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Alice H
Alice H, Solicitor/Partner
Category: Law
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Experience:  Partner in national law firm
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I am about to exchange contracts on my house sale. the sale

Customer Question

I am about to exchange contracts on my house sale. the sale covers the mortgage and leaves £2000 over. there is a second charge on the property with a settlement figure of £7.3k. I have been told by them that i cant proceed as there is a short fall. i said i would increase my monthly payments back to them but they still said no. the name of the 2nd charge on the property is not the same as who i took the loan out with, the name on the deeds actually dissolved in 2012. both companies have different companies numbers also.
can they stop the sale?
Submitted: 2 years ago.
Category: Law
Expert:  Alice H replied 2 years ago.
My name isXXXXX and I'm happy to help with your question today.

Could you just clarify - did you know of the existence of the charge? Was it for a secured loan or following a judgment of a court for an unpaid debt?
Customer: replied 2 years ago.

I knew about the charge but not that it was in the name of another company, i assumed it was with the company i had the loan with. 2 years ago i out the house up for sale and had a conversation with them asking what happens to the loan. they said then they would just carry on collecting. this time around i didn't think there would be an issue given their previous response. the reason they gave is that they felt the house was worth more than what it sold for. i explained it was not and the price was fair given the work that needed doing on it. i explained it would never sell for more and also that i was moving to my new rental property next week so the house would be standing empty.

Customer: replied 2 years ago.

i should state it was for a secured loan

Expert:  Alice H replied 2 years ago.
Thanks.

Its not unusual for the lenders name to change - its quite possible the original loan was assigned or "bought" by another company. If there was such a take over you can ask the company named on the paperwork for a notice of assignment under s.136 Law of Property Act 1925 to make sure things were done properly - but in principle there is nothing wrong with this kind transfer.

But the botXXXXX XXXXXne as far as the charge is concerned is that the loan company is entitled to seek settlement on the sale of the property. If there is a shortfall then its down to you, I'm afraid, to find the money from another source to settle the balance. It would be highly unusual for the lender to go from being a secured creditor to an unsecured creditor so I can understand their reluctance to agree to repayment of balance on a monthly basis.

The options available to you are: to find the balance of the money from a different source so you can settle the outstanding charge or do nothing in which the sale will not be able to go through.

Alex
Customer: replied 2 years ago.

okay. i have explained to them and spoken to the mortgage company, explaining to them the situation. i explained that i will not be able to maintain payments on two properties after next week when i move so ultimately the house will be reclaimed by the mortgage company.


i should state the name of the company i took the loan with has not changed. the name listed of the 2nd charge i have never heard of before but they were apparently owned by the same parent company before they went into liquidation. if i did not have an agreement with the 2nd charge can the loan company still impose the sanction?

Expert:  Alice H replied 2 years ago.
I understand.

If the property is repossessed by the mortgage company and they sell, they will have to discharge the second loan with any money that's left over from the proceeds of sale. But if their is a deficit you will still be liable for any outstanding balance.

With regards XXXXX XXXXX paperwork the Consumer Credit Act and the Law of Property Act set out all the rights and obligations. To see whether the loan company is acting properly you will have to contact them for the loan agreement, statements of account and the paperwork relating to transfer or assignment.

On receipt of this paperwork you can see whether the loan company has the right to take their present stance (without knowing what you've signed up to I cannot say whether they are right or wrong to take their present stance).

Alex
Customer: replied 2 years ago.

thank you for your help

Expert:  Alice H replied 2 years ago.
No problem. Please come back to me of you have any further queries about this. Alex
Customer: replied 2 years ago.

Hi, sorry to bother you again but i have done some checking on the above and have obtained a copy of the land registry forms for the house.


the title charge on the land registry form is dated 2004 with progressive finance. the loan i have now was taken out in 2007 and part of it was used to pay that original loan off. the company did not re-register the new loan in 2007. does this mean the loan is not secured as they keep telling me?

