NRock Together query

RPH2007

Can anybody help with a query regarding priority of charges on a property:

The story:

g/f bought house in 2006 with a NRock Together mtg: approx £100,000 plus approx £20,000 unsecured.

In 2007 I gave/loaned her £15,000 to set up a new business. We set up a proper 2nd charge on her property to 'protect' my £15k.

We have since split up (fairly amicably). In meantime she has got into arrears with both her main secured loan and with her unsecured loan. NRock got a suspended possession order a few months ago. They also got a CCJ for the unsecured loan, and then an interim charging order - which is now logged on the Charges Register (Land Registry deeds). It is dated well after 'my' charge.

She plans to sell the property now but the sale price will only be £112,000. After selling fees of approx £2,000 That will be sufficient to clear her main secured mtg account, plus about £10,000 which would mean that I'd at least get back 2/3 of what I loaned her. And I'd be happy with that.

But - and here's the Big Question - does NRock's "interim charging order" for her unsecured loan take priority over my charge?

On the one hand, my charge pre-dates NRick's new charge so, in effect, I am 2nd in the priority ranking. On the other hand, I've read something about the small print of the Together mortgage gives NRock the right to add their additional unsecured loan to the main one.

Anybody know that exact legal position? Or how I'd find out?

Btw, I have tried phoning NRock.... it was like trying to talk to a brick wall.

boredofbeingathome

I think you may well have to take some free legal advice on this one. I would send a letter to Northern Rock, and get a current update of the situation, recorded. Then i would contact a solicitor who specialises in this, i would suggest your original solictor as they would hold the original documentation.
Also put this on the Mortgage board, as someone who is more knowledgeable may know..Oh and a poster called Pania, may also be able to help, as could fermi.... Good luck.BOBX

pania

just talking to mortgage rock, one sec

pania

northern rock even.. he he

pania

OK, the official verdict is that the unsecured element, once the charging order is issued becomes a part of the original first charge on the property, and as such, although dated after your second charge, would become a part of the first charge and therefore require to be settled prior to the 2nd charge being paid.
Unfortunately it doesn't look asthough you will be able to receive any of your money back, and further more NR will be able to pursue your x to recover the remainder of the 20k that is still outstanding.
Sorry to be the bearer of bad news.
Hugs
P
xx

Debt_Monkey_3

pania wrote: »

once the charging order is issued becomes a part of the original first charge on the property,

i dont understand how this can be true, they are two seperate debts, the secured and unsecured, if NR get a C/O it is still two seperate debts, just that they are now both secured.

find yourself a good solicitor, pm me if you want a recommendation, i personally believe that you would be entitled to any remaining funds after the mortgage has been paid, but it is likely that you will have to fight for them if NR are giving out advice such as above

pm2326

If the unsecured loan has been charged to the property NR wont allow your ex to sell the house unless she confirms how she will repay the shortfall of £10k.
Your ex's solicitor will write to NR asking if they will agree to the sale, they can and will refuse to allow any sale to go through unless they recieve the full proceeds of the sale minus any fees and that she agrees to repay all of the unsecured by another method.