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MCD and Developer loan

tekie
tekie Posts: 151 Forumite
Part of the Furniture 100 Posts Name Dropper Combo Breaker
in Mortgages & endowments
Hi,
I bought a new build property in 2010 with 75% mortgage and developer holding the remaining 25% as an interest free loan and developer secured this against my mortgage as second charge.

Will this come under EU's MCD regime. If it is according to the MCD rules I need to settle this with a developer appointed financial organisation rather than repaying the developer directly. As I'm planning to repay this loan in the coming months I need to some help in identifying whether this falls under MCD regime.

I would really appreciate if someone can provide me the right guidance to move forward.

Thanks in advance.

Comments

  • davidmcn
    davidmcn Posts: 23,596 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Fact sheet here says yes:

    https://www.fca.org.uk/publication/other/fs037.pdf

    Probably simplest if you just contact the developer, as surely they'll know how redemptions ought to be made?
  • tekie
    tekie Posts: 151 Forumite
    Part of the Furniture 100 Posts Name Dropper Combo Breaker
    I did tried speaking to the Developers but they are saying theirs is an un regulated loan and this does not come under MCD!!. Is that righg?
  • davidmcn
    davidmcn Posts: 23,596 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    tekie wrote: »
    I did tried speaking to the Developers but they are saying theirs is an un regulated loan and this does not come under MCD!!. Is that righg?
    Probably, since they're the ones who deal with this on a day to day basis and have undoubtedly thought about whether the regulations affect them.

    Is there a reason you're bothered? It's the developer who has to comply with the regulations, not you.
  • tekie
    tekie Posts: 151 Forumite
    Part of the Furniture 100 Posts Name Dropper Combo Breaker
    I know, but when I called they haven't had a clue what MCD was. It took them 4 days to comeback with the answer. I don't think this developers are well informed. I'm happy to pay them back, but as far as I know this loan comes under MCD and I'll be paying tbis back to a FCA authorised financial agent not to the Developers bank account.
  • kingstreet
    kingstreet Posts: 39,406 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    You won't.

    You'll be paying it to a solicitor of your choice; who will hand it to the developer's solicitor, in return for the second charge being removed.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • tekie
    tekie Posts: 151 Forumite
    Part of the Furniture 100 Posts Name Dropper Combo Breaker
    Are you sure, we are talking about MCD.
  • tekie
    tekie Posts: 151 Forumite
    Part of the Furniture 100 Posts Name Dropper Combo Breaker
    kingstreet wrote: »
    You won't.

    You'll be paying it to a solicitor of your choice; who will hand it to the developer's solicitor, in return for the second charge being removed.


    Are you sure, we are talking about MCD here, not about repaying a developer loan, which I'm familiar with.
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