Need advice with Mortgage problem

[Exclus]

Hope someone can offer me some assistance with my problem.
In 2002 we took out a relatively small 10 year term mortgage on our property, and at the same time my bank, who arranged the loan through their own Building Society, arranged for us to have a mortgage reserve current account (our own cheque book etc) - which means that as the mortgage gets paid off we could draw down more money from this account. Everything went well until my business hit problems, and we had to start drawing down this money. At the end of the 10 years the mortgage balance was nil (never being late or missing a payment), but the reserve account had gone up to about £73K.
We have put the house up for sale so that this would be settled (house value to amount owed is nearly six times over), but not sold as yet. We have been paying a monthly amount to cover the interest and reduce the balance a little, but not as much as we were paying as a repayment mortgage. The bank have accepted this for some time, but have now said that they are declining our offer to keep paying this amount until the property is sold, and may start to take other action.
We are pensioners with no other form of income, and cannot pay more than we are at present.
Really want to know that if they start any action just what can we do, and how long would it be before this reached court proceedings. We are very worried about the whole situation - don't really want to sell the house that has been in the family for about 50 years - but obviously have no other option, as we would not consider an equity release.
Our son and daughter have offered to raise a mortgage and 'buy' the house, but we do not want to go down this route as we want to sort this problem out ourselves.
We would be very grateful for any advice/assistance that is offered.

[PlanB]

Re: Need advice with Mortgage problem

I see from your previous thread that you were troubled by this in November 2012 but somehow you've managed to keep the status quo since then:

http://forums.all-about-debt.co.uk/s...l=1#post259830

Has something formal happened to cause you this current worry other than the bank piling on the pressure to force you to sell your home?

At the moment they have security on your house so if they wanted to call in the loan (because it has effectively expired) then they would have to repossess you through the courts. That's not an easy process for them which is why they want to bully you out of your home instead. There may be options which I'll explore with you when I've got a bit more information to go on.

I note you say you're a pensioner (so am I ) but can you tell me exactly how old you are, but if that's an embarrassing question then send me a PM.

I'm not around this weekend but I'll be back on Monday.

[PlanB]

Re: Need advice with Mortgage problem

We have put the house up for sale . . . . . We are very worried about the whole situation - don't really want to sell the house that has been in the family for about 50 years .

I've got your PM and I'll reply on Monday. Things may not be as bleak as you think

[Exclus]

Re: Need advice with Mortgage problem

Thanks for your kind help and assistance.

[Exclus]

Re: Need advice with Mortgage problem

Haven't heard anything from the bank for a couple of weeks, although fully expect to any day now. Waiting to receive PlanB's thoughts on why things may not be so bleak, so that I may respond positively to any action the bank may take.

[Never-In-Doubt]

Re: Need advice with Mortgage problem

Send planB a PM. She's a tad busy I think. But that'll jog her memory

[SA Gold]

Re: Need advice with Mortgage problem

Just wanted to pop in and wish you well with this. You are in good hands!

Best wishes
SA

[Exclus]

Re: Need advice with Mortgage problem

Thanks for your kind thoughts. However, as predicted we received a letter this morning from the bank saying that they could not agree to a term extension - which they had semi suggested in the last letter - and that all possible options were now exhausted. Our request for further hold pending a sale has also been declined. They have asked to be updated in the next 14 days or action will continue. Not sure what they mean by action. Any suggestions how we should reply will be gratefully received.

[diddlydee]

Re: Need advice with Mortgage problem

Don't panic if you don't get an immediate reply here from PlanB. As Nids says she is a tad busy, but keeps her eye on this section of the forum, and is the sites housing expert.
She really is very good at all matters relating to housing, so if anyone can help you with your predicament, she can
If you have dropped her a pm, you will no doubt receive a reply from her as soon as she gets the time.

Best of luck

[Exclus]

Re: Need advice with Mortgage problem

Thanks for the support, it is appreciated. I hope to hear from PlanB as soon as she has time to give my problem some thought.

[Tuttsi]

Re: Need advice with Mortgage problem

The Cheltenham and Gloucester v Norgan case allows you to spread the arrears over the remaining term as long as your finances stack up for the repayments. I am pretty sure Plan B will guide you.

Thanks for your kind thoughts. However, as predicted we received a letter this morning from the bank saying that they could not agree to a term extension - which they had semi suggested in the last letter - and that all possible options were now exhausted. Our request for further hold pending a sale has also been declined. They have asked to be updated in the next 14 days or action will continue. Not sure what they mean by action. Any suggestions how we should reply will be gratefully received.

