unsecured to sceured loan

hornets_2

Hi.
My son is in the process of buying his first house, and only a matter of weeks away from signing the contracts. However the vendors got in touch saying they could no longer sell the house as there is a charge placed on the property, this is for a loan payments which were missed. When questioned further it would appear it was originally an unsecured loan but the loan company managed to put a charge on the property which now they cant sell until the loan is repaid.
The route they have got to go down is repossession so the charge reverts back to them and not the property.
My son still wants to purchase the house.

Any ideas anyone-can the loan company do this?

Typhoon2000

There shoulld be no problems selling a house with a second charge on it. Their solicitor just pays off the loan company as well as the mortgage lender before passing on whats left to the vendors.

hornets_2

Hi thanks, but there is not enough in the property sale to do that, thats why they are handing the property back. Can a unsecured loan become a secured loan without them knowing cos thats whats been implied.
Would our solicitors pick this up in the searches as it was the vendors who told us and not the solicitors.

Typhoon2000

No there is no way a unsecured loan can become a secured loan automatically at a later date without the vendors agreeing to to it.

hornets_2

Thanks for that, didnt think you could, but nice for it to be verified

CLAPTON

a charge can be put on the property if a judge so decides; there is no need for the debtor to 'agree'

the vendor needs to seek expert advice etc but as a potential purchaser I would go elsewhere.. the whole thing could drag on for ages.

jonesMUFCforever

Typhoon2000 wrote: »

No there is no way a unsecured loan can become a secured loan automatically at a later date without the vendors agreeing to to it.

Sorry this is incorrect - anybody who is owed money can put a charging order on a property but it can only be enforced by a court.
The only way for the son to proceed it would seem is to offer more money for the property.