Second Charge Mistake

Keviola

Hi folks,

I would really appreciate some advice. My wife and I took out a Momentum Mortgage with the Ulster Bank in 2009. This basically allowed us to purchase our home with the developers paying the 5% deposit. This would not be payed back if the value of the house did not rise by atleast 5% and it also entitled us to a 10% reduction in our mortgage if the house price dropped after the initial 5 year tie in period, again paid for by the developers. In turn, the developers held a second charge on our property for this period.
After 5 years the Ulster Bank arranged a valuation and this found that the house price had dropped. Our mortgage was reduced by the agreed amount and a letter was sent to say that the second charge would be removed.

Now, 2 years later, we are in the process of selling our current home and buying a new one. We are on a tight deadline as our new property can not start to be built until we have exchanged contracts on our sale. 3 weeks ago we found out that despite everything that had been done, the second charge was never lifted. The bank have fully admitted that this is their fault, however the developers are now querying the legalities of what they signed up to initially and are refusing to remove the second charge.

Obviously this has put us in a position where, through no fault of our own, we are close to loosing both our sale and purchase as the bank cannot give us a timescale for how long it will take to remove it. I have put in an official complaint and contacted the financial ombudsman to date. However I am hoping that someone might have some further suggestions for what can be done?

Thanks for any help that you might be able to give!

Thrugelmir

Keviola wrote: »

The bank have fully admitted that this is their fault, however the developers are now querying the legalities of what they signed up to initially and are refusing to remove the second charge.

Only the developer can remove the charge. What has your solicitor advised?

Keviola

Hi, Thanks for your quick reply. Our solicitor had initially advised us to request a letter from the bank confirming that they were working with the developers to have the second charge removed and that this should be done before completion, which is scheduled for 31st September. We were hoping to bring this to our buyer's (who are close family) in the hope of getting contracts signed to allow the new build to start. Unfortunately, today the developers have said they will not remove the second charge as they feel they should not have had to pay the money 2 years ago. I have emailed my solicitor this afternoon to update him but as we are very anxious at the thought of loosing out on our home I was hoping for some advice here in the mean tim ie. Are there any other options that may be available to us?

Richey_

Completion is scheduled for 31st September...
I strongly suggest that you will not complete on that day........... :A :beer: :A

MortgageMamma

This is way too complex for the forum and without knowing or seeing the contracts that were signed I don't see how anyone could possibly help you. Sounds like the developers are wriggling out of something they can no longer afford to commit themselves to and at worst if they wound up the company it could become very messy indeed. That is just my speculation on what you've already said.


The only thing I can really think of to say is don't lose heart, keep the faith, push for a resolution and use every legal angle you can. If the chain collapses then its not really your fault, so don't let anyone guilt you about it.

Keviola

30th September, sorry it's been a long day.
I appreciate that it's a complex situation, and the developers certainly do seem to be trying to get out of the situation regardless of the consequences.
Has anyone had experience of second charges being removed without the consent of the party involved, which is the avenue the bank have said they are exploring.
Or is there any way that the property can be legally sold, with the second charge still in place, in the knowledge that the issue will be resolved between the bank and the developers one way or the other in due course? The bank have agreed to pay all charges incurred by ourselves.

davidmcn

Keviola wrote: »

Has anyone had experience of second charges being removed without the consent of the party involved

Only via court, which is unlikely to be an easier option (especially if the developer is contesting it).

Or is there any way that the property can be legally sold, with the second charge still in place

If your purchaser needs a mortgage, definitely not.