MISSOLD My Choice HomeBuy Equity Loan - Help, Martin!

Learning_Curve

I'm really looking for advice from Martin but I don't know how to contact him direct. It's about a 'my choice home buy' equity loan from a housing association which we took out in 2009 along with a building society mortgage to buy our house. The MCHB loan was higher than the mortgage. We didn't properly understand the terms of the loan. And I have proof of this as I had emailed the housing association in 2011 (2 years after taking out the loan saying what we believed and they didn't show any concern then that we had misunderstood and we didn't realise the future implications when they said we had misunderstood) showing that I thought we were paying off the balance. Further evidence that we misunderstood, is that at the time we took out a life assurance policy that is a decreasing policy going down from the original amount borrowed.  I'm not even sure it covers the MCHB loan, it might only cover the mortgage. My husband (who is foreign so English is not his first language) misunderstood also, but his misunderstanding was different than my own. He thought we were paying 'rent' on the amount borrowed, but that we would have to pay back that same original balance we borrowed.

I asked the housing association about paying back the loan and they said we needed to get a valuation. I didn't properly understand even then, the purpose of this, but paid for this to be done. They said as a result, that we have to pay back a sum that is almost double the original amount borrowed which has staggered me. It turns out the loan is like an interest only mortgage but the amount goes up (unless property prices go down). We can afford to pay off the amount we borrowed as this has been diligently saved, but will never be able to catch up and pay off the amount they are asking. I twice transferred the amount we borrowed into the housing association's bank account but they just transferred it back to us. During the time they had the funds, we cancelled the DD for the monthly amounts as you can't pay a charge on a loan that no longer exists, but they have since sent us arrears notices (the DD was reinstated after they returned the funds the second time).

I have some lifelong conditions that affect my understanding of things (and I have medical evidence of this), although they were not diagnosed at the time we took out the equity loan. I have told the housing association this and they just said we signed the forms which means we understood. Of course this is illogical because on that basis no financial product could ever be missold. I am a disabled carer to two disabled children also and I will never be in a position to be in full-time work to improve our financial situation. So we are trapped and it's not our fault. The only option to repay what they are asking, is to sell our home, but in repaying the housing association we wouldn't have enough to buy another home and would be homeless. The whole point of the MCHB loan is to get people on the housing ladder. My husband works in the hospitality industry and his employment therefore in the COVID-19 situation is insecure now, he is not trained or qualified in any other job. I know that's not their problem, but I explained we will not be able to pay the amount they are asking and they don't care.

Also I had no idea either and have only very recently realised from looking at paperwork, that the equity loan information states, that if we repay our mortgage we have to also immediately repay the MCHB loan. This would be impossible for us and seems totally wrong, as it puts us in the position of being forced to stay in debt with a mortgage even if we had enough to repay that, but not to repay the equity loan. There seems to be so much about this equity loan that we didn't understand so it's even more of a mess than I thought.

I did raise a complaint with the housing association through Resolver, but they did not uphold the complaint. I have emailed one or two solicitors giving them the details but they didn't reply, except one, who thought it might come under a different category than missold mortgages but I can't remember what she said. One of the housing association's letters to us regarding the complaint even had the wording "regarding the missold loan" as if they were admitting it was missold. The housing association said they dispute that it was missold (of course they are not going to find that they did anything wrong) and their solicitor suggested we go to the solicitor we used when we purchased the house. But this was 11 years ago and the solicitor wouldn't remember anything, plus solicitors just call you in to sign the papers, I don't remember him going through anything to check our understanding but he wouldn't be liable anyway surely and even if he was, that wouldn't mean the housing association would accept back the original sum borrowed. We did the purchase through a broker who dealt with the mortgage and the equity loan. I looked up the FCA handbook on mortgages and although I don't understand most of the meanings, I saw some things that seem to clearly show the housing association failed in their duties towards us. As I understand it, the lender has to make sure the borrower understands the terms and conditions, the responsibility is on them. So I don't think they can blame our solicitor anyway.

I don't know whether the Financial Ombudsman can help with this but none of the ombudsmen have good reputations and it would be so stressful to go through that and for them not to uphold the complaint.

Martin if you are reading this, please help!

davidmcn

Learning_Curve said:

I'm really looking for advice from Martin but I don't know how to contact him direct.

I think he's on the tropical island he bought with all the money he got from selling this website.

MWT

Learning_Curve said:

...and their solicitor suggested we go to the solicitor we used when we purchased the house. But this was 11 years ago and the solicitor wouldn't remember anything, plus solicitors just call you in to sign the papers, I don't remember him going through anything to check our understanding but he wouldn't be liable anyway surely and even if he was, that wouldn't mean the housing association would accept back the original sum borrowed.

Firstly, just to avoid any misunderstandings, Martin is not reading anything on these forums and by posting here you are not reaching out to him, just to people to give their time in a non-professional manner to offer their thoughts and comments on what you have written.

From what you have written it seems that even now you don't appear to fully understand what an equity loan involves, so I would suggest you take the advice you've been given to talk to your original solicitor again as they will have your case notes on file and that will confirm what they explained to you at the time, what questions you asked and what documents you signed.

