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I am at month 54 in a 60 month IVA. I recently asked a question about having to take out a secured loan at a high interest rate over a 15 year period as settlement of my IVA. The unanimous response, including from the experts, was that this seemed unfair. I have raised this with my IVA agent (Debt Free Direct - DFD). An extract from the relevant clause in my agreement is:
“After month 54 of the arrangement the Supervisor will obtain a professional valuation of the property. The debtor will then obtain two remortgage quotes from reputable brokers/lenders to satisfy the Supervisor that the equity realisation is the maximum achievable. The property shall be re-mortgaged to a maximum of 85% loan to value less existing secured borrowings. A re-mortgage of less than 85% loan to value is allowable where the lower realisation will introduce funds equating to 100% of the debtor's equitable share or where the arrangement will receive payment in full. Where the debtor is unable to obtain a remortgage the IVA should instead be extended by up to 12 months.â€
This only talks about a remortgage, not secured loan. The Mortgage Adviser that DFD appointed has stated they are unwilling to recommend a remortgage to me only a secured loan.
I have told DFD that the advice I have been given is that since my agreement only mentions a remortgage, I should not offer the secured loan as settlement but instead should make 12 months further payments. DFD are unwilling to take this approach and say I have to offer the secured loan to my creditors or face the risk of defaulting.
I am very disappointed with DFD. They have shown no interest in my concerns, but instead want to take the smoothest course possible for themselves.
I would like any further advice as to where I stand and what other courses of action are available to me. Is it still the opinion of the experts that I should not have to offer the secured loan? I can’t afford any legal advice and so feel helpless as what to do next.
I would imagine the experts will come in on this post later on, and it will be interesting to see what they say, because it would seem here we go again,
Yet another person nearing the end of their IVA being told they will have to take out a lengthy secured loan to meet their equity release clause, having had no previous mention of it until having reached the stage where they thought they had met nearly all their obligations and most of their payments (of course), not being able to remortgage, and simply assuming that they would have to make another 12 payments and that would be it...as advised and sold by their IP.
How many more times are we going to see this happen???
I genuinely think there are going to be some major problems regarding mis-selling of IVA`s and some serious damage done to the IVA industry if this ever increasing `hoodwinking` remains unchecked.
It can only be a matter of time before the press get a grip of this serious issue.
Last edited by Goosed on Wed Jan 16, 2013 12:57 am, edited 1 time in total.
"When the seagulls follow the trawler, it is because they think sardines will be thrown into the sea".
The interpretation of remortgage is yet to be tested, and clearly your own IP appears to have a differing view to others - that is not to say that they are not right. I don't personally share their view - but I guess this can only be resolved by a legal opinion.
I think that you need to get your IP to confirm in writing why they feel the term "remortgage" needs to be satisfied by the taking out of a secured loan. If you still don't agree with their stance, I seriously recommend you find a way to seek legal advice - even if it comes from your local CAB or Money Advice Centre - as the implications of being forced into something that you do not need to may be damaging to your financial situation moving forward.
I have seen posts on this forum claiming all phone conversations between debtors and IP`s are recorded.
Is this the case from initial `advice` contact or just when a debtor becomes a `client`?
It would be interesting to see transcripts or hear real recorded instances of some of the advice given during the initial debtor/IP phone appointments and compare the contents of the IP`s first/early verbal advice with the actuality of end of term equity release enforcements of some of the equity release clause complaints on this forum over the last 18 months
Last edited by Goosed on Wed Jan 16, 2013 1:52 am, edited 1 time in total.
"When the seagulls follow the trawler, it is because they think sardines will be thrown into the sea".
I would be interested to see if a secured loan would be achieved anyway...very doubtful that anyone would lend that amount of money to someone already in an IVA in my opinion, therefore te 12 month additional payments may come into play ,but this is my opinion amd like Melanie says take some advice to help you through this period.
Sharing from experiences of dealing with debt
There is a solution for everyone .... Just need to stay positive !
I agree with you there Luluj but if the loan company was affiliated with DFD that would give a different slant on it.
Andy i definately think you should take some advice on this, it is so unfair that you are now getting this thrown at you.
