Husband has taken out a secured loan against the house without informing wife

[SIeek]

Hello,

This is my parents current situation. I’ve just spoken to my mother who has informed me that my father has taken out a substantial loan against their mortgage free house. My fathers only real income his state pension and my mother works 3 days a week for the NHS. The house has hugely inflated in value in the last couple of decades but their monthly income only just about pays the bills.

From what I’ve read online, this must have been taken out fraudulently as they are joint owners and she has not given her consent. I also have no idea how he got it approved as his income is so poor, I worry about what kind of interest rate he has. (I really don’t understand these kind of loans FYI and am trying to wrap my head around it all.)

Does anyone know what can be done? My mother is terrified of losing the house and apparently my father is thousands of pounds overdrawn so we have no idea where the loan money has gone, not to mention where all his savings have gone.

Any advice would be greatly appreciated.

Oh wow. I agree your mum needs to get a clear picture of whats happened and then get some legal advice.

BTW you can contact the land registry and have an alert put on the property. It's a free service and you will receive an email if anything such as a new mortgage /loan or other change happens. I was asked if I wanted the service after my husband died. It exists to help to prevent fraud. It's very useful.

As well as finding out what has actually happened, I think you should also consider what your Dad has done with the money and what the result of this will be on your parents' relationship.

She needs to challenge him on this, is she is on the deeds?
Find out the details, & tell him its not happening without clear explication, & agreement with what it implies for her.

Look up the Etridge Protocol - which sets out requirements for ensuring that Co-owners (particularly wives) have given informed consent to charges over their property. Failure to follow the guidelines may make the charge unenforceable (but won’t stop the lender taking action against your dad personally even if the house is safe). Eg:

https://www.bclplaw.com/en-US/events-insights-news/failure-to-comply-with-etridge-guidelines.html

Your mum may need to act quickly to ensure that it doesn’t look as though she is conspiring with your dad to get out of the charge.

It's not just the loan I'd be wary of with your dad, it's the fact he's being so cagey about it all too. Why are you and his wife still scrabbling around looking for details of what he's done. Not only should it have been a joint decision but he should now fe being open about what he's done and where the money is, even if he doesn't want to disclose where his savings have gone.

In order for him to get a secured loan he has to meet this criteria -

	Prove your identity
	Prove your income
	Prove your address
	Prove ownership of the asset, which is usually your property
	Prove the amount of equity you have in the property

Unless your mother isn’t a registered owner of the property being used as collateral, it’s not possible to take out a secured loan without her knowing.
This is because the owner of the property, will be required to sign the paperwork included within the loan application.
If they aren’t on the deeds of the property, it would be possible to take out a secured loan against the property without making her aware.
However, some lenders need to send surveyors to the property to value the home to work out its current market value. This could be noticed by your mother. Not all lenders need to do this. Some can calculate the value of the property without attending the property.
I think the issue you may uncover here is that perhaps your mother is not actually registered as the joint owner.

You need to go round there and help her go through all the paperwork you can find.

If your father is difficult, put a diversion on the post to your house as a temporary's measure so that all the mail goes there and you may uncover statements etc.

If the house was worth the amount that meant IHT kicked in, they'd be able to sell it, move elsewhere and have a comfortable life, none of which sounds the case here.

I strongly suggest that your mum registers with Clearscore (or similar) to view her credit score. This will also detail all outstanding balances on any debts in her name - if indeed she is named on a loan against the house, you’ll quickly be able to ascertain the amount and the name of the lender. It will also alert her to missed payments, new loans/applications and all financial connections she has. It takes a few minutes and will give you a complete picture very quickly!

If your father is difficult, put a diversion on the post to your house as a temporary's measure so that all the mail goes there and you may uncover statements etc.

Be careful with that. Even though (despite frequent claims to the contrary on MN) it is not unlawful to open someone's mail accidentally etc, it is potentially an offence to redirect someone else' mail in this way without their consent. While a prosecution is unlikely in these circumstances, the OP should not muddy the waters, legally. At the moment, the only (apparent) wrongdoing is by the father - she doesn't want to complicate matters by doing something unlawful herself.

Takes a while to update.

