Trust Deed Equity Release. Help!!!!

[danielspaniel]

hello. its my first post so please be gentle!

 

im hoping someone can advise me on what to do regarding my Trust Deed. i have now completed 36 monthly payments at the level agreed by my trustee. however, he has now written to me asking for a half share of the Equity in the House owned jointly by my wife and i. i was aware that this was a possibility at the start but there are two things i cant get my head round:

 

1) the equity is based on the difference between the current mortgage balance and the amount that the house was worth as the beginning of the trust deed. however, houses in my area are now struggling to sell for 5-10 thousand pounds less than they were 3 years ago. could i obtain an independent valuation to prove that i am in negative equity?

 

2)even if the trustees valuation is correct, how can i get any lender to agree to a remortgage(to release equity) when ive only paid a tiny percentage of my current 95% mortgage. effectively i would need at least 95% load to value (LTV) and nobody lends that these days do they???

 

3) are these things ever written off by the trustee. he has asked for a proposal in writing. can i propose that since the situation appears impossible, that the debt could be written off

 

can anyone help because i am stressing to the max

[blueda]

Hi danielspaniel and welcome to CAG, i dont have much knowledge of trust deeds. What do you mean that he has asked for a half share of the Equity ?.

[danielspaniel]

thanks for the speedy reply blueda. the half share is because the property is jointly owned between my wife and i. her share in the property is not inlcuded in the trust deed so any equity at the moment must be divided in two.

[blueda]

So the trustee is asking you to obtain a loan secured to the value of your share in the property ?, and what kind of debts do you have ?.

[danielspaniel]

he will not sign me away from my trust deed until i "release" the equity. he doesn't suggest how. it seems to me that my only options are to:

 

A) re-mortgage (and theres not enough equity to do this)

 

b) sell the house (but again, once all fees etc are taken into account, there will be no money to give him)

 

i have no debts as all of my creditors were included in my trust deed. as soon as this is finalised, i should be debt free.

[blueda]

We need someone here who knows a lot about trust deeds, My view is taking out a loan on your home is not good, and selling your home is a no no option. You have came to the right place for advice as there are members that do know a lot about trust deeds, i will be keeping a close interest in this thread.

[danielspaniel]

many thanks. im glad i found this place

[blueda]

I have just read about the basics of a trust deed. A legally binding arrangement between you and your creditors where you agree to to repay a percentage of your debts through a trustee over a period of 36 months. You have paid into the trust deed for 36 months, yet you are expected to raise the value of your half of the house equity, yet the advert for trust deed states debt free after 36 months. Stay on this site.

[danielspaniel]

yes, it is fairly misleading. however, equity release was discussed at the beginning and im not disputing this. however, in the current climate when it is virtually impossible to unlock this equity, even by selling the house, i dont really know where i stand

 

hopefully someone can clarify it soon...

[blueda]

yes, it is fairly misleading. however, equity release was discussed at the beginning and im not disputing this. however, in the current climate when it is virtually impossible to unlock this equity, even by selling the house, i dont really know where i stand

 

hopefully someone can clarify it soon...

I agree with you, the price of houses has fallen, and it is not a good time to be doing so, i dont see it as a good thing full stop, in fact it goes against the princable of getting you out of debt as it means getting you into further and deeper debt. This could be a case to report to the office of fair trading. We will find out .

[danielspaniel]

i know what you are thinking blueda but the equity release IS a legal requirement of the trust deed so i dont think that im being deceived in any way. my problem is simply to do with HOW i am going to release this equity. the only thing that i may dispute is the value of the quity since prices have definitely dropped in the last few years

[blueda]

i have got advice on this, this is a standard letter to everyone who has just completed a trust deed, if your property has little or no equity, then you have no problem. you only have a problem if you have a lot of equity, which you dont have, so as it is a legal requirement, then let them go ahead with the survey. Others will be along to give you further advice.

Edited April 18, 2009 by blueda
Added content.

[danielspaniel]

the trustee DID have a survey done and (bizarrely) the house was valued at exactly what we paid for it 4 years ago. my argument is that this is NOT a true reflection of the house's market value since many identical flats in the same area are struggling to sell for around £10000 LESS than this. i have a feeling that it is in the trustee's interests for there to be some equity in the house but in reality there cant be much at all. do you think i could have an independent survey done to confirm this? would the trustee accept this if it was in dispute of the survey that he paid for?