Expert:  Alice H replied 2 years ago.
That may well be the case.

It is quite possible that the new loan company did not properly register a charge on your property in which case they may not be a secured creditor at all.

It is also possible that although their intention was to register the charge that this did not actually happen - sometimes mistakes happen.

In the last scenario e.g. mistake of not registering, the loan company could rectify the mistake by asking Land Registry to register their interest now. Moreover as they appear to have an interest in the property they could enforce their rights through the courts.

But in the absence of paperwork and a thorough investigation into this matter I cannot say what's happened in your situation. As I mentioned earlier you would have to contact the loan company for all the paperwork to see exactly what the position is, such an investigation would reveal whether or not the loan is properly and legally secured against the properly.

Alex
Alice H, Solicitor/Partner
Category: Law
Satisfied Customers: 2847
Experience: Partner in national law firm
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Customer: replied 2 years ago.

Hi, I have checked what I have and the loan agreement I have now taken in 2007 paid off the loan listed against the property. This created a new loan agreement that has not been registered against the property at all.


The solicitor dealing with the sale just wanted to know how to contact the listed company to ask for a redemption figure against the 2nd charge. Do I just explain it was settled in 2007 and the company has been closed since? I have no proof though that is the only thing. If they contacted the company I now have the loan with and asked they would not have a current loan agreement relating to the listed one either as it technically doesn't exist anymore.


I suppose that would be the point they wake up and realise they have not listed this current loan though. I am sorry but I am really anxious and confused about how to proceed. The contracts are ready to exchange and it is only this 2nd charge issue we are waiting to rectify. I suppose it is wishful thinking the solicitor takes my word for it.

Customer: replied 2 years ago.

I have also checked the company out and there are literally dozens of instances where they have not registered loans on properties. They have been in the process of winding down since 2007 and are only open now to collect outstanding monies, they have not been allowed to lend since 2007.



I fully intend to look into my full dealings with them once this is settled as I have so far paid £49k from a loan of £26k. I did not ever borrow £26k but that is the figure they have on my statement.



Anyway, I don't know what happens when a registered charge is not removed when it should be. Can I get this removed at all? The land registry apparently have a copy of the 2004 agreement and that will show a different loan number/details.

Customer: replied 2 years ago.

Hi,


following the thread already posted, what can i do if it is proved that welcome changed my agreement number to match that which was registered in 2004? for example, the agreement number on my statements does not match the reference number on my signed 2007 agreement. is this legal?

Expert:  Alice H replied 2 years ago.
Hello

I am getting a little confused with the various posts.

Regarding the secured loan - are the details registered with Land Registry in the name of the first company or the second?

Alex
Customer: replied 2 years ago.

I am really sorry about the confusion, I am very worried. the land registry listing is with a company that was owned by the same parent as welcome finance is. i never had the loan with the listed company, always with welcome. therefore the current loan is not listed on the registry.


but the details such as account reference, total, etc on my signed loan agreement does not match those on my latest statement. i am wondering if they changed the reference number on the statement to match the listed loan of 2004.


 

Expert:  Alice H replied 2 years ago.
OK.

Its impossible for me to say what the correct situation is here.

The only way you'll be able to get to the bottom of it is by contacting the company named on the paperwork. Only then will you or your solicitor be able to find out what the true position is.

Any number of things could have happened and any answer I give you will be pure speculation; I aldo cannot day whethef this loan can be enforced or not.

One thing is for sure - the sale cannot go through with the charge on the property. Your solicitor has a duty to ensure it is satisfied or removed.

I'm sorry if this sounds negative but you really have to contact the loan company in order to get to the bottom of this situation.

Alex
Expert:  Alice H replied 2 years ago.
Hi Henrietta

I am following up our conversation to see how you got on with the issue. If you need any further help then please let me know - remember I am a qualified UK Solicitor and able to help on most aspects of English Law. I am London based and usually able to respond to your query very quickly.

Regards
Alex Hughes

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