Can a bank refuse Transfer of Equity?

T&M's_mum

I really need a bit of help!!

My sister got married in Sept 2005, she had her own house when she met her husband to be and this was sold and when they got married they bought a house together and even though he did not put any money into the house she put her equity of £60000 into the house.

He had a bad credit rating and she went through a financial advisor and they got a mortgage through Southern Pacific. He left the marital home in Jan08 and has not contributed any money towards the mortgage or any other bills since then. He has recently started living with another girl, meanwhile my sister is getting letters still addressed to him from his bank and credit card company as he is missing payments on his cc and loan.

My sisiter is absolutely distraught, she has tried several times to ask Southern Pacific if they will do a T of E as she is terrified that he will make himself bankrupt and they will come after her house. She is managing (just about) to make all repayments and all her other bills on her own. Southern Pacific say they are not doing any new business but surely this is not new business? Isn't it in their interest as well to get him off the mortgage? Do they not have any legal obligations to look at someones situation and offer some kind of help?

She has looked at remortgaging with other reputable banks but she is tied in until sept 09 with a £5000 penalty.

I am desperate for some help or advice as to where to go next e.g. ombudsman or FSA etc.

Thanks for reading this!

Ian_Griffiths_Halifax

Southern Pacific are under no obligation to take the ex off the mortgage as he is additional security for them, even if he is as unreliable as you say.

As it was him who had the Adverse Credit and not her, she may actually still benefit from remortgaging away from Southern Pacific if her income would allow her to go with a highstreet lender. Her payments on an Adverse Credit mortgage with SP would be pretty high I suspect.

Would the value of the property allow for a £5000 penalty to be added to the mortgage?

The unfortunate thing here is that unless the correct provisions were in place, to protect her deposit, when they set up the mortgage, he sounds like the sort who would still want something out of the house rather than just transferring the property to her.

T&M's_mum

There is enough equity to allow the £5000 to be added but she will also have to take into account raising money to pay him off as she is going to divorce him. The house is worth about £145000 and she owes £85000

Thanks for your response I would just have thought they have some kind of obligation to discuss a TofE as up to now they just say straight no and do not want to discuss the problem further.

She unfortunately trusted him and went against my advice of putting in place something to protect her money that she put down.

Ian_Griffiths_Halifax

That's the problem I was talking about! Oh dear.

There may be a glimmer of hope thought. If it's currently only worth the £60,000 difference that she put in, if it can be proven that the funds came from her, then a solicitor may be able to come up with some suggestions that may help her to keep it.