Do we have to proceed with second charge mortgage for our IVA?

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hayley653
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by hayley653 » Wed Feb 14, 2018 2:56 pm
Hi
I am currently into the 66th month of my IVA with Credit Fix (originally with Mitchell Farrar) in our original docs it said that someone would be in touch around month 55 to discuss our equity release options. We were told we would need to remortgage or extend for 12 months! Finally in Month 62 someone called The select Partnership got in touch about 2nd charge mortgage. The second charge mortgage will add £4000 or so onto our mortgage! Do we have to accept this? We are now into month 67, therefore have 5 months left of our extension which actually would cost less! I am a bit fed up that in month 67 the creditors are asking me to justify my Christmas spending, food weekly shop etc? I am justified in this and can I opt to complete my extension rather than add money to mortgage (which I am paying interest only?)
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Foggy
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by Foggy » Wed Feb 14, 2018 3:01 pm
No you do not have to accept a second charge -- the agreement was remortgage or extend --- and a remortgage is not the same thing as a second charge (secured loan). You have extended, presumably with the agreement of your IP, so that is the equity release clause done and dusted.
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hayley653
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by hayley653 » Wed Feb 14, 2018 3:17 pm
Foggy wrote:
No you do not have to accept a second charge -- the agreement was remortgage or extend --- and a remortgage is not the same thing as a second charge (secured loan). You have extended, presumably with the agreement of your IP, so that is the equity release clause done and dusted.


Hi Thank you for replying
We didn’t agree extension with IP! We just carried on paying it and waited for someone to get in touch! However we now only have 5 months left (until end of July) of our extension. I have looked at our agreement and it says :remortgage or A third party sum equivalent to 85% or a maximum of 12 additional monthly payments.The extension will be assessed during the last three months of my agreement and will continue for a maximum of 12 months. If we ring CF and explain this are they likely to accept our request to carry on paying extension? Nobody assessed our payments at month 54! I’m so confused!
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Foggy
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by Foggy » Wed Feb 14, 2018 3:26 pm
CF have been remiss in not addressing this formally and calling for valuations and mortgage redemption statements at the agreed time. Anyway, I would argue that, as Select are looking at secured loans, rather than remortgages, a remortgage is not possible, so the extension would have applied at the start.

Some, in the past, have argued that "A third party sum equivalent to 85%" covers a secured loan, but, so far, have backed down when disagreed with. If it did mean a secured loan the IVA Forum (the body overseeing the Protocol terms, not us) would not have felt the need to introduce secured loans specifically in the 2014 Protocol.
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recovering
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by recovering » Wed Feb 14, 2018 3:30 pm
I was with CF after being transferred
They put me in touch with a somilar company who offerec a secured loan, I emailed back politely refusing ( they were a bit shirty) but referred me back to CF who accepted it and extended the agreement By a year
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hayley653
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by hayley653 » Wed Feb 14, 2018 3:36 pm
recovering wrote:
I was with CF after being transferred
They put me in touch with a somilar company who offerec a secured loan, I emailed back politely refusing ( they were a bit shirty) but referred me back to CF who accepted it and extended the agreement By a year


Thanks! It’s an awful situation to be in isn’t it? My issue is partly that this whole process started later than originally agreed on our paperwork. We have already been paying for 6/7 extra months. I think it is the fault of CF and they should not extend by another year but allow us to pay for the 5 remaining months. Our original agreement says a maximum extension of 12 months. They may do that when challenged! I guess I need to speak to them. Will let you know how I get on.
Many Thanks
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Foggy
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by Foggy » Wed Feb 14, 2018 3:39 pm
hayley653 wrote:
recovering wrote:
I was with CF after being transferred
They put me in touch with a somilar company who offerec a secured loan, I emailed back politely refusing ( they were a bit shirty) but referred me back to CF who accepted it and extended the agreement By a year


Thanks! It’s an awful situation to be in isn’t it? My issue is partly that this whole process started later than originally agreed on our paperwork. We have already been paying for 6/7 extra months. I think it is the fault of CF and they should not extend by another year but allow us to pay for the 5 remaining months. Our original agreement says a maximum extension of 12 months. They may do that when challenged! I guess I need to speak to them. Will let you know how I get on.
Many Thanks


I think and hope that they will accept that the term has been extended by a year and thay you have 5 months left until it is all over with.
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recovering
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by recovering » Wed Feb 14, 2018 3:44 pm
Mine was dealt with a bit late, I had to ask about it. I went online and screenshotted 2 rejections and sent those to my caseworker.
CF did not put up any resistance at all.
Only the finance company and they have no hold over any of us so I ignored the slight barb in their reply!
It was much less painful than I thought it would be.
I think CF will confirm you have already paid so many payments of your extension ... fingers crossed
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Ryan
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by Ryan » Wed Feb 14, 2018 4:21 pm
Agree with Foggy. Definitely don't feel pressured into doing something that you don't feel is in your best interest. As has been said a secured loan is very different to a re-mortgage.

