There is no harm in carrying out a review and advising the clients of their options. Some may well choose the secured loan option and many may not qualify anyway but at least the supervisor has looked at the various alternatives.
Plenty of clients are happy to maximise the return to creditors and close the IVA at the earliest opportunity. I think choice is vital and a full review will show what choices are available.
The thing that is confusing to me is that I am getting figures quoted to me over the phone while I am trying to decypher what is being said to me?. I asked for a written detail for me to study but was told by the specialised firm that this would only be sent out once I'd agree to this option - that doesnt fill me with any confidence that I am getting the correct option. Would anyone commit to financial matters with someone who has contacted via telephone and no letter or such of introduction?.
I spoke to DFD on Tuesday and they have passed on my matter to their financial team for options and I am awaiting their reply but at this moment in time I am completely confused with the amounts being apparently plucked out of the air and related to me over the phone?.
I appreciate that the DFD call centre have a busy day dealing with customers but it was obvious that the person dealing with me was just replying from a script in front of her as I just kept getting the same monotone response to my concerns.
Kev ... it is disgusting that they are expecting you to agree to a very important financial undertaking on the phone, with no chance to examine and digest the figures.
Personally I would make a complaint -- they are also laying themselves wide open to mis-selling claims by applying such pressure and refusing to provide essential information.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
Hello Kev.70,
If you email me directly a member of the team will be able to review your case in more detail and look into your concerns. Hopefully we will then be able to put your mind at ease and answer any queries that you may have.
Kind Regards
Judith
What is your actual IVA contract wording on this subject? Does your equity release clause mention attempting a 'secured loan' and/or 're-mortgage'?
Modern protocol-compliant IVAs will probably contain the following wording:
'where the debtor is unable to obtain a remortgage, the supervisor will have the discretion to consider accepting one of the following alternative proposals:
• a third party sum equivalent to 85% of the value of the debtor’s
interest in the property; or
• 12 additional monthly contributions (with the aggregate sum paid to
the supervisor being limited to 85% of the value of the debtor’s interest
in the property).'
Important to remember that a 'mortgage' and 'secured loan' at 2 separate legally defined products.
So if your IP tries the secured loan 'hard-sell' approach, I think you would have reasonable grounds to refuse, arguing that the request falls outside the terms of contract.
Saying that, as your IVA pre-dates 2010 protocol, it may have a much more stringent equity release clause, where the bottom line is almost: 'remortgage to release equity, or sell-up'.
IVA customers pretty much cannot get a remortgage no matter how much equity they have. So faced with the prospect of losing your home, a secured loan may not be so bad.
I assume as well that standard affordability criteria apply here, ie: the 'loan' repayment is capped at 50% of your current IVA repayment, with the existing IVA repayment reduced accordingly.
My opinions are just that: Based on my experience and being a self-employed IVA customer.
I have recently sought Counsel's opinion on this matter - yet again at my own expense! - and am in the middle of taking up this matter with the IVA Protocol Standing Committee.
At this time, there is some disagreement as to whether a secured loan and a mortgage are the same - both myself and the barrister advising me think not - but am awaiting the views of the Committee who are next due to sit in February 2014.
Once thing I am able to share with you is that from January 2014, the IVA Protocol is to be changed to include secured loans as an option of funding equity. This will be widely welcomed by the firms involved in providing secured loans, but I imagine less so for those people wondering whether an IVA is the right option for them. One thing is for sure, IPs who use the IVA Protocol as the basis for their IVA proposals will have to ensure that their clients are fully appraised of these changes, which can only relate to cases accepted after that time and with those provisions specifically highlighted.
font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>Originally posted by MelanieGiles
I have recently sought Counsel's opinion on this matter - yet again at my own expense! - and am in the middle of taking up this matter with the IVA Protocol Standing Committee.
At this time, there is some disagreement as to whether a secured loan and a mortgage are the same - both myself and the barrister advising me think not - but am awaiting the views of the Committee who are next due to sit in February 2014.
Once thing I am able to share with you is that from January 2014, the IVA Protocol is to be changed to include secured loans as an option of funding equity. This will be widely welcomed by the firms involved in providing secured loans, but I imagine less so for those people wondering whether an IVA is the right option for them. One thing is for sure, IPs who use the IVA Protocol as the basis for their IVA proposals will have to ensure that their clients are fully appraised of these changes, which can only relate to cases accepted after that time and with those provisions specifically highlighted.
Hi Melanie
Thank you for this very useful information.
We have had a number of clients of late with enquiries relating to this issue.
On another subject we would like to take this opportunity to wish all on here a merry Xmas and happy New Year.
I'd be glad to have a chat with you off-line about this to see what advice the CAB are providing - both locally and perhaps nationally on this very important subject.
font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>Originally posted by MelanieGiles
Hi Paul
I'd be glad to have a chat with you off-line about this to see what advice the CAB are providing - both locally and perhaps nationally on this very important subject.
This is a very very disturbing development. Secured loans are NOT mortgages as I keep being told by Barclays FirstPlus when I complain that my interest rate has never decreased in line with BoE base rates. When I took my loan out in 2005 I took it based upon it being a variable rate loan secured on my property. I foolishly thought that meant it would generally go up and down with base rates. I was only half right as every single BoE base rate increase between 2005 and 2008 was applied to the loan and my monthly payments increased. However, not one single fall in the BoE base rates between 2008 and now has ever been applied to my loan. Complaints to the company have come to nothing so far. I did receive a reduction back to my original rate of interest earlier this year but was never told why it had been reduced. The interest rates on these loans are now currently anything up to 40%. People who have been in IVA's will be considered a massive risk and will no doubt be charged the highest possible rate. Extremely disturbing development
