Secured Loans: cheapest lending of last resort

cesca1959

My son had a secured loan from a major high street bank (won't mention who because I don't want to tip them off!!) to fund his pilot training secured on a relatives property which the bank actually split into 2 separate loans a smaller one & a larger one. When he finished his training he couldn't find a job and was paying the bank the smaller loan payment in full & a small payment (more like a token payment) off the larger loan. They whinged for a few months but accepted the payments nevertheless. Out of the blue, the relative then had a letter from the bank stating that as far as the bank was concerned, they no longer had any interest in the property re the loan. Just to see what would happen, my son stopped paying the larger loan altogether to see what would happen and nothing happened. This has now gone on for over 2 years. He makes no payments to them at all for the larger loan, he receives no letters chasing for payment or default notices & hasn't for 2 years. He's in regular contact with them re the smaller loan & no mention is ever made about the larger loan, but the loan is still showing on his credit report & the charge is still showing at the land registry against the relatives property. Does anyone know where he stands legally please?

AMILLIONDOLLARS

Because there is a charge on the property, the bank are not worried, they are allowing the missed payments and interest to accumulate, so that when that property is sold, they will claim what is owed. There will be a hefty price to pay when the time comes, unless that relative gets the charge removed from Land Registry.

PS. keep the letter in a very safe place!

AMD

Tixy

cesca1959 wrote: »

Does anyone know where he stands legally please?

Legally he still owes the debt.
Legally the company can take court action against him as he has stopped making repayments.
If the charge is still registered against the land registery then I would imaginet that the debt is still secured regardless of the letter sent to the relative.
If I were the relative I would have followed up the letter to ask for the charge to be removed (although would not be surprised if it is refused).

AMILLIONDOLLARS

bacchusvalkyrie wrote: »

Hi, I took out a secured loan about 6 years ago with my then partner. We have since split and he had an accident meaning he couldn't work. He has since returned to work though in a lesser paid job.
What I want to know is - was the bank right in allowing us to take a loan out against a property that is solely in my name? Or was it miss- sold? I am the only one with the security against this loan and now I have to pay back the whole lot by myself for the next 19 years.
Is there anything I can do to get the 50% that he signed up for before we split? The loan itself was to pay off debts incurred due to a failed business. I have already relieved him of a car and caravan to cover some of what he owes but he has no more assets. I am quite able to cover the payments by myself but now we are not together i don't see why I should!!

Did the bank or ex hold a gun to your head demanding that you sign the loan agreement?

The bank are not responsible for the private arrangement you had with your ex. It was up to you to ensure you had a written agreement in place with your ex in the event of a split or the situation you now find yourself in, as it stands you are going to lose your house if you don't continue with the payments!! Your ex has got nothing to lose. This one you will have to take on the chin. Please think long and hard before you sign up for anything like this again in the future.

Good luck.

AMD

HeimRoller

Considering trying to get a secured loan.
Am self employed, am due to pay corporation tax at end of July but have overpaid my dividends so cannot afford the coprporation tax.
I also do not have enough to pay my personal tax.
I know I can approach the HMRC to spread the repayments but will struggle to do this. however with a good size secured loan I can pay these off, and work on other debts (C Cards etc).
Have tried to remortgage but new lending rules meant I was declined and also been rejected for an unsecured personal loan.
P Loan rejected as I had overpaid dividends which reflected badly on my account! Applied on the grounds of consolidating credit card debts (which is almost exactly the same amount as the corp tax) as I do not want to alert the bank to the state of the business (pending tax problems) and lose the overdraft facility I have in place.

Pixie5740

Pre-2008 you'd have been able to get a secured loan no problem. Now you need a lot of equity in your home and a good credit file which given your recent rejections you may not have.