trust deed equity demand

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Can anyone advise me please? I have just had a meeting with the trust deed company and they want £12500.00 within 6 months as equity release. They have valued my house at £150,000.00 when in reality my house won't sell for even £135,000.00 in the current market. I cannot afford to pay back all that money and have expressed serious concern that I was misinformed that this amount would rise in the first place. ( their intitial demand was for £6000.00 but when I called office to ask if this amount had to be paid within 6 months OR at the end of the trust deed I was specifically told 'No. Just pay this amount after the three years is up'. Unfortunately the person who told me this no longer works for the trust deed company) What am I supposed to do next? I genuinely fear that the only option will be having to sell my home at the end of the trust deed, something my husband is horrified about. The woman at the meeting the other day said something about there being MAYBE some room for negotiation over the amount. I hate to sound like a complete idiot but what does that mean exactly and what should I do now?
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Comments

  • billybraggtastic
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    Get the estate agents around now and ask for a valuation as you are considering a move. Their valuations don't stand for lending purposes but they will give you an indication of what your property is worth.

    If they reflect your opinion that a sale in current market would net £135k then you can use this to counter the valuation the your trust deed co have put on the property.

    I would also consider a complaint against your trust deed co re the erlier advice. It is not your fault that their employee/advisor has left and you can kick up a bit of a stink regarding the advice you were given previously - I know you may not have evidence/record of conversation but it would cause them some grief. Maybe wait until your negotiations over equity release have been settled.
    :shocked: Debt @ January '10 =£79712 :shocked:



    :dance: Debt @ November 2015 =£00000 :dance:
  • poetica
    poetica Posts: 17 Forumite
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    Thanks very much for the advice. I will set about trying to do this as soon as possible. This really is a complete nightmare but I so appreciate the fact that you took time out to reply to me. will keep you posted
  • Antoine_Roquentin
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    What did you agree to at the outset?

    What was the house initially valued at?
  • poetica
    poetica Posts: 17 Forumite
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    I agreed to £6000 at the outset but this went up to £7500 after the house was valued at £150000. I called the office to ask if this had to be paid now and was told specifically that I could pay this at the end of the three years and that this would not increase because property values were static at present. Then I received notification in October that because I had paid off more of mortgage and secured loan and my house had surveyed at same price I now owed £12500. I contacted the trust deed people and chap in charge said he'd get trustee to contact me before December. This NEVER happened so I went to see company in person this week. It turns out chap in charge has left company. I pointed out that my house had NEVER been surveyed a second time AND that the survey company called my husband to arrange a time to come out for survey but my husband does NOT have the deed, instead it is me. The survey company actually broke the data protection act by revealing to my husband that I had a trust deed in the first place. Anyway, the company have told me my house will need to be surveyed again and I pointed out that the valuation is too high and I cannot afford to pay £12500 in any way. They told me if I want I can pay to have a chartered surveyor come out to do my own valuation but not an estate agent. I am now ill with worry. I don't know how to negotiate a price with them or what this actually means. I apologise for this reply being so very long winded. Any advice would be most welcome.
  • Charco_2
    Charco_2 Posts: 1,677 Forumite
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    Tis true, the valuation needs to be done properly. An Estate Agent drive by is not acceptable.

    Have any houses similar to yours in your street sold recently or are up for sale?

    This will be a decent indication of how much your house really is worth and that is your first step. The next step is to start knocking money off that price for various reasons.

    1. There house sold for more because they have a jacuzzi out the back... In Scotland? I Know! Crazy eh?
    2. There is no-way a mortgage company is going to lend you the full amount of the value of your house, 85% would be a maximum.
    3. If you sold the house there would be various costs involved which would obviously eat into the amount of equity you released...

    4. It is your Trust Deed and not our husband's. But half the equity in the house belongs to your husband (please tell me you have a joint mortgage and that half the house belongs to your husband). He is willing to buy out your share though for £x....
    Would you ask the wolves to look after the sheep?
    CCCS funded by banks
  • poetica
    poetica Posts: 17 Forumite
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    Ha ha! Jacuzzi and croquet lawns too probably. Yes it is indeed a joint mortgage. Only one house has sold recently in our street but this house has an additional bedroom and reception room and more land and it sold for £160000. Before that, exactly the same house as mine sold in February 2008 for £149995. I expect I will just have to wait till it gets surveyed again but to be honest I think it will probably have to be sold to raise these funds - if any are raised - at all. Just feeling incredibly stupid and naive at present but apparently have six months after the date of survey to raise the money. Even though I have no chance of that and I do not have any rich relatives who can help out either. Nevertheless I have to try and maintain some form of stoic optimism and see exactly what 'negotiations' bring to the table. I have no idea how to negotiate either, incidentally. Again, many many thanks for your inredibly lucid advice.
  • Charco_2
    Charco_2 Posts: 1,677 Forumite
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    So how much is your Mortgage for?
    Would you ask the wolves to look after the sheep?
    CCCS funded by banks
  • Choo_Choo_4
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    Yea - how much is the mortgage on the property? Is your partner's share deducted from the total amount of equity?

    Surely there is something on paper at the time your Trust Deed went into the Edinburgh Gazette - yes it is an Estimated Statement of Affairs but for the amount of equity that they expect you to realise to come back 2.5 times what they originally estimated is a bit much.

    This should have been clarified before you signed the Trust Deed as it clearly would have had a bearing on whether you would realistically be able to raise these funds for the benefit of your creditors.
  • poetica
    poetica Posts: 17 Forumite
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    If house goes for £150000, when you subtract the mortgage and the loan together there would be £25000 equity in the property itself. Hence why I am being asked for £12500 for my share. I am seriously not trying to get out of repaying what I owe but I too feel that this is a massive difference to original estimate. The company claim that the girl in charge of the trust deed at the start would have told me to expect significant increases - she did not. Then when I got the second estimate of nearly £7000 and phoned the company to ask if I had to pay straight away I was told specifically 'no of course not' and 'in all likelihood this amount will decrease' . Of course I have no paper to verify this and the guy in charge has now also left the company itself. i was also told this week that the law changed in december 2009 and that the house has to be valued BEFORE the trust deed is signed to avoid any confusion. I would never have signed the deed itself had I known about this massive money increase.
  • Choo_Choo_4
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    You might not have any paper proof of the Original Statement of Affairs but the Trust Deed company should have this on file. It would have been the first circular that went to your creditors shortly after the notice was published in Gazette.

    Companies carry out procedures in different ways but there are a number of IP's in Scotland who will not issue a Trust Deed until a full, professional property valuation has been carried out to CONFIRM level of equity in property. This does entail a cost, sometimes to the client, but surely it's better to pay £100 at the offset to confirm that you will be asked to bring in £6000 equity than to decide NOT to pay this fee and later find out that your IP now wants £12500.

    It might be an idea to request a copy of the Original Statement of Affairs that was sent to you creditors detailing YOUR offer. YOU offered to realise £6000 equity and THEY accepted this therefore you should ask your IP to explain why this figure has double - especially in the current economic climate when houses are not selling, you are unlikely to get a remortgage so how can you possible realise an amount that he has decided - did a professional chartered surveyor come to your house to value it? If not how can he be sure it's really worth £150k?
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