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Second charge owner wont give permission for another charge on property - what can i do?


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Hi All,

 

 

I have a mortgage on my property, and a second charge on it. I want to put a third charge on it for a secured loan which has been agreed, and the first mortgage company have agreed to allow the new charge, however the second charge company are refusing point blank to allow any other charge against the property.

 

 

The new loan isn't large enough to give me the amount I require and to pay off the second charge, and it needs to be secured, so how can I get this new loan done - preferably quickly?

 

 

What options do I have to persuade them to allow it or to get it registered in any other way please?

 

 

Thanks for your help

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Have they said why they are refusing ?

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Yes because I had said that the new loan would be paid off within 12 months, they said this 'significantly weakened their position'. I pointed out they were still second charge holders but they just said what I was trying to do was wrong and they wouldn't allow it to happen! They are now refusing to discuss it 'because we have already said no' - which I don't feel is the most 'mature' stance.

I did try to talk too them about guaranteeing their loan being repaid before paying the new one - didn't want to know, so now in a situation where everything is lined up but can't do it - and cant the loan increased to a level where I could take the 2nd charge out unfortunately as would probably be the best plan.

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Not sure I know what advice can be given - if they have said no, then I am assuming the new lender wont provide the loan.

 

I will ask others on the team to see what they have to say.

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No that is correct - third company want security by way of a charge on the property.

 

 

Wondered if someone else had experienced this and if they had found a solution

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Hopefully someone on the site team can think of something.

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1: How can BCOBS protect you from your Banks unfair treatment

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Advice & opinions given by citizenb are personal, are not endorsed by Consumer Action Group or Bank Action Group, and are offered informally, without prejudice & without liability. Your decisions and actions are your own, and should you be in any doubt, you are advised to seek the opinion of a qualified professional.

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There is not much you can do if another lender has declined.

 

Normally this would happen of there is not enough equity to cover all three

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I can see why they would say no if there wasn't enough equity but in this case there is more than enough equity to cover all three, and it doesn't affect the second charge holder's position - the LTV would be 64% after third charge.

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Is the 3rd loan higher than the 2nd ?

 

I would have thought in the event of something unpleasant happening, as 2nd charge, they would still have a priority ?

 

Could it be there is some conflict between the 2nd lender and the 3rd

 

Are they all main stream lenders ?

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3: Feel Bullied by Creditors or Debt Collectors? Read Here

4: Staying Calm About Debt  Read Here

5: Forum rules - These have been updated - Please Read

BCOBS

1: How can BCOBS protect you from your Banks unfair treatment

2: Does your Bank play fair - You can force your Bank to play Fair with you

3: Banking Conduct of Business Regulations - The Hidden Rules

4: BCOBS and Unfair Treatment - Common Examples of Banks Behaving Badly

5: Fair Treatment for Credit Card Holders and Borrowers - COBS

Advice & opinions given by citizenb are personal, are not endorsed by Consumer Action Group or Bank Action Group, and are offered informally, without prejudice & without liability. Your decisions and actions are your own, and should you be in any doubt, you are advised to seek the opinion of a qualified professional.

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Third charge will be higher than second charge, but second charge still has priority over third as priority is in date order so their position isn't affected. All are mainstream and there isn't any conflict between 3rd and 2nd lenders.

 

 

The 2nd charge holder won't communicate and say 'if you agree to x then we will allow the charge', and without the charge being allowed on the property then the new agreed loan can't happen - and we need it to.

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Is the "X" they want you to agree to, unacceptable ?

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Uploading documents to CAG ** Instructions **

Looking for a draft letter? Use the CAG Library

Dealing with Customer Service Departments? - read the CAG Guide first

1: Making a PPI claim ? - Q & A's and spreadsheets for single premium policy - HERE

2: Take back control of your finances - Debt Diaries

3: Feel Bullied by Creditors or Debt Collectors? Read Here

4: Staying Calm About Debt  Read Here

5: Forum rules - These have been updated - Please Read

BCOBS

1: How can BCOBS protect you from your Banks unfair treatment

2: Does your Bank play fair - You can force your Bank to play Fair with you

3: Banking Conduct of Business Regulations - The Hidden Rules

4: BCOBS and Unfair Treatment - Common Examples of Banks Behaving Badly

5: Fair Treatment for Credit Card Holders and Borrowers - COBS

Advice & opinions given by citizenb are personal, are not endorsed by Consumer Action Group or Bank Action Group, and are offered informally, without prejudice & without liability. Your decisions and actions are your own, and should you be in any doubt, you are advised to seek the opinion of a qualified professional.

