will going bankrupt after mortgage rescue be classed as fraud??

charley1

Hi I was wondering if anybody on here could help me,me and my husband are going through mortgage rescue and we have been lucky enough to be accepted onto the scheme, due to other debts we were planning on going bankrupt later this year (we have been considering this for over a year now) but are really worried as we have heard if we do this after mortgage rescue it could be classed as fraud! our mortgage company will only agree to let us go through mortgage rescue if we sign a deed of agknowledgement for the shortfall which everyone says not to do,we are so confused and don't know what to do for the best any help in this matter would be greatly appreciated
thanks in advance

charley1

one more thing can selling our house on the mortgage rescue scheme be classed as sale undervalue? thanks again

debt_doctor

Hi,
I've helped a few clients through mortgage rescue and one of them did infact sign a deed of acknowledgement.
So, (although this still has to be tested by the courts) you are signing to say, or re affirming that a debt still exists at the moment you sign it. You are not obtaining any further borrowing, you are (potentially) re affirming that you owe a sum of money.

I do not believe that to be fraudulent in any way. You can do with that debt as you could any other that may be outstanding at your BR date - ie it be included within it.

The undervalue issue is dealt with in the Technical Manual, and it seems that the IS accept that the MRS does not fall foul of the undervalue rule and we (the CAB) have not seen any practical issues relating to the issue.

Congratulations on being accepted for MRS, it is an excellent scheme in the right circumstances.

DD

debtinfo

I would add a slight note of caution, When i was an examiner there was discussion about this point and basically we were told that it would be for a court to decide when a relevent case arose, although like DD says i know of no case wgere it has yet been tested.

The main point where this is different to other deed of acknowledgement cases is that in this circumstance although you receive no financial incentive as such (ie the amount you owe remains the same) you do receive a less tangible although significant improvement in your situation in return for promising to repay the amount if they release their charge.

So it could be said to be possible that it could be considered fraud although until there is a case no one will know for sure and as yet other people have done it successfully and not had any comeback

IF

Hi charley1, here's the link to Angie's thread, hope this may help too.

Govt Mortgage to Rent Scheme/Will it save my house? - Click here

Best wishes
If...x

Depth_Charge

charley1 wrote: »

Hi I was wondering if anybody on here could help me,me and my husband are going through mortgage rescue and we have been lucky enough to be accepted onto the scheme, due to other debts we were planning on going bankrupt later this year (we have been considering this for over a year now) but are really worried as we have heard if we do this after mortgage rescue it could be classed as fraud! our mortgage company will only agree to let us go through mortgage rescue if we sign a deed of agknowledgement for the shortfall which everyone says not to do,we are so confused and don't know what to do for the best any help in this matter would be greatly appreciated
thanks in advance

Hi

This is a good question and still a contentious issue, well covered by debt doctor and debtinfo.

More pressure needs to be put on lenders in this type of situation and clear clarity put down on paper somewhere, it is ridiculous that this has not happened given the time the scheme has been running and the millions it has received in funding.

There are people who say, well you are lucky that lenders agree to the Mortgage Rescue, I dont buy that as this a goverment funded scheme to help people stay in their homes it should not end up being a time consuming gun at the head type negotation putting unecessary stress and worry on those facing losing their homes.

Also in many cases (if not all) the lenders end up much better off than if the home owners were to call it a day, throw in the keys and go bankrupt anyway (if this an appropriate solution) as some of them end up doing.

People who are eligible to enter the Mortgage Rescue Scheme basically have to be at the end of the road as far as having their homes re-possessed and usually also have a shed load of other debts both priority & non-priority on ocassions.

The idea I thought is to be secure in their homes and have dealt with their overall debt problems, not to still have the burden and misery of unmanageble debts round their neck just because a lender wants their cake and eat it.

I have seen examples where after the Mortgage Rescue lenders suggest disproportianate payments to them as far as pro-rata DMPs are concerned, maybe they also want to re-write the recognised debt management procedure too as well as the bankruptcy rules.

It is well past the time where this whole sorry nonsense issue was sorted.

