Equity Release - My View

[mole]

I think any IP company forcing (or even suggesting) clients go down a Secured Loans route are going to get into significant trouble.

After a IVA proposal is accepted, it is the duty of the IP to administer and manage that agreement to ensure it is executed within the agreed terms and conditions.

Therefore, on what basis can or should they put forward alternative proposals to those agreed, usually for the detriment of the client and often with non-substantiated claims of what may happen if you do not comply. I think this can easily be judged as mis-selling by the FCA or Ombudsman.

If a secured loan is in the original proposal the fair enough. Similarly if a minimum dividend is specified and that must be met, the IP should then discuss the options with the client.

However, I would go as far a saying to try an force a secured loan on someone who has no need to take it, and would be worse off because of it, is potentially fraudulent.

Thankfully my equity claim has been resolved, but those in agreements prior to the 2014 protocol are often unfairly having to battle and argue around this, with the naive or uninformed perhaps just accepting.

I don't think the first legal case is far away.

[Adam Davies]

Hi

I agree with you entirely Mole

Regards

[Michael Peoples]

The main point is being forced to do anything. Many clients choose secured loans because they get out of their IVAs early and other choose extensions.

I also doubt if anyone will ever try a case and doubt even more if they would win. The clients have already agreed to a remortgage up to 85% loan to value and their new mortgage payments could not exceed 50% of their IVA payments. Any secured loan is at a lower loan to value but sticks to the maximum of 50% of IVA payments. They are therefore raising less than creditors were originally promised paying the same amount of money.

No one is being forced into accepting a secured loan as a means of raising equity but even if the IP demanded it a judge may well feel it to be a 'reasonable request' and find in favour of the IP.

[Goosed]

font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>Originally posted by Michael Peoples

The main point is being forced to do anything. Many clients choose secured loans because they get out of their IVAs early and other choose extensions.

I also doubt if anyone will ever try a case and doubt even more if they would win. The clients have already agreed to a remortgage up to 85% loan to value and their new mortgage payments could not exceed 50% of their IVA payments. Any secured loan is at a lower loan to value but sticks to the maximum of 50% of IVA payments. They are therefore raising less than creditors were originally promised paying the same amount of money.

No one is being forced into accepting a secured loan as a means of raising equity but even if the IP demanded it a judge may well feel it to be a 'reasonable request' and find in favour of the IP.

Or they may indeed find in favour of the debtor who was sticking/trying to stick to the legally binding contract/arrangement that they had been advised on and signed up to, with no mention orally or written of lengthy secured loans with outrageous interest rates as a means of a possible equity release vehicle...should the hypothetical scenario of a court case ever arise.

It`s old ground that`s been covered many times now, a remortgage IS NOT a secured loan and we are all aware that this was confirmed as so...and is one of the reasons why the recent 2014 protocol includes secured loans in wording as a possible means of equity release.

Secured loans may suit some people...the people they suit most of all are the lenders who would reap the 16% + APR rates and set up fees of such loans and the insolvency companies pushing the loans who will get their pound of flesh by way of the 15% instant chunk of any monies released into the IVA via any such loan...a much better return than the 15% in fees trickled over twelve months from any much smaller amount achieved via an extension.

There have been claims in similar previous threads over the last couple of years that `As your credit rating improves in a few years, you will be able to trade the loan over to a remortgage with better rates`...

I am yet to see a post from anyone to substantiate such.

However, there is a post from a forumista called `Chappie` currently on page 3 on the `pushed down a loan with obscene interest rates` thread where Chappie explains how they are about to lose their home after taking out one of these secured loans.

I`m with you mole and Andy.