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If the property had burnt down Halifax had it insured and as a result could reinstate their security. Halifax had the property insured, not your Mum. It is standard for any insurance put in place by the lender to be charged to the mortgage account
Well yes in theory. But "reinstating their security" to the value of 43p is taking the pee. If the OPs mother had not insured and the worst had happened and the property burnt to the ground, the land on which the property stood would be worth more than 43p.
Halifax are taking advantage of the situation, anyone whose mortgage is of only nominal value doesn't need to insure to protect the lenders interest.
I would make a formal complaint to the Halifax. If that fails follow through by complaining to the ombudsman.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0 -
Well yes in theory. But "reinstating their security" to the value of 43p is taking the pee. If the OPs mother had not insured and the worst had happened and the property burnt to the ground, the land on which the property stood would be worth more than 43p.
Halifax are taking advantage of the situation, anyone whose mortgage is of only nominal value doesn't need to insure to protect the lenders interest.
I would make a formal complaint to the Halifax. If that fails follow through by complaining to the ombudsman.
Halifax are in a no win situation here. If they chose not to enforce their rights to insure the security due to it being 43p they risk being accused of allsorts.
Protecting the security is a clear part of the terms and conditions regardless of the amount. If the OP's mother had not insured the property and the worst were to happen would they be happy to class it as a 43p loss? Also would they pay for site clearance costs, any possible claims for injury, damage to other properties, damage to cars, surrounding areas, medical bills or any other claim which may arise from any event?
Whilst any land has a value the value of land could be wiped out by costs. How negligent would the lender with a charge on the property look in the event of a non insured catastrophe?
I agree whole heartedly with the harshness of the costs and genuinely think there is a sensible resolution to be found here. Insurance covers more than the value of the property, it covers liabilities arising from it.
We live in a world of compensation for mis selling and mis advice of eberything. A solicitor would have a field day if the lender offered a 43p settlement on a property because they deemed it non insured but acceptable risk due to the low amount. Immediately reffered to the terms and conditions of block insurance in the event of no policy in place. Figures are meaningless. This case is the absolute extreme of numbers. Halifax appear to have followed their requirements in terms of communication to the mortgagor. They ae however 100% guilty of failing to apply common sense, something which all major companies are guilty of.I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0
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