Six months after sale of house, Equity Release company want more

user1977

TBagpuss said:

I think it is absolutely worth making a formal complaint - it's a pretty major error for them to have made and it sounds as though you, as executor, have altered you / the estate's position - you have distributed the funds.

You can I think, request that your siblings return their shares so the loss doesn't fall solely on you if they do depmand the money but it is certainly worth making a formal complaint first. 

I doubt the OP is going to be personally liable anyway if they've acted in good faith.

GDB2222

djl0001 said:

Thank you everyone for your comments and information. Just for background info - my parents took equity release on a total borrowed amount of £46,000 in 2003. The house sold for £240,000. The original loan and interest taken back by Aviva amounted to £208,000. I have never of course begrudged my parents the enjoyment they received from this cash in their retirement years. Having now looked at most recent statements from Aviva it does appear that the revised claw back is roughly correct. I am just angry that this error occurred at all (after distributing share of proceeds to my 4 siblings) and the offhand way I was made aware of this. I wish I was rich enough to treat 27k as someone else's regrettable error...

Based on £46k borrowed and an interest rate of 8% over 17 years, the redemption amount would have been £184,000.  My recollection is that these mortgages were often on that rate of interest.

An interest rate of 9.5% is required to bring the redemption figure up to £235,000, which is what they are effectively asking for now. 9.5% seems rather on the high side.

If I were in your position, I would be asking for all the paperwork issued when your parents took this mortgage out, and then I'd be double-checking the figures.