First Direct Legal mortgage

shell1000

I was wondering if anyone can help, this is my fourth remortgage but i've never received a legal mortgage document before, the document recommends that i seek the advice of my solicitor or a legal advisor before signing the mortgage.. im a member of the union so can possibly get free legal advice on this but I'm wondering whether this is pretty standard or not, I only ask as it says things about renting in it and I currently rent my spare room out and have a rental deposit in a savings account also. if anyone can advise i would really appreciate it!:money:

The document is quite lengthy but im a quick typist and it reads as follows:

(The cover sheet says)
This docuument is a mortgage of the property and other assets described overleaf on the terms set out in the separate document called the HSBC Bank Plc mortgage deed conditions (2006 edition). You should sign this mortgage in front of a witness who should be your solicitor, other legal adviser or a hsbc bank plc official.

HSBC bank plc will hold this mortgage as security for the debts and/or the other liabilities to hsbc bank plc as set out in clause 2 of this mortgage. what this means is that both present and future indebtedness, together with the other liabilities in that clause, are secured by this mortgage.

If any of the debts and/or the other liabilities are not paid when due, hsbc bank plc can take possession of the property and other assets, sell them and put the money from the sale towards the debts and/or the other liabilities.

The debts may include overdrafts, loands or money due under any other facilities that hsbc bank plc has granted to you or grants to you in the future. They may also include any liabilities under any guarantee or indemnity that you have given or may give in the future, to hsbc bank plc, for example, agreements to be responsible for the debts of another customer or for liabilities incurred by hsbc bank plc on your behalf.

This mortgage is separate from and not limited by, any other mortgage or guarantee which may already have been given to hsbc bank plc or which may be given in the future.

This mortgage and the mortgage deed conditions contain other terms which affect you.

(the actual form says)
1. the property and other assests
with full title guarantee, you, and if there is more than one of you, charge by way of legal mortgage and (as appropriate) assign and transfer to the bank as continuing security for the payment and discharge of the debt (and each and every part of it):
(a) the property: freehold property... and parking space..registered at H M Land Registry with title number....
(b) the benefit of all rights, licences, guarantees, rent deposits, contracts, deeds, undertakings and warranties relating to the property;
(c) any shares or membership rights mentioned in paragraph 3 of the cnditions;
(d)any goodwill of any business from time to time carried out at the property;
(e) any rental and other money payable under any lease, licence, or other interest created in respect of the property; and
(f) any other payments whatever in respect of the property, for example, payments from any insurance policy or any compensation money.

The bank agrees to release, re-assign or transfer back the above assests when the debt has been repaid and the bank is no longer under an obligation to provide any loan, credit, financial accommodation or other facility to you.

2. The debt which is secured on the property and other assests
the debt is all money and liabilities whatever, whenever and however incurred whether now or in the future due, or becoming due, from you to the bank
this includes but is not limited to:
(a) overdrafts, personal and other loans or facilities and further advances of money;
(b) guarantees and indemnities to the bank and any of your contingent liabilities;
(c) discount, commission and other lawful charges and expenses;
interest in accordance with any agreement between you and the bank and, if there is no agreement, interest on any money and liabilities due from you at an annual rate of 3% above the banks base rate from time to time computed and compounded monthly and/or according to the banks then current practice. interest as above applies before and after any demand or judgement;
(e) money agreed to be paid by you under paragraph 24 of the conditions
The debt is not any money and liabilities arising under a regulated consumer credit agreement falling within part v of the consumer credit act 1974, unless agreed between borrower and the bank.

3. restriction
you, and if there is more than on of you, each of you, apply to the h m chief land registrar to enter the following restriction against the title mentioned above;
"no disposition of the registered estate by the proprietor of the registered estate is to be registered without a written consent signed by the proprietor for the time being of the charge dated in favour of the hsbc bank plc referred to in the charges register"

in witness of the above, this mortgage, which is intended to take effect as a deed, has been executed by the mortgagor and is now delivered on the date mentioned above.

SouthCoast

A search for "All Monies Charge" should help explain.

charlie2517

Hi there!

Please dont do anything with this document - I think you really need to take full legal advice. Without wishing to offend (my intention is to assist) as South Coast says this is an "all monies charge" and has heavy implications which you need to go into with your eyes open. Whereas with an average mortage if you get into arrears and they take you to court the court has discretion to make a number of orders if it's an all monies charge and you default the court have NO DISCRETION. You really need to take legal advice, I've had a quick read and the clauses you cite do not from what I read deal with what you ask re restrictions on renting out rather the sections deal with what the lender deems as an asset - have you quoted the right part? It's getting late so I might be tired and have missed it but I can see it.

Hope this helps!

shell1000

thanks for that southcoast, the mortgage is a first direct offset mortgage.

I'ts highly unlikely that i will default in future, i am fixing my rate for three years and i earn a decent salary as well as renting my spare room out. I have no loans, no credit card debt and only dip into my overdraft at the end of the month.

But this doesn't sit comfortably with me, are first direct likely to allow me to proceed without signing it? should i be worried about it?

locoblade - have you received anything similar for you fd mortgage?

thanks for your help, i think im going to call the union solicitors tomorrow and ask for advice

tinkerbell84

I read it and signed it without any issues whatsoever.

Our re-mortgage completes next month.

shell1000

hi charlie! ive written the whole thing at, my understanding is very unclear over all the rental quotes, to be honest the need for this document seems really harsh. I'd really like to know if they are standard for offset mortgages.

Ive already paid 300 reservation fee and 180 survey on this mortgage and am really annoyed they have only sent this through at this stage..

shell1000

tinkerbell, did you take legal advice on it? as i said its highly unlikely i would default but you never know what the future holds i guess

tinkerbell84

You sign a legal mortgage document with any mortgage.

This one just says that if you default on the mortgage, not only can they reposess the house, they can take other assets like savings in HSBC accounts and any rent deposits that you hold in order to repay the debt.

It's a slightly harsher version of their 'close your 1st account to get £100 leaving fee and you have to cancel ALL other accounts held with us'.

If you are concerned, seek proper legal advice, but neither me nor my OH had any problems with the document and we both read it at least twice.

tinkerbell84

I didn't take any separate legal advice, no.
I did study contract law a few years back

charlie2517

There is scope for a lawyer to negotiate the removal of certain clauses (I did for a good while specialise in mortgages but only in the litigation side and not the drafting/negotiation of contracts) but my understanding is that it can be tried to see if they will, but I expect they wont.

The decision then is yours having had advice (I can see where you're coming from on the likely to default, but sometimes life throws curves balls (and I sincerely hope it doesnt at you or anyone) but you want to protect yourself as much as you can. It's a matter of personal choice and you're (in my humble view) doing the best thing and getting advice, then armed with full info you can make a decision.

shell1000

i guess this means if you are going to default on your mortgage take all your money out of your bank accounts or they can lawfully remove it to repay the default??