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Is my home going to be taken away? (UK homeowner, 2nd mortgage)
May 21, 2013 6:35 AM   Subscribe

More details after the jump, but in short: Mortgage lender holds the deeds to the house after missing payments for years. I am trying to figure out what the imminent risks to the house are and if I could find a debt negotiator. Many thanks to you all.

UK homeowner, elderly people who are unable to move. Value of the house is over £600k and is now at risk of being lost over a badly managed £10k home loan.

20 years ago £10k second mortgage taken out to do some rebuilding work. Because of a dispute with the broker over what they thought was mortgage fraud, they stopped making payments and the figure has ballooned to £40k+. It turns out that there was no mortgage fraud and the bank simply wants to get paid now. Homeowners only have £10k to their name and could perhaps pull together another 10k.

The bank has the deed now and they wont return it until payment is made in full.

Questions:

1. Do you know of any debt/mortgage negotiators in the UK?
2. Is it reasonable to expect the bank to settle for 50% (£20k)
3. The bank holds the deed. Could they repossess at any time?
4. I found http://www.nationaldebtline.co.uk/ to be somewhat useful in terms of info. Are there additional resources online?
posted by seatofmypants to Work & Money (6 answers total)
 
The best place to go for advice and help is your local Citizens Advice Bureau. They will be very experienced in helping people with debt and money issues. They are independent and free. Call them now.

My inexpert view on the points you raise are that, if there is only £40k of debt secured against a £600k house, then the bank won't be likely to negotiate the sum, because there is plenty of money there to cover their costs. However, it also means that it should be easy to get another mortgage or loan secured against the house to cover the £40k. If however, there is already a large original mortgage, this might not be possible, but it might increase the bank's likelihood to negotiate. Don't forget, they can take the £10k from the bank account and still repossess the house.

The fact the bank holds the deeds does not allow them to repossess. They need a court order for that. You can find out more about that process and what you can do on housing charity Shelter's website here.

tl;dr - Ring your local Citizens Advice Bureau now
posted by prentiz at 6:46 AM on May 21, 2013 [3 favorites]


Seconding that your first call should be to the CAB. Your conversation may be with a solicitor but note that they only provide advice and do not fight battles for you. Their advice may ending up being "get a solicitor".
posted by epo at 6:51 AM on May 21, 2013


No, there is no chance of repossesion without court action. Even then the court will be very favourably inclined toward the householder.

Another vote for the CAB here. Depending on where you live there will probably be too much demand and too few volunteers. Twenty years is a hell of a long time. Have the people been ignoring communications from the bank? I ask because it makes a big difference to the people's rights and obligations.

Once I know that I may be able to help further.
posted by BenPens at 9:01 AM on May 21, 2013


Ask this question on the moneysavingexpert forums in the mortgages section. The people who hang out on there tend to be quite knowledgeable about this sort of thing. Also, consult a solicitor who specialises in personal finance issues.mand consider contacting e financial ombudsman if you can't get answers via the first two routes.
posted by hazyjane at 10:51 AM on May 21, 2013


Thank you all for your input.

BensPens: The homeowners simply stopped making payments a few years in and then ignored all communication from the bank (C&G).

They were upset because it was one of those ARM products and they thought the broker had mislead them. They stopped making payments while they tried to find fault with the broker. In a subsequent court hearing, the broker was found to have been in the right and the homeowners were left with a ballooning loan. It became so overwhelming that they kind of went into a state of denial about it. It continues to accrue interest every month!
posted by seatofmypants at 11:38 AM on May 21, 2013


Go to the CAB web site now , put debt cab advice guide on goggle. Follow the process outlined on there. Try to get a CAB appointment if you can. In essence you need to negotiate an afforrdable repayment plan such that when the matter comes to court the judge will agree that you offer is reasonable. On that basis the bank is unlikely to take it to court.

I was hoping the bank were at fault so that a morre robust stance could be taken but it doesn't look like that is the case. Act quickly, the bank will have more options and be more amenable the quicker you act.
posted by BenPens at 1:48 AM on May 22, 2013


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