Charging Order? The myth

Hootin_Heck

Quick Update....
Not a lot being happening the last few weeks, but no major problems encountered just yet.

The only issue we are concerned about is to do with the way the mortgage was structured when we took it out 12 years ago. It was a "Together Mortgage" which means there was a secured amount and an unsecured amount borrowed.
We are trying to ensure that we only pay the secured element of the mortgage when the sale completes. We need the unsecured part to be "de-linked" (which will mean a higher interest rate) and luckily we have found the original paperwork which states that the unsecured and secured elements are to be treated separately. One is regulated by the FSA and the other by the CCA 1974...so we need to get this to the solicitor today as the lender is including the unsecured element in the redemption figure.

We also discovered that we have being paying PPI on all elements of the mortgage..so we are going to get the solicitor to look at that too.

We are hoping to confirm a completion date in the first 2 weeks of July, so hopefully will be able to update on progress regarding the funds soon.

eggbox

I've never come across this type of mortgage and I'm trying to get my head around how a lender would allow "unsecured" borrowing as part of the mortgage loan? But its good you have the original paperwork detailing the lending as separate.

And if you have discovered there was PPI on the loan that, potentially, could be a big help in making a settlement of the mortgage on the terms you want?

Hootin_Heck

yeah...back in the day, NRAM used to offer 120% credit, consisting of main mortgage, and an unsecured amount not above £20k...literally threw cash at people back then!!...but profited most from the PPI they lumped on, and an increase in rates to 8% for the unsecured amount if de-linked. Basically, as an example, for an additional £5k which was borrowed.... with PPI.... the total amount for that £5k is £13000k. We have been ripped off from day 1 with them as our lender

eggbox

Oh, yes I forgot about the extremely dodgy Northern Rock!

Fingers crossed you get a fair whack back on the PPI, though?

Pinkypo

Hi all, I know this is an old threat and am hoping someone sees this. We are told about this by a solicitor last year when the house was in the process of selling, unfortunately it fell through. We went on to sell it again this year, but we used a different estate agent, because we couldn't pay their fees up front, we had to use a solicitor they choose. Now the problem we have is that this solicitor is adamant that the sale procedures has to pay of the charges and we know there isn't enough equity to do so. We have tried to tell them what we was told by the other solicitor, but they are not listening. The buyer signed two weeks ago, but our solicitors is waiting for redemption figures from the creditors. We just don't know what to do. Is there a piece of legislation I can throw at them? Any suggestions would be appreciated

Pinkypo

Hi all, I need some advice please. We was told about this with a previous solictor, unfortunately the house sale fell through. We are selling again but unfortunately we used a different estate agents and because we couldn't afford to pay their fees up front, we had to go with the solictor of their choice. The buyer signed over two weeks ago but our solicitors are waiting for redemption figures from the creditors, no matter how many times I have told them about this, they believe the creditors have to be paid out of the equity, I have even told them there isn't enough equity. I am getting so frustrated and worried the sale will fall through. Does anyone know a regulation or anything I can throw at them so they believe me.
Any advice would be much appreciated

Pinkypo

Hi, I am using a solictor that has no idea about this. What can i say to her to make her understand?

Land_Registry

Refer them initially to Practice Guide 76 section 4 3rd para and explain that a form K restriction can be automatically cancelled providing it protects an interest under a trust of land and the interests under the trust have been overreached because there has been a transfer for money by two or more proprietors to a third party.

I am sure eggbox can provide some additional material/explanation as well although this thread does refer, many times, to the sort of detail needed

eggbox

Pinkypo

What LRR has advised is the best way to start and explain that there is no legal obligation to settle the debt in order for the property to be transferred to a new owner. You also explain that the Land Registry will confirm they don't require proof of payment of the debt, to transfer a new owner, as the terms of the Restriction does not require this.

Unfortunately, I suspect it will be more of a "professional" obstacle you face as they will, most likely, want you to settle the debt as that is what they are used to doing? You should also keep in mind that Solicitors look after their own interests first and their client's interests second.

So, armed with LRR information, you need to explain to your Solicitor that you do not wish to settle the debts at the time of the sale as you have no legal obligation to do so. (If they say there is, by the way, you simply ask them to explain to you where this is, legally, written down.)

You further explain to them that you understand the debt exists and you will make arrangements to pay the debt if and when the creditor contacts you for payment. But you are instructing them (you are the paying client remember) not to settle the debt from the sale funds and it is of no concern to them if a third party creditor gets paid or not when the sale occurs.

Start with the above to see what resistance you get but come back to the board if they don't play ball?

Pinkypo

Thank you. I'll email them now, unfortunately I don't hold much hope. I have already sent two emails with no response. Their service is terrible and I am at my wits end. There isn't enough equity in the house and the thought of parting with that much money is getting to me