Is my home going to be taken away? (2nd mortgage)

bubbly1980

Value of the house is over £600k and is now at risk of being lost over a badly managed £10k home loan.

20 years ago £10k second mortgage taken out to do some rebuilding work (house was paid off in full).

They were upset because it was one of those mortgage products where the payments suddenly jump and they thought the broker had mislead them. They stopped making payments while they tried to find fault with the broker. In a subsequent court hearing, the broker was found to have been in the right and the homeowners were left with a ballooning loan. It became so overwhelming that they kind of went into a state of denial about it. It continues to accrue interest every month!

The figure has now ballooned to £40k+

Homeowners only have £10k to their name and could perhaps pull together another 10k.

The bank has the deed now and they wont return it until payment is made in full.

Questions:

1. Do you know of any debt/mortgage negotiators in the UK?
2. Is it reasonable to expect the bank to settle for 50% (£20k)
3. The bank holds the deed. Could they repossess at any time?
4. Are there additional resources online?

Thank you all for your time and input.

opinions4u

bubbly1980 wrote: »

Value of the house is over £600k and is now at risk of being lost over a badly managed £10k home loan.

20 years ago £10k second mortgage taken out to do some rebuilding work (house was paid off in full).

They were upset because it was one of those mortgage products where the payments suddenly jump and they thought the broker had mislead them. They stopped making payments while they tried to find fault with the broker. In a subsequent court hearing, the broker was found to have been in the right and the homeowners were left with a ballooning loan. It became so overwhelming that they kind of went into a state of denial about it. It continues to accrue interest every month!

The figure has now ballooned to £40k+

Homeowners only have £10k to their name and could perhaps pull together another 10k.

The bank has the deed now and they wont return it until payment is made in full.

Questions:

1. Do you know of any debt/mortgage negotiators in the UK?
2. Is it reasonable to expect the bank to settle for 50% (£20k)
3. The bank holds the deed. Could they repossess at any time?
4. Are there additional resources online?

Thank you all for your time and input.

1. CAB, Shelter, amongst others.

2. Why would they? They get all the money if they repossess.

3. By going through the due legal process.

4. No idea.

Why don't they sell up and move downmarket?

Senior_Paper_Monitor

You talk about 'my home' and what 'they did'.

Who owns the house ?

Who are 'they' ?

I suspect this is your parents in both cases.

If so how old are they and what is their income ?

'Deeds' have no significance as such - the charge does ?

Who is the loan with - presumably it has gone into default ? Presumably it has been the subject of a court process ?

Thrugelmir

bubbly1980 wrote: »

In a subsequent court hearing, the broker was found to have been in the right

No basis on which to negotiate a settlement. Lender will seek full recovery of the debt from the sale proceeds of the property.

Has legal action been threatened?

Goldiegirl

Yes I'm confused to who 'they' are

More background details would help. For example, is the first mortgage still going, if so how much is outstanding on it. How old are 'they' and who else lives in the house.

At £600k, it sounds like a substantial house. Perhaps the answer for them is to sell up and downsize?

bubbly1980

Thank you everyone for your input. Much appreciated. I will try and respond and clarify as best I can.

This is my parents home. They are in their late 70's. Very tiny income from benefits. Mortgage had been paid off in full before the second home loan was taken out.

No legal action threatened as far as I know, though bailiffs may have visited at some point (sorry for being vague; I don't have a way to verify that). Loan is with C&G. No court process so far.

Selling and moving down market is a possibility but something they want to avoid at all costs for various reasons including family, etc.

Senior_Paper_Monitor

Depending on the actual definition of 'very tiny' and IF downsizing really is not an option then Equity Release solutions (otherwise known as lifetime mortgages and home reversion) would appear to be the only solution.

Senior_Paper_Monitor

Bailiff visit(s) but "no court action" doesn't ring true I'm afraid.

Someone needs to take control of this situation urgently.

GMS

It wasn't a second home loan, it was a first charge as there was no other mortgage.

Trying to find fault with the broker has led to huge costs. Added arrears fees, account management costs and further interest has led to the debt quadrupling.

Expecting the lender to take 50% is ridiculous. Why would they? Their loan is secured on the property and full recovery is possible.

Did your parents have an income at the time of taking the loan?

Rising payments would have been in line with the terms and conditions agreed to. Not liking these after the event is no grounds for complaint.

As has been stated this needs to be dealt with asap. The heads need to come right out of the sand and face it before the inevitable happens and a repossession order is applied for.

Aside from sale or equity release is there any way you and any siblings could raise the funds against your own properties?

Thrugelmir

bubbly1980 wrote: »

Selling and moving down market is a possibility but something they want to avoid at all costs for various reasons including family, etc.

Then you need to explain to them the seriousness of the situation. Get a grip of the facts and ascertain the best option. Better to be in control of the situation than allow events to dictate to them.

dimbo61

Why are your parents surviving on a tiny income with a £600K property ?
They could sell and move into a beautifully retirement property.
It could be a bungalow, smaller house, flat in sheltered / retirement complex.
Or the family get there act together and help clear the mortgage debt.
My Dad sold his big expensive to maintain property nearly ten years ago and has enjoyed many holidays all over the world, He has few money worries as the money ( HE EARNED) is there for him to spend.