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F E Smith
F E Smith, Advocate
Category: Law
Satisfied Customers: 10817
Experience:  I have been practising for 30 years.
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In 2003 my ex husband bought a house solely in his name. His

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Hello
In 2003 my ex husband bought a house solely in his name. His name appears on the title/deed. Shortly after, we took a second mortgage to perform renovations. This was applied for in joint names with myself at the time, we were married and had no reason to think there would be any issues, nor were we advised of any pitfalls to this situation should an issue arise - at least that I remember. Some years later we separated and I moved out of the property. We visited the HSBC branch to try and have me removed from the 2nd mortgage. AT the time of the visit the staff member was confused and said she couldn't really understand how it had been done that way. Effectively lending me money, secured against an asset that I do not own. However she managed to 'fob us off' and said there was nothing she could do unless ex husband remortgages or sells. He hasn't, and I feel I am unable to force this.
My new husband and I are applying for a joint mortgage now and not only does it mean that we are unable to apply as first-time buyers and are subject to stamp duty, but I am afraid that I will still be considered to own a property and possibly be subject to the higher rate of tax/stamp duty. I do not legally have any interest in the property and HSBC have rejected my complaint and directed me to the ombudsman.I feel at a complete loss, but every mortgage advisor I have spoken to has advised me to pursue it. I am awaiting a call back from HSBC later today as I called them to discuss the letter I received today before I go to the ombudsman.Please help if possible!

Hello for clarification - was that a condition of the divorce that you have no interest in the first property?

Customer: replied 3 months ago.
I can't remember the detail but I remember signing something saying I had no financial interest of anything of his and couldn't claim anything such as pensions etc. I do not own the property - he does and still lives in it. I've never paid it. He made it interest-only since we split in 2007. He has not remortgaged because since separation he has ruined his credit rating. (Thankfully not mine.) I do not want anything from it, only to walk away and not have this 2nd mortgage showing on my credit file. I do not want to be subject to higher land tax on the purchase of a property currently in progress with my new husband.
Customer: replied 3 months ago.
there is a clause on the decree which states: any property which, or an interest in which, is devised or bequeathed to the former spouse shall pass as if the former spouse had died on the date on which the marriage is dissolved unless a contrary intention appears in the will.

I must admit, I am confused as to how your name can be jointly on a secured mortgage loan when the property is not in joint names!

Most unusual in the extreme.

The effect would be that your husband is liability is secured by way of a charge over his property but that your liability is unsecured. In over 25 years in the legal profession, I have never come across this although was no legal reason why it cannot be done that way I have never come across it.

The issue in respect of your husband selling the property or not is nothing whatsoever to do with your liability under the terms of the loan except to say that if the property is sold, or remortgaged, the loan gets repaid automatically. Until then, it remains extant unless the lender will agree to release you. There is no legal reason why they cannot release you, that is their decision.

If the old house was in joint names, you could apply to court for an order for sale under the Trusts of Land Appointment of Trustees Act and you could get removed from the mortgage by forcing the sale of the house. That isn’t an option for you because you’re part of the loan is nothing to do with his property.

You say that only your ex-husband’s name appears on the title deeds (and always has done) and therefore there is no second home stamp duty issue in respect of any purchase with your new husband. As you say, you do not legally have any interest in the property.

I don’t know who advised you that you should enter into the loan in the way that you have or whether the ramifications will fully explained to you but by simply referring the matter to the Ombudsman, whoever is told you to do that is obviously not prepared to make a decision to remove you from the loan unless they have to. As I said earlier, there is nothing to stop them just removing you, they just choose not to. I agree with what you have already been told, I would refer this to the Ombudsman because I think the advice that you received by whoever arranged this at the time was negligent.

If his credit rating is not good, it is highly likely that HSBC will not agree to remove you from the loan although, as I keep saying, there is no legal reason why they cannot, they simply choose not to because of your husband reneges on the mortgage payments, you will be on the hook for them.

Even if this went to court, the court will not order a lender to relinquish the security of a borrower but if the advice has been deemed to be negligent and you suffer loss as a result, you have a financial claim against the lender and the Ombudsman can audit you removed from the loan.

When you were arranging a financial order as part of your divorce (if you didn’t do that at the time) it should have been a term of the order that he used best endeavours to remove you from the mortgage because clearly, he hasn’t done that. Nonetheless, if his credit rating is not good enough to do that, the order is of very little effect.

Can I clarify anything else for you?

I’m happy to answer any specific points arising from this.

Please take a moment to look at the top right hand corner of the page and rate my service by clicking one of the stars at the top of the screen. It’s important you use the rating service because that gives me credit. It doesn’t just give me a pat on the head! (Although there is an incentive scheme where the more five-star ratings I get, I do actually get a pat on the head! :-)) All you need to do is press Submit. Thank you.

If you still need any point clarifying, I will still reply because the thread does not close.

Best wishes.

FES.

F E Smith and other Law Specialists are ready to help you
Customer: replied 3 months ago.
Thank you! Your first line is pretty much the reaction I get from every professional I speak to but HSBC keep justifying it by simply saying "you signed jointly based on affordability" and sent me a copy of the signed document. I never disputed that I signed for it, I'm disputing that it was sold to us like this in the first place!I will take it to the Ombudsman as I have nothing to lose even if they agree with HSBC's stance. Am I allowed to use any of your response in support of my claim? And if so, does it require a caveat?