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Help we are so stuck and need advice please! Cant stop crying!

(29 Posts)
HalloweenDuck Tue 21-May-13 12:00:10

Ok, we live in a small 3 bed detached house. We have a huge drive ( enough for 5 cars) out the front. Our next door neighbours live right on the road and have no parking. We agreed to sell a strip of our land ( out the front of our house and to the side of theirs) We agreed £10k for this and they pay our legal fees. We approached our solicitors and they theirs and we started moving forward. We however had to get permission from our mortgage company, which turned into a bigger deal than anyone thought and we had reports done etc etc. We were pushing to get it done as we were due to go on holiday for 3 weeks. Eventually mortgage company gave go ahead with conditions. So we informed neighbours and started sorting out paperwork. On the letter mortgage company sent they said about what they could be entitled to take as part of the payment and we rung them up to discuss what this was exactly. We were told by a male employee that it would be our arrears ( a few grand from 2 years ago when my father in law died and my partner couldn't pay for a while) We agreed with this and double checked no other costs. Bloke 100% guaranteed.

We went ahead and signed exchange contracts and it was going to complete sale when we were on holiday. We agreed with neighbours that it made sense for them to park on our drive and do the building of the wall/ fence while we were away. Before we went away we spray painted the area and everyone was happy. Our neighbours also gave us £4k deposit, this was used to fix our car, pay off a bill in my husbands company and give us some spending money.

On the friday before we went away on the sunday, I walked into my house at 5pm to a letter from mortgage company saying they wanted the whole £10k! We tried ringing them but shut, I just managed to get hold off solicitors. They said must be a mistake and go on holiday they would sort it.

Well over the course of the holiday with a lot of emailing and chasing going on we were basically told that no, that was correct and they mortgage company want all £10k! Obviously we have spent £4k of it!

We have complained and explained that we went ahead as a member of their staff told us just the arrears. Our neighbours have built the wall etc and are now getting abit cross at the stress/ wait of it all.

We legally have to be completing tomorrow and my husband has just received a call from mortgage company saying " oh well, that bloke was not meant to say that to you, was not allowed to, and basically it is down to the under writers, they say they don't care and still want the £10k!"

We are so stuck and do not know what to do. I lost my job 2 months ago and we have not paid the mortgage for the last 2 months as was planning on it coming out of the £6k! We will be in breach of contract tomorrow with our neighbours, who have already done the building work and all because this bloke told us all will be ok.

We have asked to listen to a copy of the call but mortgage company have said it will not make any difference! We are now looking at having to take out a£5k loan and I have no credit history and my husbands is in tatters, not even sure if he will get one or not!.

We have no idea where to go and I am so so worried. To make it worse I have my ds in and out of hospital as not very well.

Any help or advice please as I can not stop crying and do not know where to go what to do!

SolomanDaisy Tue 21-May-13 17:41:37

I understand why you have made the plan you have, but have you made any initial enquiries about a loan? You already have a poor credit record and your record will show 2 months mortgage payments missed. You have recently lost your job. TBH your chances of getting a loan must be close to zero, don't commit to anything which relies on you being able to do this. Do you have anything you can sell to cover the gap? How much is the car worth?

CajaDeLaMemoria Tue 21-May-13 16:25:02

Sounds like a plan.

Do you know if the mortgage company has recorded the arrears on your credit files?

If they haven't yet, you may be able to get a loan quickly before they appear. If they have, you might struggle. Keep an eye on interest rates etc, so that they aren't huge.

Then complain, with a copy of the letter they sent, and explain everything. It's all you can do, really.

I'll bet that Flibberty is right with regards to why they are claiming that money, but there seems to have been a big error with relaying this information to you.

HalloweenDuck Tue 21-May-13 16:24:42

Thanks Rhurbarb x

HalloweenDuck Tue 21-May-13 16:22:57

ok replies to latest questions.

We exchanged with the figure of 2.5k arrears being paid. They then sent letter saying more after exchanging.

Solicitor never advised not spending money etc. obviously we have not told bank or Ireland about car etc, I was telling people why we spent it on here when people questioned.

