The problem I have with this issue is not the fact that any given debtor may have to take out a secured loan as against remortgage instead of the twelve month extension to meet equity release clauses, if that`s what they have KNOWINGLY signed up to.
The problem I have is that NONE of the people experiencing this predicament over the last year or so who have posted were at any stage during the consulting, drafting or indeed IVA term periods ever informed by their IP that this may be a possibility.
If you are assured/told by your trusted IP that you will make an extra twelve contributions if unable to remortgage, and that will be the end of it, that is what you expect and believe.
Who in their right mind would agree to an IVA if their IP told them that they would have to take out a 15 year 20.5% APR secured loan at the end of it???
And that is what`s happening, people are deliberately not being told this could be a possibility.
I think this whole scenario brings into question the integrity, honesty and morality of the industry and some of it`s practitioners.
"When the seagulls follow the trawler, it is because they think sardines will be thrown into the sea".
My point is that people have agreed to remortgage and once these products are available they may have to accept them. Creditors have been promised equity from a remortgage and the extension is only there if people cannot obtain this finance. It is not a choice that clients have and too many people seem to have the idea that they will have automatic 6 year IVAs which may not be the case.
A secured loan may be a cheaper option than a total remortgage and indeed could clear up a credit file much quicker. Within two years of the secured loan being taken out a client will have nothing adverse on their credit file and can move the lot to a new lender at High Street rates. However, if they have to get two offers of rejection from banks before their IVA gets extended, these searches will be recorded and remain on the credit file potentially damaging that credit file for a further 6 years.
Finally, people are saying they would not agree to a 15 year secured loan yet they would agree to an increased mortgage over a similar or even longer term. That seems strange to me when the total repayable would be greater in a remortgage than the total of the existing mortgage plus a secured loan.
The point I am making is why should people not expect to have 5/6 year IVA`s if that is what their IP has `sold` them?
Why should people in IVA`s have to accept that they will have to take out a loan at an extortionate APR `because they may have become available` as against remortgage or twelve month extension as advised, expected and agreed??
Anything to do with the fact that there is a lot of pocket lining in the offing here with such high APR`s???...please don`t forget the APR`s being banded about.
Last edited by Goosed on Fri Jan 18, 2013 3:34 pm, edited 1 time in total.
"When the seagulls follow the trawler, it is because they think sardines will be thrown into the sea".
Does anyone have figures for people who have managed to get a remortgage in year 4 of an IVA? I must have read literally thousands of posts and have never come across anyone who managed it, if some have managed it due to having enormous equity then I'd still hazard a guess that its the minority (sub 5 percent) which means the other 95% take on the IVA knowing they will be unable to remortgage so expect the 6 Year IVA as per there IVA protocol compliant terms.
I for one signed up knowing that with mine and my wifes credit status and the property market I would be unlikely to get a remortgage and that a further 12 months would be a given! if after nearing completion and being debt free my IP was to turn around and say sorry you cant pay a further 12 months you have to take out a 15 year loan I would not be amused.
Luckily my IVA company is within the 99 percent who keep to there contracts and word and I have had it confirmed that should I be unable to remortgage it would be a 12 months extension regardless of Equity because thats what I signed up for! and I suspect thats the answer 99% of others would get if they asked there IP's.
Sorry mate but your IVA company is taking you for a mug, stand up to them and battle for what you signed up for.
Future products are exactly that Future products and are not specified in this Agreement therefore irrelevant.
yes I would agree to a remortgage as it was a condition within the protocol compliant IVA that I had to accept to get it approved and no at this point I wouldnt agree to a 15 Year Secured loan becuase in this case its been plucked from thin air !!!
Course.
You say that ' I have had it confirmed that should I be unable to remortgage it would be a 12 months extension regardless of Equity because that's what I signed up for.' You also say you would agree to a remortgage as that was what you accepted. Therefore when your IP tells you that you will have to switch your entire mortgage to sub-prime rates in excess of 8% you are going to be happy!
For affordability reasons it may be that your mortgage will have to be extended to anything up to 30 years and that is what you have agreed to. I have only said that a secured loan may work out cheaper for those who have to raise equity and people should be stop being complacent and realise that there could be mortgage products available when their time comes to investigate this option so do not think your IVA will be an automatic 6 years.
It is currently true that remortgages are difficult to obtain but only a couple of years ago you only needed equity and a pulse to get a remortgage. While the market may not ever go back to this level there are certainly lenders prepared to offer products to but the rates will be high.
Goosed. No one knows how the mortgage market will go in the next few years so no IP can sell an IVA guaranteeing no remortgage. If this was the case the IVA would be strictly 6 years from the beginning and the property automatically excluded at the start. I always advise my clients that they may have to raise equity if the products are available as I do not know for sure whether they can or cannot in 54 months time.
I just wanted to add another thing which has not been picked up on. People complain about the rates of the loans but perversely it works in your favour the higher the rate. Since you only have to pay the loan back at 50% of the IVA payment, you can borrow much less at an APR of 20% than one of 8%. This means that when your credit file has cleared up after a year or two and you remortgage the lot to the High Street, you will have less owed on your home with a high APR loan than a lower one!
It is a very good point in that no one knows how the mortgage or housing market will be in five yaers from now, whilst it is true at the moment that nearly all people in their final year will have a one year extension this can't be guaranteed to be the case in five years time
I do understand what people are saying in terms of the fact that a secured loan was never discussed but there is no doubt that the possibility of a remortgage was discussed resulting in a possible increased outgoing potentially equal to 50% of their IVA payment.
Is anyone aware of any other companies insisting on secured loans rather than remortgages ?
font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>Originally posted by Michael Peoples
Course.
