Potential mortgage fraud! Help!

BristolBoy23

I hope this is the correct place to ask these questions so I'll fire ahead and hope for the best hehe :-)

My partner entered into a joint mortgage on a house with a family member in 2010. Whereby the mortgage was assessed on my partners salary etc and then the family member I think just being a guarantor. Things went quickly down hill in the relationship and my partner was made to move out. She's had no contact or anything with this family member since.

In April this year my partner was convinced that the mortgage was due for renewal. My partner didn't want to renew as she wanted out. She heard nothing from the family member in this period or anything from the mortgage company with regards to a renewal so she assumed she had the renewal year wrong.

However, just the other day my partner received a mortgage statement via a miss-directed mail redirection which showed that the mortgage had been renewed in April 2013 for a further 12 years!!

My questions are :

How was this possible without my partners signature?
Is this fraud?
What is her best plan of action to try and get out of this predicament?

I hope this makes sense and any help would be much appreciated

If you need any further clarification I'll try and provide that,

Thanks

BristolBoy23

worried_jim

What do you mean by "renewal"? You take a mortgage out for 25 years (or longer) and normally if it is repayment by the end of the term you have paid it off, there is no renewal.

Annisele

It would be very unusual to take out a residential mortgage over a 3 year term.

I suspect the mortgage your partner took out in 2010 was for a much longer period, but with a particular rate over three years. After the end of the three years they'd have needed to choose a new rate (or go onto standard variable), but the mortgage continued.

Who owns the house? Does your partner own in jointly with the other person?

The best way to get out of the predicament is probably for the other person to take over the whole mortgage (transfer of equity) if that's affordable to them, or for the place to be sold if not.

BristolBoy23

Sorry my terminology isn't great.

It was a fixed 2 year deal initially but has been renewed/remortgaged into a new 12 year deal of interest only.
So the 120k mortgage is remaining unpaid and she's just sitting pretty not paying the mortgage off at all!

Goldiegirl

You say that it's a joint mortgage - if it's a joint mortgage the other person wouldn't be just a guarantor - they would have the same rights and responsibilities as your partner.

The mortgage term is very unlikely to have been just for two years - that would have been the fixed rate deal period.

What basis was the mortgage originally agreed on - was it a repayment mortgage and over what term?

Also, what is the interest rate now - is it just the SVR, or has a new interest rate deal been set up, and over what term.

If she's not able to answer these questions, she needs to get in touch with the lender to clarify what has happened. The mortgage holders are jointly and severally responsible for the mortgage - so she has a responsibility to see that the mortgage is paid, even if she's not living in the property.

BristolBoy23

Annisele wrote: »

It would be very unusual to take out a residential mortgage over a 3 year term.

I suspect the mortgage your partner took out in 2010 was for a much longer period, but with a particular rate over three years. After the end of the three years they'd have needed to choose a new rate (or go onto standard variable), but the mortgage continued.

Who owns the house? Does your partner own in jointly with the other person?

The best way to get out of the predicament is probably for the other person to take over the whole mortgage (transfer of equity) if that's affordable to them, or for the place to be sold if not.

Yes I think that must of been the case then. But wouldn't you need a signature to confirm which rate to go next onto? As my partner hasn't agreed to anything other than the initial 2 year.

It's a bit complicated situation, but the family member put all of the money into the deposit to secure the house but then the mortgage was done on my partners salary etc with the family member being the guarantor (I think that's how it works).

It's a crazy situation for my partner really I think!

My partner isn't bothered about getting any money she just wants out and to not have this mortgage against her that she's getting nothing from.

I don't think the family member has much of an income so them taking the mortgage on is pretty slim to none I think

cattie

The problem is you are very vague about who is named on the mortgage. If the other person put up the deposit, then it's extremely likely that they are also on the mortgage. Banks don't like deposits coming from anybody else than one of the mortgagees.

Until you are able to say for sure who holds the mortgage, nobody can give any constructive advice here.

You can find out who is named on the mortgage from the Land Registry website. I think it costs about £4.

Goldiegirl

In cases where a mortgage applicant can't support a mortgage on their income, a guarantor is sometimes appointed so that the applicant can proceed.

This guarantor is typically a family member, with enough income to support the mortgage, although they are not named on the mortgage.

In this case, it appears that the OP's partner had sufficient income to support the mortgage, and the family member has very little income.

So it is very unlikely that the family member is a guarantor.

I think it's more likely that it's a joint mortgage.

holly_hobby

Perhaps if would be better if your parnter came on here, the 3rd hand info is confusing and doesn't appear accurate.

But from what I can glean, your partner and her family member, purchased a property together, your partners role was to be the applicant with the income (to support the mge assessment), and the family member stumped up the deposit.

As stated, unless this was a gifted deposit they will be party to the mortgage.

They definately are not a guarantor, as you have said they had no income, and guarators are assessed for affordability as thoroughly as the mortgage applicant themselves, given that they are legally responsible for paying the mge if the mortgagor defaults on the arrangment - so considering this, I think we can safely say this is a joint mortgage, where they are both named on the deeds and mge and are both responsible for servicing (paying) the debt.

Your partner can only be released off the mge if the other mortgagor (and/or anyone else to wish to replace your gf with), has sufficient income to meet the mortgage repayments - if they don't the lender will not release your GF, nor (with no or little income) will the family member even be able to find an alternative mge with another provider.

The only option in this case would be to sell the property, as the solicitor on sale will use the funds to repay the morgage, releasing your GF from any commitment (assuming there is no negative equity in the mix too).

If the family member won't do this on a voluntary basis, then I'm afraid she will need to consult a solicitor and look to force sale throughthe courts (although this would be a costly route and only a last ditch option).

So first things first, she needs to start mediating with the family member (as always better and cheaper to keep things friendly) , and she also needs to immediately advise the lender that she no longer resides at the property, and that she requires a duplicate of documents issued in respect of the mortgage (statements etc) also sent to her current address, so she can keep abreast of whats going on.

As joint mortgagor, she may also discuss with the lender what this mortgage change you mention was, and ask for copies of all documents etc. (in fact if she submits a Subject Access Request (SAR) with a £10 fee - they legally have to provide her with a copy of all file documents, inc any auditory data, ever issued in respect of the account), so she can have a look at what exactly has been going on.

Here is an explanation of SAR requests, with a template letter for her to download and send off if she wishes to review the account in full -http://www.ico.org.uk/for_the_public/personal_information

Hope this helps .. she needs to start getting wheels in motion asap, because if the mortgage goes into default she's not only responsible for the debt but her credit record and status will also be adversely affected.

Holly xxx

Wallhart

I have to ask why anyone would be as irresponsible as to not have any contact etc to make sure mortgage was being serviced either through family member or lender.

Sounds like a sale is the best way forward here. If family member won't play ball then I you could possibly propose that any equity is given up to the family member. Especially of they have no income.