Goosed i too am with this dreadful company and i have never spoken to my IP and only ever received year end reports and one email from them in all that time, believe me it wasn't for the want of trying either.
Om shanti, namesté, good luck to all who are embarking on the IVA journey, it isn't always an easy one but the outcome is the best.
IVA COMPLETED August 2012, received Completion certificate 18.4.13.
My personal view as perviously stated by myself is that the DFD of 2012 now 2013 has no idea about good customer service
talk about making it up as they go along. read their annual report it talks about launching " financial products "
I may be wrong and adding 2 + 2 and getting 1 million !! but are they trying perhaps ? to guide you to taking a loan out from a company they own or are in partnership with
DFD - shame on you AGAIN
Last payment made April 2012
Certificate received 1st Nov 2012
Posters who are directly involved with these issues are quite within their rights to ask those questions directly of their own IPs if they have concerns.
IPs have a duty of complete transparency when they are recommending or insisting on financial products being taken out by their clients, and I am sure that the IPs at DFD act completely independently of any other services offered by the firm that they represent, in the best interests of their clients and in accordance with best practice guidelnes and the IPs ethical guidance.
Would it be possible for you to write to DFD's own regulatory body. An existing IVA which only mentions re-mortgage should be just that. However, I can see in the future that DFD's proposal will include the terms "raise additional funds by means of re-mortgage or secured loan" but for now this is NOT the case.
Talk about conflict of interests. DFD should not be recommending secured loans to go for. This is the latest money grabbing method which if successful many more firms will follow suit!!
Effectively you will be jumping from frying pan to fire with a high interest high fees secured loan which will last for years after you should have been debt free.
Poor and something regulators should be clarifying before more people sign up for ivas which have the habit of changing to suit only creditors as the years roll by!!
Paul
Discharged today the 8th feb 2012. View is much brighter now.
Continuing to rebuild our credit worthiness.
I have exactly the same clause in my IVA. There is no way to interpret it to mean anything other then how it reads! There is absolutely no mention of Secured loan in the text it specifically states Remortgage NOT Secured loan or any other method to raise funds. Its crystal clear and in black and white, I think your IVA company are absolutley talking nonsense that on top of a 5 year IVA you should take out a further 15 year Loan , what a load of **** ! Had they told you this initially would you have taken IVA? I most certainly wouldnt have. There are a few IVA Companies who think they are above the law and can interpret things to suit them , How about they just stick to the agreement you signed up for, Remortgage and if unable you pay a further 12 months payments, its not rocket science and Im sure your creditors arent ushing for this 15 year loan its your IVA company, Why? when 99% of the rest are not? what makes them so special....
Thank you all again for your responses. I am now trying to speak to a different person at DFD to get their position confirmed. Of all the responses that I have received (over 50 from by two postings) not one has suggested that this is normal and yet when I have spoken to DFD they could not see what I was kicking up a fuss about. I will try to persue it and let you know the out come so that at least others can try and avoid the same pit falls.
Hi Andy it is imperative that you try and speak with your IP, easier said than done, i know as i'm with them also, i would put this in writing to your IP, send it recorded delivery so that they HAVE to answer it, good luck and best wishes. xx
Om shanti, namesté, good luck to all who are embarking on the IVA journey, it isn't always an easy one but the outcome is the best.
IVA COMPLETED August 2012, received Completion certificate 18.4.13.
I have not been posting much but I do think that it is difficult to comment on this without seeing the modifications on the Chairman's Report as well as what was in the proposal. If Andy offered equity at the time the IVA was proposed and there is a minimum dividend requirement he may be obliged to release the equity or even sell his house. I have seen such conditions and if he has huge equity and the ability to borrow money at less than 50% of the IVA payment, creditors may not accept a 12 month extension.
It is all very well quoting what is written into the proposal but modifications supercede the proposal and failure to adhere could lead to failure. HMRC for example and possibly other creditors would be loathe to accept an extension where the client has promised equity at the beginning, is in a position to release it but refuses to on the grounds that a secured loan is not a remortgage.
Finally as I have stated before, a small secured loan may be much cheaper than a total remortgage to adverse rates and possibly losing an existing lifetime tracker mortgage.
