www.iva.co.uk

Hi,
My wife and I are into month 56 of 60 in our IVA.
We have submitted the required documents for equity release to be assessed.
I am concerned that DFDs chosen mortgage broker Select are taking so long to respond to us.
Are they possibly waiting for the house market to heat up further to increase the likelihood of equity release?

So far, it has taken 17 weeks without any feedback at all despite 4 phone calls to DFD for an update.
With only 4 payments to go, DFD has suggested that "maybe" we won't need to re-mortgage and "it's likely" we won't have an extension to out 60 months.
This non-commital attitude is making my wife ill and I would love your advice please as to what you recommend we do now.
Many thanks

Agreed this is hugely stressful, hang in there mate your have done so well

It's probably because they are trying to come up with a secured loan that with all the fees and interest going to be added over the next 15 years is not going to increase your mortgage payments by more than 50%

Good Morning GC1967,

Please email me directly with your details so that I can locate and review your account and provide an update. My email address is in my profile.

Many Thanks
Nicola Cunliffe

Hi GC1967 - welcome to the forum. Glad to see Nicola is on the case with your concerns - lets hope something can be resolved soon and your wife feels better about things.

This is a simple process - get a current valuation and mortgage redemption statement and have DFD do the maths for you. Don't understand why this is getting so complicated, when you just need a straight answer - and things should only be referred to financial advisors when it has been determined that there is an equity sum to actually raise.

Just to update you all on what is happening.

We rapidly recieved a call from Select Finance after my post on here. (It does have an effect clearly!!).

We do have equity in our property, but due to the lending criteria of the banks we are unable to release it.
So, Select Finance has stated that, following a review of our case, we should offer £8500 to our creditors as a Full and Final Settlement.
This has been offered as follows:

A secured loan of £8500 (APR c20%) over 15years....
This will give low payments of c.£150 per month compared to our current IVA payments of £713 per month. After 18months, Select would then look to incorporate this into our mortgage to reduce the overall cost. They did not want to disrupt our mortgage currently as we have a very low rate of interest at c.2%...(even though it couldn't be achieved anyway!).
So, to clarify, DFD is stating that Secured loans ARE the way forward as the banks are not releasing equity.
This, despite no mention of this is the contract signed in Aug 2008.
Personally, I am so sick of paying £713 a month out - it will be a pleasure to drop the payment so drastically. However, the IVA does not deliver a DEBT FREE solution does it?
I guess it never did, as equity release would mean borrowing at the end anyway.
I now have two options....either borrow from Select or beg the family to give a gift sum to the creditors to achieve a conclusion to the IVA.
I am working hard on the latter of the two.

Whilst this is still making my wife bite her fingernails off, shake like an Elvis convention and worry like a Dot Cotton clone... we can maybe (just maybe)see some light.
I am hoping that if either of the two options above are agreed, the payments can stop immediately. Could anyone offer advice as to the chances of this happening please?
Say the in-laws paid £8500 in July, would payments stop immediatley?

All we want is to be able to take our sons on holiday again for the first time since 2006.... wouldn't that be a treat?

A few posters in this situation have proposed a variation to allow a 12 month extension in lieu of the equity release ( this is pretty much the standard these days and DFD are attempting to buck the trend) which was accepted by the creditors. Yes, it would, if accepted in your case, mean 12 extra payments, amounting to £8556 (what a coincidence), but the creditors would be getting their ounce of flesh and you wouldn't be stung for 20% interest along with the brokerage fees, and you would, then, be debt free.

I see no reason for DFD not accepting this proposal, apart from b*****-mindedness.

