2nd Charge - Info Requ'd Please ?

greenspun.com : LUSENET : Repossession : One Thread

A close friend is having his home repossessed by their building society as they can no longer afford the mortgage payments due to ill health over several years. (They have no access to a computer for the same reason). However, they have also got a second charge charged to a bank. Do they have to notify the bank about the possession proceedings with the building society ? They have considerable negative equity and there will be nothing left to cover the first charge let alone the second charge. Can and will the second charge/bank object and should they be a party to the proceedings ? any info for them would be appreciated. Thanks, Kenny.

-- Kenneth Haymes (kennyhaymes@aol.com), January 19, 2001


The Bulding Society will be in what is called a Ist Charge position,and the bank should be in a second charge Position, Either can apply for Repossession proceedings .if we presume and you check .What is called Deed of Postponment is in place.

This is usually standard procedure were the Bank agrees to go behind the Building Society,hence the name second charge and it is Registered with The Land Registry.

The bank if not aware should be put on notice perhaps this has been already done if they have a Lawyer acting for you. The negative equity position will not effect the Bank if no funds are left from the First Chargee ie The Building Society

The comment used by many lawyers in this Problem is it is like waving your hand in the Albert Hall! for there are no funds left.

One point that can be looked into though is if the second charge to the bank was not joint or was signed by the wife for help towards a buisness then you could have a case ( there are many case studies on this) which would possibly leave the wife with a claim if not advised at the time by the bank ,what the loan was for. This would change or could change the equity position and leave a percentage left which is your wifes!

To sort this out you need a good lawyer who,is used to this sort of Problem-the only thing then is the Funding of the case which if you cannot get Legal Aid For what ever reason - then comes the problem! AS you already state that there is no funds left for the Building Society-there will be none for the second ie the bank and if as you state your friend has not worked due to ill health, although you do not state if the DSS have been paying anything. towards this or you have a Income protection policy?

There will presume lack of payments at the bank also you do not state this?

These are some of the various issuses that arise and many Qustions that follow on -hope this has been of some help-but advice your friend to get legal advice on this ASAP


Charles Twford

-- charles twford (twford@lineone.net), February 08, 2001.

Moderation questions? read the FAQ