Mortgage Broker suggeststhat I release the equity

[rachel.v]

I have an IVA (in my 3rd year) and will have to pay some equity in my 4th year from my house (via a re-mortgage) it has been suggested by a Mortgage Broker that I release the equity now £15,000 & ask them to accept this in full and final settlement. What do you think?

[Lisa2009]

It would depend if the offer would bring your creditors the same dividend as if the IVA were to run for 5 years. They may stand to gain more if they wait.
Are there particular reasons you want to end eaarly?

[MelanieGiles]

Hi rachel and welcome to the forum

It is unlijely that this will be acceptable now - as why would creditors allow you to forego a further year's contributions? No harm in asking your IP for his/her opinion though!

[Reviva UK]

Hi rachel and welcome to the forum.

In my experience there are not many mortgage brokers who have any significant experience of doing mortgages for folks in an IVA.

What the broker is suggesting is a Full and Final offer to conclude the IVA. Lots and lots of Q's before we could give you an answer.

What is the monthly payment into the IVA?
How many monthe remain
What soes the IVA say about year 4 equity release
What is the reason for the early offer
Which IVA company are you with ( some debt matters clients are having their F&F offers slowed right down now that debtmatters have sold the business)

Have you tried talking to Andrew Graveson of Bright Oak ( www.brightoak.co.uk) as they have some experience of IVredemption mortgages. I really would recommend you speak to an expert in this field.

[rachel.v]

I currently pay £257.00 per month to the IVA Company which is Accuma. There are approximately 30 months left to go. They also have half of any overtime and bonuses my husband earns and in the first year they also had about £3,500 in monies earned from the sale of my Barclays shares (which annoyingly they used to pay their fees!).

For the last 4 months of the IVA my car loan will be finished £135.00
per month which they will require me to pay into the IVA.

In my first year I paid in over £10,000 to the IVA with the shares, overtime, bonuses etc and only about £3,000 of this was actually put aside to pay my creditors the rest went on Accuma's fees!

I have had a letter from the Mortgage Broker to say that a lady from Accuma is supporting a variation on my IVA for a full and final settlement to my creditors.

I also have a secured loan (the worst thing I ever did) which is about £35,000 and it has been suggested that I also add this onto a new mortgage along with the £15,000 so that I only have one large debt of about £96,000. I have spoken to my Mortgage Company (Abbey National) about this as their mortgage rate is 7.08% variable (repayment mortgage) against the Mortgage Brokers suggested rate of 10.04% (interest only mortgage)and they said that they may support my application as long as I have a Notice of Discharge and a letter off the Receiver saying that they are looking for no further assets/monies from us. Do you think the Mortgage Broker is only after his fees and not to actually help us?

[ianmillington]

Hi Rachel

Did you contact the mortgage broker or did you receive this letter out of the blue? If the latter then beware! They have got your name from the Individual Insolvency Register and will probably offer you a remortgage with a lender of last resort with an interest rate that may make your secured loan look cheap, but who pay them a load of commission.

Have you authorised them in writing to contact Accuma? If not, Accuma will not speak to them about your IVA due to client confidentiality, and the representations made to you will almost certainly not be true.

Who is the mortgage broker in question?

Ian

[Reviva UK]

Did you find the mortgage broker , or have Accuma contacted you with regard to settling the IVA or did the mortgage broker find you through marketing?

still recommend you speak to Andrew Graveson to make sure you are doing the right thing.

An increase in interest rate of 3% ( abbey to new mortgage company) on a loan of 96k is 240 per month - EVERY MONTH!!!!

please please call andrew

[ianmillington]

Agreed totally Paul. Have re-read Rachels mail.An interest rate of over 10%? I do not believe for one moment that Accuma would require Rachel to attempt a remortgage like that as an exit route from the IVA - it will be a millstone around her neck. Ignoring the secured loan there is precious little difference between the increase in mortgage payments and the IVA contribution. She would potentially be better off extending the IVA in lieu of a remortgage if this is the only deal available, although to be fair we don't know how much the secured loan costs.

I agree Paul's comments - I would recommend you call Andrew for some advice.

Ian

[rachel.v]

The Mortgage Broker is from Gains Park Mortgage Centre and we were approached by 'phone. We curently pay £295.00 per month on the secured loan with GE Capital Lending.

[ianmillington]

Rachel, have you signed anything, specifically have you authorised them to contact Accuma?

Ian

[rachel.v]

Yes, he has contacted Accuma and I've had to send him a Income and Expenditure form for them but I haven't signed any mortgage documentation.

[ianmillington]

Has he had any response from Accuma?

Did they give you any information as to where they got your name from? Also, do you know who they are proposing to do the remortgage with?

I am sorry to labour the point but I actually warn all my clients immediately following approval of their IVAs that they will get approaches like this.

Ian

[rachel.v]

Yes - he said that Samantha Fenton of Accuma is supporting a variation on my IVA for a full and final settlement to my creditors. I've never spoken to this lady before although whenever I speak to Accuma I always get a different person. I think he must have got our details off the Register. Accuma never warned us that we would be approached by anyone! I spoke to a lady myself at Accuma about paying in the equity early (due to the credit crunch) and she intimated that I would have to carry on paying all the remaing payments to Accuma until the 5 year term was up?

!

[rachel.v]

The mortgage would be financed by GE Money Home Lending Ltd

[ianmillington]

If the IVA is to be varied there will need to be a creditors meeting. You will have to agree to the proposed revised terms. You have to instruct Accuma to propose a variation - they simply cannot do it at the request of a 3rd party.

The warnings I issue to clients originally stemmed from witnessing first hand the antics of some of the less reputable mortgage brokers who had got the names of clients from the register. I cannot say that the broker you are dealing with falls into that category but there are inconsistencies. For Accuma to do an alleged U-turn on what they had recently said to you is very strange. I'm asking myself what they have been told.

Also in an earlier post you said "I also have a secured loan (the worst thing I ever did)". Why is that please? Bear in mind that the mortgage broker is planning to do the whole remortgage with effectively the same company.

There are too many questions here for my comfort, Rachel. I don't think anyone here will say I'm exaggerating if I say if you get this wrong there could be disaster. If you want to investigate a remortgage, speak to Accuma and an independent broker, please, before taking this any further.

Ian