Secured Loan not Discharged by Solicitor on Sale of House

MissMoneypenny

dicky-dicko-2009 wrote: »

Hi All,
I tell the insurers that I am not at fault here and that I will not be out of pocket, and that if they take on assignment the same terms of agreement must be kept, they say we will not be out of pocket.

You have already informed the insurers that you want the same terms. Have you kept their response where they said you "will not be out of pocket"?

dicky-dicko-2009 wrote: »

And why now 364 days later they chase me for this money. I have also stated that it is not down to me to have suggested terms of payment and that this should have been agreed, and a new term of agreement be set up with then before settlement was made.

They are chasing you because you owe the money. Haven't you already agreed with the insurers that you will keep the same terms as the original agreement and therefore the same payments?

silvercar

It is now the primary issue. The insurer has meddled in a contract to which it is not a party - as your correctly say, to look after the interests of the new purchaser. It is now trying to enforce dubious rights against the OP

I don't think of the insurer as meddling. The in-laws solicitor notifies their professional indemnity insurer that there is a claim against them ie they failed to ensure all charges were removed on purchase. The insurer then pays out whatever it takes to settle the claim - in this case to pay off the loan to give in-laws clear title.

So the insurer, having failed to persuade lender to transfer loan to new property, clears the loan as a final settlement, the charge is removed, in-laws have clear title and the insurer has covered the negligence of the solicitors.

This could be the end point, but the insurers now want to reduce their costs, so they see if they can get something out of the original loan taker (ie OP).
There is no contractual relationship betweent these insurers and OP, so its a bit of a try on. Yes the OP should have had a loan secured on their new property, but its not OPs fault they don't. There is only so much unravelling that can be done.

If I was OP I would either:
a) tell insurers that the loan was covered by PPI and you would by now have claimed and therefore the PPI would be paying the loan. Let the insurers take on PPI if they want.
b) require proof of a contractual loan agreement between the insurers and OP (of course there is none).

Thinking again, I wonder if the insurers have bought the loan off the lender rather than just settled it. This would mean that they are more than likely have paid less than full value to clear it and given them the right to chase OP.

MissMoneypenny

silvercar wrote: »

a) and you would by now have claimed and therefore the PPI would be paying the loan. Let the insurers take on PPI if they want.

Have I missed that bit? Where did the OP say he would have qualified to claim off the PPI?

silvercar

Six months go past and nothing heard credit crunch hits etc. times are now hard even though I no longer have to pay for this secured loan anymore

Here. Without knowing the exact terms of the PPI, times being hard in the credit crunch suggest a lack of income.

MissMoneypenny

dicky-dicko-2009 wrote: »

I currently do not have the funds to hire a solicitor, so am asking for help here as to where I stand legally. Any help will be greatly appreciated.

This is just an internet forum and people just give their opinions.

Have you got house contents insurance with the optional extra of Legal Cover, that you might be able to claim for a solicitor from? Or a policy with a legal helpline? Or credit card with legal helpline?

Thrugelmir

DVardysShadow wrote: »

OP may not be in a position to take the risk of incurring legal costs. The more I look at this, the more I agree with silvercar - insurer has paid less than full whack to clear the loan and is now seeking to make a profit out of OP. OP should have been consulted - should have been given his own legal advice at insurer's expense.

Legal advice for what purpose?

The only remaining issue is the settlement of the outstanding loan. Which putting the issue of the actual balance aside, the "insurers" or whoever owns the debt has asked for a payment proposal for. Fair and reasonable approach.

The change in the OP's financial circumstances would be the same, possibly worse if the loan had been transfered and secured against the new property.

silvercar

What stinks is that the negligent solicitors payout because the lender won't allow the loan to be transferred to the new property.

They might have done so had the transfer been made at the time of the property swap April 2007 as this was before lending criteria tightened. The fact that they wouldn't even take a lower loan secured on the new place has caused the insurer to be more out of pocket than otherwise.

MissMoneypenny

silvercar wrote: »

Here. Without knowing the exact terms of the PPI, times being hard in the credit crunch suggest a lack of income.

That's what I read too, but didn't want to make the assumption that they didn't have a job and had met the terms of the PPI.

MissMoneypenny

silvercar wrote: »

What stinks is that the negligent solicitors payout because the lender won't allow the loan to be transferred to the new property.

They might have done so had the transfer been made at the time of the property swap April 2007 as this was before lending criteria tightened. The fact that they wouldn't even take a lower loan secured on the new place has caused the insurer to be more out of pocket than otherwise.

The solicitors have righted the wrong and removed the charge from the parents house.

The OP now has an unsecured loan instead of a secured loan.

Unless the OP comes back and tells us that he would have met the PPI terms and had his loan installments paid for now, isn't he better off?

silvercar

MissMoneypenny wrote: »

The solicitors have righted the wrong and removed the charge from the parents house.

The OP now has an unsecured loan instead of a secured loan.

Unless the OP comes back and tells us that he would have met the PPI terms and had his loan installments paid for now, isn't he better off?

If the terms of the unsecured loan are as good as or better than the secured loan terms then he would be better off.

There are other considerations. Should have OP been hassled? Should he have had a demand for payment in full? If th OP is now in real financial difficulty, would the options have been different? With a mortgage you can extend the term of the loan. Would OP be able to claim on his PPI? His OP also talks of a refund of PPI after 5 years, will that still happen?