MRS/Firstplus issues

[AJG36]

Hi

 

Not entirely sure if this is the correct forum for this type of post however, any advice would be greatfully received.

 

I am currently in an interlocking IVA with ex hubby, in joint property with 2 children with morg and secured loan.

 

House worth 100k approx, first charge owed 94k second 50k so as u can see major neg equity, loan was given in 2005 when they were giving 120% ltv. Meantime husband left me with 2 children and cannot pay both liabilities and neither can he as he is now paying for rented flat.

 

Went to shelter for advice they recommended MRS, first charge agreed no problem and to a 27k shortfall, Firstplus refused based on figures they amended themselves on our i&es and a valuation they say is 15k more than anyone elses.

 

I understand they stand to lose 50k which is a massive amount of money however, in whatever circumstance they gain to get nothing and actually if they agreed to MRS i can put it into my current IVA arrangement and they will get a return albeit small. If the house is sold market value they will get nothing likewise if it gets repossessed.

 

So altho i can see their issue they stand to benefit nothing at all by blocking the scheme, they are putting me and my family on the streets for nothing and its very frustrating, i have asked for a review and provided written backing from Shelter, my LA and Insolvency Practitioner all trying to point out from different angles the situation but as yet they still wont bend.

 

I can no longer pay the loan so just making sure the first charge get paid as they have been fantastic and very supporting, so going to get alot of hassle now and they will more than likely go for repossesion however, not sure how a court would take it given ive accepted i have a problem, tried to address it and FP have said no.

 

I realise the ombudsman cannot make them overturn their decision but my solicitor said they can make it known what the beat course of action is maybe that may help i dont know. I also intend to go to the Financial Ombudsman and realise that he cannot change minds but strongly reccommend they do.

 

Very worrying times any thoughts would be great.

[sir_gilmour]

Hi AJG36

Welcome to The Consumer Action Group.

 

 

I am just letting you know that as you haven't had any replies to your post yet, it might be better if you post your message again in an appropriate sub-forum. You will get lots of help there.

 

Also take some time to read around the forum and get used to the layout. It is a big forum and takes a lot of getting used to.

 

 

Once you start to find your way, you will soon realise that it is fairly easy to get round and to get the help you need.

 

It can be bit confusing at first.

[BRIGADIER2JCS]

I've alerted the site team to your problem, hopefully someone will be along to advise soon.

[AJG36]

I've alerted the site team to your problem, hopefully someone will be along to advise soon.

 

Hi

 

Thanks can you recommend which forum

Its best placed?

 

Thanks

[AJG36]

I've alerted the site team to your problem, hopefully someone will be along to advise soon.

 

Hi

 

Thanks can you recommend which forum

Its best placed?

 

Thanks

[Conniff]

Have moved you into the Formal Solutions: Bankruptcy, Administration Orders and IVAs section

[Wintry]

Hi

 

Not entirely sure if this is the correct forum for this type of post however, any advice would be greatfully received.

 

I am currently in an interlocking IVA with ex hubby, in joint property with 2 children with morg and secured loan.

 

House worth 100k approx, first charge owed 94k second 50k so as u can see major neg equity, loan was given in 2005 when they were giving 120% ltv. Meantime husband left me with 2 children and cannot pay both liabilities and neither can he as he is now paying for rented flat.

 

Went to shelter for advice they recommended MRS, first charge agreed no problem and to a 27k shortfall, Firstplus refused based on figures they amended themselves on our i&es and a valuation they say is 15k more than anyone elses.

 

I understand they stand to lose 50k which is a massive amount of money however, in whatever circumstance they gain to get nothing and actually if they agreed to MRS i can put it into my current IVA arrangement and they will get a return albeit small. If the house is sold market value they will get nothing likewise if it gets repossessed.

 

So altho i can see their issue they stand to benefit nothing at all by blocking the scheme, they are putting me and my family on the streets for nothing and its very frustrating, i have asked for a review and provided written backing from Shelter, my LA and Insolvency Practitioner all trying to point out from different angles the situation but as yet they still wont bend.

 

I can no longer pay the loan so just making sure the first charge get paid as they have been fantastic and very supporting, so going to get alot of hassle now and they will more than likely go for repossesion however, not sure how a court would take it given ive accepted i have a problem, tried to address it and FP have said no.

 

I realise the ombudsman cannot make them overturn their decision but my solicitor said they can make it known what the beat course of action is maybe that may help i dont know. I also intend to go to the Financial Ombudsman and realise that he cannot change minds but strongly reccommend they do.

 

Very worrying times any thoughts would be great.

