Second charge mortgage

louise0910

Hi, I’m hoping for some advice.  15 years ago when we were young and stupid we took out a second charge mortgage on our property.  I’m self employed and have had to close my business for the time being due to the virus.  Our main mortgage have been fab and offered us a three month payment holiday but our second charge mortgage refused to help in any way and said they don’t have to do anything as the government advice only includes main mortgages.  Has anyone heard any different?  Our payment is due next week and I’d like to know more about where we stand before I call them back next week.  Can anyone please advise?

calcotti

Is it actually a mortgage or a loan secured against your home? This is not my area but perhaps there is a difference and different rules apply. https://www.experian.co.uk/consumer/loans/types/secured-loans.html

At the moment there are lots of questions but the government has not yet worked out the details behind many of the headline policy announcements so answers to many questions are not yet available.

louise0910

Yes it is secured against our home. They called it a second charge mortgage.  This is my concern 😔

Jeremy535897

As Calcotti says, we are light on details at present. The lenders have signed up to a voluntary code whereby they should offer three month holidays. It is not mandatory, but most banks are offering mortgage holidays. I am not aware that the Government went into the complexities of two mortgages on one property, so I doubt the second charge lender is right to say that the voluntary code definitely doesn't apply. (They wouldn't need to, as it is voluntary.) They of course are nervous that in a significant market downturn caused by coronavirus, being second in the queue could mean getting nothing at all on a sale. Ask therm to show you a copy of the material they have that says that second charge loans are excluded from the code.

calcotti

Jeremy, do you know if a loan secured on a home is a different financial vehicle to a mortgage?

Jeremy535897

Calcotti, I'm not a lawyer and want to be cautious, but I think any loan secured on a property is a mortgage. The definition of a mortgage is "a legal agreement by which a bank, building society, etc. lends money at interest in exchange for taking title of the debtor's property, with the condition that the conveyance of title becomes void upon the payment of the debt." Most people assume a mortgage is a loan to buy a property secured on that property, when people take mortgages out for all sorts of reasons, not always entirely sensible. So a mortgage is simply a secured loan on a property or land.

calcotti

Thanks Jeremy, that makes sense.

Jeremy535897

The only bit that troubled me was  "lends money... in exchange for taking title of the debtor's property". I know a charge (first or second) is registered on the title deeds, but is that the same thing as "taking title"?

louise0910

I’m still getting nowhere with Nemo Finance.  I spoke to them again today.  After trying on many occasions and only getting through to an overflow department I finally got to speak to someone about not being able to make payments at the moment due to being in the at risk group from coronavirus and having to close my beauty business, which has caused me to completely lose my income.  I was basically told that they’re only offering payment holidays to people who are up to date on their payments but I’m still paying arrears off from when I was hospitalised for a long period of time a while ago.  I’ve got the arrears down to about £500 but they won’t help me.  She then informed me that my payment for March had bounced as they take it from my debit card for some bizarre reason and the money wasn’t in the bank.  I’m so angry about this because I told them I wouldn’t be able to make the payment over two weeks ago and they still tried to take it regardless.  The woman I spoke to said that as a “good will gesture” she would remove the charges they had put on my account for the payment bouncing.  The best she could do for me apparently is to make the payments interest only for two months, which is only £30 less than what I already pay.  She also kindly informed me that if I don’t make my payments on time over the next two months I will then be in arrears to the tune of £1500 as this months payment has already gone onto the arrears balance.  I could have cried when I got off the phone as I seem to be getting nowhere with them and don’t know what to do 😔.  I’m not allowed to leave the house for 13 weeks according to my GP so can’t even get a second job to cover things.