2nd Charge on a Property

missk_ensington

Debt_Free_Chick wrote:

But the charge prevents the seller from completing the sale of the property. The sale cannot go ahead until the charge is cleared - that's the whole point of having a charge. If the debt were simply to be written off, then there's no point in going through the Court process and cost of getting the charge.

Yes but the Lender isn't going to get their charge come what may because their isn't enough equity in the property. It is assumed that the equity will pay off the charge, which is the point is putting a charge on the property. Therefore the bank may lift the charge to esure the sale of the property for damage limitation- they'd rather get £3,000 than nothing, which is what they'll get if the sale doesn't go through!

silvercar

If you do a land registry search you will find the name of the lenders who have the charges. You could then try and contact them to make them aware of the situation.

regularsaver1

but as a second charge they are down in the pecking order to the first charge - so shouldn't the second charge step back?

Debt_Free_Chick

regularsaver1 wrote:

but as a second charge they are down in the pecking order to the first charge - so shouldn't the second charge step back?

I had thought about that, but I think they can simply block the sale of the property, which is what the charge does. The sale cannot complete without permission from the lender with the second charge. They might continue to block the sale if they think that the value of the property would increase in the future, enabling them to get their money at a later date.

Debt_Free_Chick

missk_ensington wrote:

Yes but the Lender isn't going to get their charge come what may because their isn't enough equity in the property.

Unless they are content to let the charge sit there, on the basis that an increase in the property value would provide enough equity to pay off the debt, in the future. Otherwise, there's no point in getting a charge. The charge doesn't just acknowledge the debt ... it puts the lender in the driving seat when it comes to selling the property.

regularsaver1

but if the house got repossessed then the 2nd charge wouldn't get any money anyhow

and when a 2nd charge gets applied do they not need permission of the 1st charge ? - or is this different because of court order

Hopefully the vendor can sort something with the 2nd charge bank

silvercar

but if the house got repossessed then the 2nd charge wouldn't get any money anyhow

Well 3k at the moment, but when they placed the charge they would have thought there was sufficient equity to cover the amonut, or they presumably wouldn't have placed the charge.

and when a 2nd charge gets applied do they not need permission of the 1st charge ? - or is this different because of court order

They don't need permission AFAIK as they are down the pecking order.

regularsaver1

I work for a lender and if someone applys for a secured loan elsewhere as second charge they have to get permission from main lender - but that is different situation

goldiewil

I do not think he secured the loan on the property, i think he defaulted on a loan and the lender is going after his asset. We dont have the full story, his solicitor is not being very coorporative

silvercar

I think they are keeping you in the dark. Who knows what the true story is?

Unless the loan was secured on the property, the lender would not be able to stop the sale.