Not too much up to date in depth information about on this scheme if you ask me, the link below is the best I have seen for a while and worth a read for anyone who wants to know the ins and outs etc -

http://www.wmrhf.org.uk/documents/mortgage%20Rescue%20Scheme%20Information%20Guide%202012-13.pdf

Just out of interest, if you do not mind, what is the view of the debt / money adviser who is helping in your particular case?

charley1

Thank you all so much for your replies it is greatly appreciated we have spoken to different people and had different responses,the national debtline told us if we sign the deed the debt cannot be taken into bankruptcy even if it is before, but cccs say it should be okay :think: we went to our local council to ask for their advice the and the woman who has taken on our case told us not to sign it.she has been in touch with shelter who have told her the same thing,she called us on thursday and told us shelter may take our case on and fight the mortgage company on our behalf but we wont know until after the bank holiday, our mortgage company want to charge interest at a variable rate which they can change at will and the fact that they have held the entire process up by denying receiving paperwork,emails and even faxes the shortfall is now up to around £14000 because of all the interest and charges they have been adding, the shortfall would have been under £7000 otherwise, they wont even switch our mortgage to interest only so they are adding full repayment contractual payments on each month with is £730 plus charges for being in arrears.
Just wanted to add we feel very lucky to be accepted onto the scheme and the council and h/a have been fantastic I will let you know what shelter say when they tell us thank you all again

Depth_Charge

charley1 wrote: »

Thank you all so much for your replies it is greatly appreciated we have spoken to different people and had different responses,the national debtline told us if we sign the deed the debt cannot be taken into bankruptcy even if it is before, but cccs say it should be okay :think: we went to our local council to ask for their advice the and the woman who has taken on our case told us not to sign it.she has been in touch with shelter who have told her the same thing,she called us on thursday and told us shelter may take our case on and fight the mortgage company on our behalf but we wont know until after the bank holiday, our mortgage company want to charge interest at a variable rate which they can change at will and the fact that they have held the entire process up by denying receiving paperwork,emails and even faxes the shortfall is now up to around £14000 because of all the interest and charges they have been adding, the shortfall would have been under £7000 otherwise, they wont even switch our mortgage to interest only so they are adding full repayment contractual payments on each month with is £730 plus charges for being in arrears.
Just wanted to add we feel very lucky to be accepted onto the scheme and the council and h/a have been fantastic I will let you know what shelter say when they tell us thank you all again

Hi

Thanks for the very interesting reply, especially as you have highlighted the issue of interest and charges still being added, very good point that I forgot to mention.

Familiar story I am afraid and again well past the date when this should have been sorted.

Anyway the very best of luck to you with the Mortgage Rescue, the scheme has been a real success for some and lets hope you are another

Keep us updated if possible

charley1

Depth_Charge wrote: »

Hi

Thanks for the very interesting reply, especially as you have highlighted the issue of interest and charges still being added, very good point that I forgot to mention.

Familiar story I am afraid and again well past the date when this should have been sorted.

Anyway the very best of luck to you with the Mortgage Rescue, the scheme has been a real success for some and lets hope you are another

Keep us updated if possible

I will definitely keep you updated so hopefully it will help others in the same situation thanks again

Angiepange

charley1 wrote: »

Hi I was wondering if anybody on here could help me,me and my husband are going through mortgage rescue and we have been lucky enough to be accepted onto the scheme, due to other debts we were planning on going bankrupt later this year (we have been considering this for over a year now) but are really worried as we have heard if we do this after mortgage rescue it could be classed as fraud! our mortgage company will only agree to let us go through mortgage rescue if we sign a deed of agknowledgement for the shortfall which everyone says not to do,we are so confused and don't know what to do for the best any help in this matter would be greatly appreciated
thanks in advance

Hi Charley1

There are some really good informative replies on here. I hope you get a definitive answer as soon as possible. Good to hear also, you have had a positive experience with the council and HA

I can't speak highly enough of the scheme in reagrds to outcome if successful. However the execution of it for myself was a whole different story :eek:

I have sent you a PM on my thoughts.

Good luck

Angie x

Depth_Charge wrote: »

Hi



http://www.wmrhf.org.uk/documents/mortgage%20Rescue%20Scheme%20Information%20Guide%202012-13.pdf

Wow, if only I had access to a document like that back in 2010!

Very informative, thank you Depth Charge for the link.

Depth_Charge

Angiepange wrote: »

Hi Charley1

There are some really good informative replies on here. I hope you get a definitive answer as soon as possible. Good to hear also, you have had a positive experience with the council and HA

I can't speak highly enough of the scheme in reagrds to outcome if successful. However the execution of it for myself was a whole different story :eek:

I have sent you a PM on my thoughts.

Good luck

Angie x



Wow, if only I had access to a document like that back in 2010!

Very informative, thank you Depth Charge for the link.

Hi Angie

You know you are welcome (add it to your thread on MRS if you think it helps)

By the way just like to say that it is fantastic and a credit to you that you continue to help and support people like you do, no substitute for first hand experience and you certainly have that as far as the Mortgage Rescue Scheme is concerned from what I have read

I know another poster has already linked to your original thread on the MRS, but here it is again and well worth a look through in my book

https://forums.moneysavingexpert.com/discussion/1930931=