8 weeks after remortgage settled-we owe £1500!!!

Kippaxian1

We recently remortgaged from Halifax to Post Office with no issues- or so we thought!! We were on a high rate and went down to a lower one and we used the opportunity to keep our payments the same but get over than what we needed (about 7k) to do some big changes on the house. We told the BOI that we had a secured loan on the house with Halifax which had 2 years left to go at about £62 per month with an amount outstanding of £1600 and we were not settling this on completion of the remortgage. The remortgage went through on 9 September. We have now received a letter from the Solicitors saying that the Halifax had not included the Secured Loan in the settlement figure and we were now required to pay the settlement figure (we have continued to pay the last 2 months repayments on the loan totally unaware of this!) Surely these two are separate, BOI borrowed knowing about the remaining balance, we were continuing to pay as normal and it can't be right that 2 months later (DIY jobs complete) we now have to find £1500 to pay off a loan that we were happy repaying!! Any advice welcome!!!

silvercar

Write back saying that you weren't repaying the secured loan so it was correct that it shouldn't be included in the settlement figure.

To keep the second charge (secured loan) going the lender of the second charge would have to agree a deed of postponement. This effectively means that the Halifax agree that the Post Office have first charge (ie main mortgage) on the property and the Halifax secured loan slots into second place - as it was originally.

If the Halifax won't agree to this (and the fact that they previously had the first charge on the property may mean that they didn't need to register a separate charge) then the secured loan will be the first charge as it pre-dates the Post Office mortgage. Clearly the Post Office are not going to be happy with this as they lent to you on the basis of being the first charge and if they don't get this they may want to go as far as calling in the loan!

Your mortgage has now been transferred. The question I would want answering is whether the legal paperwork has been completed. If the Post Office has been registered as the main mortgage holder on your deeds, the Halifax have less bargaining power than if they are still registered as the first mortgage.

If the deeds show the Post Office as the main mortgage holder, you can tell the Halifax that you never intended paying off the secured loan and it should remain. If it is not registered on the deeds they can do so.

If the deeds don't mention the Post Office and still show the Halifax as your only charge on the property, they may refuse to release that legal charge until the secured loan is repaid. In this case you could complain that your instructions were ignored.

Thrugelmir

Kippaxian1 wrote: »

We told the BOI that we had a secured loan on the house with Halifax which had 2 years left to go at about £62 per month with an amount outstanding of £1600 and we were not settling this on completion of the remortgage.

The matter has nothing to do with the BOI. It is between you and the Halifax.

Did you speak to the Halifax at any time regarding the secured loan? Or look at the terms and conditions that were issued when the loan was advanced.

Goldiegirl

At the time I was working for the Halifax, secured personal loans were only available to mortgage holders. So if the mortgage was redeemed, then the secured personal loan had to be cleared in full as well.

The provision of a redemption statement to a solicitor is a very important job, but in my time it was typically allocated to entry level staff ...... And this circumstance happened from time to time.

However, it was typically picked up by the solicitor before completion, so the situation would be rectified before money exchanged hands.

I'm surprised the solicitor didn't pick up on this problem before completion and of course the Halifax didn't send out full information.

If everything had been done correctly, you would have had to repay the secured loan at the same time as the mortgage.

So my feeling is that you should repay the secured personal loan now, but ask for an ex-gratia payment from the Halifax as a goodwill gesture to reflect the fact that they made an error.

kingstreet

+1 for solicitor responsibility to deal with anything secured on the property, before he reported to new lender that unencumbered title is available.

Presumably this was BoI's appointed solicitor and therefore for them to sort out between them.

silvercar

kingstreet wrote: »

+1 for solicitor responsibility to deal with anything secured on the property, before he reported to new lender that unencumbered title is available.

Presumably this was BoI's appointed solicitor and therefore for them to sort out between them.

If the Halifax was the mortgage provider, they may have considered the secured loan as an extension of the original mortgage, so felt it not necessary to register a second charge.

I would be tempted to pay £3 and download the deeds to see if BOI has been registered as the mortgage holder and if there is any mention of the Halifax. If the deeds are correct you have more power to tell the Halifax you won't pay anything.

If the deeds haven't yet been updated, there is an issue because BOI could try to call in the loan if they can't get first charge.

I imagine the solicitors will try and persuade you to find the money and pay up. For a relatively small sum of £1500, they probably think they can get away with it. If the secured loan was £20,000 it would be more difficult just to pay it off because the solicitors want you to. Consider this when dealing with them. Basically they have messed up, so don't be brow beaten into submission.

silvercar

Goldiegirl wrote: »

At the time I was working for the Halifax, secured personal loans were only available to mortgage holders. So if the mortgage was redeemed, then the secured personal loan had to be cleared in full as well.

The provision of a redemption statement to a solicitor is a very important job, but in my time it was typically allocated to entry level staff ...... And this circumstance happened from time to time.

However, it was typically picked up by the solicitor before completion, so the situation would be rectified before money exchanged hands.

I'm surprised the solicitor didn't pick up on this problem before completion and of course the Halifax didn't send out full information.

If everything had been done correctly, you would have had to repay the secured loan at the same time as the mortgage.

So my feeling is that you should repay the secured personal loan now, but ask for an ex-gratia payment from the Halifax as a goodwill gesture to reflect the fact that they made an error.

Not necessarily. A number of options would have been available, including (a) not going ahead with the mortgage transfer (b) borrowing an extra £1500 from BOI to combine the secured loan with the mortgage.

Kippaxian1

Thank you for the responses - Prior to receiving this solicitors letter, I recieved a call from them advising me of the issue - I told my wife afterwards that I got the feeling that the Solicitors were a little too pally about this and they were saying things like: "We will be contacting the Halifax and complaining on your behalf,etc etc etc but here are our bank details, can you transfer straight away etc" which suggested that they were in some way at fault for this and this seems to be the case from reading your replies.
Their letter suggests otherwise though, putting the blame firmly with Halifax!

Whilst I am aware that I will need to repay this, I feel that, as an uneducated "customer" in this field, (some would say naive!) it seems somewhat unfair that after

• Confirming in our letter to Bank Of Ireland that the Secured Loan is NOT to be settled on completion.
• Direct Debits have continued to be taken on the Secured Loan for the last 2 months
• No correspondence has been received from any party in relation to this until a phone call of 1st November some 7 weeks after completion.

we are now requested, out of the blue, to find £1500, and just accept it. I feel that it should not be us to resolve what seems to be an issue between the BOI appointed Solicitors, and the Halifax.
I'll write to Halifax to get their "side of the story" before paying the solicitors.

ValHaller

In your position, I would be offering a settlement plan of approx £62/month over 2 years and allowing them to secure on the property

opinions4u

Doubtless Halifax procedures have changed since they became part of LBG, but this is something where the clerk providing the settlement figure would have been expected to spot the secured loan and provide a figure to clear this too.

While something in my head says the solicitor should also have spotted it, I can't articulate the reasons for that. Either way, Halifax messed up. While you still owe the money there are grounds for a complaint, an ex-gratia payment and a compromise.

Good luck!

silvercar

ValHaller wrote: »

In your position, I would be offering a settlement plan of approx £62/month over 2 years and allowing them to secure on the property

This to the solicitors or to the Halifax?