 

Hi

 

If a lender does not go along with the MRS there is not too much you can do about it as far as my experience of the MRS goes.

 

I think you have posted on another forum and have had a similar response.

 

I believe that Shelter are assisting you so it is hard to really step on their toes so to speak

 

You can try the avenues of complaint you have mentioned and maybe something will happen but the MRS does not accommodate much in the way of appeals etc.

 

Not all lenders play the game with the MRS.

 

The interlocking IVA is interesting as I was wondering if you have had a negative change of circumstances since it was first started leading to you no longer being able to afford your secured lending costs.

 

I can see the logic of approaching the MRS and looking at putting any post mortgage rescue shortfalls into the current IVA.

 

It is not clear from what you have put if the first lender has agreed to a write off of their estimated shotfall or whether they would be looking at the possibility of including it in a modified IVA.

 

As you say Firstplus would likely get at least something out of any modified IVA (if of course the IVA was successfully modified to include these extra debts)

 

Looking at your figures and what you have put so far then it would seem that you are likely to have an increase in disposable income for any potential modified IVA due to you paying much less in rent than the combined total of your mortgage and secured loan (you should have been told the amount of rent successful post mortgage rescue that you would be paying based on the percentage of average rent in the area that you live which would then give you a different SOA or Financial Statement}

 

The interlocking IVA will be based on both incomes and can mean one party could currently be making a higher percentage contribution which could change based on the above.

 

If the house is eventually repossessed and any resulting shortfalls are not included in any potential modified IVA then obviously these jointly liable debts would still stand in the event of the current IVA being concluded.

 

It is a crazy situation and Firstplus's stand does not make much sense but the MRS sometimes turns up situations like this which you are acutely aware.

 

I dont know from what is written here what position arrears and probably county court adjourned possession hearing wise you are with your first lender or Firstplus for that matter.

 

The case may be that you already have a set time court adjourned hearing with your first lender and if so will have another hearing date in the pipeline where the District Judge will almost certainly want to know and see evidence on what progress has been made with the MRS.

 

If the above is correct then you and / or anyone representing will have to explain to the District Judge and to your first lenders reps / solicitors and subsequently the MRS application could fall through in the Disrict Judges eyes and your first lender may then take a different approach with the District Judge possibly making a possession order in the first lenders favour if you see what I mean (this would obviously depend if payments are being maintained to the first lender and payments / proposals to accommodate any arrears etc)

 

If you fall behind sufficiently with payments with Firstplus then they can then take possessionn proceeding themselves and the above could apply.

 

The Shelter people are experienced in the MRS know their stuff and I would imagine that they are trying everything but if Firstplus continue in their approach then it looks difficult and the above mentioned procedure could apply.

 

Other ideas might be raising the issue with your local councillor or MP.

 

Its a difficult one and shame on lenders who do not enter into the spirit of the well intentioned and vastly underspent Mortgage Rescue Scheme (I have had to listen to similar from lenders reps many times at court hearings now)

 

Some lenders just dont care

 

Have you been in touch with your Local Authority Housing Department about potential homelessness issues and re-housing if the worst comes to the worst eventually becomes possible

 

Keep us updated and I will come back on this if get further info

 

Sorry, but just a not too much positive of a guide from me I know all too well

 

Keep us updated if you can

 

Like I say just a guide only from me & genuine best wishes, maybe things will still turn out OK for you and your family (hope so)

Edited May 30, 2013 by Wintry

[AJG36]

Hi

 

Many thanks for responding and apologies for late response, i didnt realise someone had responded.

 

The position now is that ive done absolutely everything to try adn get Firstplus to overturn their decision, every step of the way they havent looked at the big picture and taken snippets from everywhere instead of looking at all the facts and ultimately decisions ahve been made on false figures, false information etc etc.

 

I have even written to Commercial Director and thats got declined also on affordability, the financial statements were produced by Shelter and are a true reflection of my circumstances and my ex husbands we clearly cannot afford the repayments and in turn the loan is majorly in arrears.

 

MY first charge stands to lose 27k but happy for it to be taken into a modified IVA, which in answer to your question has all been agreed prior to these problems with Firstplus we would then just pay over the remaining term with Santander and Firstplus forming part of it.

 

Makes perfect sense to me as the loan was given on 120% ltv so never in its lifetime will it raise enough equity to fully repay both charges and whatever happens FP will stand to lose near enough 100% of the debt. so seems very pointless to gain nothing but put a family on the streets.

 

The case is now being forwarded to the Ombudsman for consideration as the reasons arent justified at all however, i realise he cannot make them change their mind but worth it for a last ditch attempt.

