Help - Letter from the mortgage company following my discharge from BR

minic

Hi All,

Firstly apologies for this lengthy post but something has come up today which I have no idea how to deal with.

I was automatically discharged from bankruptcy on 1st Feb this year. I have a jointly mortgaged house (in significant negative equity). My beneficial interest in the property was tranferred back to me by the OR last September, presumably as the OR was of the same opinion as me in that the house will not be out of negative equity in the three years the OR has to deal with the property.

Anyhow today I receive a letter from my mortgage lenders Retail Services Lawyer which states the following (**** = names removed):

"I understand from the Isolvency Service that Mrs.***** was automatically discharged from bankruptcy on 1st February 2013. I further understand that her interest in the property has been transferred back to her by the Official Reciver.

In order to remove the bankruptcy notice from your mortgage account and in order to also re-instate Mrs.**** covenant for payment which was lost on discharge, would you both please sign and return to me undated the encolsed Deed of Covenant and Variation.

I enclose a copy of the Society's Mortgage Conditions (England & Wales) and the current Offset Account Terms. By signing the Deed, you agree that the mortgage will be governed by these Mortgage Conditions and Offset Account Terms in substitution for the Mortgage Conditions and Offset Account Terms presently applying to your account.

It is because of the change to the Mortgage Conditions and Offset Account Terms that Mr *** is required to sign the Deed of Covenany and Variation.

As you will appreciate, there are some differences between the original Mortgage Conditions and Offset Account Terms and those included within this letter so you may wish to seek legal advice."

So I guess my questions are what does this mean? Is this the mortgage company trying to pull a fast one knowing the property is in negative equity to protect themselves if we subsequently leave/have the house repossessed knowing they cannot chase me for the shortfall?

As I see it if I don't sign it the mortgage company can't do anything, is this right? and our mortgage will just continue on the terms we signed up to when we originally took the mortgage out. I don't really understand what signing the Deed of Covenant and Variation would mean for me (apart from potentially making me liable once again for any shortfall) and wondered if anyone else had experienced something similar?

At the moment my gut feeling is don't sign it. Anyone agree or disagree?

Grateful for any advice.

M.

fermi

minic wrote: »

So I guess my questions are what does this mean? Is this the mortgage company trying to pull a fast one knowing the property is in negative equity to protect themselves if we subsequently leave/have the house repossessed knowing they cannot chase me for the shortfall?

Certainly looks that way.

Find_The_Real

I'm no expert so it would probably be best to seek legal advice but looking at it they are trying to get you to sign an acknowledgement for any shortfall should the house be sold.

Personally I wouldn't sign anything that comes from the mortgage company as they play on peoples ignorance by trying to make it look all official and something you have to sign when in fact you don't.