Thrugelmir

Learning_Curve said:

As I understand it, the lender has to make sure the borrower understands the terms and conditions, the responsibility is on them. 

In accepting the terms and conditions the borrower acknowledges that they accept them. Lender would automatically suggest independent legal advice if the potential borrower has any concerns. Lender will remain at arms length. 

Learning_Curve

MWT said:

Learning_Curve said:

...and their solicitor suggested we go to the solicitor we used when we purchased the house. But this was 11 years ago and the solicitor wouldn't remember anything, plus solicitors just call you in to sign the papers, I don't remember him going through anything to check our understanding but he wouldn't be liable anyway surely and even if he was, that wouldn't mean the housing association would accept back the original sum borrowed.

Firstly, just to avoid any misunderstandings, Martin is not reading anything on these forums and by posting here you are not reaching out to him, just to people to give their time in a non-professional manner to offer their thoughts and comments on what you have written.

From what you have written it seems that even now you don't appear to fully understand what an equity loan involves, so I would suggest you take the advice you've been given to talk to your original solicitor again as they will have your case notes on file and that will confirm what they explained to you at the time, what questions you asked and what documents you signed.

Thank you. Even if they have notes on file saying they explained everything, clearly we still didn't understand it anyway. So I'm not sure how that could move anything forward.

Learning_Curve

Thrugelmir said:

Learning_Curve said:

As I understand it, the lender has to make sure the borrower understands the terms and conditions, the responsibility is on them. 

In accepting the terms and conditions the borrower acknowledges that they accept them. Lender would automatically suggest independent legal advice if the potential borrower has any concerns. Lender will remain at arms length. 

Thanks. If that was the basis of proof then there couldn't possibly be any missold financial products as I said in my OP. They didn't suggest any advice, although they knew of course that we were using a solicitor to do the house purchase. The FCA conditions I read seem to suggest otherwise (link in the OP) unless I am misunderstanding them too. But the fact remains that we did misunderstand and the lender didn't fulfil their obligations to ensure we understood. They have to lend responsibly.

Learning_Curve

davidmcn said:

Learning_Curve said:

I'm really looking for advice from Martin but I don't know how to contact him direct.

I think he's on the tropical island he bought with all the money he got from selling this website.

So he is nothing to do with Money Saving Expert any more?

monetxchange

It is your responsibility to prove you were actively missold the loan, not simply that you didn't appreciate the terms. It sounds like you can't do that.

Not familiar with this kind of loan, but similar to the current HTB equity loan they're (eg) 40% of whatever you sell at, not what you bought at. The lender wants their slice of the profit too, they aren't just helping you out from the goodness of their heart. Did you get any other advice from a mortgage advisor or broker at the time? I was advised by mine that the goal is to get these loans paid off asap.

Tigsteroonie

Learning_Curve said:

davidmcn said:

Learning_Curve said:

I'm really looking for advice from Martin but I don't know how to contact him direct.

I think he's on the tropical island he bought with all the money he got from selling this website.

So he is nothing to do with Money Saving Expert any more?

Suggest you look at this page regarding ownership, Martin's original involvement and his role now. https://www.moneysavingexpert.com/site/about-the-site/

Learning_Curve

monetxchange said:

It is your responsibility to prove you were actively missold the loan, not simply that you didn't appreciate the terms. It sounds like you can't do that.

Not familiar with this kind of loan, but similar to the current HTB equity loan they're (eg) 40% of whatever you sell at, not what you bought at. The lender wants their slice of the profit too, they aren't just helping you out from the goodness of their heart. Did you get any other advice from a mortgage advisor or broker at the time? I was advised by mine that the goal is to get these loans paid off asap.

In my OP I stated"

"And I have proof of this as I had emailed the housing association in 2011 (2 years after taking out the loan saying what we believed and they didn't show any concern then that we had misunderstood and we didn't realise the future implications when they said we had misunderstood) showing that I thought we were paying off the balance."

"Further evidence that we misunderstood, is that at the time we took out a life assurance policy that is a decreasing policy going down from the original amount borrowed.  I'm not even sure it covers the MCHB loan, it might only cover the mortgage."

"I have some lifelong conditions that affect my understanding of things (and I have medical evidence of this), although they were not diagnosed at the time we took out the equity loan. I have told the housing association this and they just said we signed the forms which means we understood. Of course this is illogical because on that basis no financial product could ever be missold."

That's 3 separate proofs.

As for them "not helping us out of the goodness of their heart", they will have had the monthly payments from us (11 years and counting) and this was supposed to be a government scheme to help people get on the housing ladder, not to line their pockets. And the fact remains that we misunderstood what we were signing for.

Learning_Curve

monetxchange said:

 Did you get any other advice from a mortgage advisor or broker at the time? I was advised by mine that the goal is to get these loans paid off asap.

We used a mortgage broker who just did the paperwork, no additional advice was given from what I recall, but if it was, it made no difference to our understanding anyway.