Regards
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hayley653
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by hayley653 » Wed Feb 14, 2018 4:32 pm
Ryan wrote:
Agree with Foggy. Definitely don't feel pressured into doing something that you don't feel is in your best interest. As has been said a secured loan is very different to a re-mortgage.

Regards

Thanks all for your advice today! I have just been in touch with CF. The woman I spoke to said she thinks it’ll be fine to carry on with extension but has emailed closure dept. She said I’ll hear from them within 48 hours! Fingers crossed and will let you all know.
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Foggy
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by Foggy » Wed Feb 14, 2018 4:50 pm
hayley653 wrote:
Ryan wrote:
Agree with Foggy. Definitely don't feel pressured into doing something that you don't feel is in your best interest. As has been said a secured loan is very different to a re-mortgage.

Regards

Thanks all for your advice today! I have just been in touch with CF. The woman I spoke to said she thinks it’ll be fine to carry on with extension but has emailed closure dept. She said I’ll hear from them within 48 hours! Fingers crossed and will let you all know.



I am sure it will be OK.
nc26nb
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by nc26nb » Tue Feb 20, 2018 3:00 pm
recovering wrote:
I was with CF after being transferred
They put me in touch with a somilar company who offerec a secured loan, I emailed back politely refusing ( they were a bit shirty) but referred me back to CF who accepted it and extended the agreement By a year


Hi, we are in a similar situation at the moment cf have told us that if we can't remortgage then we have to accept the offer of a second charge mortgage, which will cost us around £10,000 in interest to release £5200 to our creditors! After reading this thread I have tried to decline the offer as suggested but have been told this will mean we're in breech of our Iva agreement, any help would e greatfully appreciated, thanks
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Foggy
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by Foggy » Tue Feb 20, 2018 3:08 pm
nc26nb wrote:
recovering wrote:
I was with CF after being transferred
They put me in touch with a somilar company who offerec a secured loan, I emailed back politely refusing ( they were a bit shirty) but referred me back to CF who accepted it and extended the agreement By a year


Hi, we are in a similar situation at the moment cf have told us that if we can't remortgage then we have to accept the offer of a second charge mortgage, which will cost us around £10,000 in interest to release £5200 to our creditors! After reading this thread I have tried to decline the offer as suggested but have been told this will mean we're in breech of our Iva agreement, any help would e greatfully appreciated, thanks


Use the arguement in the post above from me:

"CF have been remiss in not addressing this formally and calling for valuations and mortgage redemption statements at the agreed time. Anyway, I would argue that, as Select are looking at secured loans, rather than remortgages, a remortgage is not possible, so the extension would have applied at the start.

Some, in the past, have argued that "A third party sum equivalent to 85%" covers a secured loan, but, so far, have backed down when disagreed with. If it did mean a secured loan the IVA Forum (the body overseeing the Protocol terms, not us) would not have felt the need to introduce secured loans specifically in the 2014 Protocol."


Unless you have the 2014 Protocol, or later, or have agreed to modified terms they cannot force a secured loan on you. I would suggest a word with a solicitor with experience in insolvency matters and / or a formal complaint to CR, followed by a complaint to their regulators for acting outside of the agreed terms.
nc26nb
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by nc26nb » Tue Feb 20, 2018 8:33 pm
Foggy wrote:
nc26nb wrote:
recovering wrote:
I was with CF after being transferred
They put me in touch with a somilar company who offerec a secured loan, I emailed back politely refusing ( they were a bit shirty) but referred me back to CF who accepted it and extended the agreement By a year


Hi, we are in a similar situation at the moment cf have told us that if we can't remortgage then we have to accept the offer of a second charge mortgage, which will cost us around £10,000 in interest to release £5200 to our creditors! After reading this thread I have tried to decline the offer as suggested but have been told this will mean we're in breech of our Iva agreement, any help would e greatfully appreciated, thanks


Use the arguement in the post above from me:

"CF have been remiss in not addressing this formally and calling for valuations and mortgage redemption statements at the agreed time. Anyway, I would argue that, as Select are looking at secured loans, rather than remortgages, a remortgage is not possible, so the extension would have applied at the start.

Some, in the past, have argued that "A third party sum equivalent to 85%" covers a secured loan, but, so far, have backed down when disagreed with. If it did mean a secured loan the IVA Forum (the body overseeing the Protocol terms, not us) would not have felt the need to introduce secured loans specifically in the 2014 Protocol."


Unless you have the 2014 Protocol, or later, or have agreed to modified terms they cannot force a secured loan on you. I would suggest a word with a solicitor with experience in insolvency matters and / or a formal complaint to CR, followed by a complaint to their regulators for acting outside of the agreed terms.


Thanks for your reply, we took our Iva out in 2013, having checked paperwork, it does state the part about introducing a third party sum or a 12 month extension, do you know what they mean by a third party sum and does third party include secured loans?
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hayley653
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by hayley653 » Tue Feb 20, 2018 8:40 pm
No, the company are using scare tactics! Our agreement said the same. A secured loan is not part of your original agreement. The 85% is if you inherit money or are able to borrow from family member! Stand your ground or seek some legal advice. Try not to worry.
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