Has my sister been badly advised by Barclays and her solicitor?

Monkey_Joe

Ditch_Crawler wrote: »

Barclays obviously included the 22k debt repayments in their affordability calculation, so if they calculated that the debt was unsustainable in addition to the mortgage, they should never have made the advance (ie they should have insisted that the debts be repaid first). If they made the advance in the knowledge that the total debt was unsustainable, then they are indeed guilty of irresponsible lending, and the 30-day condition would count against them rather than for them if they tried to use it to defend themselves.

Looks like you understand me...

Woolwich did include the combined 22k debt (graduate loans for both and car loan) in their affordability calculations. My sister and her husband are both teachers and have a combined salary of £60k. They mortgage is for a 30% share in a flat so I believe the mortgage was for around £50k, the rent they would have to pay for the HA was around £250pm. Their combined outgoings for the debt is around £1k (i think). I'm not a finacial expert but its clear affordability is not an issue and if it was then Woolwich should never have made an offer.

As you said, their debt is sustainable and they will pay it off within 5 years but 30 days...i dont think so.

As I mentioned earlier, she did confront the Barclays advisor several times and asked if it was possible to remove it. She was refused each time and was told not to worry about it because its would only become an issue if she never kept up with payments (which would never happen).

Everyone: I would appreciate if replies to this thread would be about the actual condition not judgmental comments about my sisters debts, your oponion on shared ownership, why did she go into shared ownnership ect Lets keep on topic please.

betmunch

In answer to your original question: Yes.

Your sister was badly advised as it is a condition of her mortgage that she repay this debt.

However, she must take responsibility for her own actions, she knew she had to pay back the debt and if she is unable to meet repayments for the original debt and the mortgage then it is entirely her fault for taking on such commitments.

It is interesting that she should record the Barclays adviser, however this seems to me that she knew she was doing something she shouldnt so she gathered evidence to protect her if it all blew up in her face. If she had stopped asking people after the solicitor told her it would be ok then you could claim ignorance, but to gather recordings and emails like that shows she knew it was wrong and wanted a get out.

Monkey_Joe

dunstonh wrote: »

Its fairly standard on debt clearance cases but its not on a purchase or remortgage that doesnt involve debt clearance unless the underwriters are only willing to agree on that basis. However, the Barclays clerk is correct in that they are unlikely to remove it.

The bank clerk I can forgive somewhat. They are generally low skilled, low knowledge employees looking for the path of least resistance (or least work). The solicitor cannot be forgiven as they are meant to act within the law. Not when it suits them to. They should have warned her that a check may be made to see debt has been cleared. Fair enough to say they may not check but foolish to say its not an issue (although in reality it probably isnt).



What is the worry about? If she doesnt default her payments and is clearing the debt, even if it takes 2 months, then its not an issue.


What about the solicitor as its not the Barclays clerk that matters. The solicitor is the one that matters when it comes to the contract.

Yes got him as well.

I dont believe the Barclays rep was a just a "low skilled clerk". His job title was Finacial Advisor and his buisness card had various qualifications such as ""MBA". They guy looked mid 30's and is pretty well off, since he had a 7 series brand new BMW and wore fancy suits!! So if he has BS my sister then he can not plead ignorance.

Yes there is nothing to worry about since my sister and her husband will never miss their payments. However, the acrual condition and its wording is just too dodgy. I'm just confused, since everyone who appears to have some understanding of the topic (like u, advisor, solicitor) seem to be confident that they will never or unlikely to check up on it.

What happens if they check up on it say after 1 year?

Monkey_Joe

betmunch wrote: »

In answer to your original question: Yes.

Your sister was badly advised as it is a condition of her mortgage that she repay this debt.

However, she must take responsibility for her own actions, she knew she had to pay back the debt and if she is unable to meet repayments for the original debt and the mortgage then it is entirely her fault for taking on such commitments.

It is interesting that she should record the Barclays adviser, however this seems to me that she knew she was doing something she shouldnt so she gathered evidence to protect her if it all blew up in her face. If she had stopped asking people after the solicitor told her it would be ok then you could claim ignorance, but to gather recordings and emails like that shows she knew it was wrong and wanted a get out.

As someone mentioned earlier,

"Barclays obviously included the 22k debt repayments in their affordability calculation, so if they calculated that the debt was unsustainable in addition to the mortgage, they should never have made the advance (ie they should have insisted that the debts be repaid first). If they made the advance in the knowledge that the total debt was unsustainable, then they are indeed guilty of irresponsible lending, and the 30-day condition would be as likely to count against them as for them if they tried to use it to defend themselves."

My sisters debts is sustainable. Her and her husband have a combined salary of 60k. Its sustainable.


It appears based on the advise of forum members who appear to know what they are talking about, the Barclays advisor and her solicitor that the condition in question only becomes an issue if she fails to meet payments. This will never happen so hopefully my sister will be ok in the future.

