Secured Loan Shambles - Lancashire Mortgage Corporation via ASC Finance

[jcsmum]

Hello all, I'm new here and would welcome any advice about the complex situation I'm dealing with. It's quite a saga but I'll try to keep it as short as poss

 

Hubby divorced in 2004 and was ordered by court to pay out ex-wife within a short timescale or his business would be sold to meet the settlement. He was introduced to a broker who arranged a domestic mortgage on the marital home and this broker then passed him onto ASC who arranged what seems now to be an unregulated loan secured on the land from which he operates his self employed business. Not being well versed in finance he simply signed all he was told to in order to get the money to meet the court deadline.

 

 

The domestic mortgage is now long gone but the one on the business land remains. He assumed the loan was a capital and interest "normal" mortgage (loan amount £35k). The account is up to date but I became involved when I noticed the debt wasnt reducing and the back of the document referred to Rule of 78. Long correspondence ensued and after employing solicitors the company have accepted that the loan is for a consumer debt (to pay personal liability) and agreed that they will apply actuarial interest rather than Rule of 78. (FOS said they couldn't get involved as not under CCA)

 

 

This has all been a pain but the worst part is that my hubby now has a serious degenerative illness and has been advised by his neurologist to stop work. Clearly he will need to sell the land but there is a further complication as the land is licensed to the Environment Agency who will not surrrender the licence to enable its sale until they are happy with the condition of the land. The costs involved will be at least £10k but could be 2, 3 or 4 times that depending on results of investigations & soil samples they want. The stress of the situation is adding to his health problems and we need this sorting asap.

 

A relative has offered an amount to help but it will fall short of the amount owing on the mortgage even with our savings added. Would it be worth approaching the lender with an offer? (they have been less than helpful in the past)

 

 

Is there no recourse to the broker ASC? They sold the mortgage on a 25 year term to a 46 year old man. It has also come to light that the mortgage company have a letter signed by hubby saying his income was far greater than it ever has been! (We have an extensive file of records but no application papers).

 

He says he signed whatever they gave him and this seems to be supported by the fact that the income letter produced by the mortgage co has his address mis-spelt in the road name and village and was sent to him by the broker for signature.

 

 

Sorry this has been such a long post - any help gratefully received:oops:

Edited February 23, 2012 by alanfromderby
spacing for easier reading

[Lea_HTH]

You can definitely make a full and final settlement offer to the lender - they may be more than willing to accept this, but you won't know until you make the offer to them (in writing), and explain the circumstances behind why you are making the offer (the fact that your husband is in poor degenerative health).

 

As for the broker - it may well be that he missold the loan, but proving it and getting any form of compensation may not be worth the length of time it will take and the cost to you of getting there. It is not something you would be able to do by yourself, you would almost certainly need a solicitor.

[jcsmum]

I'm thinking that it's not worth the hassle, the funds would probably be best spent elsewhere. We went through solicitors to get them to agree not to use Rule of 78; it worked eventually but cost us £2000 to get there!

Thanks for your reply

[Guest Kingsley Sansom]

We are ASC Finance for Business. We are not sure whether we are the ASC referred to in this post as we do not work with the Lancashire Mortgage Corporation.

We have no record of any complaint relating to this matter. We do have a very robust complaints investigation procedure and if your husband would like us to investigate he can ask us to do so via our website (asc.co.uk). My name is Kingsley Sansom and my role is Head of Operations - at ASC, and I take my responsibility to investigate such matters very seriously.

We will deal with every complaint promptly, but on the basis of the limited information posted by you there is very little we can currently say in response to your “allegation”.

Incidentally, I am surprised that you say that the FOS cannot help; although their focus is on consumer problems they will handle complaints from "Micro-enterprises” as long as they have an annual turnover of less than two million euros and fewer than ten employees.

[jcsmum]

Hello Kingsley, thank you for your post.

The complaint was raised with Lancashire Mortgage Corporation and not ASC as that was the original advice received. As I mentioned we have no copy of any loan application papers, only paperwork from the loan company and a brochure and couple of copy letters from ASC (the loan seems to have been arranged via ASC Lancashire and Cumbria in Burnley). The FOS have indicated that they cannot investigate because the loan was in excess of £25000 and arranged in 2004 (before LMCs membership started). The last letter from the FOS did suggest that we approach ASC direct as the adjudicator stated he had run a data check and been "unable to establish relevant information in terms of whether it currently runs as a live or defaulted business". Alternatively he also said we could contact the Finance and Leasing Association regarding the matter.