LIZ- I am so sorry but I am either really thick or very jetlagged and bogged down with sick child, but what your saying is not very clear to me? We used these solicitors when we got mortgage 8 years ago? Everything is being done above board as it should be them (or so I believe we are not legal minded at all and put 100% faith into them)

THERhubarb Tue 21-May-13 16:21:42

Let's get this straight, neighbours are in no position to sue as you could counter-sue and their solicitor will have advised them of this.

I think your course of action is logical and reasonable and I support you doing down the official complaint route too. The mortgage company have given you bad advice and have misinformed you, costing you money and a lot of anxiety.

Gather together your evidence, put it all in writing today and send it off first thing tomorrow with copies to the solicitors. Give them a reasonable time period in which to respond before approaching the ombudsman.

It might also be worth calling the CAB just to make doubly sure you've covered all your bases. You could also try asking the question on a legal site forum too.

HalloweenDuck Tue 21-May-13 16:16:58

Thanks again.

As it stands now, if our solicitor contacts mortgage company and informs them that we will try and proceed with sale with all money they are demanding paid to them then they will re open.

So we have asked solicitors to email mortgage saying as such, aswell as our neighbours solicitors so that they will hopefully give us grace of a few days. We will then attempt to get a loan to cover outstanding money and complete asap.

We will then demand a new demand for recording, put in official complaint etc etc.

Lets just hope we can get a loan sorted as basically we have no other option than to complete sale as otherwise neighbours can sue, will have solicitors fees and will have too big arrears on house.

LIZS Tue 21-May-13 16:14:51

so effectively you spent the money before you had it ? Did the solicitor not also handle the mortgage side as presumably they have first charge on the deeds so first dibs on any proceeds.

Hmmm

I'm not a property expert either. But on a mortgage of £165, plus arrears of £2.5k and 2 months payment missed, is probably £168 that you owe. Property valued at £200k.

The amount of equity is about 16%.

The remaining 84% of the property and land is owned by the mortgage company. Thefore they could want £8,400 of the £10k for their share of the asset that is being sold. Plus the arrears. I think that's where they've come up with the figure of the full £10k.

And playing devil's advocate, I can sort of see where they are coming from. Just don't understand how you managed to exchange without a figure for them being finalised.

And sorry but I don't think 'we needed the car to get to the airport' is going to get much sympathy from the mortgage company, I'd be inclined to say the vehicle repairs were essential for the business.

THERhubarb Tue 21-May-13 16:03:36

There seems to have a misunderstanding somewhere down the line. As I understand, your contractual paperwork stipulates that arrears must be paid off but your conversations with the mortgage company have had a loose other agreement.

I don't understand why you didn't pay April or May as you did not have the final agreement then? So the mortgage company should not have agreed to these late payments. It does sound as though you have been quite presumptious too.

You have a bad credit rating. You have had previous arrears which you are paying off monthly. You did not pay April or May's mortgage payments. I can totally understand why the underwriters are making the demands that they are.

However, the mortgage company should never have agreed to these terms in the first place and should have fully informed you about the risk if the underwriters did not agree. It does sound as if your solicitor did try and warn you but you chose to spend the money anyway.

You may not be able to force the underwriters to change their mind but I think you do have a case against the mortgage providers. You need to speak to their customer service dept and ask to launch an official complaint. Put it all in writing to them, with emails, etc. Send by recorded delivery.

As regards your neighbours. They too have been presumptious in starting a build before the contract was complete and so if they threaten to sue you for breach of contract, you can remind them of this. Try to keep things amicable, go round there and tell them what is going on and what you are planning to do about it. Keep them informed every step of the way.

You might not get your desired outcome but you could be offered a different deal from the mortgage company.

CajaDeLaMemoria Tue 21-May-13 15:59:33

Right. As I understand it, then, and I don't specialise in property law; you have two separate issues.

The first is that the mortgage company have, for some reason, changed their minds about how much money needs to be paid to them. They may be able to do that, legally, if you have gone into any further arrears since they authorised the sale. Still, you should complain officially, because it's shoddy behaviour.

The second is that they have now refused permission for the exchange. As you haven't completed yet, they may well be able to do this. I suspect that your official letter will also be problematic: your solicitor should have returned it, and got them to send one stating that the moneys could be payable on receipt of the funds from your neighbour, so that it was an accurate reflection of what was agreed.

Have you met the other conditions on the letter, or are they debateable too?

It's a tough situation now, because of the time constraints. I'm presuming that there is absolutely no way of recovering any of the money that you spent?

