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Original poster

Anyone know what to do if previous owner of house had secured loans on it and is now defaulting on payments ?

109 replies

scatterbrain · 16/06/2008 09:50

We bought this house last summer and still get loads of post for the previous owners - my solicitor friend suggested we opened the post to see what was going on and anyway - it appears that he has several loans secured on this house, hasn't changed his address with them and is now defaulting on the payments !

I have written to one of the loan companies and just phoned another one now and gave them his new address - but I am really worried now that our house is going to get credit blacklisted or something because of his secured loans .

Anyone know what we should do to make sure his debts stay with him ??

OP posts:
BigGitDad · 16/06/2008 13:07

Give them a call in two hours as others have suggested and see what they say. Then call another solicitor and discuss the matter with them and see what they have to say, they should be able to advise you. I am not an expert in law but I would guess there are two or three legal issues going on here (1-your ownership of the house between you, the mortgage company and the loan comapanies, 2-the incompetance of the conveyancers and 3-That of the person who sold the house to you) These issues and their impact need to be explained to you.

Original poster
scatterbrain · 16/06/2008 13:28

Thanks everyone - will give them a call later on.

OP posts:
MrsPuddleduck · 16/06/2008 13:33

I would also make a record of all costs you have incurred e.g. the Land Registry check and get the conveyancing company to reimburse you.

Also I would look into the cost of credit clearing your house (if possible) and then tell the conveyancing company that you want them to pay for that as well.

BTW - I would phone them sooner than later - they are bound to try and fob you off - they have cocked up big style!

NotQuiteCockney · 16/06/2008 15:28

I'm at this, tbh. I'm afraid I jumped to assuming the loans weren't secured, because I couldn't imagine a conveyancing firm screwing up this badly. (I used to work as a real estate legal secretary, albeit in another country and a long long time ago.)

Didn't your mortgage company have their own solicitors in the purchase? I'd be surprised if they'd accept a net conveyancing firm, so would assume they used their own solicitors, too?

I wouldn't hold the seller of the property responsible, although their solicitor obviously mucked up a bit - your real issue is with your conveyancing firm, though.

youknownothingofthecrunch · 16/06/2008 16:20

Have you had any answers?

Original poster
scatterbrain · 16/06/2008 17:49

No response yet - only just got back in after dreadful traffic jam - no messages or missed calls though and no email. Of course they have gone now - so will ring them in morning !

They are a proper firm of solicitors though - not just a team of conveyancers - and the mortgage company didn't use their own solicitors as they were happy with this lot.

What really worries me is what can they do at this stage ?? What if the previous owners can't or won't clear the debts - can they remain on our property ?

The seller was a complete nightmare - it doesn't surprise me at all that this has happened. Quite possible that it was deliberate !

OP posts:
Original poster
scatterbrain · 17/06/2008 09:20

Quick update - dh has just spoken to a solicitor on a legal helpline thing he has through work and her immediate advice was not to move in !!! When he told her we had been in for 11 months she was absolutely horrified !!

She said we should complain immediately through the internal complaints procedure as this is professional negligence - and complain through the Law Society. Just tried to ring the firm - but still on answerphone - so have emailed again requesting a phone call at his earliest opportunity.

Helpline solicitor said that we have no legal right to be in the house and previous owner could sell it again from under us !!

OP posts:
MrsTittleMouse · 17/06/2008 09:33

Sounds like you're getting good advice from that lawyer. I would be on the phone to the Law Society asap! Thank goodness you opened that post, so you can get on top of this.

DaisySteiner · 17/06/2008 09:39

You sound very calm - I'd be sh*tting myself!

Have you spoken to your mortgage company? They may well get their lawyers on the case which might help.

Original poster
scatterbrain · 17/06/2008 09:42

No I am not at all calm ! But what can I do ?

Thank god for Prozac !

OP posts:
Freckle · 17/06/2008 09:43

I am very surprised that your mortgage lender hasn't picked up on this. Once their charge is registered against the property at the Land Registry (which should only take a month or two following completion), the deeds are normally lodged with them for security. Surely they would either have been querying where the deeds were if they don't have them or querying the fact that there are outstanding loans secured against the property and that you (the mortgagor) isn't even registered as the owner.

On completion, the transfer deed should not have been handed over unless all secured loans had been discharged. So what happened on completion?

MamaG · 17/06/2008 09:43

Yes, you need to find out what their complaints procedure is and start that immediately. If they don't deal with you satisfactorily, go to the Law Society. They (law firms) have insurance to deal with this sort of thing BTW

MamaG · 17/06/2008 09:44

Yes, me too Freckle.

Scatterbrain - please get back on teh phone, ask to speak to the partner and if you aren't satisfied with what he is doing, ask about complaints procedure

Original poster
scatterbrain · 17/06/2008 09:46

I suspect that the mortgage componay thinks we have the deeds as we held the last ones (same company) so it seems to be their policy.

Not sure whether to kick off full scale panic with them yet or wait and see what solicitor says. Maybe it is easily solved and if so there's no point getting them involved.

