The bank gave the wrong info to my OR 3yrs ago & now they want my home. HELP!

Stavaldo

Hi, Myself and wife were discharged from BR back 2010.

At the time we had personally guaranteed a business loan for a business that went bust. The bank informed us that the personal guarantees were supported by an 'All Monies Charge' on my mortgage.

We therefore supplied this information to the OR when including it in our eventual BR.

The OR investigated the debt and security but the bank basically didn't state they held an AMC or state that we owed them any money beyond the value of our mortgage. They therefore deemed the debt to be un-secured and took the view that we had equity in our home.

The OR therefore took out a charge over the equity in our property and forced us to settle to the tune of 10k. Not long after we were discharged and debt free, or so we were told.

The bank 3 years on contacted us out of the blue to say they want us to settle the beneficial interest with them and repay the debt using the security they claim to hold.

I have obviously complained and they have even acknowledged that they gave the wrong info to the OR meaning we already bought the beneficial interest from them in error. This mistake according to the bank however doesn't seem to matter!!!

The case is with the Ombudsman but I spoke with the lady dealing with the case today and she really seems out of her depth. She said I made the mistake including the debt in the BR and so even if the bank did make this mistake it wouldn't have mattered. I have since spoken with the OR and they say no I had to include the debt and details of security so that they could then investigate what (if any) equity there would be left for them in my home.

The OR agrees with me but aren't helping me defend against the bank or helping explain things to the Ombudsman. They obviously don't want to get drawn in because they have had 10K and spent it and don't want to have to give it back.

Help!!! I'm not giving them my home or paying for it again, I did as instructed every step of the way.

debt_doctor

All monies charges are rare and complex.

I'll get back to you later.

DD

debt_doctor

Hi,

First, just to give an idea to all of what an All Monies Charge (AMC) is, read here; http://www.lovemoney.com/news/property-and-mortgages/mortgages/10381/the-secret-clause-in-your-mortgage-contract

If I understand correctly, there was an AMC relating to a personal loan, which, if an AMC genuinely exists, will effectively make this loan secured against the property.
The OR investigated this and they felt that this was just an unsecured loan and it therefore become a bankruptcy debt. It would appear that the bank went along with this and accepted at the time that this was an unsecured debt. They later called this action 'a mistake' - Is this correct?

I feel that your current action (complaint against the bank and then FOS) is a correct one. I also am aware that like most organisations, FOS have staff of vast experience and some with little experience. One case I had about a year ago resulted in an appalling ruling by FOS - but I got them to completely change their opinion 5 days later!

My complaint to FOS would be that you had no choice (you're quite right, this wasn't your mistake to include it - the Insolvency Act 1986 legally requires you to include it) but to place the debt on your SOA paperwork.
The IS liaised with the bank and the outcome was that the debt was unsecured. This can only mean one of two things;
1)It was an unsecured debt all along
or
2)The lender agreed to give up their security.

The lender did not raise any objection to the IS decision so therefore 1) or 2) must surely apply.

The bank either agreed that the course of action was correct, or they made a serious error- and you should not be held responsible for that.

If FOS don't agree with you then you can ask for a re consideration (by the same person)and after that may fail you, you can ask for a review by a senior ombudsman.

I would be interested to see your complaint to the ombudsman and any paperwork between you, the IS and the bank - any chance of scanning such things (taking out any personal info)?

DD

Stavaldo

Hi,

The AMC was apparently part of the security I signed for my mortgage on my home. We had a business loan with the same bank and when we lost the business the bank used the all monies charge secured on my home to pull in the business loan. Obviously when we signed the mortgage paperwork we never intended this to then secure our business loan but who knew!

"The IS liaised with the bank and the outcome was that the debt was unsecured. This can only mean one of two things;
1)It was an unsecured debt all along
or
2)The lender agreed to give up their security.

The lender did not raise any objection to the IS decision so therefore 1) or 2) must surely apply."