I was just concerned for her and wanted some advise

betmunch

Oh, I have to totally agree with the people who said that Barclays are unlikely to check. But that was not your original question.

That was: has she recieved bad advice? To which the answer is yes.

Her actions then imply that she knows she has recieved bad advice but is following it anyway.

If they dont check and you sister can maintain all credit then there WILL NOT be any problems for her.

If they do check, or if she cannot maintain her payments then there will be porblems, and I dont feel that "I was told it wasnt a problem" will (or should)protect her even with recordings and emails.

Cannon_Fodder

What might be sustainable, in terms of debt versus salary today, might change pretty soon - expect cuts to hit Education budgets this year, or next at latest...

Maybe the lenders will be slow to check, maybe the debts will be cleared before cuts take effect.

Maybe not.

To say "it will never become an issue" is a leap of faith, imo.

Ditch_Crawler

If your sister's mortgage was not in fact a debt consolidation deal, then I can't get away from the idea that the condition got in there by mistake, and that the rep simply couldn't be bothered to get it removed because - yes - he knew that in reality it was of no importance. Maybe if your sister had thought about withdrawing from the deal, thus costing him his commission, he would have become more proactive.

But, if there was no good reason to put the clause in there, there is similarly no good reason why they will bother to check - if they were really really serious about it, they could have asked your sister to provide evidence within 30 days that the 22k had been cleared.

D.

Monkey_Joe

betmunch wrote: »

Oh, I have to totally agree with the people who said that Barclays are unlikely to check. But that was not your original question.

That was: has she recieved bad advice? To which the answer is yes.

Her actions then imply that she knows she has recieved bad advice but is following it anyway.

If they dont check and you sister can maintain all credit then there WILL NOT be any problems for her.

If they do check, or if she cannot maintain her payments then there will be porblems, and I dont feel that "I was told it wasnt a problem" will (or should)protect her even with recordings and emails.

I agree, if they do end up checking then the advise she recieved was bad.

However, I believe it would be very unfair if after several months or years, despite my sister keeping up with all payments (inc debts) and not faulting, they turn around and demand the loan back if it turns out my sister had not paid of all her debts within 30 days of completion after they do a random check.

As poster mentioned earlier, when making the decision the lenders included the 22k debt repayments in their affordability calculation, so if they calculated that the debt was unsustainable in addition to the mortgage, they should never have made the advance or at least insisted that the debts be repaid first before completion. Most people can not pay off debts of £22k within 30 days and it would be very unfair of them to kick up a fuss 30 + days after completion if my sister had not paid of the debt within the time limit esp if she has been making all payments, never faulting and paying off her debt as fast as she can.

If it was such a big deal why did they not ask her to pay off debts before completion or at least get written confirmation in writing from her solicitor that she will pay of debts within 30 days of completion. They have done neither.

VIGILANT22

Ditch_Crawler wrote: »

If your sister's mortgage was not in fact a debt consolidation deal, then I can't get away from the idea that the condition got in there by mistake, and that the rep simply couldn't be bothered to get it removed because - yes - he knew that in reality it was of no importance. Maybe if your sister had thought about withdrawing from the deal, thus costing him his commission, he would have become more proactive. D.

Hmmm..The "rep" was a barclays mortgage advisor...no commission involved!!..so that has blown yr cynical theory apart.......

A condition in the offer when someone does have 22k debt doesn't just happen to "get in there by mistake".......

Monkey_Joe

VIGILANT22 wrote: »

Hmmm..The "rep" was a barclays mortgage advisor...no commission involved!!..so that has blown yr cynical theory apart.......

A condition in the offer when someone does have 22k debt doesn't just happen to "get in there by mistake".......

Yes the guy who sold us the mortgage does work for Barclays. Also, as some believe, he was not some "dumb" clerk who knows little about the product his pushing, this was based on the qualifications on his card (e.g. MBA, BA ect) and that he was not affiliated to one branch but traveled around the country offering advise to Barclays customers.

As I said before, my sister asked for it to be removed since during the application process she nor a husband mentioned or promised that they will pay of the debts within such a time limit. He frankly told them that the underwriters wont remove it but they had nothing to worry about as long as they keep up with payments. He told her they wont make you an offer unless they think you can afford it, the debt was taken into consideration before they made the offer.

Im not a finacial expert nor do I know anthing about the mortagages, but surely is it not a bit stupid for a lender to lend someone money on the condition that they will pay off £22k of debt within 30 days AFTER completion! Would it not be just easier and hassle free to make the person pay off the debt first BEFORE completion? It was not as if my sister and husband promised them at the start they will pay of all debts if they get a mortgage, no one even mentioned it and the debts where obviously taken into consideration when the underwriters where making their decision whether to lend or not to my sister. Therefore, if debts like my sister have is such an issue to them why lend to her in the first place, why not make her pay debts of first and then lend, why go through with the completion and then demand 30 or so days later for the money back when they discover that the debts have not been paid!? Its sound a pretty dumb tactic or am I misunderstanding something here?!