As I indicated in my post it has been a long saga via LMC and FOS so far and the health situation alone is very stressful. I am now dealing with all my husbands paperwork as he is unable to cope with it so I am trying to establish if there is any benefit to starting another complaint or if it will just add to his stress and so worsen his health. However, your post is reassurring and I will look at the website as you suggest and discuss it with him.

[Guest Kingsley Sansom]

As I said in my last post, we do not deal with Lancashire Mortgage Corporation so it still may be possible that it is a case of “the wrong ASC” but let me have some details and I will see what I can find out for you.

If your husband is seeking to refinance the LMC loan (or its replacement) we will be happy to look at this for him without charge.

If you let me have some basic details (husband's name, loan amount) I promise to look into things without causing stress!

[citizenB]

In order to protect members, we dont encourage the sharing of personal information. However, it is appreciated that in this instance without that information this will stall.

 

jcsmum - if you are going to do this, could you please keep us informed of progress, within your thread:)

[jcsmum]

Thanks you for your post, I have provided the information to Site Admin as I'm not happy to post personal details to the thread. Unfortunately refinancing is not an option as my husband will stop trading in the very near future because of his health. Your offer to investigate sensitively is appreciated.

[citizenB]

jcsmum - responded to your message and forwarded information as requested.

 

Lets hope there is some positive assistance that can be given

[Guest Kingsley Sansom]

I've received the information via admin, thanks. I'm not sure how long it will take to get to the bottom of this but I will give you an update in a week's time if I don't have something to report before then. I have asked admin to send you my emaill address, if they do please send me an email so we have a direct line of communication.

[citizenB]

KS, message forwarded as requested.

[Guest Kingsley Sansom]

Hi

You asked jcsmum to keep you updated. As the ball is firmly in my court I thought that it would be right for me to update you. We are investigating the issue but it is taking some time. I need to get information from, for example, “Mr jcsmum” (as he is the actual borrower) and from the lender concerned etc. At this stage we really do not know enough about all the circumstances to enable us to express any opinion. As you will appreciate, some eight years after the event this is far from simple. I’ll keep you informed.

[jcsmum]

As some time has passed since my original post in February I thought I should post an update on what has been happening since then.

I have provided Mr Sansom with copy documents we have from ASC dating from when the loan was arranged. As Mr Sansom said in his last post he is investigating the matter and authority has been given for him to liaise direct with with LMC. I understand from their customer service department that a request for information has been received and they are dealing with it.

I have, at long last, managed to meet with a representative of LMC (after 2 years of trying to talk with them) so I am now confident that everyone has a clear understanding of the situation. As yet, there is still no clear way forward but we are hopeful that a solution can be found in the very near future without having to involve the FOS or FLA. I last corresponded with Mr Sansom by email last Friday and he has advised me that he will write to me this week. I will update the thread when there is anything further to report.

[honeybee13]

Hello there.

 

Thank you for keeping us updated. It's good to see that Mr Sansom is doing what he can to help you as company rep. Please let us know how you get on.

 

My best, HB

[Guest Kingsley Sansom]

I thought I would bring you up to speed. I have written to Mrs [EDIT] in some detail a little over a month ago,

what I write here is obviously limited by confidentiality restraints.

I did manage to establish that Mr [EDIT] “problem loan” was arranged by a lender which was not (and has never been) on our approved panel.

The lender concerned has, despite Mr [EDIT] authority, refused to provide us with any information apart from that already in Mr [EDIT] possession.

Why do I use inverted commas when describing this a”problem loan” – I simply do not know what the commercial circumstances were,

if the loan was a sensible solution for Mr [EDIT] or not and/or why there were financial issues – unfortunately in today’s recessionary times there are just so many.

 

We are always willing to help, even if we are not responsible for the circumstances,

because we want to make sure that everyone involved in our industry operates to the highest standards.

I do appreciate that Mrs [EDIT] is upset that Mr [EDIT] business project did not work, but unfortunately today’s economic climate has introduced many issues for many business people.

I note from Mrs [EDIT] original post that the Financial Ombudsman Service (FOS) said they were unable to help as the loan was not covered by the Consumer Credit Act;

according to their website the FOS do deal with business cases as long as the business concerned

has an annual turnover of less than two million euros and fewer than ten employees.