You may be able to convince the mortgage company to accept the remaining 6k from the sale, and then you pay them overpayments on your monthly mortgage payments so that they eventually get the full 10k? (The 6k will cover all arrears, correct?)

Or it may be that they won't shift on allowing the land to be sold, in which case you'd need to speak to your solicitor about your liabilities. If you didn't give permission for work to begin, and the sale was never completed, you could try to counter any legal claim that they made.

Do you still want to sell the land?

HalloweenDuck Tue 21-May-13 15:41:47

We started the ball rolling in March, start of April was when we got the survey done and start of May (after us chasing) the official letter stating sale could go ahead as long as certain things were done. One of these was be up to date with payments. Our solicitor had agreed with them that the funds would go straight from their account to mortgage company ( arrears of 2.5k and 2 months payment plus £100 admin fee) as they understood we would not have money free before the completion of sale.

CajaDeLaMemoria Tue 21-May-13 15:34:57

Okay, so I'm trying to get this straight so I can make sure I'm as legally accurate as possible.

When did the mortgage company agree that you could sell the land to your neighbour? Prior to April?

HalloweenDuck Tue 21-May-13 15:28:36

Thanks for replying.

To be honest we didn't expect the neighbour to do the work until we had completed, but we did not stipulate that to them. We did agree/ ask that they park on the drive from the day we left as obviously easier for them and makes our house less likely for a break in. When events started to turn bad, our solicitor himself drove past and saw neighbours doing work and he sent them an email telling them to get off our land! This pissed neighbours off which is now why I am worried about how they will take things. But I understand why the solicitor done this. Though we did not know until got home and neighbour showed us email.

In regards to the money, it is my husbands business, and without paying the suppliers and wages there would be no business for him to return to. We also had to get car fixed ( school runs/ and getting to airport) and the rest I was being honest we took as spending money as it was a week later we were expecting to get £6k! on hindsight I can see not best idea but no one advised us otherwise.

House valued at £200k, mortgage at £164k with £2.5k arrears added on.

So still small amount of equity.

In our defence there was no mention of £10l from mortgage company until after we had exchanged. We were expecting it to complete while on holiday, all paperwork signed etc. If it looked like it was in doubt we would never have spent deposit.

Did you tell your solicitor that the neighbour was going ahead with the work before completion because any solicitor would have advised that this was not wise.

How much equity is there in the property? If you bought 8 years ago when prices were rising, perhaps the mortgage company are now worried that the loss of part of the land will reduce the value of the property at a time when the property market is still very unstable.

I am still a bit shock that on a mortgage with some arrears already, you didn't pay the mortgage for 2 months and went on holiday with the proceeds of this 'sale', when the land is probably not technically completely yours to sell. When you sell a house with a mortage on it, you have to pay off the mortgage first. I think this is the angle the underwriter is taking.

HalloweenDuck Tue 21-May-13 15:04:27

trying to answer some previous questions.
The arrears from 2/3 years ago were added onto each months payments, I think around £50 extra a month. Paid off each month with the mortgage payment.

We didn't pay April or May's payment as was expecting £6k to come in and pay out of this. ( 2.5k to pay back over due arrears and the the 2 months payment straight to mortgage company from solicitors account) They were aware of this and have replied to letters/ emails where we reminded them of this time and time again.

Apparently they want the remaining 7.5k (2.5k arrears already deducted) as their lending criteria has changed since we done mortgage 8 years ago. We understand this and agree it was in the letter they sent us. WHICH IS WHY WE RANG THEM TO BE TOLD EXACTLY HOW MUCH IN OUR CASE as it was a generic letter. This was when we were told for us it would be £3k. We were happy with this so moved forward etc.

Apparently last thing nice lady at mortgage company told husband is she will find out how to get a copy of the tape.

Then suddenly her boss is ringing my solicitors saying case closed!

THERhubarb Tue 21-May-13 15:04:08

You have been badly advised.

Can your husband's company not help with a loan to pay back your neighbours?

It was most likely your arrears which caused this, the mortgage company have got cold feet because of this. You would have been better advised to use the £4k the neighbours gave you to pay off those arrears.

I'm sorry, I can't advise further. Send a letter of complaint, approach the ombudsman and call the CAB to find out where you stand. If you are in 2 months arrears however I am slightly shocked that you didn't use the money to pay this off. Presumably you were not in arrears when you first approached the mortgage company?

