Secured Loan not Discharged by Solicitor on Sale of House

Thrugelmir

If you took out a secure loan against the property originally. By moving how have you ended up in negative equity of over £100k? And also managed to secure yet another secured loan against your property in the last year for £20k?

dicky-dicko-2009

Thrugelmir wrote: »

If you took out a secure loan against the property originally. By moving how have you ended up in negative equity of over £100k? And also managed to secure yet another secured loan against your property in the last year for £20k?

The original secured loan was taken as additional borrowing (secure loan) through mortgage providers subsiduary on 125% deal as shown below.

On my original property value and sale cost (£200,000) i had a mortgage of £165,000 and the secure loan £85,000 this total came to 125% secured.

New property original cost £225,000 with 85% mortgage of £191,250. With £85,000 secured loan = £276,250 less than 125% would be same deal. I had more equity at time of purchase than when secure loan was originally taken.

The further secured borrowing of £20,000 was taken after the original secured loan was cleared and I was left to believe was dealt with, secured against my property only £210,00 as original secured debt is not secure since being cleared by Insurer. So total borrowing now at approx £210,000, House currently valued around £215,000. Still have £5,000 equity.

gauly

dicky-dicko-2009 wrote: »

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

OK, from an online-mortgage calculator, after 2 years you would owe aprox £103,883, so since you were a month short of that I reckon you still owed about £104k. On top of that I guess there was a £3k early redemption penalty.

£21k of that is PPI which you no longer have the benefit of (and which you would have recieved back after 5 years anyway) so I think that should be subtracted too - you problem is that the insurers have messed up on the PPI and they are not just going to take a loss of £21k without a fight.

There is also one years interest at 9.99% owed on the money. So, I make it that you owe the insurers:
Loan-PPI: £104k - £21k = £83k
Plus one years interest: 8.3k
Total: £91.3k

A lot of money - and no PPI cover if you wanted that! You aren't even going to keep up with the interest paying £200 a month. I think you would be better off saving the £200 a month you can afford and using it to see a lawyer. I can't believe the loan company is allowed to just sell off you debt without your permission.

silvercar

dicky-dicko-2009 wrote: »

The original secured loan was taken as additional borrowing (secure loan) through mortgage providers subsiduary on 125% deal as shown below.

On my original property value and sale cost (£200,000) i had a mortgage of £165,000 and the secure loan £85,000 this total came to 125% secured.

New property original cost £225,000 with 85% mortgage of £191,250. With £85,000 secured loan = £276,250 less than 125% would be same deal. I had more equity at time of purchase than when secure loan was originally taken.

The further secured borrowing of £20,000 was taken after the original secured loan was cleared and I was left to believe was dealt with, secured against my property only £210,00 as original secured debt is not secure since being cleared by Insurer. So total borrowing now at approx £210,000, House currently valued around £215,000. Still have £5,000 equity.

If I'm reading this right, you increased the mortgage from 165k to 191.250k on moving and kept the 85k secured loan. I'm guessing all this was/ is interest only or the amounts would have dropped on moving.

TBH I thought these 125% mortgage deals were with unsecured loans but anyway...

You then took another 20k knowing you had the main mortgage to pay and the other debt was still floating around, even if not secured?

I would forget your supposed 5k equity for the moment. If you needed to sell it would be swallowed up in charges. If you were repossessed it would be lost in legals and selling costs.

With those figures and reduced income I think you should be considering bankruptcy anyway, so the mess could work in your favour.

dicky-dicko-2009

silvercar wrote: »

If I'm reading this right, you increased the mortgage from 165k to 191.250k on moving and kept the 85k secured loan. I'm guessing all this was/ is interest only or the amounts would have dropped on moving..

Yes the mortgage increased as did the hous value accordingly, and the mortgage is repayment and the secure loan was also repayment.

silvercar wrote: »

TBH I thought these 125% mortgage deals were with unsecured loans but anyway....

This was not a 125% mortgage, the additional £85K was a seperate secured loan via the mortgage lenders (Barclays) subsiduary (Barclaycard Secure Loans)

silvercar wrote: »

You then took another 20k knowing you had the main mortgage to pay and the other debt was still floating around, even if not secured?.

No, I had been led to believe the Secured loan had been cleared and that was the end of the matter, it was 6 months after the £85k was cleared and no response to requests for information that I took the other £20K. Easily within my budget.

silvercar wrote: »

I would forget your supposed 5k equity for the moment. If you needed to sell it would be swallowed up in charges. If you were repossessed it would be lost in legals and selling costs.

With those figures and reduced income I think you should be considering bankruptcy anyway, so the mess could work in your favour.

I know some people will think this is an opportunity to go bankrupt and get rid, but I don't want to do that. I have done nothing wrong here, I am the injured party and don't see why I should even have to consider bankruptcy. I understand that the original debt was mine and that i do have an moral obligation to pay something back. However I aslo believe that I would not be in this position had things been done correctly by the solicitor and it's insurer. I would have not taken any further borrowing had I not been led to believe the 85k had been cleared, not only did I not receive any communication after it was cleared despite requests, the amount had been wiped from the my credit files too. I was under the belief I had been very lucky and that the insurers had resolved the issue with no come back to me. I only want to resolve this issue in a away that is fair to all concerned, but of course if there is no legal obligation on my behalf I wish to exploit that. Can I also say that the distress this is causing my family is unbearable. The legal advice I get with my banking service is just that advice, but not represenation. I really am stuck as to what to do next.

silvercar

Can you afford your 190k mortgage and the 20k loan payments?

dicky-dicko-2009

silvercar wrote: »

Can you afford your 190k mortgage and the 20k loan payments?

Yes comfortably and like I said I could afford another £200pcm.

RabbitMad

dicky-dicko-2009 wrote: »

Yes comfortably and like I said I could afford another £200pcm.

You and I differ in what we would consider comfortably affording something if I only had £200 pcm spare.

I think your best course of action would be to get it in writing from your bank that the loan has been repaid and get them to confirm that they haven't sold it on. Also get a breakdown of the settlement figure that was provided.

That way you can claim not to owe the insurance company any money.

dicky-dicko-2009

RabbitMad wrote: »

You and I differ in what we would consider comfortably affording something if I only had £200 pcm spare.

I think your best course of action would be to get it in writing from your bank that the loan has been repaid and get them to confirm that they haven't sold it on. Also get a breakdown of the settlement figure that was provided.

That way you can claim not to owe the insurance company any money.

That is £200pcm I could comfortably afford from my disposable income. I have a copy from lender confirming loan was cleared, but it doesn't state how it was cleared and for how much. I have already asked the insurer for copies of the breakdown, but I think I will also approach my original lender.