All Monies Charge

matt74_2

I'm in the process of signing up for a remortgage deal and noticed an All Monies Charge in the contract terms.

Whilst I don't have any particular problem with this, I just wondered how common this is amongst the different lenders and if there should be any reason for concern?

Thanks very much.

Trollfever

AFIK all banks (not building societies) have this clause in their legal charges.

Goodtimesahead

could well be a problem if it all went t$$s up as I understand its easier for them to get possesion of a property with an ALL MONIES CHARGE, usually find them where directors businesses borrowing against their properties.

No expert but maybe better off with a building society?

Goodtimesahead

Here's what I mean.....

Press Release - 21/01/08

HOMEOWNERS RISK PROPERTY WITH MORTGAGE LENDER’S UNSECURED LOANS – CHECK FOR ‘ALL MONIES CHARGE’ BEFORE SIGNING, WARNS MONEYNET.CO.UK

• Little known ‘All Monies Charge’ locks mortgage to further borrowing
• Read small print before agreeing to additional unsecured loan or overdraft with mortgage lender
• Ask lender to remove clause – or look elsewhere for funds

A LITTLE known clause in some major lenders’ mortgage agreements could lead to homeowners losing their property should they default on any additional borrowing, warns personal finance data comparison site Moneynet.co.uk.
Far from being an unsecured loan, further borrowing or an overdraft with their mortgage lender could in fact be secured against their property if the original mortgage agreement included an ‘All Monies Charge’ clause.
“It’s shocking that borrowers who believe their additional borrowing is safely separated from their mortgage are actually agreeing to risk the security of their home – something many people would never consider doing,” says Moneynet.co.uk chief executive Richard Brown.
The ‘All Monies Charge’ clause in the mortgage agreement documents issued by some lenders means the lender secures all debt against the mortgaged property, including any additional borrowing such as personal loans or overdrafts. This means they are entitled to repossess the property should the borrower default.
“People may think better the devil they know when deciding which lender to choose for an unsecured loan – but unless they read all the small print they could be unaware that they are to all intents and purposes signing up for a secured loan rather than unsecured,” he says.
In a year which could be a challenge to many homeowners as the economy faces turbulent times, awareness of this silent but deadly clause could make the difference between losing and keeping their homes.
“Anyone in the process of taking out a mortgage should ask their solicitor to find out if the lender applies an ‘All Monies Charge’,” adds Brown. “If they do, it’s worth asking the lender to remove the offending clause.”
Mark Beaton, Head of Residential Conveyancing and a partner with East Anglian firm Ashton Graham, said: "This issue is not always investigated by a borrower and can come as a surprise at a later date. I would therefore advise clients to raise the question with their mortgage broker or potential mortgage company at an early stage."
Brown concludes: “If the lender refuses to remove the clause I would recommend finding a lender that does not include this exacting requirement. If this isn’t feasible, at least borrowers will know that any additional borrowing must be sourced elsewhere in order to protect the security of their home.”
* BBA/BSA data, April 2007
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cazzieclarity

I'm new to this forum and apologise for responding to a very old post! However, I'm a trainer for a charity specialising in housing law and am getting abit stumped by the all monies charge thing.

My main concern is that if repossession takes place on an all monies charge the courts do not have the discretion to suspend an order for possession (administration of justice act isn't available to all monies charges) as they would with a standard mortgage charge. Or at least that's what I can summise.....

This is very worrying. If lots of banks do use the all monies charge this is potentially leaving people wide open to lose their homes if they default.

I'd appreciate anybody's thoughts on this issue

Thanks

Radiantsoul

I used to work for a recoveries department of a bank and I am pretty sure a possession order can be suspended on an all monies charge.

All an all monies charge applies is that all borrowing is secured, rather than just the mortgage.