Saved in the nick of time

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Due to ill-health three years ago we built up arrears with First National Bank who had a second charge on our house. I suppose we were lucky to get away with the arrears for so long but due to a combination of false promises and the usual case of burying our heads in the sand, we did.

Davis & co then got involved and did their best to have us evicted. Their Miss Raja, (anyone heard of her?), told us that First National would be open to an offer to settle. When we made an offer she stated that they would only accept the full amount. What's the point in saying they'll accept an offer and then saying they won't?

With 20 days to go before the eviction we contacted a mortgage broker who arrived, covered with gold chains in a soft top Jaguar. My first reaction was that he was a con artist who was only trying to rip us off. He left two hours later and I still had the same opinion.

Within seven days the house had been valued, the solicitors carried out the conveyencing in one day instead of the usual four weeks and had the eviction stopped and we had a mortgage offer a week later and paid off the Halifax and First National. I couldn't believe how fast everything was done.

It's true to say that the interest rate and brokers fees are very high but now that we've got good money coming in again they're very affordable and are certainly better than being evicted.

I've purposly not posted the brokers details because I don't want to look like an advert.

I just hope anyone reading this who is in the same position that we were in can realise that there is always hope.

-- Dave Spencer (riders@btinternet.com), September 09, 2003

Answers

Hi I may be in the same boat as you were. but not as bad I hope, Iam glad you got sorted, I am currently been riped off by Legal & general also the Alliance & lesicster, and my payments are increasing for insurance & morgage etc.

maybe you can send me the brooker that helped you as the big names just want to do a rip off procedure.

Thanks & regards

-- frustrated (lychpit@tinyworld.co.uk), September 09, 2003.


Dave, whilst i know this message come too late for you, it is really intended for all who read your success story and in particular those who may wish to follow your steps.

Whilst I appreciate that you really wish to resolve mortgage arrears problems, it is not always the best to go to a sub prime/non status lender. There are many companies out there who will lend to you, and often pray on vulnerable borrowers in unfortunate circumstances. Brokers may charge you huge fees for setting up the mortgage or secured loan these are the fees you know about and pay because they are doing you a service by finding you the best deal.

Some brokers also take payments and commissions from the lender which are not disclosed to you. If the broker receives payment from the lender over 250 they are required to tell you. There are those that do not.

What you must ask yourself is this how can they get me the best deal when their income is based upon or supplemented by an undisclosed payment from the lender?

You must ask what benefit the broker has by recommending this product to you. Insurances are also pushed and many fail to be of any benefit when called upon, or would never cover you anyway.

If you do decide to go this way take a look at the interest rate is it the best you can get?

Take a look at the small print especially any extra charges which occur if you are late or miss a payment. They will also attract interest throughout the term of the loan.

Look out for deferred legal costs these attract interest throughout the loan and can mean that you are left with many thousands of pounds to pay at the point where you think you have reached the end of the term.

Do not make a panic decision to enter into a sub prime/ non status mortgage or secured loan.

Ask questions lots of them. Seek legal advice BEFORE you sign anything.

-- Lexie (lexie.fabriane@ntlworld.com), September 09, 2003.


Sub prime borrowers considering a loan(or mortgage) secured on your home please note: -

Some tips for ensuring you are with a legally compliant broker

Before signing anything ask the broker to provide you, note them

1 Data Protection License number 2 Consumer Credit License number 3 Mortgage Code Compliance Board (MCCB) Number 4 Ask to see a copy of their Professional Indemnity Insurance and ensure the expiry date has not lapsed. 5 Get their Terms of Business letter and business card 6 A detailed summary of their reasons why recommending this product 7 Note the advisors related qualifications if not mentioned on the business card

If the broker is charging you any fees not required by the lender as stipulated on the offer or agreement ensure it is written down how much they will receive from the lender(should really be within item 6 above).

If the broker is awkward or evasive about you needing any item(s) from this list DO NOT USE THEM.

Any REPUTABLE broker when asked will quite happily provide the information to you and will understand your unease.

If the broker says they do not have number 3 but can provide all other information. Many Secured Loan companies do not have a MCCB license and these companies do not require introducing brokers to have it either. Because they claim the finance to be a loan and not a mortgage (what is the difference when secured on property I would ask?) - USE THEM AT YOUR OWN RISK - YOU HAVE BEEN WARNED. In short the MCCB certificate confirms to you they have provided evidence to the Compliance Board of fairness and have demonstrated good knowledge regarding advice.

If you do all the above then there is some form of protection in place. Should you have an issue at a later date then you have a process of complaint and if found in your favour by independent ajudicators you have a claim of compensation. These are in addition to your normal legal rights and can be a lot cheaper than solicitors.

finally,

Shop around with the insurance companies regarding payment protection. This is highly profitable for brokers and some BAD brokers even have the lump sum fee added to the Loan increasing their commission whilst the policy generally doesnt cover you for the full term! - this is not necessary and if you are told that this is a requirement DO NOT PROCEED, any RESPECTABLE insurance company will accept monthly payments.

-- fairer financial world (fairerfinancialworld@hotmail.com), September 11, 2003.


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