PLEASE DO NOT ASK ME TO GIVE ADVICE BY PM - IF YOU PROVIDE A LINK TO YOUR THREAD THEN I WILL BE HAPPY TO OFFER ADVICE THERE:D

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  • 2 months later...

Just a quick update on this as have established that it doesn't matter how much 2nd charge is, they can refuse to allow another charge even if 1st charge holder has consented to '3rd charge'. Solution is to try and get 3rd charge holder to up the amount so that can repay 2nd charge holder and remove them from security which enables would be 3rd charge holder to become 2nd charge holder and thus have the security - albeit still behind 1st charge holder.

 

 

That's easier said than written - or done at the moment!

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I may me stating somehting you have already considered but how about going back to mortgage co who hold 1st charge? Borrow enough to pay off second charge holder and the balance can be used for the purpose you want the money for. If you pass the afforbibilty test then this will be the cheapest way of borrowing anyway.

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  • 3 weeks later...
Hi All,

 

 

I have a mortgage on my property, and a second charge on it. I want to put a third charge on it for a secured loan which has been agreed, and the first mortgage company have agreed to allow the new charge, however the second charge company are refusing point blank to allow any other charge against the property.

 

 

The new loan isn't large enough to give me the amount I require and to pay off the second charge, and it needs to be secured, so how can I get this new loan done - preferably quickly?

 

 

What options do I have to persuade them to allow it or to get it registered in any other way please?

 

 

Thanks for your help

 

Hi Ironic,

 

Just a quick question if you don't mind me asking, did you have to notify the original mortgage lender and second charge company about the third charge or did they contact them direct ?

 

In my circumstance the third charge advised that they did not have to notify anyone as that was the advantage of their loans.

 

Or can anyone else kindly advise if this is the case.

 

Thank-you

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Hi Baz, the third charge company said they would notify the other two but would do it in their own time, and the other two would respond in their own time, so probably minimum of a month if they were going to do it.

If your third charge company don't notify them and they find out you could end up in trouble if under your contract with 1st or 2nd companies you have to get their permission for additional charges to be added and don't do that.

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Hi Baz, the third charge company said they would notify the other two but would do it in their own time, and the other two would respond in their own time, so probably minimum of a month if they were going to do it.

If your third charge company don't notify them and they find out you could end up in trouble if under your contract with 1st or 2nd companies you have to get their permission for additional charges to be added and don't do that.

 

Thanks for your reply Ironic.

 

Well that's interesting to know as my third charge company said the opposite :shock:

 

Said their loans were different (they certainly were) and they would not have to notify anyone else. Have it in writing.

 

I have an ongoing complaint with them and should I add this to it. Should I ask my original lender / first charge what their stance is on further charges ?

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Look at the paperwork for your 1st and 2nd ones and the Ts & Cs will tell you if you should have told them. If not you don't have a problem but if so, depending on the issues with your 3rd then make a call as to whether to or not, because if you should have informed them, (and I had to get their written permission first for other charges) and didn't then you are in breach of the contract

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Look at the paperwork for your 1st and 2nd ones and the Ts & Cs will tell you if you should have told them. If not you don't have a problem but if so, depending on the issues with your 3rd then make a call as to whether to or not, because if you should have informed them, (and I had to get their written permission first for other charges) and didn't then you are in breach of the contract

 

OK thanks Ironic and will try and locate relevant T & C's.

 

It just worries me that third charge company have lied to us and in which I have written and recorded evidence. So therefore how can we be in breach of contract due to our nievity ?

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To be fair some companies don't restrict you from seeking second charge and will either grant consent or not. Quickest way to find out what your companies do is Ts & Cs or alternatively ring them and ask what procedure is. The contract is between you and them so potentially you could have gone against it by not telling/asking them. if 3rd charge company have lied to you then you will have the proof of that.

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To be fair some companies don't restrict you from seeking second charge and will either grant consent or not. Quickest way to find out what your companies do is Ts & Cs or alternatively ring them and ask what procedure is. The contract is between you and them so potentially you could have gone against it by not telling/asking them. if 3rd charge company have lied to you then you will have the proof of that.

 

Thanks again Ironic and I will just make a few calls either tomorrow or Monday to find out.

 

Will keep forum posted of any developments.

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