OP posts:
Freckle · 17/06/2008 09:49

I'd get your lender involved. After all these solicitors were acting on their behalf too. If both you and the lender go in all guns blazing, you're more likely to get some action.

So where are the deeds then?? Do you have them? If not, who does?

Original poster
scatterbrain · 17/06/2008 09:51

No idea where deeds are - I guess that's a big question for the solicitor ! Presume they are either with sellers solicitor or with mine ?

OP posts:
MrsTittleMouse · 17/06/2008 09:51

I wouldn't care if it was easily solved! The solicitors who dealt with your house purchase have fucked up royally and I would be complaining to the Law Society right now!
Just my opinion, of course.

Original poster
scatterbrain · 17/06/2008 10:00

Damn - was on phone to mortgage company who didn't seem too bothered - just put a note on my file ! and missed a call from solicitor ! Now he's on another call - bugger bugger bugger

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Original poster
scatterbrain · 17/06/2008 10:11

OK - just come off phone to solicitor ! he tried to down play it - saying that all three mortgages on the property were paid off at time of sale - but one DS1 form was missing from a particular company who are renowned for being useless at sending them through ! So he wasn't too worried !

He said the mortgage company spoke to him in Feb and were chasing it through with their own solicitors - I wasn't aware of this at all.

He has been on to the sellers solicitor and they had allegdely forgotten about it and he then got onto the mortgage co's solicitor who had left and the work had not picked up by someone else yet !!

Anyway he was sying that all the loans were paid off and it was just an admin thing which was easily sorted out etc - until I said that I had a letter in my hand saying that one of the loans was in arrears so definitely had not been cleared ! then he agreed with me that this is serious and asked me to send him the letter !

What do yoyu reckon ?? WQhat do I do now ?

OP posts:
MrsTittleMouse · 17/06/2008 10:16

At the risk of repeating myself - Law Society. This is a really bad mistake on his part. Can you imagine if you hadn't found out and started chasing it? If the mortgage company had been onto him to sort it out, why on earth hadn't he told you?

Original poster
scatterbrain · 17/06/2008 10:23

I kind of feel I should give him a little time to sort it out though - he clearly believed that all the loans had been cleared, although what he was doing comleting our sale without the necessary paperwork I don't know !

OP posts:
whoops · 17/06/2008 10:27

It may not be just Scatterbrains solicitor at fault here the other side are for not sorting the ds1 though (I think)
He needs to speak to them and get all the details of the mortgages being redeemed - they should have proof on file however payments were sent as paper trails are so important in this line of work

Original poster
scatterbrain · 17/06/2008 10:36

Well - I have just posted him the demand letter which states that the loan is still in existance and in arrears - so hopefully he will use that to chase sellers solicitors up and get it moving.

OP posts:
MrsPuddleduck · 17/06/2008 11:00

Without getting too technical I will try and explain the Land Registry bit for you from the stance of what you do as a solicitor when acting for someone buying a house

  1. The sellers solicitor sends you an Official Copy of the Register. This shows all info relating to the land including Charges (mortgages secured against the property). It also has a time and date at the top when it was printed off from the Land Registry.
  1. When you are ready to complete the buyers solicitor sends a form to the sellers solicitor called 'Completion Information and Requisitions on Title'. As part of this form the sellers solicitor lists the Charges which are to be paid off on completion and provides an undertaking - a legal obligation - to pay them off on completion and provide a form DS1 (DS1/END1 is a form which the lender signs to confirm that the mortgage is paid off - when you send this to the Land Registry they remove the charge). Your solicitor should have checked their replies against the Official Copy of the Register to check they were going to pay off all three mortgages which were listed.
  1. Just before you complete the buyers solicitor does a search at the Land Registry called an OS1 (official search) they do this against the property to be purchased and quote the date at the top of the Official Copy of the Register. The Land Registry then confirm that since the date at the top of the original Official Copy no changes have been made (ie the seller hasn't tried to put another mortgage against the property without you knowing) and most importantly....YOU ARE GIVEN PRIORITY FOR A CERTAIN TIME (usually 3 weeks) THAT MEANS THAT NO-ONE ELSE CAN CHANGE THE REGISTER WITHOUT YOUR PREMISSION - EG THE SELLER WOULD NOT BE ABLE TO SELL IT OR PUT ANOTHER MORTGAGE ON IT BECAUSE ANYONE WHO DID THE SEARCH WOULD BE TOLD BY THE LAND REGISTRY THAT YOU 'HAD PRIORITY' over the land. This would give you complete protection and should have been done.

In theory the solicitors you used should have been doing this search every time it expired (eg every three weeks for the last 9 months is it? At a cost of £6 a go)

Presumably they will have crapped their pants and done a search by now - check that you have priority and when it expires and ask to see a copy.

BigGitDad · 17/06/2008 11:09

But doesn't the fact that Scatterbrain has paid good money in faith for a property count here and she is living in it? Does that not impose rights on her behalf?

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