[PlanB]

Re: Need advice with Mortgage problem

PM sent explaining my absence

The plan of action is to get a letter prepared to send in Monday's post.

[PlanB]

Re: Need advice with Mortgage problem

we received a letter this morning from the bank saying that they could not agree to a term extension . . . . and that all possible options were now exhausted. Our request for further hold pending a sale has also been declined.

You have 14 days to reply to that letter (note 23rd May deadline) which give us time to get to the bottom of this and take control of the situation.

Starting at the end, I expect this will go to the FOS if the Woolwich don't play ball. The lender knows you've reluctantly put your house on the market so they feel they're home and dry. So first question: do you want to sell your home and downsize or are you only selling it because of pressure from the Woolwich? I'm assuming you want to keep it for longer so that's what we'll aim for unless you say different. You need to tell them what you want to happen not ask them what they want to happen.

This Mortgage Reserve account is a complicated product which I'm not familiar with. But nevertheless it'll be a contract and I think it makes sense to see if Andrew can make sense of it. Is it one contract i.e. a mortgage account with Ts & Cs which allow for drawn down, or two separate contracts with separate Ts & Cs for each facility i.e. the mortgage and current account? I would like you to email it to me and I'll PM you about that in a minute. What I would really like to see is the KFI document given to you when you took out the mortgage because that's what you believed you were buying into.

Is it this product: http://ask.barclays.co.uk/help/mortg...s/reserve_work

You say that you cleared the mortgage element when the mortgage term expired in 2012. At that point they declined to extend the term of your mortgage. Did you ask them in writing and is there a paper trail to back this up? What was the reason for their decline (if they gave one)?

I've checked the Woolwich's current lending criteria on the intermediaries' (brokers and packagers) website and the maximum loan term is until the age of 70 years old. So in theory you could ask them to extend the mortgage term by another 4 years because lenders will use the current criteria when considering any changes to mortgage terms. It also says that they will consider longer. Read the full criteria here (click on "Age/Term if the link times out)

http://www.woolwichintermediaries.co...P1242620533007

If I'm right the outstanding balance which relates to your Reserve Account is £73k on an interest-only deal. If you could get that mortgage term/length extended by four years then you ought to be able to continue to pay only the interest and they can demand the £73k back in full in 2018. That's when you may have to sell your house or do an Equity Release scheme or whatever options are available to you at that time.

At the moment you are paying the interest and £100 a month on top which is a struggle. Your goal should be to get the term extended and continue to pay interest only as per the original Tc & Cs. That's not an unrealistic or unreasonable request since you have so much equity. The lender's money has security so what's their problem?

The only possible snag is that this is a joint mortgage and your wife is more 'mature' than you so they may want to consider her age as the cut-off point but unless they've noticed that yet it may not become an issue.

We need a few more facts before you write that letter. You've got plenty of time.

Don't be panicked into accepting a low offer on your home. You've already reduced the price by £25k. How long has it been on the market and have you had plenty of viewings but no offers? The property market is rising so quite frankly I'd be tempted to put it back to the original asking price and see what happens. Maybe switch agents as some can get stale and complacent. Let's hope you don't need to sell it at least not for a long while. We all know it takes up to a year to get a complaint through the FOS system.

[Exclus]

Re: Need advice with Mortgage problem

Thanks PlanB for your thoughts etc, and I will try to sort out some relevant paperwork tomorrow and PM you with the more personal details. From memory the details of the reserve account are just in a letter - no real T & C's. I know that when we were arranging the mortgage at the local Barclays the advisor told us about the reserve account facility, and asked if we wanted it. We said we did not want it, but he said that it would be better to arrange at that time as it would be harder to do so at a later date - so we agreed, not really thinking that we would ever need to use it!

[PlanB]

Re: Need advice with Mortgage problem

The Cheltenham and Gloucester v Norgan case allows you to spread the arrears over the remaining term as long as your finances stack up for the repayments. I am pretty sure Plan B will guide you.

That's my favourite case law of all time because it rescues so many homeowners from homelessness (it should help to get you a suspended possession order). But alas in this case the OP's mortgage term has already expired so he's fighting to get the term extended.

Let's post it up anyway so anyone facing repossession who reads this will know that there is a light at the end of the tunnel and it's not an express train coming towards them:

http://www.bailii.org/ew/cases/EWCA/Civ/1995/11.html