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've only just found out about all this, hence the recent interest.

It won't affect me financially at all.

However I am worried that if she doesn't sell the house while she is alive, then the bank might take the whole thing on her death?

My grandparents worked so hard all their lives and were so proud of their house. So for me, it seems like such a shame they were robbed of it by a greedy aunt and her factory.

Whether it's their fault or not I just wondered could anything be done.

How do I check the land registry? And so do you think I should ask for original agreements? As someone suggested to see if they have the paperwork.

I was only 10 at the time it all happened so yes I don't have all the facts I am sure. All I've been told is what grandma remembers.

And now am worried the whole house will go. I just wish aunt had made attempts to pay off the loan over the years and she wouldn't be in this mess.

I think grandma basically thought they were using her house as security and they would pay the loan. And she never would have thought the business was in trouble. I suspect she was told she was investing or some crap.

So she never had any intention of paying a mortgage as she couldn't afford it.

What a mess.

As far as I know it happened right at the start when it all went pear shaped.

I remember my mum crying and then not long after telling me they could live their until they died.

But I don't know timescales - not long after I don't think.

If she only has a life interest (which is what you describe sounds like) then she can't sell the house necauas she doesn't own it.

*because

Live there til they die is a life interest. That to me says the bank own the house and will sell it after your gm passes and that will be how they will collect their profit.

Maybe that's right - a life interest?

I will have to do some digging.

Thanks for all the replies.

Thanks for the explanation mychild

If the motivation is simply to give your grandmother peace of mind about how the finances have been worked out, I'm sure the lender will be more than happy to arrange a meeting where they can explain what the terms of the loan were, what will happen upon your grandmother's death, and how much is owed now. Nobody disagrees that a debt is owed so there's no reason to be cloak and dagger about trying to find out what the lender has or knows.

In the '90s your now 90-year-old GM wouldn't have been a vulnerable, doddery old sap who wouldn't have understood what she was signing. With the addition of the independent legal advice which was ignored, there's not really any case of lender taking advantage.

Think about it logically.

How would the bank make any money if they lent £x in 1993 and only collect that same amount in 2017 (or whenever your gm passes).

That's not logical (leaving the rest of the legal side out of it)

It would be helpful to find out what's going to happen.

I spoke to her just now. My other aunt is trying to get her to sell the house, pay off the bank and buy somewhere else. So she can have peace of mind and not think about it anymore.

But maybe she can't do that

My child. It doesn't make any sense does it.

I wondered if they did that Becuase they realised they had made a huge cock up in lending in the first place.

But maybe I have it all wrong.

I would be more worried that a bank or building society was being so cavalier with their paperwork.

I have been over charged by banks and have had to argue with them as to what interest I was supposed to be paying.
I had one mortgage company where I should have been paying 3% above base and when the mortgage rate went down my mortgage went up. In the end I was told in no uncertain terms that I owed what they said I owed and if I didn't like it then I could take them to court. So I did but they capitulated before it reached the court and I was changed to a more beneficial rate and was refunded the excess back and given something extra for my costs.

Maybe you would call that wriggling out of debts I owed but there was a thread on here recently about a woman who moved into a house and the other residents had been paying a yearly bill which she questioned . They thought she was trying to wriggle out of paying but it turned out to be a scam.

So they borrowed 130k 20 years ago, they haven't paid anything and the debt is still 130k? And you're sure it's not an equity release?

This doesn't make any sense

Oliver's. The grandmother isn't disputing the bill.

It sounds after what you said there op that there is a charge on the house. That'll be recorded in the land registry on the deeds. It costs a very few quid to get a copy so that should be your first stop.

Upthread you said the aunt had looked after her , so she can't be that bad and frankly it does sound like you have an interest financially , even if it's only second hand via your parents .

www.gov.uk/get-information-about-property-and-land/copies-of-deeds

Link

Excuse if repeated - did bank advise GPs to take legal advice? Where were the docs signed & who presented them to GPs for signature?

80s & 90s banking could be little dodgy. Maybe go to Financial Ombudsman.

Flora how could you possibly know that

My grandma has seven living kids

So divide what's left by 7 and by the time my mum pays off her mortgage she will still owe some!

So it's nothing to do with money for me if you really mist know. But thanks for thinking the worst of me👌

According to op they took independent legal advice and were advised not to proceed but did so anyway.

I don't think bank asked them to get legal advice but they were friendly with a solicitor and asked him.

He said not to do it

I only know that as he wrote to them after as he was concerned. It was a personal letter addressed to home. In the style of dear Fred and Nora...

Docs signed in bank office.

OP I am a lawyer specialising in banking. I have give advice to hundreds of people like your grandparents. My job is to explain to them what they are getting into and to confirm to the bank that, in my opinion, they understand. The purpose of this is so that in 20 years time, they cannot complain that they didn't understand what they were getting into and wriggle out of paying.

The bank doesn't really care very much what you do with the remortgage monies so long as there is sufficient equity (value) in the house to repay the loan if it sold to cover the mortgage. It's possible that the bank wasn't told what the money was for, or maybe they didn't care. 20 years ago, the banks were more relaxed about those kins of things.

You have almost no chance of challenging this and in any event it would be your grandma's case, not yours. mychild knows what she is talking about. Oliversmummy does not, in this instance.

Op, yes this is what I posted earlier, it makes sense so I really think your gran is correct , she used the house as security against the loan, they defaulted and could not pay as due to the business failure, rh bank now owns the house, which is validated by your mother saying she could live their till her death. The "rent" is effectively the escalation in value.

So if you assume the property has increased in value by 270k, then basically that's About 900 pounds a month rent equivalent she has paid over the last 24 years.

They were advised not to proceed and did so anyway.

They were very very foolish.

The law does not protect you from a bad bargain. They've had 20-odd years to dispute this and managed to negotiate some kind of agreement back in the day so they can't claim lack of capacity.

Honestly I don't think you have much hope of claim

X post with this is me

Banking law isn't my speciality and it's a good while since I did land law so it's good to know I'm not totally doolally.

Checked the registry thing and it says nothing registered for the address

So what do I do now to check about the bank having a charge over the property. ?

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