Have I been missold my 2nd charge mortgage?

davidmcn

Stephen198906 wrote: »

Now how the hell do you close a thread hahaha!:rotfl:

You don't "close a thread", you leave it here so that in the future everyone else can benefit from your experiences and our advice.

Stephen198906

It was a joke David, cheers.

AnotherJoe

Stephen198906 wrote: »

Judging by the replies I agree I may have jumped the gun using the misselling angle. I was just curious if my post had substance. Thanks for all replying.

My issue really is that we borrowed the money from Barratts and now they have sold that debt on for a reduced figure (the article I read from a few years ago could work out around half the amount).

That reflects the risk they are taking, there will be some people in your position who default (dont pay) on the debt. You dont buy a £10k debt for £10k if statistically say only three quarters will pay it back and of those half will give them a hard time and act all surprised when asked to pay it. There's also cost and hassle of collecting it.ANd inflation over ten years. Not to be discounted at all.


Now I owe a third party company the full amount we borrowed when they have probably only paid half for it.

See my comments above. I know this sounds like sour grapes and probably is. It sounds like you didnt think it through and wonder why Barrats woudl sell £10k for £5k. If I said I've got an IOU from Steven Smith for £10k would you buy it for £10k or want it cheaper in case he legged it?

We actually have the money there to settle the debt, I would have just preferred to settle it with the company we borrowed it from.

Why???????? What difference does it make?


That was my underlying reason for not wanting to pay the full amount back and only pay back what the debt was actually sold for as that it in theory all it is worth.

You are looking at just your debt. You need to consider the bigger picture, what its worth statistically across thousands of these debts once you include bad debts and the cost of collection and profit and inflation. That includes people who completely default and people who pay it back and people who make it expensive to collect it and the fact that over ten years that money is depreciating.



By 2022 the "£10k" you'll pay back will in 2012 terms probably be about £8k. So thats another reason why this third party wouldnt buy it at face value, if you buy an IOU for £10k in 2012 and get that £10k paid back in 2022 you've lost about £2k right off the bat.

Stephen198906

Thanks AnotherJoe. You're spot on there with that, appreciate the feedback.

Scad

This thread is indeed open for others to learn from.

Stephen came on to mess with the bull but ended up getting the horns from posters on here thinking he's completely at it.

Don't be a Stephen.

amnblog

Must admit, the idea of paying back a debt only at the value a new purchaser placed on it is a new one even for the most looney tunes of threads on here.

Stephen198906

Scad wrote: »

This thread is indeed open for others to learn from.

Stephen came on to mess with the bull but ended up getting the horns from posters on here thinking he's completely at it.

Don't be a Stephen.

Scab, I didn't come on here to try and outwit anybody. The idea of opening a thread asking a question (albeit a daft one now) is what this forum is for.

Not to be chastised for asking said question by people hiding behind keyboards.

A few of the posters on here gave me honest feedback which I duly appreciated.

They didn't however try a put down like you.

Don't be like scab.

ACG

It should have been explained to you by the broker/advisor, not necessarily the solicitor.

But in order to get compensation, you need to show where the loss was. So far the loan has cost you nothing, it enabled you to purchase the property you could not have otherwise bought and you did actually know about it, even if it were not necessarily explained to you.

What difference does it make if it were secured (a second charge) or unsecured as ultimately it amounts to the same thing.

Where else are you going to get a 10 year interest free loan from?

Do you definitely mean interest free or interest only? Even if interest only, I am not sure it will alter the answers on here too much.

If you mean Interest only, I assume you have been making payments to it? If not and the loan has increased year on year and been compounded then I think you probably have more of a valid complaint, but I can not see this being the case.

silvercar

I think people should be more polite, particularly to new posters.

People ask questions to gain knowledge, often in areas they know nothing about. Even if the questions seem to have obvious answers, it is only because you know the answer.

Thanks Stephen198906 for taking the answers in good spirit and welcome to the MSE forum.

silvercar

I think the question is not unreasonable, given that people are warned that using a solicitor recommended by a builder/ developer may not be wise.

How far down the road of explaining a second charge the solicitor should have gone is debatable. At the very least he should he have said the loan is secured on the property rather than unsecured.

Be very, very grateful that the second charge is for a fixed amount, rather than a percentage of the property value. Those buying now under help-to-buy have a loan of 20% of the property, interest free for only 5 years. After which time the interest rate starts to increase and to repay the loan you have to hand over 20% of the current property value.