Newbie: Father in a bad equity release scheme

[pbrady]

My father was either mis-sold or unwisely bought an equity release scheme. The solicitor who advised him has since been disbarred and the firm she worked for (which had been in the local high street for many years)no longer exists. The original debt has been charged at a high rate of interest and is now more than three times the size of the original loan and continuing to acrue interest well above what you'd get on a bank loan.
I have obtained power of attorney for my father but unless I can do something about this skyrocketting debt without realising my father has effectively sold his three bedroom house for £20,000
The company who hold the debt are Papilio UK. Can anyone advise as to realistic options? I am seeing a solicitor next week but any guidance would be appreciated.

[enquirer]

Re: Newbie: Father in a bad equity release scheme

The Terms & Conditions should be thoroughly checked as it may be that they are so unreasonable as to be unenforceable.

Given that you now have POA, might it be that your father was not capable of managing his own affairs at the time he agreed to this arrangement? If so, the validity of the whole thing is thrown into question.

The fact that the solicitor concerned has been disbarred may well mean that he was misled as to the nature and terms of the agreement. Knowing nothing of these matters, your father put hismelf in the hands of an expert professional upon whose advice he relied.

Would a little digging turn up any sort of relationship between the firm and the solicitor?

[CleverClogs]

Re: Newbie: Father in a bad equity release scheme

The company who hold the debt are Papilio UK.

Was it originally with Northern Wreck?

It would appear that Papilio UK Equity Release Mortgages Ltd is not licensed to operate or administer mortgages in the UK - link

[PlanB]

Re: Newbie: Father in a bad equity release scheme

Was it originally with Northern Wreck?

It would appear that Papilio UK Equity Release Mortgages Ltd is not licensed to operate or administer mortgages in the UK - link

Clever you Cleverclogs. Would that be the same J. P Morgan (of course it is) which is behind these rogue financial/mortgage deals in this recent press report:


http://www.thedailybeast.com/article...ine-tally.html

We should be told.

[PlanB]

Re: Newbie: Father in a bad equity release scheme

Equity Release schemes were eventually regulated by the FSA so a lot will depend on when your father took out this plan. Do you have a start date?

These schemes are now monitored by the Equity Release Council (formerly SHIP) which has a code of conduct for members etc.

http://www.equityreleasecouncil.com/...lease-council/

A little more information will help us to help you

[CleverClogs]

Re: Newbie: Father in a bad equity release scheme

These schemes are now monitored by the Equity Release Council (formerly SHIP) which has a code of conduct for members etc.

http://www.equityreleasecouncil.com/...lease-council/

Papilio UK Equity Release Mortgages Ltd - as one might have predicted - are not members.

[IanM]

Re: Newbie: Father in a bad equity release scheme

My father was either mis-sold or unwisely bought an equity release scheme. The solicitor who advised him has since been disbarred and the firm she worked for (which had been in the local high street for many years)no longer exists. The original debt has been charged at a high rate of interest and is now more than three times the size of the original loan and continuing to acrue interest well above what you'd get on a bank loan.
I have obtained power of attorney for my father but unless I can do something about this skyrocketting debt without realising my father has effectively sold his three bedroom house for £20,000
The company who hold the debt are Papilio UK. Can anyone advise as to realistic options? I am seeing a solicitor next week but any guidance would be appreciated.

Do you know why the solicitor was disbarred?
Have you asked the SRA for a copy of the solicitors file in relation to your father?

Forgot to say, if the solicitor was investigated by the SRA an independent solicitor would have been appointed to take over the case files of the solicitor that was disbarred, if the file was already closed or not had a complaint made by the client it would have not been looked at for discrepancies unless it was selected by chance to be looked at by the investigators.

If you can obtain the files from the solicitor you may find evidence to show some kind of negligence or fraud in the setting up of the original loan and may have grounds to make a claim against the solicitor or the company that insured them at the time they acted for your father in respect of the loan and the interest it has accrued since inception.

Look at every angle, especially if the solicitor has already been disbarred!

[PlanB]

Re: Newbie: Father in a bad equity release scheme

My father was either mis-sold or unwisely bought an equity release scheme. The solicitor who advised him has since been disbarred and the firm she worked for (which had been in the local high street for many years)no longer exists.

If your father was the victim of mis-selling then the villain of the story would be the salesman not the solicitor. The solicitor would have some duty of care but I wouldn't think he can be held responsible if the product was unsuitable since he wouldn't have advised on its suitability. Although you could argue that the solicitor should have checked for an unfair clauses in the contract.

