Grandparents house repossessed - any legal minds around please?

[onemorecakeplease]

I'm not even sure that's the right title really

Mid 90s my aunt persuaded my gps to remortgage their house and used the money to pay off an outstanding business loan. Her business was struggling and before the first mortgage payment was due, the business was made bankrupt.

Gps bank knew what the funds were being used for and that neither of them had an income beyond pension.
They were lent £130k in 1993.

The bank allowed my gps to stay in the house until they died and froze the interest I believe.

No payments were ever made to the mortgage by my aunt or gps as nobody could afford to.

I've recently found out about this and am just so surprised the bank would lend money to pay the debts of a clearly failing business (was hundreds of thousands in debt)
And that they would lend the money to my gps who would have not been able to pay it back.

Have I cause to complain and ask the bank to explain where it's duty of care to its customers went that day? And if so, how do I go about it after all this time

I have statements and account numbers etc so that's a good start I suppose.

Thanks for reading - I'll try to answer any qs I can.

GPS were never involved in the business other than this loan.

I think it will be hard to make a case after all this time - especially as they had capacity and independent legal advice and chose to ignore it.

Given they didn't pay the mortgage and were not evicted it sounds as though it has at some stage been converted into equity release or similar deal.

Where is the aunt who persuaded them to do this?

No idea where you stand legally, but wonder if your anger shouldn't be directed at the aunt instead of the bank. She is the one who got them in to this mess. She took advantage by possibly misleading and pressuring.

How old is your grandma? I know it is easy to see older people as vulnerable and financially unaware, but twenty four years ago they would have been perfectly competent to make financial agreements regarding their house.They were foolish to go against their solicitors advice, but that is foolishness not incompetence. I don't think you are going to get very far with the bank, as far as the bank is concerned they have lived mortgage /interest/rent free for twenty plus years. If they are lucky enough to live in a part of the country eg some parts of london, where house prices have rocketed, your grandma might be able to come to an agreement with the bank to sell, pay the bank and have enough left to buy somewhere else, but unless the equity in the house has risen beyond all reason this is not going to be viable.

Yeah I suppose so. Haven't had much time to think it all through was just so shocked they had done it and hadn't told anyone.

And that the bank would lend money with no way of being repaid just seems so odd

She's 90 now

House may be worth 400 perhaps? I don't think she can sell it

Don't get me started on the Aunt....

Have you seen recent statements? It seems incredible that a bank would loan 130k and then wait for an indefinite period until they could recoup their investment. Is it possible that this has been dealt with and resolved somehow? Could your aunt have paid off the debt somehow? Or the loan transferred to an equity release arrangement?

Find the CEO email for the bank and contact them directly.
A while ago an elderly neighbour got in a muddle financially becaof some issue over council tax that they solved by taking out a series of loans and getting into a downwards debt spiral.
I took them to local bank who were seriously unhelpful and talked repossessions etc. Then I tried via the telephone with equal lack of success.
I then made direct contact with CEO and suggested the bank were seriously culpable for consolidating the loans into a single loan with repayments above the state pension level. I suggested the notion of a court case would be both terribly sad and terribly funny at the same time as nobody had given and consideration as to whether my neighbour had capacity to make this level of financial decision and was not in a position to enter into the contract freely and fully informed. The Mental Capacity Act 2005 applies to banks as much as care homes but they hadn't made any assessment of the neighbours ability to understand.
The CEO wrote of the debt completely, paid a significant sum into the neighbours account as a goodwill gesture for inconvenience caused and sent a huge bouquet. So, I wouldn't assume there is nothing you can do about it.
Have you considered raising concerns about financial abuse by your aunt? It might be another route to go down.

And that the bank would lend money with no way of being repaid just seems so odd

Well they wouldn't. There is definitely more to the situation than you have seen.

I saw last years sgatement.

Definitely not paid off

Possibly made into equity release yes. I just hope there isn't more to it and they take the whole house

It doesn't make sense to me either that the loan just sat there. But gma says she doesn't know and Aunt says she has no idea

Thanks crumbs

I might try that - nothing ventured?!

Migraleve - I don't see how? Business was in so much debt, grandparents on a pension

Where was the money going to come from? Surely if the business was going to fund it, it wouldn't have gone bankrupt within a month

Aunt was clearly trying to paper over the very large cracks

Financial abuse?

Can you make an appointment to take GM to the bank to discuss it? Perhaps she has forgotten the details if your GD used to take care of the financial stuff

Yes I could do that. I don't know that the bank exists on the high street anymore - was a building society
So not sure anyone would know anything about it

For me it's not about the money - it doesn't affect my gma now and when she passes her estate is to be split between her dc and won't be anything to do with me.

It would just be nice for her to have some closure and know it was sorted before she does.

What is the outstanding loan amount?

Same as the original £130k

Does your grandmother or aunt have a file somewhere that can be located with relevant paperwork for the original deal?

At the very least, perhaps you could make a case that your Aunt is not entitled to anything when your grandmother passes. Your Aunt has already got 'her share' of the estate.

Yes she has a whole file of stuff.

I wish that was the case with the Aunt.

But to give her her due, she has looked after grandma for years now and has really done her best to make up for it.

Not that she can in my eyes

If the aunt is looking after her mother and she is still living in her own home what is your problem . If she only owes the bank £130k then surely she could sell and just give them the part owed and the rest is her equity . With regards to mental capacity , I doubt you will be able to go down that route unless you have Drs notes that can prove they / she was incapacitated 20+ years ago , which you have said she wasn't . Why does your grandmother want it sorted out now and why is she not getting her daughter to sort whatever it is .

Mental care act 2005 wouldn't apply. The original loan predates the act

What is my problem!?

That a bank lent money to pensioners for a failing business they were not involved with and had no means of repaying.
It even says on the Agreement that it was to pay off business debt!

Where was their duty of care and risk assessment. How is this even possible?!

That's the problem. I appreciate it may be too late and nothing can be done but that is how I feel.

But your grandparents took legal advice

The advice was independent

That advice told them not to proceed

They did anyway.

That's their own look out.

I don't think it will still be £130k owed by now.

Read the file carefully. Perhaps there will be something in it that will make everything clearer?

I'm struggling to understand what the actual problem is. Your info is sketchy and confusing.

What I take from this is that your aunt looks after her mum and they are financially linked from whatever happened 24 years ago. I can also assure you the bank didn't remortgage your grandparents and then let them remain in the house with no payments due. There will have been some sort of equity release situation involved because banks don't lend to people unless they can prove they can pay back, and they certainly don't let them live for free for over 20 years.

What you are looking to achieve here bough is a mystery