Shared Ownership Mortgage mis-sold?!! Financial Ombudsman case??

dunstonh

Do the Halifax have advisers or are they information only clerks? Or if they do have advisers is there an information only process and an advice process or does everything go through on an advice process?

If the Halifax just took the application to process without going through an advice process then they are not liable for the suitability of the mortgage.

LondonSW5

Yes...i am for real!!!!

I signed up for a scheme called "Social Homebuy" which means you have the right to buy either a share of the property that you were renting...or all of it. It follows Shared Ownership rules for mortgages though. But it is not shared ownership as such. I was renting the property from the housing association for years before i decided to buy a 25% share. I can staircase up....just like with shared ownership...and buy 100% if i so wish. I am not sure you can do that with shared ownership? If i decide to sell....it would advertised on the housing association website. If no takers...then after 4 weeks i can put it on the open marker and sell it that way. It would be sold as 100% ( even if i owned 25%) and then the shares values would wou worked out between myself and the housing association..so yes, i am for real? Is the same as shared ownership?
As for the value. Yep...market value has dropped...about 10-15% in this area. In febrary this year it was valued at 209k. Now, after my renovations is 300k...as Halifax valued 10 days ago! Hence the 91k uplift!
It is my responsibility to read all the term and conditions of the mortgage i bought. Do you think i am completely stupid? Of course i did. There is absoloutely nothing there, that i can see, that mentions anything regarding using the uplift in value...which is a result of my improvements and so the housing association have no claim on....to add to my mortgage as additional borrowings?
If i sold the property today i would get my 91k uplift backin its entirety. i can use all of the 91k to staircase but i can add any of it to my mortgage for debt consolidation. And there is nothing written anywhere that says i cant.

LondonSW5

...also the scheme is a 'pilot' scheme.It is not being run by many housing associations. I thoroughly read everything that i was sent around this scheme. Nothing i was sent by the housing association has any information regarding this situation.

opinions4u

A lender can vary what it will / won't arrange additional finance for.

Does the original mortgage off guarantee additional finance in future?

If not, I can't see where you can take this.

UK007BullDog

Your social buy is nearly the same as shared ownership. They (Government) repacked and respin'ed it as new, due to some lenders pulling out and others never joining the scheme, due to said problems like the one you are experiencing now.

Yes, you could sell but lets face it, not many people are elegible for this scheme. As for selling the 100% in a falling market at this time it could mean that you might be out of pocket.

The fact is that your mortgage company is first in line and the housing association second. If you were to remortgage the housing association were to move to place 1 and the lender to place two. No lender in their right mind would do that unless there is lots of equity in it for them.

In your case there is not. Also the market is falling and cannot comment on your evaluation but it sounds way over the top. I would bet they would send in a second evaluator just to double check.

The only way for you to get that extra money is to remortgage to buy the rest of the shares to make it up to 100% and then if the value is truly that much more remortgage again or do it all in one go.

This scheme will only work for those who can buy up to the 100%. Otherwise nothing but headache.