When the bank contacted me almost 3 years after our discharge to demand repayment I obviously rang my OR. He said don't worry they can't demand payment because they don't have any security. I explained to the OR the bank claim to have security through AMC and he said "OH!" It was news to them. The OR got my file from storage and sent me a copy of the information they received from the bank. It was like a fact sheet detailing my mortgage and secured charge against my home backing it up. It also states that there is no other debt outstanding (no mention of the AMC or business loan). The OR therefore determined that the business loan either didn't exist or wasn't secured on my home.

I should point out that this was the OR's decision and I didn't know about any of these communications at the time.

I also can't answer your question as to whether the bank accepted the OR's final decision and agreed to give up security because again I was not privy to those communications. I am starting to wonder if the OR even bothered to write to the bank about the business loan after the bank failed to disclose any knowledge of it.

The bank told me recently however, that they were standing outside the BR but unfortunately they never declared this to me or the official receiver.

This is hitting my wife really hard and it is just so unjust. We did exactly what the OR told us to do. They were supposed to be the experts not us but yet somehow we are the ones in trouble. Any decision that was taken about how to treat and settle my debt was made by the OR not us.

Also something else i haven't mentioned just to show how messy this all is...
The bank say we owe 100k!
But we only signed a guarantee for 86K!
The actual debt we owed was only 36K
The bank have never once asked us to pay the correct amount. I have asked the Ombudsman/lady to investigate this but she doesn't think its that big a deal.

ARGHHHH!

Stavaldo

I looked at scanning the info you asked for but there are so many documents/letters and info to blank out it would take forever using my limited equipment.

I should also point out something I forgot to mention already. The bank have in writing admitted that they supplied the wrong information to the OR about the security and business loan. I pointed this out to the Ombudsman and asked her to decide if this matters or not. I await a decision.

alastairq

I also can't answer your question as to whether the bank accepted the OR's final decision and agreed to give up security because again I was not privy to those communications. I am starting to wonder if the OR even bothered to write to the bank about the business loan after the bank failed to disclose any knowledge of it.

The bank have in writing admitted that they supplied the wrong information to the OR about the security and business loan

From the information you have provided, it seems to me it is the bank at fault, not the OR.....?

The OR [like anyone else], can only rely upon information supplied.

silvercar

I can understand how this happens. If you have a mortgage it will be run by the bank's residential mortgage department, separately a business guarantee will be with their small business department and the 2 probably never communicate. Until everything goes wrong and the business department decides to look around for security.

We therefore supplied this information to the OR when including it in our eventual BR.

.......

The bank 3 years on contacted us out of the blue to say they want us to settle the beneficial interest with them and repay the debt using the security they claim to hold.

If you told the OR about the debt, then it has to be the bank's responsibility for not claiming it.

But, I wonder, in the same way that a debt that you forgot about is still included in your bankruptcy, does this debt still exist?


If the debt is proved, what outcome do you want? I assume that

The OR therefore took out a charge over the equity in our property and forced us to settle to the tune of 10k. Not long after we were discharged and debt free, or so we were told.

means that there was about 10k equity in the property. I don't know how much equity there is now, but if the ombudsman was to find in your favour, a way of putting things right would be to take 10k off the amount required to buy back the BI again.

Of course if the amount of buy back required is far in excess of the equity in the property, it will fall into your bankruptcy. You don't buy it back and when the property is sold or given up eventually, the debt is written off in your original bankruptcy. Which leaves you 10k out of pocket. The only way to balance this would be for the ombudsman to rule that 10k be taken off your outstanding mortgage. I don't know whether this is possible, given that the 10k went to the OR not the lender.

If there is less equity in the property than the amount owed the excess falls into your bankruptcy. Make sure you don't sign anything acknowledging this debt.

AMILLIONDOLLARS

Very interested in the outcome.

AMD

Matts_Mum

I used to work in the mortgage securities department of one of the high street banks. We used AMCs. Bank branches would only advise us of branch based borrowing being secured by a charge when the mortgage was first taken out, there didn't seem to be any mechanism for them to regularly update our systems to reflect ongoing borrowing. When we issued redemption statements, these would often not include branch based borrowing.
The other problem is that not all solicitors understand AMCs and fail to give the right advice.