Help needed! Anyone work for Halifax legal team?

superbabe612

We are due to exchange contracts on Friday but the Halifax have referred our mortgage offer to their legal department.

Our solicitor had a duty to disclose that our deposit has been gifted from my father-in-law, who is in a nursing home and receives Continuous Health Care Funding from the NHS due to his primary health needs. The local authority are not involved in the payment of his care and as such the 'deprivation of assets' is not a possibility. I emailed our mortgage broker confirmation of the funding to reassure the underwriters should it be necessary.

Surely the deprivation of assets would only be a problem if, in the future:
My father-in-law no longer needed NHS funding
and we claim he has no funds available to pay for his care
and he stays in the nursing home rather than comes to live with us

But:
My father-in-law is not going to get better
and If we did need to fund his care we could remortgage the property since we have so much equity from the gift
and we have purposefully chosen a house with a dependent relative's suite so my father-in-law can come and live with us if he needs to.

As far as I understand, if the deprivation of assets did apply, the local authority wouldn't have a legal charge over the property, they'd just 'means test' my father-in-law as if he still owned the capital. I may be naive but I don't think it affects the mortgage at all!

According to our mortgage broker, Halifax should have an answer by the end of tomorrow, so he's going to call back on Wednesday for an update.

So it'll be 2 days before exchange when we find out whether our mortgage offer has been withdrawn or not!

Has anybody got any experience of something similar? What are they likely to say? Is there anything I can do (apart from panicking!)?

Apparently Halifax "don't know what to do" with our application!

Please help and be nice because this is my dream about to come true/be shattered into a million little pieces!

handytips

This should have been sorted out long ago, it should have been declared on the original application that the deposit was a gift, the lenders usually want a letter signed by the parent saying, they do not want the money back and will not take a second charge on the property, your broker will know about the letter that needs to be sent to them and your father will have to sign it. people have deposits gifted all the time and as i say this should have been covered long ago.

kingstreet

The lender is concerned about a similar situation to an insolvency, where the creditors have the right to demand the return of money which would have been theirs had it still been under the control of the donors.

Sadly, I don't have any solution to this issue. Not knowing how the solicitor conducted the transaction, I wouldn't seek to lay blame.

This was always going to be a difficult transaction, IMHO.

kingstreet

Under the circumstances, I checked with SWMBO and she tells me if your father in law's condition loses its instability and unpredictability which is what triggered the fully funded CHC, he could find it withdrawn at a review.

These are normally held after three months and annually thereafter. He would then require care through social services, which would, of course, be means tested and potentially open the issue of deprivation of assets.

superbabe612

kingstreet wrote: »

Under the circumstances, I checked with SWMBO and she tells me if your father in law's condition loses its instability and unpredictability which is what triggered the fully funded CHC, he could find it withdrawn at a review.

These are normally held after three months and annually thereafter. He would then require care through social services, which would, of course, be means tested and potentially open the issue of deprivation of assets.

Thanks Kingstreet,
But there's no intent to deprive him of assets because the gift is to provide him with a safe place to live in the unlikely event that his condition improves. We're had the first 3 month review; the annual review was due in March 2011 but we've not heard anything since August 2010!

I've now got the lender emailing our mortgage broker, emailing me, emailing our solicitor, who needs the lender to contact her direct, but the lender wants the solicitor to contact them because they don't make outgoing calls!

I think I need a new solicitor or a new lender! :mad:

holly_hobby

superbabe612 wrote: »

But there's no intent to deprive him of assets because the gift is to provide him with a safe place to live in the unlikely event that his condition improves.

The jitters may also be because at the moment its a goodwill gesture from your part to offer him a home in the future -you could of course change your mind/divorce/circumstances may alter -and without any legal basis/contract to enforce your FIL residency in the property, should you refuse to accomodate him, the disposal of assets may raise its head.

Just as a wild thought, would an offer for you to to draw up a legal agreement detailing such help ? (if of course there is a legal document as such, which would force one party to accomodate the other). Just an off the wall idea - which may be un-operable or not, your Sol should be able to give guidance.

Hope this helps

Holly

Thrugelmir

From the HMRC's point of view if your FIL came to live you. Then he would be deemed to own a share of the property, i.e. the deposit. So in legal terms as well this could be a major issue. As if your FIL was readmitted then the asset would potentially need to be liquidated.

kingstreet

superbabe - you're making a massive leap of faith here.

How likely do you think it could be someone could go from fully-funded 24 hour nursing care to being cared for in their own home?

His needs may become stable and predictable, ending the CHC, but he may still need 24 hour care in a residential setting. If he does come home, he would still be expected to meet the cost of his care.

It may not be a question of you not wanting to accommodate him, but that you may be UNABLE to and as a result find yourselves having to fund his residential care, as his cash is tied up in your home.

superbabe612

That's my point exactly! My father-in-law is never going to improve, he's always going to need nursing care, so he'll always need CHC funding. So the deprivation of assets will never be an issue!
I can't even get to speak to Halifax Legal Team myself, they don't accept incoming calls or emails, only faxes, and they don't make outgoing calls, and they only deal with solicitors who are unable to give them any advice! And our solicitor doesn't work on Wednesdays anyway!

kingstreet

superbabe612 wrote: »

MY father-in-law is never going to improve, he's always going to need nursing care, so he'll always need CHC funding. So the deprivation of assets will never be an issue

I'm sorry if it appears I keep harping on about the care funding, rather than the mortgage issue. Pam Coughlan admitted herself, despite being the landmark case, she would not now qualify for continuing health care under the new rules.

Here's a thread from an Alzheimer's carer site on the issue of the withdrawal of continuing care;-

http://forum.alzheimers.org.uk/showthread.php?33241-can-CHC-be-removed

Your mortgage problem is that you cannot guarantee either of these issues, nor will the PCT guarantee they will always provide fully funded care. I don't know how this can be resolved.

His condition doesn't have to improve, it merely has to change by becoming stable and predictable and bang goes your NHS funding.

superbabe612

But even if he did need to fund his own care, we could remortgage or sell the house. There's an assumption that we'd intentionally leave him stranded or defraud the local authority! The equity in the house means we could remortgage to fund his care on a regular basis or if necessary sell up, repay the gift and pay off the mortgage or transfer it to a smaller property. Either way, the lender will get their money back. How do I convince them of that?!