short fall in mortgage

Barnaby

Hello can anyone offer some advice on this please.

In August this year my 3-part mortgage is due to end.
Part 1 covered by a guaranteed endowment with some over.
Part 2 due to pay of in August completely.
Part 3 interest only - I was relying on the endowment covering that fully but I have £12,400.00 shortfall.

My guaranteed endowment matured in Feb this year and has been applied now to my Part 1 with the over credit being applied to parts 2 & 3 leaving the £12,400.00 shortfall.

I'm with Barcs/Woolwich and have asked them for an extension of 5 years to pay this off.
All was going well with my local bank person when the mortgage head office said I would need to be treated as a new customer and make a new application.
This I'm told will take 2 hours on the phone to process asking all the normal income, loans questions.

The fact that the local bank person has worked out the repayment over the 5 years to be some £140.00 pounds/ month less than I was paying seems not to make any difference to them.

My concern is I am also in a DMP due to finish in 5 more years or less too.
What effect will this have on any new application I make.
Could Barcs/Woolwich refuse any new application totally ignoring my 30 years of mortgage payment with them.
Could I be forced to sell up to pay off the outstanding instead of over a 5 year period.

I have no difficulties in paying the DMP or my existing mortgage and in fact will be some £140/ month better off due to the endowment having matured.

The extension to 5 years with my existing mortgage I thought would be the easiest and best way to go but I now wonder if there are any other options.

Best regards

Barnaby

This is the guts from above, I need to apply for a 5 year extension to pay off the £12400 remaining on my mortgage, does anyone have an opinion on this.

My concern is I am also in a DMP due to finish in 5 more years or less too.
What effect will this have on any new application I make.
Could Barcs/Woolwich refuse any new application totally ignoring my 30 years of mortgage payment with them.
Could I be forced to sell up to pay off the outstanding instead of over a 5 year period.

Thanks

~Beanie~

Being in a DMP will definitely affect a new application, yes. I doubt you will pass the credit score.
Yes, Barcs/Woolwich could definitely refuse a new application despite 30 years of mortgage payments.

Not sure about the other bit.

Thrugelmir

Barnaby wrote: »

Could I be forced to sell up to pay off the outstanding instead of over a 5 year period.

Thanks

The onus is on you to settle the mortgage balance by the end of the contractual term. So if your lender is unwilling to play ball. Then you may need to consider other options. As contractually you would be in default so the lender could force the sale.

Suggest you take a pro-active attitude to the problem. So you retain control.

ValHaller

Is any of the DMP related to debt to Barclays or Woolwich or any related company?

Did Barclays or Woolwich have a hand in selling you the endowment?

On the whole, I think that in your position I would not be wasting time on putting in a new application, but I would be writing with my proposals for repayment - putting the former endowment money to the mortgage. In fact, I would be putting the former endowment money to the mortgage immediately. Doing that would make it harder for a jugge to grant a repo and in turn make it harder for the lender to take it to court.

Thrugelmir

ValHaller wrote: »

Doing that would make it harder for a jugge to grant a repo and in turn make it harder for the lender to take it to court.

There's a default contractual position at the end of the mortgage term. So a judge would rule automatically in favour of the lender. If possession were sought.

ValHaller

Thrugelmir wrote: »

There's a default contractual position at the end of the mortgage term. So a judge would rule automatically in favour of the lender. If possession were sought.

I can't see a judge being at all happy turfing someone out of their home for a debt which is on a very viable repayment plan and for which there will be very adequate security. The judge would be invoking CPR's and ensuring that all of the pre action protocols were complied with and would be stalling and reviewing unless he really had got out of bed on the wrong side.

Added to which, if Barclays or Woolwich were involved in selling the endowment, they will not have clean hands in this, which will muddy the waters over contract compliance to the detriment of the lender.

Thrugelmir

ValHaller wrote: »

I can't see a judge being at all happy turfing someone out of their home for a debt which is on a very viable repayment plan

The judges personal opinion is of no relevance. Nor the repayment plan on offer.

The judge will rule on the basis of the legal contract that was signed at the outset. Which both parties are bound by.

ValHaller

Thrugelmir wrote: »

The judge will rule on the basis of the legal contract that was signed at the outset. Which both parties are bound by.

If forced to. Judges are adept at not being forced. It does depend on OP helping himself

Barnaby

Hello my answers follow.

BEANIE Thanks

THRUGELMIR That’s what I’m doing I have a 2-hour application via the phone tomorrow with Barcs/Woolwich. Do you have any other pro-active suggestions; I’ve been looking at loans which seem to be a comparable rate to mortgage.

VALHALLER Yes some of the DMP debt is with Barclays but all debts under the DMP are paying back in full but with no added interest.

The £12,400 short fall is with a Barclays endowment which when I got made redundant and then financial trouble got cancelled in a meeting with a Barclays advisor. It was some 6 months later that I found out it was meant to cover a part of the mortgage.

I have sent them a letter stating what I would like to do to cover the short fall and their response has been to say I must be treated as a new customer and go through a 2-hour phone application to see if I’m suitable.

I have used the matured endowment monies to pay off most of my mortgage only leaving the short fall of £12400 to pay.

I’ve also got a phone discussion appointment with the CAB tomorrow before Barcs/Woolwhich are due to phone.



Regards gents.

Barnaby

Hello here is an update.

The CAB say there could be an awkwardness due to the DMP but if I hit a brick wall they can negotiate on my behalf with me in the room.

Barcs/Woolwich called but as soon as I mentioned the DMP he said he couldn't deal with that and a different team would call me within 24 hours.

So I await their call.............

Worrying - I did think that being responsible paying off my debt through a DMP and never missing a mortgage payment would count for something, I'm beginning to think not.