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Is it legal for a bank to do this?

(5 Posts)
MoonlightPicnic Tue 24-May-16 13:24:13

My DW's sister took out a mortgage some fourteen years ago to pay for a stable block, then out of the blue the bank called saying they're going to call in the loan as they should have sold her a commercial product as opposed to the personal one she signed on. I'm I alone in thinking this a little strange or is this actually legal practice? She has made all payments on time and to the full amount.

MoonlightPicnic Tue 24-May-16 13:25:53

Sorry by Stable block I meant stable block and land.

AnchorDownDeepBreath Tue 24-May-16 14:17:11

Did she misrepresent what she wanted the loan for? Or was it their mistake?

If they believe she misled them about what the mortgage was for, to get a preferential rate on a residential mortgage for example, they are entitled to call in the loan with little notice.

If they made a mistake and missold the loan to her, I'd be expecting them to transfer it to a commercial mortgage and inconvenience her as little as possible.

MoonlightPicnic Fri 27-May-16 17:13:16

Thank you anchor much appreciated

treaclesoda Fri 27-May-16 17:16:43

Something sounds not quite right. If she took out a mortgage, the bank would generally do a mortgage on survey the house, and a solicitor would have had to be involved. How would she then have used that money to buy stables? Is it possible that she is mistaken when she says she had a mortgage?

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