Whos fault and what steps to take next?

[Inapickle2011]

I wondered if any one could help? I have bought a new build house on a shared equity scheme. We were thinking about moving and called into the bank to see what mortage we could get when we were then advised that our existing mortage has not been flagged as a shared equity home. Unbeknown to us until reading through all the paperwork the bank has allowed us additional borrowing and a payment holiday which would certainly not be allowed due to the house been in negative equity. Should the bank been made aware of this at time of doing the mortgage? Have they failed in doing searches on the property with us having a secondry lender? Why has this been allowed to happen? I have advised the secondry lenders of the situation and they have said when we come to sell the difference between our original mortgage and the sale price will go to them whhich is fine, however when I have asked the bank about the amount that will be outstanding when we sell they have said we have to pay in full and there is no room for negotiating a payment plan.