If you take out a secured loan over 15 years, you will pay £27k as opposed to the £8,556 you would pay on a 12 month extension because you aren't able to remortgage. Also, there is no guarantee that Select Finance would accept you for a remortgage to "incorporate" the loan into your mortgage in 18 months time so this is a bit of a red herring. I don't think you should be swayed by the massive reduction in monthly payments offered by the secured loan and if DFD insist on you going down this route, reduce the term so you don't feel so trapped by it (even though your payments will go up slightly). I personally think it is outrageous that IVA'ers coming to the end are forced to take out a secured loan if they can't remortgage - they are NOT the same at all - and I would prefer a 12 month extension to being tied into 10/15 years of another loan! The equity release clause is a bit of a pain and, as you say, does mean that you are not debt free after 5/6 years but, certainly for us, that is a small price to pay for the "freedom" that the IVA has brought us. If you are able to get the funds to offer a F&F in lieu of the £8.5k you are being asked to borrow then I feel that is the way forward but it sounds as if DFD are being very b***** minded! Best of luck.

I think the poster is being treated fairly as they clearly have the equity to release and the means to repay the borrowings. If DFD stick to the letter of the proposal they could insist that the poster obtains a remortgage at adverse rates and their mortgage payments could increase by up to £356 per month for the remainder of the term.
This would cost a lot more than the secured loan and the poster would lose their current tracker deal.

DFD are not being b*****minded but are trying to act as an 'honest broker' and do their job for the creditors and debtors alike.

Sorry, Michael -- do you know something we don't ? The initial post suggested that there were the "usual" protocol alternatives: release or extend. Without full detail of the relevant clause we cannot be certain that DFD are acting fairly at all, or within the actual letter of the proposal.

That apart, an extension will get the creditors the same as this secured loan, without costing the debtor an arm and a leg in punative interest and broker's fees. So, by offering an extension DFD will be being the honest broker by getting the creditor it's due without penalising the debtor --- to force a secured loan IS sheer b***** mindedness!

I have to agree with Foggy ... when a 12 month extension would give the same return to creditors as a secured loan over 15 years, then the extension is the obvious choice as the creditors get the same and the debtor is not penalised.

In this case if the 12 month extension is refused in favour of the secured loan by DFD then the only logical conclusion is that DFD are in connection with Select Finance and are benefitting in some way.

I can understand a secured loan where that might give a better return to creditors but only in limited circumstances and certainly not when a 12 month extension would offer the same return to creditors.

Something here does not seem ethical to me but I hope I am wrong

Foggy.
In protocol the extension is only there if you cannot obtain a remortgage which this poster may actually be able to do. The secured loan is a cheaper alternative to the remortgage and allows the poster to keep their tracker rate.

Creditors are already getting wise to protocol IVAs whereby clients with equity offer to release equity but with no intention of doing so. The equity calculation promises an unobtainable dividend but now creditors are saying that failure to achieve this dividend will be a breach.

If this poster has the equity to release and the means to repay why should creditors wait an extra year for their money? DFD could force them to remortgage and pay a lot more but they have not done so.

Hi I have tried locating this company called "Select Finance" online but cannot find them ... a search of the Financial Services Register does not throw up any further light either... anyone have their details?

Hi again,
Thank you for all the comments.
Whilst I understand they are all with the right intentions I didn't really expect it to turn into a "have a go at DFD" session LOL.

We have equity and we fully expected to have to either re-mortgage or extend.
DFD states £8500 will more than likely be accepted as a F&F settlement.
If that comes via a one year extension, a gift from family or a secured loan - DFD state it is my choice - there is no pressure from Select nor DFD to take out a loan.
Fortunately, my father in law has offered this sum as a gift to settle and we await their response once the creditors have considered it.

The T&Cs in 2008 stated we would have to apply for a re-mortgage.
So, fingers crossed that DFD come back to us quickly so my family can return to normal living after 5 very very tough years.
Rest assured, we have learnt some invaluable lessons over this time.
Shop around.
Think "do I REALLY need it"? before buying.
Manage childrens expectation better.
Do not accept first, second quotes for building/maintenence quotes.
Shop at Asda....not Tesco.
A £10 gift is just as thoughtful as a £20 gift.
Running is cheaper than joining a gym.
You don't need 18 pairs of different coloured trainers/shoes.

I'm feeling slightly lighter already and pray to the big fella upstairs that this is all resolved before the summer holidays so our kids can have a well deserved week in the sun.