Not sure what happens if you manage to prove that you have been badly advised. Hope someone else can offer more help.

THERhubarb Tue 21-May-13 14:58:28

The arrears have most likely caused this change of terms.

I would also advise that you look closely at the T&Cs. If they agreed to those T&Cs in spite of your having been in arrears then you are entitled to complain, but if the arrears are recent then you have effectively broken the terms set down by them which is why they can in turn change their own terms.

Make sure you pay this month because getting in arrears again will not help your cause.

Your solicitors should be advising you on all of this and it's disgraceful that they aren't. Get back to them and tell them that they need to work with the mortgage company to ascertain exactly what the original T&Cs were and why they have changed.

I know underwriters can overturn mortgage agreements so they possibly have the power to overturn this one but in any case you should have been advised of this by the mortgage company and your solicitor. They have a case to answer at the very least.

HalloweenDuck Tue 21-May-13 14:56:48

Many thanks for your replies.

Well it has just got a whole load worse.
Solicitors just emailed and send mortgage company rang them and told them they are shutting our file and will not release the land!

I have been onto the solicitor who was not very helpful and just said oh well they have power to do that!

My husband had been on the phone to the lady who had been dealing with it all the time this morning. She was being quite fair over it saying she understood it was this blokes fault and trying to get underwriters to re consider etc.

After this email from solicitors husband rang mortgage company back and she has gone home ( part time) and spoke to her boss, who apparently has the authority to shut nice ladies files, says we can not let them have the whole £10k so no need to proceed!!!

So now we are2 months overdue paying, can be sued by next door for breach of contract as not completing and now owe them £5k!!!

I am just rocking and sobbing in a corner, I do not know what to do!!!

Please someone help me.

cumfy, I think the mortgage company IS entitled to say what happens to the money, as the op is selling part of the asset that the mortgage is secured against. When the land is sold, the asset is worth less, and so maybe they want to reduce the loan accordingly?

If you sold a house that had a mortgage on it, you can't just take the money and spend it, you have to pay it back to the mortgage company.

OP How much is the total of the past arrears and the two months current arrears?

The neighbour is hardly likely to walk away and say 'no I don't want the piece of land anymore', so you'll have some bargaining room there.

cumfy Tue 21-May-13 14:45:20

Just to be clear, it's not simply a case that they have asked you to pay off the arrears but, unbeknownst to you, those arrears have risen to £10k ?

cumfy Tue 21-May-13 14:38:35

What does the letter from the mortgage company say exactly ?

1. It seems odd that they say they want "part".

2. It doesn't seem clear that they have any legal entitlement or signed contract for the £10k.

I would consider small claims court or just tell them to fuck off.

CajaDeLaMemoria Tue 21-May-13 14:22:10

The complaints procedure will probably require them to call a certain department or write, and they need to fulfil that.

OP, the timings of your missed payments could be really relevant here. When you asked for a copy of the recorded call, and they said it wouldn't make a difference, did they say why? It doesn't sound like they dispute what was said, just that it isn't now relevant.

So you'd need to look into the T&Cs to see why. It's possible that going further into arrears would mean the whole amount was payable to the mortgage company, unless they knew that you would withhold payment until you had the 10k.

THERhubarb Tue 21-May-13 13:54:22

I think they have complained haven't they? Not in writing as such but they have lodged a complaint and the mortgage company refused to release the call recording and told them that the underwriters have the final say.

If you are refused evidence to help you lodge your complaint then I'd bring this up with the ombudsman as the mortgage company are not recognising your complaint.

3nationsfamily Tue 21-May-13 13:44:20

The Ombudsman will only get involved AFTER you lodge a formal complaint with the mortgage company , they investigate and respond to you, and then if you are not happy with their response, THEN you can refer it to the Ombudsman. That is the process for all financial institutions, so the soilcitor is absolutely right in not involving them at this stage.

titchy Tue 21-May-13 13:36:01

Complete tomorrow - get the £10k transferred into your own personal account (inform your solicitor to pay YOU not the mortgage company), pay your mortgage arrears from two years ago and now. This should then leave you up to date with your mortgage to whom you complain very bitterly. But if you have cleared all your arrears they have no right really to demand more off you.

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