Is a mortgage agreement by email legally binding?

karljt2015

This is a complicated matter so I will explain it the best I can. 5 years ago I agreed a private mortgage with a long-standing good friend. The mortgage agreement states that the first 2 years would be interest payments only mortgage and after 2 years a new 25 year mortgage agreement would be formulated. There are no dates or specifics on the initial mortgage agreement (so much so that my solicitor expressed genuine concern before I signed it but I trusted my friend absolutely.)

After two years no new agreement had been drawn up and my friend and I agreed that we would continue with the interest only payments although there was never anything put in writing to set this in stone. It was merely a verbal agreement.

I also must mention that when the initial mortgage agreement was signed my name was placed on the deeds to the house and I have recently learned that this is quite rare.

Unfortunately 3 months ago my friend who had given me the mortgage died and he did not leave a will of any kind. Because there is no will his son has had to apply to gain legal "probate" In order to represent his fathers estate.

This is where I started to exchange emails with my friend's son, who now has the legal right to represent his fathers estate. He noticed that no new mortgage agreement had been drawn up after the first two year agreement expired so he has decided to formulate his own 25 year mortgage agreement and he sent it to me by email recently. This new proposed mortgage agreement increases my monthly payments by hundreds of pounds and he also wants backpay for the past 3 years where I have only been paying the interest as agreed with my frien who died.

I felt quite intimidated by this new proposal and because I was scared that I may lose my home if I did not agree I sent him an email agreeing to his new mortgage terms. I did this without consulting my solicitor or signing any documents. Two days later I sent him an email retracting my agreement to his terms explaining that I panicked because I was worried about losing my house.

I am so concerned about where I stand legally right now, I have had people telling me that because my name is on the deeds to the house I am quite secure, I have had other people saying that because no new agreement was made after the initial 2 years ended that there is no agreement in existence anymore.

I am now very worried that he will try to use the email I sent to him as the basis for legal action because he hasn't been back in touch since I retracted my agreement to his terms.

Can somebody please help me out and explaining how important it is that my name is on the title deeds, if it is relevant that the initial mortgage agreement only details the first 2 years and no new agreement was made after that, and how much legal clout can be attached to the email I sent agreeing to his new horrendous terms (even though I retracted it days later.)

Or would I need to officially sign a new agreement.

It is one of the strangest mortgage agreements ever I know - but now I need to navigate my way through this without losing my house (which I have invested thousands in repairing.)

GMS

You need good legal advice here.


Do they have a legal charge on the property?

Annisele

So you're saying that you own the house, and your friend lent you the money to buy the house? If that's the case, then your name is supposed to be on the deeds.

Do you know if your friend (or anyone else) ever registered a charge against the house? If the property is in England or Wales, you can pay £3 to check with the Land Registry here. (If it's not in England/Wales, tell us which country it's in - land law is different in different parts of the UK).

Also, do you know if your friend's name is on the deeds? I'm guessing not, but since this is a fairly unusual situation I think it's worth checking.

So far as the email is concerned, I think you're saying that you withdrew your offer before the executor accepted it. That means (I think) that neither of you are bound by it, but I'm not certain about that. Unfortunately if you want proper reliable advice, by which I mean advice from somebody you can sue if they're wrong, you need to pay for it.

Ultimately, either you and the executor come to an agreement, or one of you sues the other and this ends up in court.

It sounds as though you completely accept that you owe money to your friend/your friend's estate, but you agreed that you wouldn't pay it all off for 27 years or so. The exact terms of that agreement are difficult to work out, since they're not written down. However, the fact that you've been paying interest only for five years, and your friend apparently didn't do anything about it, would (to me) indicate strongly that you and your friend were both happy for the situation to continue.

Are you in a position to remortgage with another lender, so you can pay off the original interest only debt?

chanz4

is he licensed, if not he may have hot water

ACG

How can the friend be in hot water? Hes passed away.
The friends son hasnt done anything wrong, he never lent the money. That to one side, the loan doesnt appear to have been set as a charge against the property - so it does not fall into the regulated world of mortgage lending.

The friends son can not demand back pay i dont believe as you have kept up with the agreement... he said carry on paying interest only so you did. Agreements can change and become new agreements over time -he can request the loan be paid (I would assume) and he may be within his right s to request it all in one go - but as its an unsecured loan, he would then need to file for your bankruptcy I would assume in order to force the sale of your property but how in practice that would work as you are keeping up the agreed repayments is beyond me.

Why not secure a mortgage against the property with a "normal" lender and pay off the friends son/estate?

You need legal advice without doubt.

Thrugelmir

Personal view. I doubt that the back dating would be legally enforceable. As the parties maintained the same relationship even though no new contract had been drawn up. The son has no personal knowledge on which to enforce the assertion. On the balance of probabilities a court may well find in your favour. Given you continued to pay the money every month.

ethank

Its a debt, you agree that you owe it. If son goes to court, he could either get a charge over the house or even make you bankrupt and force a sale.

tvfreek

ethank wrote: »

Its a debt, you agree that you owe it. If son goes to court, he could either get a charge over the house or even make you bankrupt and force a sale.

Not an area of my specialism I must confess but this will not happen.

Although you have no agreement in writing a discussion with your solicitor will confirm your agreement with the dead man is binding in law.

I hope this helps.