First Direct/HSBC Remortgage Deed Conditions 2012

Tomis000

Morning all,

My wife and I are currently in the process of remortgaging our house for the first time. We're (hoping to) move from Natwest fix, which ends this year, to a MSE recommended fix with First Direct (HSBC owned). After reviewing all our options, we're applying directly to the lender.

Reasons for First Direct choice - it's fee free, has unlimited over-payments (which we are going to use heavily), has a 10 year fix which should see us pay it all off and interest is 2.69% which is almost the best for our LTV.

Our concerns - Everything has gone smoothly so far, up until receiving a document to sign called 'HSBC Bank Plc Mortgage Deed Conditions 2012'. It has some strong legal language in here, which concerns us as it makes no sense to someone use to standard sentences. I've contacted two local solicitors who will not review the sole document unless we agree for them to carry out the whole remortgaging process (£450+).

The Legal wording -

Under 'Power of Attorney' - "you, and if there is more than one of you, each of you, irrevocably (until the debt has been paid in full and the mortgage released) appoint the bank, and/or each and every receiver appointed by the Bank, as your attorney" - is this with all mortgages or will this grant the Bank extraordinary powers over us? It goes on to say they can sign documents, renew inruances, represent us a member of any management company, or delegate its powers to a Third party where reasonable to do so.

General - what does 'when the mortgage become enforceable' mean? Is this if we default and they want to repossess the house?

Under 'The Bank's powers to deal with Accounts and Money received' - "If the mortgage is given for your Debt, and the bank has more than one account for you, if the mortgage becomes enforceable or the bank receives any notice mentioned, the Bank at any time, without prior notice, transfer any credit balance in or towards discharge of any debt balance on any of your accounts". Does this mean if I have a savings account with HSBC/First Direct and I default on mortgage then they have unlimited access to my savings?

Under same as above, "All money received by the Bank under the mortgage may, in the Bank's reasonable discretion, be credited to, and held in, a separate account in your name for so long as the Bank may reasonably think fit until the money, and any interest on it, is used by the Bank in or towards the discharge of the Debt". They plan to keep my payments in an ISA or something? What's that all about??

Under 'Dealings with You, the Borrower and Others' - "You agree that the Bank may... give any loan, credit, financial accommodation or other facility to any Borrower for whom you have given the Mortgage as may be agreed between the Bank and the Borrower. This means that the level of Debt may increase without your knowledge". Does this mean my wife or I may borrow against the house, or change the terms, without the other person knowing?

Under 'Restriction' - "You, and if there is more than one of you, each of you, apply to the HM Chief Land Registrar to enter the following restriction against the title mentioned above: No disposition of the registered estate by the proprietor of the registered estate is to be registered without a written consent signed by the proprietor for the time being of the charge dated...in favour of the HSBC Bank plc referred to in the Charges Register". This makes no sense to me in the slightest.

Under 'Transfer of Rights' - "The Bank may transfer all or any of its rights under the Mortgage and/or the Debt to any person at any time". Am I to assume this will be within reasonable limits and not to transfer rights to, say my postman?

Under 'The Debt which is secured on the Property and other assets' - "The Debt is all money and liabilities whatever, whenever and however incurred whether now or in the future due, or becoming due, from you to the Bank".What implications does this have?

We're in a bit of a pickle here and are unsure with some of the terms we have mentioned above. Our current options are either go ahead as is and sign it obliviously, take it to one of the solicitors and pay the £450-ish figure for the whole remortgage process or depend on the MSE Forums wise words.

Many thanks in advance, and any thoughts or feedback will be gratefully received.

Tom.

Thrugelmir

You won't be able to remortgage without using a solicitor. Both your existing and new lenders will require you to do so. That's the bottom line.

Tomis000

Sorry forgot to mention, First Direct are paying for Enact to carry out the remortgaging process, but they are not directly acting on my behalf.