LondonSW5

I dont think the valuation i had done is 'way over the top?' You cant rally comment on that since you havent seen the property?
I have added a mezzanine and created much more floor space. New kitchen, inc granite worktops, new wooden flooring throughout, internal walls removed...new bathroom...completely renovated to a VERY high standard. This is central London....Kensington and Chelsea we are talking about. The valuation was by an independant rigs valuer. As you mentioned the market has fallen, so i was actually expecting it to be more in the region of 320k to be honest.
My issue is that my salary wont allow me a mortgage of 209k.If it did i wouldnt buy a share would i? The hypocracy of the scheme is that i would need a salary of over 50k per year to be a shared owner in some of their properties in this area...however a salary of that size prohibs you from joining the sheme and being eligible in the first place for shared ownership!!??
I know the rest of the country has much cheaper property..but this area has been my home for 12 years....hence the shared ownership mortgage was THE only option for me to get on the housing ladder near where i work.
A run down 1 bed property in this area is currently in the region of 350-400k!
My property was bought as a studio flat...but i have now converted it into a split level open space with a mezzanine bedroom..hence the uplift in value.
Am i not expected to try to improve the quality of accomodation i live in? Or to better my investment? I thought that was also the idea behind the scheme? To help people on lower incomes afford accomodation in the area they reside in and work in...and to therfore give them some investment for the future...otherwise why bother with it? Why not just rent?
My issue is that i NEVER was made aware of any implications of any kind with shared ownership mortgages regarding re financing. If i had i would not have proceeded as i had. That is partly my issue. How do i address that?
I will buy additional shares...as you said the market has fallen..so now is the logical time to do that..i can buy more shares cheaper than ever before....bad news for the housing association..better for me...but i still cant afford a 100% share in this area and i still wont be able to add a small amount of my (now even bigger) equity to my mortgage for debt consolidation. Is completely crazy?!!
So what can i do? Sell?.....doesnt that undermine the point of the scheme?
Any ideas on what a 'deed of postponment' is? How would that change things? I have heard that metioned as a suggestion but i am not sure exactly what that means legally? Would that help me?

LondonSW5

dunstonh wrote: »

Do the Halifax have advisers or are they information only clerks? Or if they do have advisers is there an information only process and an advice process or does everything go through on an advice process?

If the Halifax just took the application to process without going through an advice process then they are not liable for the suitability of the mortgage.

I arranged my appointment with a Halifax Mortgage Adviser who specialises in Shared Ownership!!
She knew exactly the situation and knew exactly why i wanted additional borrowings. She arranged the valuation..charged me for it...provided me with an illustration, then the day the funds were to be released she called and advised me that she couldn't proceed??!!
I have examined over and over again all the literature and terms and conditions of my mortgage as provided by the Halifax, and i cannot see written anywhere that with a Social Homebuy/Shared Ownership mortgage i cannot have additional borrowings for debt consolidation? Perhaps this adviser also couldn't see this clause...? When it went to their underwriters , it was decided that since was Social Homebuy i didnt qualify!! But i cant see this in any of my terms and conditions!

dunstonh

I arranged my appointment with a Halifax Mortgage Adviser who specialises in Shared Ownership!!

But did she give advice or just information only? was a factfind completed and suitability report issued? Did the key facts document state that advice was being given or just information?

She knew exactly the situation and knew exactly why i wanted additional borrowings. She arranged the valuation..charged me for it...provided me with an illustration, then the day the funds were to be released she called and advised me that she couldn't proceed??!!

All those things are done with information only cases.

The only reason I mention this is because it impacts on your ability to complain. If no advice was given then you cannot complain about advice. A lot of the lenders have moved from giving advice to giving information only. I dont know about Halifax which is why I was hoping one of the mortgage brokers may.

LondonSW5

The Halifax adviser that specialises in shared ownership carried out a credit check, asked for payslips and provided an additional borrowings agreement that i was asked to sign. The interest rate and type of additions to my mortgage was calculated. I have a 25% mortgage that is variable and the additional borrowings was to be added as fixed rate for 2 years. As i said i agreed to the amount for borrowing and signed. we were all set. The funds were due to be credited to my bank acct, however on the day i was expecting the release of the funds to me...i get a call from the adviser saying "bad news!. I cant proceed!"
That to me says that an agreement was made. It couldnt possibly be only for information surely...not at that late stage?
I am really stressed by all this. I wouldnt be writing on this forum for advice if i knew all the answers..but it doesnt seem right to me!
I also dont have any terms and conditions in anything i have received that says that i cannot use additional borrowings for debt consolidation? Maybe they got confused? This is Social Homebuy after all and not Shared Ownership..however now i am being penilised and i read and agreed to what i saw as the terms and conditions of my mortgage.
I really need some help with this.
All your thoughts and comments are really appreciated. Thanks.

_Andy_

London - what Dunston meant was whether the person who sold you this did so on an advised basis, or information only - they would have given you an IDD at the start which would have disclosed this.