Help to Buy switcharoo

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Hi
It's been 8 months of effort to try and get off a Help to Buy mortgage and for my cousin's partner to assume my share in the property.

Before Help to Buy can submit for "sealing", they are requesting a document from the lender (Barclays) to confirm they are OK to forgo the "Deed of Postponement".

Solicitor is as confused as Barclays and while they're chasing their tails trying to work it out, Help to Buy remain unmoved in their request.

Does anyone know what this is? Is it definitely needed in this scenario and any ideas how we can expedite?

Thanks,
Z

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Anyone? 

AdrianC

I think you're going to need to give a lot more detail. Your reference to "get off an HtB mortgage" does not make it at all obvious what's going on, and suggests you aren't actually sure yourself.

You own a property, bought with HtB. On your own? Jointly?
You want to sell it to your cousin. The whole property? Just your share?

AIUI (and I'm no HtB expert) a deed of postponement, it's where an HtB owner is remortgaging, and is basically saying to HtB "It's OK, the property isn't changing hands, no need to repay the HtB loan yet". Obviously, that wouldn't apply here, because it is changing hands, so the HtB would need to be repaid.

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Currently, two people are on the HtB mortgage. I have instructed to come off it, in place of my cousin's partner.
Cousin and her partner have been approved for the mortgage (affordability), valuation has happened etc.

HtB support phone agent explained that the ONLY thing that they are missing is written confirmation from the lender (Barclays) confirming that HtB DO NOT need a "Deed of Postponement". Apparently, HtB can submit the case for "sealing" once they've received this document.

However, cousin's solicitor has explained that this is an unusual request and they aren't really sure on the protocol here. Apparently, they are speaking to the lender (Barclays), but this has gone on for two weeks (it's been almost 12 months of back & forth in total).

What is this document? Does the above sound like an expected procedure? How long should we expect to wait for this (given "sealing" itself can take 4-6 weeks,l or longer) and is there anything we can do to expedite?

AdrianC

So you and A are currently joint owners, and HtB borrowers.
You are now selling your part-ownership to somebody else, and the property will be being remortgaged as well as partial transfer of ownership.
I can't see why a deed of postponement wouldn't be needed - unless it's simply because the HtB is being repaid as part of the transaction. I'm not even sure your portion of the HtB is transferable to the new part-owner...

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It IS transferable as we have agreed it with HtB, but apparently, they stopped allowing this very recently and you can't partially x-fer out. Not sure why.

On any case, they're (HtB) asking for a "Deed of Postponement" waiver from Barclays and I was wondering if anyone had any advice?

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Hi 

Just bumping this to see if I can get anyone's take on it. 

Bank is saying they've never produced such a letter before and solicitor is saying the same. 

Yet H2B are adamant they need this letter confirming forgoing of Deed of Postponement from Barclays. 

What to do? 

Many thanks
Z

HopeAndDriftWood

Barclays will want a deed of postponement. Financial charges on properties are dealt with in the order of registration - so your HtB loan would be settled first, if Barclays agreed to this, and Barclays would have to accept any shortfall in what was left.

Are you dealing with Barclays directly or through a broker? Have you got anywhere in writing that they’re happy to do this? I expect they are saying they’ve never produced this letter before because it’s not something they do. 

I suspect that if HtB are happy for you to transfer it to your cousins partner, they’ll need to do this with a Deed of Postponement, or between you you’ll need to settle the HtB loan first. There’s nothing in it for Barclays to allow this. But hopefully I’m wrong and they’ve already agreed. 

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SaucySecrets said:

Barclays will want a deed of postponement. Financial charges on properties are dealt with in the order of registration - so your HtB loan would be settled first, if Barclays agreed to this, and Barclays would have to accept any shortfall in what was left.

Are you dealing with Barclays directly or through a broker? Have you got anywhere in writing that they’re happy to do this? I expect they are saying they’ve never produced this letter before because it’s not something they do. 

I suspect that if HtB are happy for you to transfer it to your cousins partner, they’ll need to do this with a Deed of Postponement, or between you you’ll need to settle the HtB loan first. There’s nothing in it for Barclays to allow this. But hopefully I’m wrong and they’ve already agreed. 

Hi and thanks for this!
There is no plan for my cousin and her partner to settle the HtB loan - they are keeping it on; simply transferring my share to her partner's name.

The only outstanding document from HtB's perspective is this letter from the lender (Barclays) confirming they are happy to forgo a "Deed of Postponement".

We haven't had anything in writing from Barclays to confirm that they're willing to do this, but they simply said: "any requests like this must be initiated from the solicitor's" (meaning the owner's solicitor - in this case; my cousin).

FYI The (re)mortgage and the original mortgage were not done through a broker, but through Barclays directly.

tim_london

Deed of postponement is for registering second charge.  With HTB, it is common that the mortgage lender is first charge and HTB would be registered as second charge.  Meaning if you ever sold the house in negative equity, or bailiff got involved due to a bad situation, the mortgage would get paid first and HTB will get whatever is left over.  I'm pretty sure you had a deed of postponement for your current mortgage.

Usually a new bank (i.e. in a remortgage situation) will always want a new deed of postponement, because they need to ensure they are first charge.  With product transfer (i.e. remortgage with same back) IIRC you do not need it.  However your situation is different because of the equity transfer.  There may be a difference if the bank sees it as a new contract vs an existing contract transfer.  It sounds you need get the bank to confirm and instruct the solicitor to tell the HTB agent. 

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tim_london said:

Deed of postponement is for registering second charge.  With HTB, it is common that the mortgage lender is first charge and HTB would be registered as second charge.  Meaning if you ever sold the house in negative equity, or bailiff got involved due to a bad situation, the mortgage would get paid first and HTB will get whatever is left over.  I'm pretty sure you had a deed of postponement for your current mortgage.

Usually a new bank (i.e. in a remortgage situation) will always want a new deed of postponement, because they need to ensure they are first charge.  With product transfer (i.e. remortgage with same back) IIRC you do not need it.  However your situation is different because of the equity transfer.  There may be a difference if the bank sees it as a new contract vs an existing contract transfer.  It sounds you need get the bank to confirm and instruct the solicitor to tell the HTB agent. 

Thanks, Tim. Is it normal that the bank (Barclays) will not communicate with me as to whether or not they require it (Deed of Postponement)?

It doesn't seem like something that would need to go through a solicitor?

Obviously, the Deed itself would need to, but just to get a decision as to whether or not it will be required I would have thought could be organised between us and the lender itself without the need for a solicitor.

In any case, I case I'm hearing from what you said (given the equity transfer) there's a fair chance that the lender (Barclays) WILL want a Deed of Postponement - in which case, is this complicated to acquire? 

Why is HtB suggesting that a waiver agreement is what they need, rather than a signed Deed of Postponement? Does the requirement for a Deed of Postpone pose potential risks to us/the process then?