What you need to explore is whether the solicitor was impartial. Did he act for your father and the lender at the same time? Did your father source his own independent solicitor or was this one recommended by the lender? Or, worse still, was it a condition of the loan that your father instructed the solicitor nominated by the lender?

Equity release schemes are normally sold through brokers. Was this the case with your father? If so then the broker would be the villain of the story if the product was not suitable or appropriate for your father's needs.

[pbrady]

Re: Newbie: Father in a bad equity release scheme

Thank you for your advice, it is greatly appreciated. In terms of further information. The original scheme was with Northern Rock and it was sold to Papilio after its collapse. I am currently untangling paperwork, my father was legally competent when the loan was taken out. Unfortunately he can no longer remember exactly when that was but from the papers I have seen so far the earliest it could have been was June 1993 and the latest was March 1994. Thank you again for your time and advice.

[pbrady]

Re: Newbie: Father in a bad equity release scheme

The solicitor (who was later disbarred) was reccomended by the lender (Northern Rock). My father did not go through a broker, he is old fashioned and talked to the place he had his old mortgage.

[pbrady]

Re: Newbie: Father in a bad equity release scheme

Sorry, my father said 1993 he and my mother signed the equity deal with Northern Rock on 13th April 2003.
Currently I am looking to be as informed as I can be before I see the solicitor tomorrow. My current thinking is that I have two approaches;
1. The solicitor was the one suggested by the lender and she was later disbarred for fraud (three cases apparently). I suggest that my father may have received negligent or advice that was not impartial. As he mistakenly did not take other advice his solicitor was his only source of information. My father was still legally competent at this time.
2. The company that holds the debt. I have no idea how realistic it is to argue that they are not licensed for mortgages in the UK or anything else.


Any thoughts would be appreciated. Are Papilio UK holding a mortgage on the house or a debt from my father secured against the property? I have been thinking about possibly trying to raise finance to pay the debt in full, leaving us with another debt but possibly at a lower rate of interest?
Thanks for you attention.

[PlanB]

Re: Newbie: Father in a bad equity release scheme

Are Papilio UK holding a mortgage on the house or a debt from my father secured against the property?

You can check the details of the charge Papilio have placed on your father's property using Land Registry's online facility. It will only cost you £3 for an instant PDF download. You can also get a copy of the original mortgage deed for a further fee but I think that has to be done in writing (it's an anti-fraud thing).

http://www.landregistry.gov.uk/publi...erty-ownership

You will need a copy of the original equity release contract signed by your father so you can check for any unfair contract terms.

I'm not sure whether the fact the solicitor was subsequently disbarred is helpful unless your father was one of the three clients who were defrauded. That doesn't necessarily mean she was negligent with all her clients. Although I believe in 'no smoke without fire' you would need hard evidence that she did, or didn't do, something to your father's detriment.

I'm leaning towards the mis-selling argument because this product had to be *sold* to your father. Even though there may have been no rogue broker involved that doesn't mean that the NR branch manager wasn't on commission for selling the equity release product to your father who was already a customer. He should have been told he could get a better offer elsewhere etc etc. Was he also sold any life insurance product at the same time?

And most importantly, did the bank advise your mother to take independent legal advice at the time? I'm assuming the property was in joint names, or in the very least she would have had a beneficial interest in the house, so I expect she had to sign something at the time. This can be most significant. Plenty of case law on this issue if necessary.

[simonpieman]

Re: Newbie: Father in a bad equity release scheme

Hi, I am in the middle of one of these things. here I may be able to help. Is the mortgage variable or fixed?. If it is fixed on the agreement but sold as a variable then there will be an addendum changing it to variable. Check to see if the addendum is valid. named, signed and dated. 2. Check other charges, total them up, check the amount deducted from the loan by the broker, add them together, if they come to the amount on the agreement and added to the loan it is fraud. 3. check the duration, e.g. 35 years or 420 months. If interest is calculated annually it will be a certain amount. If it is calculated on a monthly basis, it will be more, it will say in the agreement, 35 years, or 420 months or whatever the duration should be. If it is months then the interest rate has been intentionally inflated, this is illegal. check these points, make sure you have all the docs to hand. Hope this helps, if you find something tell me here and I will try to help you. Simon

[simonpieman]

Re: Newbie: Father in a bad equity release scheme

By the way, I have exactly the same mortgage as you with the same firm. Northern rock transferred to Papilio. If you go to the FOS do not accept the adjudicators findings, they will be wrong. If Papilio are reading these threads, hiya boys, Im not going away lololol Let me know how you get on Simon

[theholders]

Re: Newbie: Father in a bad equity release scheme

HI we are newbies and have just discovered our parents have done exactly the same with equity release and just wondering how you have got on with Papilio