LTV exceeding 125% at Application

[hughesee]

Hi
If an application was made for an Unregulated Secured Loan in January 2007 and it exceeded the maximum 125% LTV, does this mean the Loan is unfair/unenforceable or some other means of not being valid or lawful?

[meellis]

Re: LTV exceeding 125% at Application

I would imagine it would be considered with a lot of other factors, they seem to believe in court that if you have kept up repayments then you have demonstrated affordability. It would also depend on whether this was all indicated on the application or was hidden. It seems irresponsible but being un regulated the rules didn't apply so heavily. Who was it with and did the broker know LTV and not pass it to the lender or did the lender know?

[hughesee]

Re: LTV exceeding 125% at Application

Hi
I'm not really looking at affordability, I was wanting to understand the fact that the Lender could only borrow up to 125% LTV and they borrowed above this, there is no Broker, the Lender was Picture Finance who transferred the debt to Webb Resolution and then to Idem who most recently repossessed the property

[charitynjw]

Re: LTV exceeding 125% at Application

Hi hughesee & welcome to LB.

Are you saying that the original mortgage was given a cap at 125% LTV, which was for some reason exceeded, or is it the case that subsequent borrowing brought it above the original LTV?

[meellis]

Re: LTV exceeding 125% at Application

Sorry that you didn't understand my post. The LTV would probably be viewed two ways by the court system. The first way would be in the security held by the lender and whether they were aware of a shortfall. If picture demonstrate that everybody was aware that the LTV was high and they prove this was taken into account when risk assessing then at best it is irresponsible. The second thing the court would look at is affordability, the 125% limit is a guideline to affordability in that it is a higher cost loan against a security that has demonstrated your affordability. The fact the property has been repossessed indicates that affordability was and issue to them for whatever reason. I take it that IDEM are now chasing for a shortfall, if so the courts will view that as the dirty debtor (you) were happy to except the loan and spend it and is complaining now that it as gone wrong. How much was the loan for and how was it made up, have you made a SAR request for all the paperwork including the valuations and risk assessment? You need to find out if the valuations were presented correctly on the risk assessment or whether they were massaged shall we say and if so whether you were aware of this and whether they can prove you were aware of this. Also you need to try and find out if the picture salesman was driven by high commission that you were unaware of especially in the sale of insurances.

[hughesee]

Re: LTV exceeding 125% at Application

Thats not what I asked and assuming things and replying is not really ideal. All I asked was a very simple question if the LTV was maximum 125% and it exceeded this % was the Loan then void unlawful unfair etc...Using the word dirty debtor is not really called for is it?

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Max LTV was 125% and was exceeded

[meellis]

Re: LTV exceeding 125% at Application

Sorry for using the words dirty debtor, no offence intended, just the ways the courts view people like me who question my own un-regulated loan when re-possession is tried. Simple answer is the loan is un-regulated ie not covered by regulations so LTV would only be guidelines not law. There might be issues regarding unfairness, irresponsible lending and others that you might be able to challenge on but it will not be a simple answer to a simple question.

[charitynjw]

Re: LTV exceeding 125% at Application

Thats not what I asked and assuming things and replying is not really ideal. All I asked was a very simple question if the LTV was maximum 125% and it exceeded this % was the Loan then void unlawful unfair etc...Using the word dirty debtor is not really called for is it?

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Max LTV was 125% and was exceeded

Sorry for using the words dirty debtor, no offence intended, just the ways the courts view people like me who question my own un-regulated loan when re-possession is tried. Simple answer is the loan is un-regulated ie not covered by regulations so LTV would only be guidelines not law. There might be issues regarding unfairness, irresponsible lending and others that you might be able to challenge on but it will not be a simple answer to a simple question.

Lol to meellis's 'dirty debtor'
[MENTION=84317]hughesee[/MENTION] - meellis has been posting on LB for some time now, & from what I can see, I reckon I'm on pretty safe ground when I say that the 'description' used is meant to encompass the way judges tend to view most debtors.
Whether it it correct to assume that..............I couldn't possibly comment, lol!

[charitynjw]

Re: LTV exceeding 125% at Application

Thats not what I asked and assuming things and replying is not really ideal. All I asked was a very simple question if the LTV was maximum 125% and it exceeded this % was the Loan then void unlawful unfair etc...Using the word dirty debtor is not really called for is it?

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Max LTV was 125% and was exceeded

From what I can see, back in the day it was not uncommon to see LTV of 125%

I guess you would need to see the contract/agreement, together with the T&Cs & variations of same to find out whether an increase was/is permissible.

[Fred]

Re: LTV exceeding 125% at Application

Just a point over LTV, there is a huge difference in some lenders (sometimes questionable) valuations as, it seems they did what they did for differing business reasons & when questioned deny anything was wrong with what they consider their opinion/system at the time of the decision.

If they broke their own rules or contact terms then, the FOS would have something possibly for you. I very much doubt if they did find something that it would make the agreement unenforceable. You need a much stronger case for that kind of ruling.

[hughesee]

Re: LTV exceeding 125% at Application

So why state max LTV 125% if you are allowed to exceed this %?

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FOS won't look at it as it's a Non-Regulated Secured Loan.

[Fred]

Re: LTV exceeding 125% at Application

So why state max LTV 125% if you are allowed to exceed this %?

It depends what the valuation was ?

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FOS won't look at it as it's a Non-Regulated Secured Loan.

Why, is it a business loan ?

[hughesee]

Re: LTV exceeding 125% at Application

Valuation was £145000 not a Business Loan, was a Secured Loan on the property
Max 125% LTV £181250 less Mortgage o/s £145000 so only 36250 max Loan not 43500 as per application so they breached the Max LTV of 125%

[Fred]

Re: LTV exceeding 125% at Application

So it is covered by the ADR supplied by the FOS.

& from what your figures suggest they, have breached "their" own rules @ inception ?

[hughesee]

Re: LTV exceeding 125% at Application

ADR? I have tried on numerous times with the FOS but they won't entertain it. I am trying to understand the validity of the Loan based on the LTV breach.