Where do i start? Reposession threat/Secured Loan/PPI reclaim, etc....

[information seeker]

Hi Everyone

 

This is not for me it's for my mother. The situation is that my father passed away suddenly last year despite always seeming in excellent health. My mother and I are shocked and devastated and always will be....

 

Now i am doing my utmost to help my mother sort out the finances.

 

Before my father died they had a joint first mortgage on their house of approx £40,000 and a secured loan with 'a loan company' totalling about £65,000 (not sure why it totals that amount when they took out the loan facility in 2006 and it was for that amount then!).

 

Although everything was joint, my mother doesn't really understand anything right now, said it was all in the hands of my father (who was a wonderful man and completely overloaded with work in the last few years, but never complained).

 

So now i'm faced with the task of trying to understand why there is no mortgage insurance on their first mortgage (when my dad always said there was - although in the last few years he might have had to stop it i don't know - remember he didn't know he would die).....

 

and why they signed up to PPI with the secured loan company's underwriters (suggested or recommended by them) that was only providing cover for 3 years - it ran out in the summer, my father died in the autumn.

 

I am new to all this - what an introduction eh! I have all the paperwork in front of me and need to go through it with a fine tooth comb to see if everything was done correctly. I am also checking whether my mother qualifies for legal aid and if so then i will get the loan checked out thoroughly to ensure the agreement was sound in the first place.

 

My mother is really in a bad place. She is likely to be reposessed at some point, although right now the loan company is allowing her to make interest payments only.

 

I guess i'm posting here to see if anyone can advise on the following:

 

* What to look for in the loan agreement to check that everything was done correctly at the time of the original agreement - it probably was but obviously i need to make sure now

 

* any other ideas that could keep my mum in her home. Eg, i've wondered if she could get equity release and use it to pay off most of the loan - if the loan company would agree to a full settlement at slightly less than is owed. Apparently the max equity release she could get is £52,000. Her first mortgage company seem happy for her to continue paying interest only - so for the time being that wouldn't be a problem and if the loan were removed, then maybe something could be worked out wit the first mortgage.

 

I've read so much on this forum and others that my eyes are sore - it would really help to interact with people that are knowledgeable and experienced on this stuff. I'm not but my mum is relying on me now and i want to do the best i can.

 

thanks for listening!!!

[rebel11]

Hi Information Seeker

 

Welcome to CAG

 

You've come to the right place, the guys will offer advise shortly.

 

Was the PPI mis-sold or was it stopped? I think something you should do is get more information from the loan companies. Send a SAR request with £10 postal order

it gives them 40 days to provide you with all the data they have on the loans, covering a minimum 6 year period. Your mum would have to make the request.

[information seeker]

Thanks Rebel11

 

Obviously there are two 'mortgages' here the original mortgage and the secured loan....

 

As they know my mum cannot pay and are merely giving her some time by allowing her to pay interest, i don't want to upset them. We have quite a bit of info in front of us at the moment - i have copies of the loan agreement and it clearly states that the PPI was for only 3 years - it wasn't stopped, it expired as it said it would.

 

I think there could have been a better way to 'sell' the product to my parents in the first place...

 

I have information on how it was done - mainly by letter. There was considerable broker fees considering that my parents never had a face to face meeting with anyone and mum doesn't remember any advice at all.

 

I have got a solicitor who is willing to go through the loan agreement with a fine tooth comb, just checking first whether mum qualifies for legal aid.

 

Re the first mortgage - i don't know whether to ask for any info yet, they are not threatening my mum with reposession, they haven't been the source of stress (that said the loan company may have done everything above board too - i just want to check everything)

 

thanks for listening

[information seeker]

I have a letter in front of me from someone my dad might have approached for help....but it didn't amount to anything....but the person looks like they were trying to resolve things...

 

in the letter they have said 'You have an amount of £9877 of PPI added to the loan. This relates to about 14.35% of the loan so is costing about £136.87 per month. Do you know what this covers you for? Does it cover you for the whole term (15yrs), eg if you were off sick from now would it pay the loan for the next 15 years or just 12 months. If only 12 months then you will have paid £9877 for a policy that pays out £9800. Also over the 15yrs you will have paid about £24000. I assume the policy was ful;ly explained to you by the broker who sold it to you. As you were charged £750 by the broker over and above the commission that they were paid on this policy I also assume that you were given full advice and recommendation by the broker concerned.'

 

It looks like this person was trying to help.

 

I'm struggling to see what the PPI would have covered them for....i will try and decipher that today............but the person that wrote the above didn't seem to know that the PPI was for 3 years only.

[information seeker]

Well it looks like the loan company will close in for reposession shortly. They have given mum one more month at her current payment agreement (a verbal agreement only) and then they will pass the situation over to their collections department.

 

Mum knows reposession is likely to take place and is prepared - well as prepared as you can be when you've just lost your husband and now losing your home....

 

What are we to expect though? (i don't live with mum but i was very close to both parents and i see this as my problem).

 

Meanwhile i'm beginning communication with a solicitor's group who will check the loan thoroughly for enforceability and PPI.

 

I've just looked at the figures:

 

The initial loan (4 years ago) was for £68,841.00. Today my mum owes them £66,000.00. This is despite my parents paying £35,000.00 over the last 4 years! I'm not clear on what all the additional charges would have been for....didn't like to ask as i didn't want to upset the company....but if they are going to try and evict my mum soon then i need to find out.

 

Regarding the equity relase thing i was taling about - i don't think that's possible as the money released would have to first clear the first mortgage - i think there is a rule somewhere that you cannot clear a second mortgage with equity until you've cleared the first - even though the first mortgage company isn't trying to repossess the home!

 

thanks for listening, your thoughts are welcome!!!