 

i really appreciate your help and input blueda

[blueda]

A survey conducted 4 years ago is mis-leading as house prices have fallen in the past year and a bit, due to the recession. An independent survey could be an option if the trustee can not be forced into conducting an updated survey. it is in your interest to have little or no equity in the property.

[danielspaniel]

the survey was conducted last week but i was not allowed to see it. this is what makes me think that something is not right. to be honest, if i could get this supposed valuation for the property on the market at the moment, id bite your hand off for it. in reality id be lucky to get what i paid for it.

 

i just dont know whether the trustee would accept a valuation from a surveyor of my choice...

[IdaInFife]

Did your wife give permission?

 

Property which is transferred to the trustee may be sold whenever it is in the interests of your creditors for the trustee to do so. If you own your home then the trustee can sell the property if there is any equity in it (i.e. if it is worth more than the mortgage). They will need consent of anyone else who owns the house or has a right to live there.

 

 

The trustee will only sell your home if there will be a proft after the sale, no matter how little it is.

 

If you can afford to get a valuation done yourself then that would be the best way to go to compare theire valuation.

 

Ida x

[blueda]

The survey report is probably not in yet, phone the trustee on monday and ask about it.

[danielspaniel]

thank you

 

Do you think an option would be to ask the trustee to approach the creditors with a view to having the equity written off, since it would be impossible to obtain a remortgage and I would be unable to sell the house?

 

in failing that, do you think that he would accept continued monthly payments in lieu of the unreleased equity?

 

i really hoped that this would be over after 3 years and now it just seems that it could rumble on

[IdaInFife]

he won't write it off I'm afraid, it's not in his or the creditors interest.

 

In theire eyes you may not be in a position to remortgage but you would be in a position to sell it.

 

why not call him and ask him for any alternatives. trust deeds last for a min of 3 years but can take many years after that.

 

he may arrange for a longer term but bear in mind if you house prices rise and there will be enough equity he then can sell it at this point

 

Ida x

[danielspaniel]

The survey report is probably not in yet, phone the trustee on monday and ask about it.

 

 

the letter we got yesterday was based on the survey recently done, so he obviously has some kind of report valuing the house at its purchase price.

 

its also incredibly difficult to get a hold of him and im usually passed on to his "assistant" who appears to be reluctant/unable to explain anything in any great detail to me

[danielspaniel]

he won't write it off I'm afraid, it's not in his or the creditors interest.

 

In theire eyes you may not be in a position to remortgage but you would be in a position to sell it.

 

why not call him and ask him for any alternatives. trust deeds last for a min of 3 years but can take many years after that.

 

he may arrange for a longer term but bear in mind if you house prices rise and there will be enough equity he then can sell it at this point

 

Ida x

 

but if my wife does not give permission to sell, could he in principle agree to accept a definite amount in monthly payments. i really couldnt cope with the thought of paying indefinitely and THEN still being forced to release equity at the end

[IdaInFife]

another thing as well i forgot to add, he should have also advised that you wife or other fmaily member etc could buy your share inthe equity to release it. you should ask him what figure this would be.

 

 

ida x

[IdaInFife]

things keep coming to mind,

 

your trustee should have ahd a valuation before the trust deed was agreed and shoul dhave gave you a figure of what he was expecting for your equity release at the end. was this figure given to you? because i donlt think they wqould have done another valuation unless you contested the original figure after 3 years?

 

this is a term in a trust deed:

 

" I have agreed that the debtor will obtain thrid party funds or a remortgage at the end of the trust deed period to relinquish my interest in their share of the equity in the property.

 

In the event that the third party payment is not received within the agreed timescale, the property will require to be revalued"

 

 

Ida x

[danielspaniel]

thanks Ida, but my wife and family are almost as skint as me!

 

you dont think he would set a definite period for the trust deed to end?

[IdaInFife]

I don't think so because when you entered the trust deed you agrred to relaease the equity.

 

i think it would be important to try and get the figures he is looking for

 

i know it's not something you want to face but this may be a ve4ry very very last option for you, i just came across it and may help further down the line.

 

National Mortgage to Rent scheme

 

 

If you are struggleing to get to speak to your trustee, give the office a call on monday and if he is not available give the assistant a message to say that he must call you with 48 hours as this is very important and if he doesnlt then you really need to speak to AIB (who oversee trustees) you really need your trustee to go over all options to you

 

ida x