Advice for a severely disabled couple - secured loan

elliexox

Hi all 

Hoping someone could possibly advice me. 

It appears my Auntie and Uncle who are both severely disabled (deaf mute) were very poorly advised to take out a secured loan against their home in 2007 by their daughter. 

The loan was for £30,327.00 with a variable interest rate of 9.80%. It appears the loan is interest only as here we are 14 years later and they still owe £24,697.32 after years of making payments. Looking back through the documents there were times when they have been paying up to £680 a month off the loan due to the interest rates. 

The company (Blemain Financial Limited) seem to be very aggressive from reading through the documents, are charging extortionate rates and seem to add on ridiculous charges to the loan e.g. one letter states ‘we have still not received confirmation that Blemain Finance Limited has been noted on your insurance policy, we are writing to inform you that we have protected our interest in relation to your property. As we have not received a response from your insurance company we had no alternative but to place your property on our company insurance policy. The premium charge is £334 which includes insurance premium tax of 5%. In addition to this there is £130 to cover administration. This amount has been added to your loan.’

The current payments are around £270 a month I believe, which they cannot afford to pay but obviously risk losing their home.

I’m wondering if anyone can help me with what their options might me? 

While they are happy to pay off the loan, they are retired currently living on disabled benefits, so I’m assuming some kind of DMP would be an option. Although I have to caveat all of the above again by saying I am in absolute disbelief they were allowed to take out the loan in the first instance - both of them are severely disabled, cannot read and barely can write and do not understand any of what is going on or what they signed up to in the first place. I have only come to find out all of the above as each time they receive a new letter they have to bring it to my mum (who also has very little understanding herself) and ask her to try and sort whatever is being asked of them etc. 

Any advice appreciated, thanks!

[Deleted User]

The loan can't be interest only if the capital is decreasing. Either that, or they made some significant overpayments.

Their best option is to overpay as much as possible, rejigging their current budget if possible. If not, then selling the house would release the equity needed, but would then create a new housing problem.  Refinancing is another option, but they're unlikely to get further borrowing from what you say. 

What term did they take the loan out over?

elliexox

Deleted_User said:

The loan can't be interest only if the capital is decreasing. Either that, or they made some significant overpayments.

Their best option is to overpay as much as possible, rejigging their current budget if possible. If not, then selling the house would release the equity needed, but would then create a new housing problem.  Refinancing is another option, but they're unlikely to get further borrowing from what you say. 

What term did they take the loan out over?

The loan was taken out over 25 years 

superbigal

Have you asked the sister what the loan was used for ?

elliexox

superbigal said:

Have you asked the sister what the loan was used for ?

I can ask my mum and try and find out the specifics, as far as I’ve been told at this time they needed money so their daughter advised them to take this out which was obviously very poor advice.  

Brie

I know that duty of care has improved greatly in the past 2 decades but I wonder if Blemain were aware at all of the disabilities.  Obviously the inability to read or write makes any management of financial matter difficult but not impossible.  But being deaf/mute as well adds a massive barrier.  I wonder if Blemain have stated anywhere that they talked to your aunt or uncle either in person or by phone.  Potentially this may mean the your cousin has committed fraud by impersonating your aunt or by blatantly setting them up to finance her in some way.  

Do you have all of their documents?  If not submit a subject access request to find out everything.

Grumpy_chap

elliexox said:

Hi all 

Hoping someone could possibly advice me. 

It appears my Auntie and Uncle who are both severely disabled (deaf mute) were very poorly advised to take out a secured loan against their home in 2007 by their daughter. 

The loan was for £30,327.00 with a variable interest rate of 9.80%. It appears the loan is interest only as here we are 14 years later and they still owe £24,697.32 after years of making payments. Looking back through the documents there were times when they have been paying up to £680 a month off the loan due to the interest rates. 

The company (Blemain Financial Limited) seem to be very aggressive from reading through the documents, are charging extortionate rates and seem to add on ridiculous charges to the loan e.g. one letter states ‘we have still not received confirmation that Blemain Finance Limited has been noted on your insurance policy, we are writing to inform you that we have protected our interest in relation to your property. As we have not received a response from your insurance company we had no alternative but to place your property on our company insurance policy. The premium charge is £334 which includes insurance premium tax of 5%. In addition to this there is £130 to cover administration. This amount has been added to your loan.’

The current payments are around £270 a month I believe, which they cannot afford to pay but obviously risk losing their home.

I’m wondering if anyone can help me with what their options might me? 

While they are happy to pay off the loan, they are retired currently living on disabled benefits, so I’m assuming some kind of DMP would be an option. Although I have to caveat all of the above again by saying I am in absolute disbelief they were allowed to take out the loan in the first instance - both of them are severely disabled, cannot read and barely can write and do not understand any of what is going on or what they signed up to in the first place. I have only come to find out all of the above as each time they receive a new letter they have to bring it to my mum (who also has very little understanding herself) and ask her to try and sort whatever is being asked of them etc. 

Any advice appreciated, thanks!

elliexox said:

superbigal said:

Have you asked the sister what the loan was used for ?

I can ask my mum and try and find out the specifics, as far as I’ve been told at this time they needed money so their daughter advised them to take this out which was obviously very poor advice.  

While I am sure you are well-meaning, have you been asked to get involved and support your Aunt & Uncle, or simply concerned off your own back.  IF your Aunt & Uncle need this support and advice, the more common family structure would be that they are supported by their daughter in the first instance.

sammyjammy

Grumpy_chap said:

While I am sure you are well-meaning, have you been asked to get involved and support your Aunt & Uncle, or simply concerned off your own back.  IF your Aunt & Uncle need this support and advice, the more common family structure would be that they are supported by their daughter in the first instance.

Did you actually read the OPs post as all of this is covered in it, clearly the Aunt and Uncle are unable to deal with this themselves, begs the question how they took the loan out in the first place and what it was spent on.

Grumpy_chap

sammyjammy said:

Grumpy_chap said:

While I am sure you are well-meaning, have you been asked to get involved and support your Aunt & Uncle, or simply concerned off your own back.  IF your Aunt & Uncle need this support and advice, the more common family structure would be that they are supported by their daughter in the first instance.

Did you actually read the OPs post as all of this is covered in it, clearly the Aunt and Uncle are unable to deal with this themselves, begs the question how they took the loan out in the first place and what it was spent on.

Yes, I quite understood that the Aunt & Uncle are unable to deal with it.
I am sure you read the post as well and realise they originally took the loan out with the advice of their daughter.

Then, the Aunt & Uncle, apparently asked the OP's Mum who is also not able to deal with it.  That leaves the OP asking Mum to seek clarifications from the Aunt & Uncle, by which time the OP is relying on multiply relayed information.

It is probably more common that the Aunt & Uncle would seek advice from their daughter.  Especially as the daughter knows the details of this loan and the original reasons for this approach, even if it turns out to be less advantageous after the event.  It may have been the only option at that time.