Mortgage Redemption Issue

Carlos77

I sold my house earlier in the year, and it completed in the middle of last month. I got a bank statement this morning, and it showed that a payment had been taken from the mortgage company, so i phoned up and questioned this with the mortgage company. They told me there is still an outstanding balance on this account. They had received payments from my solicitor on the correct day, but this had not covered all the outstanding balance. There is a shortfall of around 5k apparantly. I had a redemption statement from the solicitor, and they did take all the money that they said they would. I wasnt aware this could even happen, as I technically have a debt on someone elses property from what the mortgage guy said. Something has gone wrong somewhere by the sounds of it. The question is am i liable for this, as I completion statement from my solicitors, and all the money they stated on the redemption certificate was taken out of the proceeds? 

Thrugelmir

Did you check the completion statement for accuracy? 

Carlos77

nope, I just trusted what the solicitor sent me, i wasnt using the money to buy another house, and have had the mortgage and secured loan for about 15 years, so figured the redemption figure was about right. The solicitor has emailed me saying they paid off the amount that was calculated on the 18th May 2021. So it seems they have paid what the mortgage company said i owed last month, yet today its 5k more for some reason!?!

MWT

Probably worth checking now then...

You must have a recent mortgage statement or even online access to your account... ?

Carlos77 said:

..as I technically have a debt on someone elses property from what the mortgage guy said.

No, the debt is yours, not 'on someone else's property' and although it was originally secured against the property you sold, that charge will have been removed when you completed on the sale, so right now, if it is real, it is an unsecured debt it would seem...

Carlos77

MWT said:

Probably worth checking now then...

You must have a recent mortgage statement or even online access to your account... ?

Carlos77 said:

..as I technically have a debt on someone elses property from what the mortgage guy said.

No, the debt is yours, not 'on someone else's property' and although it was originally secured against the property you sold, that charge will have been removed when you completed on the sale, so right now, if it is real, it is an unsecured debt it would seem...

I Will have to have a dig around see what i can. The guy on the phone, did say the loan is still secured on that property though, so he couldnt understand how the sale went through. Either the old mortgage company, or my solicitor have cocked up somewhere along the line. If i must pay it, then i will, but a quick search i did online was stating that the final redemption statement is a legally binding document, so was wondering if that was really the case? Should it be the fault of my solicitor, have they acted negligantly? 

user1977

MWT said:

Probably worth checking now then...

You must have a recent mortgage statement or even online access to your account... ?

Carlos77 said:

..as I technically have a debt on someone elses property from what the mortgage guy said.

No, the debt is yours, not 'on someone else's property' and although it was originally secured against the property you sold, that charge will have been removed when you completed on the sale

No, it will (almost certainly) only be removed by the lender once they've received everything they think they're entitled to. OP's solicitor will have given the buyer's solicitor an undertaking to cover this, so they will have as much of an interest as the OP in sorting this out.

£5k is a big discrepancy, but difficult to work out what might be wrong without seeing the statements. Is there perhaps an early redemption penalty which has been incorrectly added (or omitted)?

Carlos77

user1977 said:

£5k is a big discrepancy, but difficult to work out what might be wrong without seeing the statements. Is there perhaps an early redemption penalty which has been incorrectly added (or omitted)?

No Early redemption on it, was way out of a fixed deal, Have overpaid for a lot of the mortgage, and didnt need to sell the house to buy the new place, so the amount i owed wasnt really an issue, and all the paperwork is in the loft now (will dig around tommorrow)! Have my solicitor on the case now, so letting them tell me what my next move should be. One way or another I want this sorted before they take another payment next month

MWT

user1977 said:

No, it will (almost certainly) only be removed by the lender once they've received everything they think they're entitled to. OP's solicitor will have given the buyer's solicitor an undertaking to cover this, so they will have as much of an interest as the OP in sorting this out.

That’s the odd part though, if the charge had not been released then I would have expected this to have been raised by the solicitors on one or both sides instead of the OP finding out by way of a DD…

user1977

MWT said:

user1977 said:

No, it will (almost certainly) only be removed by the lender once they've received everything they think they're entitled to. OP's solicitor will have given the buyer's solicitor an undertaking to cover this, so they will have as much of an interest as the OP in sorting this out.

That’s the odd part though, if the charge had not been released then I would have expected this to have been raised by the solicitors on one or both sides instead of the OP finding out by way of a DD…

Completion was only a few weeks ago, I wouldn't necessarily expect alarm bells to be ringing at this stage just because the security hasn't been discharged yet. 

MWT

user1977 said:

Completion was only a few weeks ago, I wouldn't necessarily expect alarm bells to be ringing at this stage just because the security hasn't been discharged yet. 

Fair point, especially with the backlogs at the Land Registry...

The bells should be ringing now though, but really shouldn't be too hard to work out if the redemption statement was wrong, or if this claimed outstanding balance is wrong...

Stenwold

Carlos77 said:

MWT said:

Probably worth checking now then...

You must have a recent mortgage statement or even online access to your account... ?

Carlos77 said:

..as I technically have a debt on someone elses property from what the mortgage guy said.

No, the debt is yours, not 'on someone else's property' and although it was originally secured against the property you sold, that charge will have been removed when you completed on the sale, so right now, if it is real, it is an unsecured debt it would seem...

I Will have to have a dig around see what i can. The guy on the phone, did say the loan is still secured on that property though, so he couldnt understand how the sale went through. Either the old mortgage company, or my solicitor have cocked up somewhere along the line. If i must pay it, then i will, but a quick search i did online was stating that the final redemption statement is a legally binding document, so was wondering if that was really the case? Should it be the fault of my solicitor, have they acted negligantly? 

I'd never suggest following this through, but I'd be interested to hear their response if you asked them what the consequences would be of not paying the loan back that's secured on a property you no longer own. If your lender made the mistake when issuing the redemption statement, they might be open to a compromise to avoid that situation.