Charging Order? The myth

eggbox

The problem is Mortgage providers will only ever agree to a mortgage if they are the first charge holder. This is because if you default and they have to reposses, all other charges become overreached and are removed to enable the Mortgage company to sell the property unhindered by other interests.

If they reclaim your existing mortgage; then any new mortgage agreed would have to be placed after HFC's Restriction placed as it would fall behind that interest on a date of registration basis.

I'm sure LRR will advise if the following is at all possible, but it may be possible to retain the mortgage provider as the first charge holder if HFC are explained that you are only trying to lower your outgoings (and not looking to borrow more money) and are in agreement for this to happen?

DAKOTA45

Hi KEATON…

Isn't HFC now HSBC… most recently infamous for facilitating tax evasion, and also interest rate derivative misselling, Euribor manipulation, misselling of mortgage related bonds, forex manipulation, violation of international sanctions, weaknesses in money laundering controls, credit default swaps and PPI misselling?

Anyway… despite having a similar restriction on my property, I have still managed to swap for a much lower interest rate with my lender and didn't have any problems at all. I told them I could not afford the current variable rate which was 4% and they were happy to let us have a two year fixed rate of 1.8%.

I think if you're not asking to borrow more money, it shouldn't make any difference...

Land_Registry

eggbox wrote: »

The problem is Mortgage providers will only ever agree to a mortgage if they are the first charge holder. This is because if you default and they have to reposses, all other charges become overreached and are removed to enable the Mortgage company to sell the property unhindered by other interests.

If they reclaim your existing mortgage; then any new mortgage agreed would have to be placed after HFC's Restriction placed as it would fall behind that interest on a date of registration basis.

I'm sure LRR will advise if the following is at all possible, but it may be possible to retain the mortgage provider as the first charge holder if HFC are explained that you are only trying to lower your outgoings (and not looking to borrow more money) and are in agreement for this to happen?

Broadly speaking that is correct although the 'date of registration' is not the be all and end all so each entry/interest is considered on merit also.

I'm not too sure what you are suggesting though re the last point.

eggbox

Hi LRR

I'm suggesting HFC agree to be retained as the second interest on the register even though they would be entitled to be the first interest if the mortgage was redeemed.

Keaton_2

Hi Dakota45

I think ordinarily a remortgage shouldn't be a problem.

The issue has arisen as Halifax have changed their systems and we're on the old one. They have said they can't offer product transfers on the old system so they need to redeem the mortgage and set us up on a new one - which means, as eggbox has said, they would now be the second charge behind HFC (Rest0ns) not the first.

Appreciate any more thoughts suggestions before I go back to them.

Thanks

Land_Registry

eggbox wrote: »

Hi LRR

I'm suggesting HFC agree to be retained as the second interest on the register even though they would be entitled to be the first interest if the mortgage was redeemed.

Thanks eggbox - HFC and Halifax would need to consider that option and understand how their interests might be affected.

One thing to bear in mind, and which relates to my previous post re the order/date of entries not always being the deciding factor is that if the lender should exercise their power of sale then a form K restriction may also be cancelled automatically if registered before the charge provided that the charge was made by more than one mortgagor.

However we are perhaps jumping the gun a little here as repossession is not the anticipated outcome and of course would potentially only arise several months after the mortgage has been secured and registered. In this case you are trying to register a new mortgage.

I note Halifax have also suggested another alternative, namely HFC securing their debt as a second charge after Halifax have registered the new mortgage. Whether HFC see that as a possible option and one which gives them more security than the form K restriction I do not know but perhaps something to engage with them on?

I suspect though that there are other competing interests in play as well as the OP refers to 'all our creditors' and this may hamper HFC's ability/willingness to go down any new route.

At the end of the day it is really a question for each creditor of eliminating/reducing risk but how they measure and then treat that risk is for them alone to decide.

harisumo

Hi Eggbox, I had a letter today from Marlin advising that they had been taken over by Cabot. I had a quick look on the internet and saw news that this in effect created the 'biggest and most powerful' DCA in the country, the sale netted the founder of Marlin a personal fortune of 30 million and he was going to now retire out of the busness (after making a fortune out of everyone else's misery!). Not sure what this means for the rest of us poor souls now, I haven't heard from Marlin since last year, if you recall I sent a letter of complaint and copies of some of their correspondence to the FCA. The FCA said they would act on the letter but I would not be advised of the outcome. I never got anywhere complaining to the CE NRock, they just fobbed me off avoiding all the issues raised in my letter. Anyway just an update incase you didn't already know about the Cabot/Marlin thing.

eggbox

Hi Harisumo

Thanks for the update as I haven't heard about this? I will see if my ex has had a letter, too?

It, also, doesn't surprise me about your experience with the FCA as from my requests for information they are more defensive than the Land Registry (sorry LRR!) regarding legal advice. And this was in regard to the CCA1974 which they now regulate?

Land_Registry

eggbox wrote: »

It, also, doesn't surprise me about your experience with the FCA as from my requests for information they are more defensive than the Land Registry (sorry LRR!) regarding legal advice. And this was in regard to the CCA1974 which they now regulate?

No need to apologise as whilst you may sometimes be frustrated with the extent to which we can advise/assist you do at least appreciate why such limitations exist - a public forum is after all for discussing and airing views and we can't all be expected to agree on everything

wembley14

Hi DAKOTA45


I can certainly understand your frustrations surrounding the modified restriction.


I received the modified one 5 months after the standard worded restriction. We received no prior notification from creditors solicitors regarding the application to the court. We got letter from county court saying they have granted this restriction. I thought at the time that that they were just duplicating the original one. I did not realise at the time it was a modified one, at that time I did not have the knowledge what I have now.


They at least gave you the reason why they applied for modified one. The reasons quoted by you in previous post should have answered LRR frequent queries about the reasons why creditors would apply for this modified restriction as He would always be wanting specifics.


The solicitors you are dealing with are the same ones involved in my case. Also one of the authors of " WHEN IS A CHARGE NOT A CHARGE " dated 2006 is/was an employee of that firm (Blake Lapthorn). In that document he admits the standard worded restriction is " ineffective " for their clients/creditors and until the courts start to allow the " effective " wording of the non standard/modified restrictions the creditors will continue to have little protection.


Obviously they now have the " effective " restriction. But this restriction still does not stop the sale of a house as long as your buyers conveyancer is clued up and complies with the wording. My solicitor was aware of the rules but the buyers solicitor wasn't as knowledgeable, which resulted in the hold up of the new owners registration.


The on going mantra of this thread is finding the competent legal people to complete the transaction.


GOOD LUCK !!!!!