House repossession

[Robertnz]

A friend has had her house repossessed by the London Mortgage Company (LMC) over arrears totalling £1500. She was suffering from clinical depression and had not opened her mail, and was thrown out of her house along with an ill mother.

 

She has offered to pay all arrears, legal costs and 4 months advance payments to get back into the house. The solicitors acting claim that they have forwarded the offer, but 3 weeks later, no response of any kind.

 

There is a difficulty in that LMC is a second lender, and the first lender has an early redemption penalty of £15,000 if the mortgage is terminated early, this mortgage penalty terminating in October, at which time she was planning to sell.

 

If LMC does not accept the offer, triggering a £15,000 loss to my friend, what rights if any does she have?

 

Any suggestions would be gratefully welcomed, as my friend is verging on suicidal, after only recently coming out from under psychiatric help. She has tried ringing LMC directly but they refuse to talk to her, referring her back to the slocitors, who will not chase LMC for an answer!! It is very frustrating.

 

All I can do is warn others NOT to use LMC or its new owner Southern Pacific Mortgage Ltd - they are obviously lenders of last resort and have no moral scruples at all!!

[Bookworm]

Hi, sorry you haven't had an answer so far, I suspect it might be because noone who read this so far has an answer for you, and I'm sorry to say I don't either.

 

I will ask someone else to have a look, see if anyone can help.

[Robertnz]

Hi Bookworm,

Many thanks - any advice would be very welcome, from anyone.

The trouble is that LMC (now owned by Southern Pacific Mortgage apparently) is a third or 4th tier lender with sharkish interest rates and absolutely lethal to deal with. It is now almost 4 weeks and no reply.

 

All I can say to anyone who reads this, no matter how difficult things are, avoid these "secured loans" as a way out of trouble. The rates are ridiculous and they give virtually no leeway if you get into trouble.

[franmc12]

Hi i am so sorry to hear of your dillema. Myself and my partner are also with London Mortgage. We also have arrears, although not too much. I have consulted a Solicitor as we were given the secured loan even though my partner is on Disability benefit, and i only work part time.

 

But in a nutshell we haven't got a leg to stand on. Its hard at the moment as we have servere unsecured debts. I know we only have ourselve's to blame, but we thought a secured loan was the right thing to have three years ago.

 

We have been advised by the solicitor to sell the house, but my partner has lived in our home for over 20 years so he is getting really depressed over it all, and afraid its all left to me to sort out.

 

If i could turn the clock back i would never ever have had a secured loan.

 

Good luck to you, sorry i couldn't give you any advice.

 

Fran

[Robertnz]

Dear Fran,

 

Unfortunately your solicitor is almost certainly right, because if you get into a default position, and LMC repossess, you will not have the chance to market the property for best value, and you will also get caught for LMCs legal costs for the repossession. I have to be careful because of libel laws but there have been instances historically (NOT with LMC to the best of my knowledge) where repossessed properties have been sold at silly prices, way below market value, to people known to the involved Estate Agents, just enough to pay off the secured loans, leaving the owner with nothing at all.

 

So you are better to take the bull by the horns and sell before LMC takes it away from you. At least you will have a chance to get a fair value for the property.

 

Good luck to you.

[franmc12]

Hi Robertnz

 

Thanks for your reply. I think personally selling is the best thing to do, but its trying to persuade my partner before its too late.

 

I also think there is one law for them and a different one for us, but with no help. I have put our names on the housing list as we have children, but as we are not homeless we are at the bottom.

 

I wish your friend lots of luck, and really hope things will get better.

 

Best wishes

 

Fran

[purplefile]

Robertnz

 

Could you get permission from your friend to speak for her?

 

If so you could contact LMC and put the offer to them.They may not be aware that there is a large ERC on the property.If the LTV is already high - there may not be enough equity for them to recover their "full" debt.

I think it may be worth speaking to the court on this one as your friend can pay all arrears etc back.

 

It may even be worth speaking to the lender for the first mortgage - if there are no arrears on it they may even do a further advance to cover LMC's loan. This would depend on your friends ability to pay the mortgage(and on who the lender is)

 

Failing that CAB may be able to offer some advice and may even be able to communicate with LMC.

 

Are your friend & her mum in a position to pay the mortgages monthly?

If not it would still be better to sell themselves and not rely on LMC to get a fair price for the house.(+ not have a repo registered against her for the next 12 years)

 

I hope your friend recovers from her illness.