We have completed a 72 month IVA with all payments made and our agreed dividend exceeded courtesy of some PPI claims which we have gladly paid into the creditors. We are aware of the fact that we now face an equity release from our property. However, there are two factors that concern me; firstly our IP is insisting that we use a mortgage provider of their choosing and is refusing to look at any other means of extracting equity and secondly, the valuation on which our equity release is based was conducted in 2007, since then we are all aware that the face of the property market has significantly altered and I am very concerned about remortgaging on what could potentially be negative equity. Our house was valued back then at £86,500 and our outstanding mortgage is for £56,000. However, looking at house prices in my street alone the average house now goes for about £75k and we have a considerable amount of work to be done on the property due to lack of maintenance funds over the past 6 years
We would appreciate your input
I get knocked down, but I get up again. They ain't never gonna keep me down.
Hi Shaved ape
Firstly well done on making all the payments
I thought you only had to extend to 72 payments if could not release equity.
But either way, if your property is now only worth 75k in good nick and you require work doing to it it should be valued for less say for argument sake 70k. the most you can borrow is 85% of the 70k which is 59k as you owe 56k there is not enough equity to remorgage. Best adivce is get plenty of valuations and submit the lowest
Kev, I am afraid pre-protocol proposals (say that after a few) differed wildly to those we know today. Some even stated a definite sum to be released, by whatever means.
Many of these have been varied by helpful IP's to reflect today's market and current protocols, but some IP's are particularly unhelpful and will stick to the letter of the agreement.
A lot will depend upon which category this IP falls under.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
I agree with foggy, but wanted to just welcome you to the forum and say well done for reaching the end of your IVA journey, albeit now faced with the equity release. Is there a reason this was not dealt with during the 72 months term - it appears a little confusing for me that it is happening at the end and when the PPI has been paid across - doesn't this normally occurr during the last but one year or last year of the IVA term ?
Sharing from experiences of dealing with debt
There is a solution for everyone .... Just need to stay positive !
Has the company your IP is recommending been able to come up with an offer of remortage for you?
Do the terms of your IVA specify that the calculation of equity has to be at pre-IVA valuation? I would very much doubt this - but as Foggy says the wording of the IVA proposal will dictate this. Notwithstanding this provision, you can always vary the terms as others have said.
Did your IVA offer a minimum dividend payment?
And which IP firm are you with? Are they suggesting that you take out an overall re-mortgage, or get a secured loan instead?
Our Chairmans reports says that we have to realise 75% of our equity and add 100% of its proceeds to our agreement and that we must submit at least two offers from mortgage providers. Its says nowt about using any specific lenders or brokers but apparently "failure to comply could result in the failure of the IVA" The agreement doesn't give a definite amount.
Sadly our IP has been less than useful. Myself my wife and children have endured a great deal of hardship and emotional distress to ensure this IVA reaches completion only to be told they will fail us for attempting to use another mortgage provider is soul destroying.
Our home is in a sorry state, Its in dire need of re-wiring, the boiler doesn't work (its four in a bed for communal warmth at the mo), there's dry rot in the bay window, wood worm on the stairs and both bedrooms, our double glazing is about as useful as a chocolate teapot, the front door is damaged from some fool that wanted to try and break into the house (good luck finding anything of value) there is damp from a burst water pipe that the insurance company washed their hands of (pardon the pun) and apparently there is a problem with the wall ties. To be honest, if someone offered double figures let alone 85k I'd be amazed.
I think re-valuation is the key to this. Does anyone know if this can be done via an estate agent or does it need to be done via a surveyor?
I get knocked down, but I get up again. They ain't never gonna keep me down.
OK - equity based on what valuation. Does it stipulate the one used for the IVA application itself, or one to be taken during the final year? Any good reputable local estate agent ought to be able to value your property conservatively, and taking into account all of its current delapidations.
Firstly, I have to say, I wish I knew about you before entering in with DFD. It says nothing about the value of the property except that a valuation had to be carried out within six months of the agreement starting, which we complied with.
Our minimum dividend was calculated at 38p but is now in the region of 51p after the 72 payments and PPI claims. Please understand that we're not trying to shirk our responsibilities but we have great concerns regarding the success of the IVA and being forced into negative equity.
I'm not too sure why the remortgage was put off for so long. back in year 4 we tried to remortgage but were told a whole bunch of no's from every lender we contacted. My uncle even offered to gift a payment that would have brought our dividend to 43p but we were told that we needed to "up the ante" and "sweeten the pot" my uncle then withdrew his offer because he said he was trying to conduct a business agreement not join a game of poker.
A few days before the initial meeting we were contacted by the team handling our case and told if we didn't extend the agreement from 60 months to 72 they wouldn't carry it forward. Our backs were to the wall and we had to leap before we looked.
I get knocked down, but I get up again. They ain't never gonna keep me down.
No, its basing all calculations from a valuation done in 2007. They have not requested any further valuations of the property.
Thanks for the input, I shall get in touch with some estate agents and keep you guys posted.
Once again, I'd like to thank you all, I've gained more knowledge of the workings of the IVA process from everyone on here than I ever have from my IP.
I get knocked down, but I get up again. They ain't never gonna keep me down.
My IVA started in 2007, (before protocol IVA’s), and a potential equity figure based on value and mortgage outstanding at the time was used in the proposal figures. However, when I came to attempt to remortgage in the 4th year the equity was almost double. House prices had actually fallen but my mortgage repayments made the difference as I am on a repayment mortgage. Of course, I couldn't remortgage and my IVA was extended for 12 months in lieu of equity which equates to less than half of the equity in the property. The amount detailed in my proposal was never treated as a definitive amount.
I would have loved to have acted for you shaved_ape - but best not to look back rather look forward.
Firstly, it today's world it is completely unfair for you to be required to raise equity based on a valuation that is now five years old. This can be easily fixed by your IP proposing a variation of terms to introduce the IVA Protocol conditions with regard to equity release - ie that the property be revalued six months before the END of the IVA and equity raised subject to a maximum lending of 85% loan to value.
As I think you will struggle to remortgage anyway, it may be better to offer 12 additional months payments, if you end up with any equity that would require raising. The money you have returned to creditors so far is way in excess of current averages. But I am curious as to why you have already paid over 72 months. Was yours a 6 year IVA right from the start?
I got nostalgic at the use of your term DEFCON 3. Takes me back to my military days - are you ex-forces?
Once again, your help calms my nerves (to put it politely).
Sadly, I've never served in the Armed Forces just aware of the ratings system but I am impressed that you have, a gal of many talents [:)].
Yeah, our the terms of the IVA were changed a few days before it was approved. I've never really got a satisfactory answer as to why. So our IVA was set over a 72 month period. In hindsight it seems to have gone quickly but living through it was a different matter. I shall email our IP today and put forward the notion of the revaluation. Sadly, I am skeptical of their response, like always I assume it will be met with threats of bankruptcy etc.
I get knocked down, but I get up again. They ain't never gonna keep me down.