Your father has broken the law and if he is found to have done this will be recorded on fraud monitoring systems and could be prosecuted.

He must have forged your mums signature and potentially have provided ID docs as well.

What does she intend to do about it?

Have you confronted your dad about this?

I would try and contact the lender and see what their procedure is in these scenarios, just explain you don’t want any personal info about the loan but how would someone go about investigating this. I would think the lender would raise it as a formal complaint and their complaints team would look into the documentation.

Also check the land registry to see if there’s a charge against the house and whether she was named on the deeds in the first place (I’ve seen this happen before, female partner not named on mortgage) and maybe mums credit file to see what’s on their.

My ex did this to me too. You can see it on her credit file if it was fraud. If the mortgage was years ago your mum might not be on the deeds as it was only the man. I think probably pre 1980?

Do you know if it really was your dad who's done it ? Not some scammer ?

Those are a lot of assumptions that may turn out not to be true. Very often, in these cases, it turns out that the other party (the mother in this case) has given consent, but may not have understood the implications of signing, or may have felt pressured into signing. There is also a possibility that the mother is not being entirely truthful with the OP, out of guilt or embarrassment.

Rather than leaping to conclusions about what has happened, the OP needs to establish the facts and help her mother talk to a solicitor.

@MissLucyEyelesbarrow
True.

It's between the OP's mother and father.

Thank you everyone for your advice. I am at work so cannot give a detailed reply but I have read through all the responses.

Turns out it was some form of equity release. My mother has definitely not signed off on anything nor given her consent. As you can imagine, throughout their entire relationship she has had to be very careful with her money because my father cannot be trusted. It is only thanks to her that the mortgage was paid off at all.

If it is equity release, there won't be any payments due on it until it is sold or until the owners both pass away. Your mother can't lose the house in this situation , but because the loan continues to accrue interest, their beneficiaries could end up with nothing to inherit . You need to talk seriously to your father asap and find out what he has done with the money - good luck .

As you can imagine, throughout their entire relationship she has had to be very careful with her money because my father cannot be trusted.

Unfortunately she has been very foolish to continue entangling herself with him financially. She must have seen this coming.

I would either confront and tell him I know exactly what he's been up to and if he doesn't come clean I will drop him in the shit

Or if he is likely to get nasty I would drop him in the shit and then see what he does pretend it wasn't me etc 🤷

We did an equity release recently.
They were very hot on capacity, informed consent and confirming IDs.
If your mother is on the deeds then the company has messed up.
If not she’s stuffed
(It should be possible to make monthly payments instead of letting the capital amount increase with the accumulated interest but she shouldn’t have to, and there are so many questions )

DH is an Equity Release specialist. He would be happy to talk to your Mum & you, if this is an ER Mortgage, to help you navigate the next steps.

He is quite concerned though. His initial thought was that the house was in just your father's name. If it is in joint names, the solicitor acting for your father should have checked - if he did, this means your father must have forged your mum's signature. A solicitor would definitely be involved as the ER company insist on there being an independent solicitor eg, not the one that the loan company use, to ensure all parties involved are aware of the consequences. So your father, the solicitor or the lender (or all of them) have acted incorrectly in some way if this is an ER Mortgage

Be aware though, before your Mum talks to anyone, that new regulation state that if any body (assume professionals, not spouses) becomes aware of fraud they must report it. The professional will not give any indication that they will.

Should also be aware that in some instances they will also report money laundering offences if those fraudulent funds are moved / used.

That also won't be disclosed (tipping off) and that covers a far higher criminal penalty.

Just thinking though - wouldn't it ring alarm bells if the property is in joint names amd the solicitor or advisor only ever met 1 person of the joint party?. Shouldnt they be asking to see both parties in person for this very reason? Unless your father did it all online but I'm thinking thats probably not the case?

Would be very unusual for equity release as it's usually F2F, however some are remote with docs being provided - especially if he said there was access issues or health issues. Most firms have measures to assist customers who can't do face to face to prevent barriers to banking.

I'd be surprised at the solicitor - but then they have been massively slated for poor CDD previously so wouldn't be unheard of.

Either way; there is a false applicant, lender and solicitor who all has serious questions to answer.