You say that ' I have had it confirmed that should I be unable to remortgage it would be a 12 months extension regardless of Equity because that's what I signed up for.' You also say you would agree to a remortgage as that was what you accepted. Therefore when your IP tells you that you will have to switch your entire mortgage to sub-prime rates in excess of 8% you are going to be happy!
For affordability reasons it may be that your mortgage will have to be extended to anything up to 30 years and that is what you have agreed to. I have only said that a secured loan may work out cheaper for those who have to raise equity and people should be stop being complacent and realise that there could be mortgage products available when their time comes to investigate this option so do not think your IVA will be an automatic 6 years.
It is currently true that remortgages are difficult to obtain but only a couple of years ago you only needed equity and a pulse to get a remortgage. While the market may not ever go back to this level there are certainly lenders prepared to offer products to but the rates will be high.
Goosed. No one knows how the mortgage market will go in the next few years so no IP can sell an IVA guaranteeing no remortgage. If this was the case the IVA would be strictly 6 years from the beginning and the property automatically excluded at the start. I always advise my clients that they may have to raise equity if the products are available as I do not know for sure whether they can or cannot in 54 months time.
Sorry Michael, I didn`t type no remortgage, I typed remortgage or extension.
But I think you have hit the nail on the head.
Most people in IVA`s are obviously increasingly unable to raise equity in the final year via the remortgage route and are therefore extending by the 12 months advised and agreed, and therefore the six year IVA they expected if they were unable to remortgage.
A third party, secured high interest loan to raise they equity on the other hand benefits both the creditor and loan provider as the creditor gets back much more than they would from 12 additional payments and the loan provider gets the rediculous rate of interest....would the IP/debt solution company recieve commission too?
"When the seagulls follow the trawler, it is because they think sardines will be thrown into the sea".
I am not sure if the IP receives a commission but I would doubt it. They will get their standard percentage which would mean more fees for a years less work so the IP would benefit. This would be the same if the client obtained a remortgage which I accept in the current market is very difficult. However I am sure this will change and clients need to be aware of this.
And what of linked companies, for example dfd suddenly start a sister firm offering special secured loans? Also a lot of these secured loans dont have interest rates fixed as such and rates can change during the term of the loan.
I do agree though that this is fairer for creditors because somebody shouldnt get thousands written off while sitting on tens of thousands in equity. Some people who have recently completed ivas or are finishing soon may just benefit in time before this becomes the industry norm.
Paul
Discharged today the 8th feb 2012. View is much brighter now.
Continuing to rebuild our credit worthiness.
If that becomes the case though, then what would be the attraction of a 5 year IVA? wouldn't it be better to just take out a secured loan for 85% of the equity and present that as a F&F IVA instead?
This topic has come up a few times over the last few years.
When we took our IVA out, i had read so many posts on this site trying to get a feel for what people were unhappy with before we signed up.
"Guaranteed dividend" this came up loads of time. Our IVA states "estimated dividend" which i feel better about!
The remortgage clause. To be really honest, im still hoping that we will get a 12 month extension when our time comes. It does clearly states remortgage and nothing to do with secured loans etc.
But if things do change than we know that the payments will NOT be more than 50% of the IVA payments, and that is what we have signed up for.
The post about Why should somebody who through bl**dy hard work has bought his house and has loads of equity in it( if lucky) get away with not releasing it because the creditors have wrote off loads of debt makes me laugh!
We have had this topic on here so many times, about people who have a house and should pay back as much as they can using their property but people who have not got their own house just gets it written off any way.
How about: Equity clause for house owners, and 10-15 year IVA's for non home owners!!!!![:D]
Andy t.w. I hope you get this sorted mate. Im 100% in agreement with you on this. There is too many companys still trying to move the goal posts as things get nearer to the finnishing line.They should be exactly what they say on the tin!!!!
Baldy[:)]
Last edited by baldy on Fri Jan 18, 2013 9:55 pm, edited 1 time in total.
How about a Formally arranged DMP -- on the lines of an IVA where all interest and charges are frozen and, due to the expected time of involvement maybe the allowances are a little more flexible --- but the term is as long as it takes to pay 100% of the debt ?
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>Originally posted by baldy
This topic has come up a few times over the last few years.
When we took our IVA out, i had read so many posts on this site trying to get a feel for what people were unhappy with before we signed up.
"Guaranteed dividend" this came up loads of time. Our IVA states "estimated dividend" which i feel better about!
The remortgage clause. To be really honest, im still hoping that we will get a 12 month extension when our time comes. It does clearly states remortgage and nothing to do with secured loans etc.
But if things do change than we know that the payments will NOT be more than 50% of the IVA payments, and that is what we have signed up for.
The post about Why should somebody who through bl**dy hard work has bought his house and has loads of equity in it( if lucky) get away with not releasing it because the creditors have wrote off loads of debt makes me laugh!
We have had this topic on here so many times, about people who have a house and should pay back as much as they can using their property but people who have not got their own house just gets it written off any way.
How about: Equity clause for house owners, and 10-15 year IVA's for non home owners!!!!![:D]
Andy t.w. I hope you get this sorted mate. Im 100% in agreement with you on this. There is too many companys still trying to move the goal posts as things get nearer to the finnishing line.They should be exactly what they say on the tin!!!!
Baldy[:)]
Indeed baldy,
It seems those in IVA`s who rent are better off than us home buyers.
Perhaps homeowners should sell their houses and hide the proceeds before embarking on their IVA`s, They`d be much better off by all accounts.
The press really should know about these shift changes within the IVA industry, enough is enough.
"When the seagulls follow the trawler, it is because they think sardines will be thrown into the sea".
