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Second Mortgage?Top-up loan? You should read this


steven4064
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Mortgages normally are not regulated by the Consumer Credit Act 1974.

 

However, Francis Bennion, who was the author of the CCA1974 points out that second mortgages, top-up loans and other products offered by mortgage companies and secured on property may well do.

 

In his paper on Section 18 (which covers 'multiple agreements'), he specifically includes the example "A mortgage company (M) wishes to float a Scheme under which it would offer its existing borrowers a further advance facility combined with refinancing. M wants to call this a ‘Topup Loan’."

 

He goes on to explain that the part of the loan covering the further advance (if it is less than £25000) is regulated by the CCA 1974 and must comply fully with that Act. Furthermore, the two parts of the loan agreement must be treated as seperate agreements. If this is not done, the agreement covering the further advance would be unenforceable.

 

This fact could obviously be of great interest to people having problems with mortgage and other loan companies and may well provide a route to prevent repossession, etc.

 

I have started a thread in the Mortgage Companies forum but there are companies offering such products that are not just morgage companies. If you have a second mortgage or top-up loan with one of these, have a look at the thread http://www.consumeractiongroup.co.uk/forum/mortgage-companies/177919-second-mortgage-top-up.html#post1920626

 

I have closed this thread here to keep discussion in one place.

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