Tomis000

Can anyone help? :A

PFloren

I work as a Mortgage Adviser and would always recommend you pay for a solicitor. When u opt for 'free legals' you have no protection as the appointed solicitor acts for the lender only and the package only covers the basic legal work. If any work outwith the 'basic' package is required then you will need to cover the costs. I assume you did not seek the advice of a mortgage broker? You could ask the lenders solicitor to review these docs for You and they should provide you with a quotation for doing so. If you are receiving 'cash back as part of the mortgage you can use this to pay the solicitor. From experience HSBC are a nightmare and I would avoid using them due to their extremely poor service.

Thrugelmir

Tomis000 wrote: »

Sorry forgot to mention, First Direct are paying for Enact to carry out the remortgaging process,but they are not directly acting on my behalf.

Was that your choice?

silvercar

It seems you have 3 options:

a) employ your own solictor at a cost of approx £450
b) scour the internet etc for meaning to all the terms you don't understand
c) accept that First Direct are a large lender in the UK with many customers and that these conditions are the same for all borrowers since they were written in 2012. If there was anything untoward in then it would be fairly public knowledge by now.

davidmcn

The mortgage conditions you've quoted are, broadly speaking, similar to those which any other bank would have (including your current mortgage!).

Tomis000

No it was first direct's choice. The covering letter to us says they will be acting on their behalf and not ours. I may just take the hit and get our solicitor in.

Tomis000

That last comment was for Thrugelmir. Thanks for your comments everyone, it seems I could gamble and just sign the thing assuming many other First Direct customers are on the same deal with no problems. Or could just pay the £450 and play it safe. My personality tends to lean to the safe option, so I may head down that route and save the next few years from anxiety!

davidmcn

Some comments below - as I said above, this is all standard stuff and if you look out the NatWest conditions you'll probably find they're much the same:

Tomis000 wrote: »

Under 'Power of Attorney' - "you, and if there is more than one of you, each of you, irrevocably (until the debt has been paid in full and the mortgage released) appoint the bank, and/or each and every receiver appointed by the Bank, as your attorney" - is this with all mortgages or will this grant the Bank extraordinary powers over us?

It's pretty standard for any mortgage. In practice only going to be used if you default.

It goes on to say they can sign documents, renew inruances, represent us a member of any management company, or delegate its powers to a Third party where reasonable to do so.

All normal.

General - what does 'when the mortgage become enforceable' mean? Is this if we default and they want to repossess the house?

Yes.

Does this mean if I have a savings account with HSBC/First Direct and I default on mortgage then they have unlimited access to my savings?

Yes. Well, up to whatever your debt is.

Under same as above, "All money received by the Bank under the mortgage may, in the Bank's reasonable discretion, be credited to, and held in, a separate account in your name for so long as the Bank may reasonably think fit until the money, and any interest on it, is used by the Bank in or towards the discharge of the Debt". What's that all about??

Not sure. Possibly that they don't need immediately to apply overpayments to the debt.

Does this mean my wife or I may borrow against the house, or change the terms, without the other person knowing?

Yes. Standard principle for joint mortgages (or say joint current accounts).

Under 'Restriction' - "You, and if there is more than one of you, each of you, apply to the HM Chief Land Registrar to enter the following restriction against the title mentioned above: No disposition of the registered estate by the proprietor of the registered estate is to be registered without a written consent signed by the proprietor for the time being of the charge dated...in favour of the HSBC Bank plc referred to in the Charges Register". This makes no sense to me in the slightest.

You can't transfer ownership of the property without the bank's consent.

Under 'Transfer of Rights' - "The Bank may transfer all or any of its rights under the Mortgage and/or the Debt to any person at any time". Am I to assume this will be within reasonable limits and not to transfer rights to, say my postman?

Could be your postman (what's wrong with him?). In practice it means they can sell your account to another lender.

Under 'The Debt which is secured on the Property and other assets' - "The Debt is all money and liabilities whatever, whenever and however incurred whether now or in the future due, or becoming due, from you to the Bank".What implications does this have?

Anything you owe to the bank is secured against your house. In practice I think they would separately tell you that they're treating e.g. another loan as being secured.