on his new home is impossible without the money from the first home. Mr P says he faces a breach of contract with the builder and a potential loss of this home.
A First Active spokeswoman says this situation does not arise very often and it does not usually hamper the sale of the home. "We have approximately 70,000 mortgage customers and we are in the process of changing over to a new bar code filing system," she said. There were two other similar cases in the last few weeks, but those deeds have been found.
"First Active is at fault here and the customer will not be out of pocket. Any loss will be borne by us," she said.
Several options are available to customers in such situations. The customer can get an interest-free bridging loan or use something else as security for the amount owed to the builder. In some cases, the company may issue an indemnity to the other financial institution that explains the situation and provides assurances that the situation will be sorted out, the spokeswoman said.
REA Mortgage Services Ms Sarah Wellband agrees that this is a rare situation - it is something she has seen only once in her 13 years in the business.
"After a great deal of time and hassle they can apply to the land registry for a substitute deed. It involves a great deal of paperwork and is time consuming as affidavits must be filed from both solicitors and from all parties concerned saying that the deeds are lost."
