Secured Loan not Discharged by Solicitor on Sale of House

RabbitMad

so if the insurer settled the loan without your agreement is there no contract between you and hence no debt that is enforcable?

DVardysShadow

What a fffffmess.

OK, it looks like the PPI was front loaded - there was a 1 off premium of £21,000 added to the loan. By paying the loan off, it appears that the Insurer may have inadvertently discharged the PPI. This is to your disadvantage. I don't know what the remedy is. But if you were to pay off the Solicitor's Insurer along the lines of your original payment schedule, I think you could insist on and be entitled to a new PPI policy from the original PPI Insurer on the original terms at the expense of the Solicitor's Insurer.

As for the loan repayments, it is plain you would now be in default on the loan. I am with Silvercar here - bankruptcy is an option and you should consider it from both the angle of a way out and of being a threat to the Insurer. If you threaten the Insurer and the resolution is that you pay what you can, I think an important part of the settlement is that the Insurer forgoes the right to petition for your bankruptcy later. [this may not be too relevant right now, but don't lose sight of it when you reach a settlement]

As for the amount owing being £107,000 it is plain that you owe no more than your original payment schedule. But the Insurer may be in some difficulties, not least because they won't have a Consumer Credit Licence - effectievley they are trying to take over the role of your lender.

You really do need proper professional advice here and I am mindful that your circumstances don't allow you to pay for it. I think you have a strong moral case that the mess is not of your making and that you should be provided with legal advice at the Insurer's expense. Perhaps your first move should be to request that politely in writing, keeping a copy, and stressing how the situation is not of your making. Doing that will make it more difficult for the Insurer to take you to court - but not impossible.

I am sorry this is far from complete or organised thinking, it is chewing at the bits I can see to chew.

DVardysShadow

RabbitMad wrote: »

so if the insurer settled the loan without your agreement is there no contract between you and hence no debt that is enforcable?

It is a thought. The trouble is, because of the money at stake the Insurer will set the legal dogs loose and the OP can't afford to defend.

dicky-dicko-2009

silvercar wrote: »

1. There is a case for arguing how you have been treated. I would consider telling the insurerer that you are not happy and you want a letter of deadlock. This just confirms that you can't reach agreement. You then take this letter of deadlock through the complaints procedure. I can never remember if it is the FSA or FOS, but one of them will examine the case and make a ruling.

They haven't even provided me with evidence of the Deed of Assignment and the evidence of what they have cleared and how the figure was reached yet. i am waiting for them before proceeding.

silvercar wrote: »

2. PPI. This generally is separate from the loan. If you would never have been eligible to claim then it could possibly have been missold. Otherwise it is a legitimate insurance package designed to pay the loan payments should you qualify. Find out if this is still with the lender or where it is. I doubt it is secured on the original property (though the money to pay it may have been part of the loan). Its terms should be intact. Again this could result in a referral to an ombudsman.

The nature of the PPI is that after the term has lapsed if no claim has been made you get back the full amount as a cashback, however they are still making money on the intrest you have paid. From the settlement fihure they provided I can only assume the PPI was included in the settlement, therefore the insurer should be obliged to honour the terms of it.

silvercar wrote: »

3. Your current finances. Lets be honest here, if the loan had been transferred to your current property, you could well have found it impossible to keep up with payments and therefore faced the risk of repossession. The fact that it isn't secured makes it easier to deal with. You now have the option to consider bankruptcy. Don't think this means losing your home; bankruptcy will get rid of your unsecured debts. Your mortgage payments will be allowed by the Official Receiver and the OR will take the beneficial interest in your home. As you are nearly in negative equity, this can be bought back from the OR for a relatively small amount of money (as low as £1 plus £2-400 legal costs). Obviously bankruptcy requires careful consideration, but the loan being unsecured means it is an option you can now examine. In fact telling this debt holder that you are considering it (leaving them with nothing) may make the negotiations easier.

My current finances have not only changed due to the loss of most of my equity and pay cut, but also due to the fact that since I was led to believe it was the end of the matter when it was cleared, I had taken a further £20,000 home improvement loan for a Conservatory and Windows and Doors over just 5 years. Had the loan transferred at the beginning I would not have taken these nor would i have pobably been able to. I would still have enough money to pay the original payments.

dicky-dicko-2009

RabbitMad wrote: »

so if the insurer settled the loan without your agreement is there no contract between you and hence no debt that is enforcable?

There is no agreement in place, but the insurer states their is a Deed of assignment from the lender, however I have yet to see this.

dicky-dicko-2009

DVardysShadow wrote: »

As for the amount owing being £107,000 it is plain that you owe no more than your original payment schedule. But the Insurer may be in some difficulties, not least because they won't have a Consumer Credit Licence - effectievley they are trying to take over the role of your lender.

How can they have settled for more than what was owed originally (Owed £106,000, settlement £107,00) taking into account I had already paid nearly £23,000. Those payments made nust have reduced some of the capital and where did the extra £1,000 come from? Again I am waiting to hear how they reached the settlement figure they paid to the lender.

DVardysShadow

dicky-dicko-2009 wrote: »

How can they have settled for more than what was owed originally (Owed £106,000, settlement £107,00) taking into account I had already paid nearly £23,000. Those payments made nust have reduced some of the capital and where did the extra £1,000 come from? Again I am waiting to hear how they reached the settlement figure they paid to the lender.

If it is more than you should have paid, it is none of your business and more fool them for paying. You don't owe that much.

gauly

dicky-dicko-2009 wrote: »

Original loan amount = £85,000
PPI Cost = £21,000
Total Borrowed = £106,000
Payment Amount = £990pcm
Payments made (no late or defaults) = £22,770

I guess the repayment figure could be larger than the amount you owed because it would also include an early repayment penalty? Not that that should be your problem of course.

Could you tell us the term of the loan (or the APR) and then it should be possible to calculate approximately how much you owed at the point where the insurer paid off the loan? The PPI part of the loan is also adding to the confusion here, but since you no longer have the benefit of it and it would have been paid back to you anyway after 5 years I think that should also be subtracted from the loan amount.

DVardysShadow

gauly wrote: »

The PPI part of the loan is also adding to the confusion here, but since you no longer have the benefit of it and it would have been paid back to you anyway after 5 years I think that should also be subtracted from the loan amount.

Forgot that bit. Of course the PPI has to be paid back too!

dicky-dicko-2009

gauly wrote: »

I guess the repayment figure could be larger than the amount you owed because it would also include an early repayment penalty? Not that that should be your problem of course.

Could you tell us the term of the loan (or the APR) and then it should be possible to calculate approximately how much you owed at the point where the insurer paid off the loan? The PPI part of the loan is also adding to the confusion here, but since you no longer have the benefit of it and it would have been paid back to you anyway after 5 years I think that should also be subtracted from the loan amount.

No early repayment penalty, original term 300 months of which 23 had passed and been paid for, rate was 9.9%.