 

Have thought about going to my MP but what can he enforce? suppose anything is worth a shot.

 

The first lender is happy at the moment even tho there is arrears on the account we are making a very small contribution as my theory is if we keep them happy then they may not be inclined to take any action given tehy will stand to lose more money in repossesion.

 

There are no court actions at present althought FP have threatened an outright possesion order but then contradicted themselves by saynig but we wont take your home??? is there any alternatives to ordering me out??

 

Thanks in advance for any thoughts on this situation

[Wintry]

Hi

 

Many thanks for responding and apologies for late response, i didnt realise someone had responded.

 

The position now is that ive done absolutely everything to try adn get Firstplus to overturn their decision, every step of the way they havent looked at the big picture and taken snippets from everywhere instead of looking at all the facts and ultimately decisions ahve been made on false figures, false information etc etc.

 

I have even written to Commercial Director and thats got declined also on affordability, the financial statements were produced by Shelter and are a true reflection of my circumstances and my ex husbands we clearly cannot afford the repayments and in turn the loan is majorly in arrears.

 

MY first charge stands to lose 27k but happy for it to be taken into a modified IVA, which in answer to your question has all been agreed prior to these problems with Firstplus we would then just pay over the remaining term with Santander and Firstplus forming part of it.

 

Makes perfect sense to me as the loan was given on 120% ltv so never in its lifetime will it raise enough equity to fully repay both charges and whatever happens FP will stand to lose near enough 100% of the debt. so seems very pointless to gain nothing but put a family on the streets.

 

The case is now being forwarded to the Ombudsman for consideration as the reasons arent justified at all however, i realise he cannot make them change their mind but worth it for a last ditch attempt.

 

Have thought about going to my MP but what can he enforce? suppose anything is worth a shot.

 

The first lender is happy at the moment even tho there is arrears on the account we are making a very small contribution as my theory is if we keep them happy then they may not be inclined to take any action given tehy will stand to lose more money in repossesion.

 

There are no court actions at present althought FP have threatened an outright possesion order but then contradicted themselves by saynig but we wont take your home??? is there any alternatives to ordering me out??

 

Thanks in advance for any thoughts on this situation

 

Hi

 

Interesting

 

Firstplus will have to go through the standard possession procedure if they want to get you out so to speak

 

If Firstplus do eventually take you to court for repossession it might be an interesting one for the District Judge as they do seem to be sympathetic towards the MRS especially if you have gone through the application procedure with a supporting recognised agency such as Shelter.

 

Having said the above there does seem to be a high percentage of Neg equity which will definitely be a factor in any forthcoming possession hearing and to be honest I am a little surprised that this did not have some bearing on the eligibility criteria for the MRS application.

 

In my experience certain lenders & their rep solicitors have been known to vigorously oppose MRS applications at possession hearings using points similar to the above, they don't always win though.

 

Like I have said before I am not too sure how the Ombudsman Service will deal with this.

 

Another question if you don't mind is - have you been maintaining payments into the IVA while all this is going on?

 

The MP might be able to make a noise, after all, the MRS is government funded, so it could help, you would expect the powers that be would want the scheme to succeed and lenders brought to question if they are not entering the spirit of the thing.

 

Hard to say much more on the info so far and as there seems to be a stand off situation and I am wondering why Firstplus seem to be stagnant on their next move.

 

Keep us updated and I will come back to you if I can

 

Best wishes and hope things eventually go your way

[AJG36]

Hi

 

Thanks for your response its really useful to hear someones take on it.

 

I spoke wiht my local MP secretary today and basically tehy wont get involved, but gave me some good advice as to when it gets to court.

 

The case is going to the Ombudsman as you say not entirely sure what will come of that but im all for trying everything now its come this far.

 

The IVA has been maintained yes so far but in my last response from FP they mentiioned that i was paying the IVA, so had to take their point and will now see if i can maybe put it on hold pending all this.

 

Im not sure why Firstplus arent accepting the facts, the have given me the only reason they will not release the security is because of affordability this has been proved by financial statements produced by Shelter and are 100% true and accurate, tehy have tried manipulatiing them and everything and still saying its affordable when clearly it isnt.

 

On the note of the shortfall being so large and u are surprised they agreed, 12 mths ago when this was mentioned the adviser at Shelter wrote to both charges telling them my intentions outlining the rough figures and the response we got back was that they had agreed in principle, ok in principle but the figures havent changed they have let me get this far 12 mths down the line and say no bit unfair really.

 

It just seems very unfair to potentially put us on the streets for absolutely no benefit to them.

 

Thanks and hope they overturn it but dont hold much hope lol