 

It is always a matter of regret when one cannot come up with a solution to someone’s problem

but in a case when we did not arrange the finance and the finance was arranged with a lender with which we do not do business

and over which we have no influence we do not see what else we can do.

[jcsmum]

To add to Mr Sansoms post above the position from our viewpoint is now as follows.

A mortgage was arranged by Kerslea Finance Limited who were trading under the name ASC Lancashire and Cumbria. I understand that they were operating as a franchise under a licence granted by ASC partnership plc . I must say that I find the whole franchise thing quite bizarre - if I had problems with a burger chain as a customer I would expect to deal with the company whose logo was everywhere not "Mr Smith" who runs the franchise, but it seems that things don't work that way.

The loan was funded by Lancashire Mortgage Corporation who have been less than helpful throughout the term of the mortgage despite payments always being made on time.

Complaints against Kerslea Finance Limited are being accepted by the Financial Services Compensation Scheme as the company was dissolved last year. At present it seems that the FSCS will be unable to help us either because of the type of product that was arranged.

To clarify Mr Sansoms comments with regard to the FOS, they advised me that they were unable to help because a) the loan amount was over £25,000 and arranged pre April 2008 and b) the lenders regulation began in April 2007 way beyond the start date of the loan.

From our perspective the wrong type of loan was made; the purpose of the loan was to provide funds to settle a personal obligation not a business one. The funds had no impact on my husband's business as they were used for his divorce settlement and sent straight to the solicitor for onward transmission to his ex-wife.

I am upset and very frustrated - not because "Mr Cook's business project did not work" but as he was sold a product with such clear disregard for the OFT's "Non Status Lending - Guidelines for Lenders and Brokers"; a document that was revised in 1997 some 7 years before this loan was arranged. Despite this it seems that nothing can be done for us as we don't seem to "fit" into any regulator or scheme that could help, even the last resort of the FSCS.

It is extremely frustrating as a lay-person to try to deal with this. Mr Sansom has investigated (sensitively as promised) and informs me that the broker was acting outside the terms of his licence and the lender is not on their list. The lender informs me that ASC Lancashire and Cumbria is on their panel of brokers and they do receive business from them. I have no way of knowing which statement is true and to be frank it matters little to me.

All I am concerned with is trying to get my husband out of this mess whilst preserving his health.

Legal advice is that my husband does have a case and could go to trial but the costs are likely to be £15 - £20k. He can't get any legal aid because we are married and my house and savings have to be taken into consideration. (I have now income now as I have had to stop work to care for him as he has a progressive disease that will put him in a wheelchair)

His land is now valued at less than the outstanding debt and it can't be sold at present anyway because it is subject to an Environmental Permit.

It is incredible to me that such a situation can occur. As I said in my correspondence with Mr Sansom my husband is not well versed in financial matters and was under pressure at the time. He simply signed what was produced to him in order to get a mortgage, he was niave and trusted the brokers and lender involved.

Edited May 30, 2012 by jcsmum

[Karada_uk]

We are in the process of buying a property and business. We approached ASC in Hove , having been directed to them as our local office even though we are in North West Surrey and there is a branch in Weybridge. The first thing they wanted was a £750 fee payable to Greenbridges Ltd before they would start looking for loans for us. Nothing seemed to happen for months then they came back and said that Fincorp would be providing the finance but we would have to pay a valuation fee of £2,700. By lucky chance we had a contact with a Director of Fincorp and we said we weren't happy that it was taking so long to get bridging finance arranged. He knew of ASC and said that they occasionally did business with them but he was able to confirm that after 4 months, no approach had been made by ASC on our behalf and no valuation had been ordered. We immediately cancelled our deal with ASC as they had been totally incompetent and had achieved nothing. We asked for our money back and after much chasing sent a cheque made out to us personally and not to the company and in the wrong amount having deducted 20% for VAT. There then followed a lot of chasing, further cheques for the wrong amount and we are still waiting for the balance of £540 plus the £750 advance fee. I have given them until next Friday to pay up or we issue a Court summons. I would never recommend anybody to deal with ASC. We subsequently found a local broker who got the commercial finance sorted out and agreed in a week. 6 months of this year has been wasted with ASC which so far has cost us £300k in lost income. The only thing that concerns me is that with the new lenders, we had to spilt the deal into a commercial and residential parts and the residential part is being placed with Lancashire Mortgage, who, from this, sound as bad as Swift Advances with whom I have also had dealings.