Mortgage & Equity Queries

[leaKybrain]

Will do HM.

If the typed valuations arrive by Monday I will be ringing them on Monday, mainly to see what's happening with the review, but also send this through and get the PPI started as well.

[leaKybrain]

I was googling, re the joint / individual £5k bit. Found this very informative site
http://debtcamel.co.uk/iva-equity-release/

[Helen.k]

I would have challenged my IP on whether it was £5k each or between, but decided to pick the easier fight, of getting the house valued, which I knew we would win without a problem.

I do wonder though, why they would lie to us about how they interpret the equity clause?

[Michael Peoples]

LeaKybrain.
The wording on your report could be interpreted differently to the de minimis clause in Protocol.
Yours states;
''If that valuation shows that 85% of my interest in the property (after deducting my share of the mortgage) is less than £5,000 then I need contribute no more to the arrangement.''

This does not refer to a remortgage at 85% loan to value so for example you have a jointly owned house worth £100k and a mortgage of £80k. Under Protocol a remortgage at 85% loan to value would raise £2,500 each so would be under the threshold but 85% of 'your interest in the property after deducting the mortgage' is actually £8,500 each. It is therefore arguable that in such circumstances as described your IVA could be extended even though under Protocol it would not be. Hopefully your IP interprets it as Protocol and does not extend.

[harrysmummy78]

I think that was standard wording on PJG proposals Michael but it does go on to say.
• The remortgage amount will be a maximum of 85% of your loan to value (LTV).

[Michael Peoples]

Hopefully that is the case but it certainly can be read that if there is no remortgage then the equity calculation is done on the debtor's 'interest' in the property which implies after deduction of the outstanding mortgage only.

Maybe I am being over picky and CF just close the case.

[leaKybrain]

I must be boggled because I can't make my head understand what you mean Michael in your last but one post, sorry.

''This does not refer to a remortgage at 85% loan to value so for example you have a jointly owned house worth £100k and a mortgage of £80k. Under Protocol a remortgage at 85% loan to value would raise £2,500 each so would be under the threshold but 85% of 'your interest in the property after deducting the mortgage' is actually £8,500 each. It is therefore arguable that in such circumstances as described your IVA could be extended even though under Protocol it would not be. Hopefully your IP interprets it as Protocol and does not extend''

I think I'm reading it to mean, they would look at 85% of the interest in the total value less mortgage then split between us...is that right.

The next line in the report refers to if its above £5k but the wording has the extra three words that says 'in the value' of the property. It looks to me as though when they typed out the report they didn't use the same wording on both lines to refer to the interest..one saying interest in property, other saying interest in the value of the property.

The release of equity clause then says what HM said, the remortgage amount will be a maximum of 85% of my loan to value.

The phrase Loan to Value isn't easy to understand, but I just googled and found another place that explained it.

[Michael Peoples]

Your reading is right in that 85% of your interest in the property could mean the total equity. The remortgage part could be read separately and interpreted differently but perhaps that was not the intention. Hopefully CF stick to the Protocol side but if this was a modification proposed by a creditor rather than in the proposal you could end up with an extension in such cases.

[leaKybrain]

This wasn't a modification, I remember clearly that none of the modifications were to do with the equity. Its in the original Chairmans Report that was sent to us to sign.

I'm thinking that this is probably the wording on most of the reports that commenced around the same time with PGJ, I don't see that someone would type out the same wording again and again for every report. I know when I worked in an office we would cut and paste or have a template to work from for letters and policies. So as other people will have had the same wording and not had the extension, I will take that as being the way of it. Thank you again for your help and especially patience...I know I ask a lot of questions but I always like to make sure I understand what I am reading