felixthecat v welcome finance

[felixthecat]

Hi all

I took out a secured loan with Welcome Finance in 2005. Soon after i lost my business and got into difficulties. I ended up with CCCS for some unsecured loans and credit cards. I moved into rented accommodation and put my house on the market. However the house didn't sell for 6 months and i had to drop the price. In the end the house sold for more than the mortgage but not enough to pay off the secured loan as well. As i was then in areas with my mortgage the Halifax wanted to sell and it went through. After the Halifax had taken my areas and early payment fees they gave £1750 to Welcome.

This is where the problems started. I tried to continue paying Them my payment but they kept saying they couldnt find my details as my account was being sent from the branch to head office and was in the middle somewhere so was not showing on either system. This went on for months every time i tried to make a payment. Eventually they started phoning my father who i had not used as a garantuor but only as a reference. He didnt give them any infomation as he thought it might be a scam but when i tried they could not find any record of me.

Eventually someone rang me and thought my house had been repossessed. I told them we had sold it and he said the loan was now an unsecured loan. We added it to CCCS and paid them £90 a month. This has been going along fine until this month. We have stopped using CCCS as they were paying some payments late and it is easier for us to pay the creditors direct. We agreed with them all that we could pay the same amount but we would pay direct.

Now Welcome are saying they want the original paymet of £280 a month hich we cannot afford. They have also told me that my account
balance is £19500. We only borrowed £15000 and we were paying £280 a month before the problems started. Then they had £1750 from
the house sale and £90 a month for 18 months. We owe £4500 than we originally borrowed.

They also said we do not have an unsecured agreeement with them at the moment and we need to sign one. Im not sure if i should and
would be grateful for any advice.

I would like to just carry on paying them £90 a month and pay the balance down but it has actually been going up for the last 3 years.


I would appreciate any advice on this matter and would like to know where i stand legally now the secured asset has been sold and
i dont have a credit agreement.

I sent the SAR letter off to Welcome along with a postal order which they received on the 30/10/08.

On the 14/11/08 i received a short statement of my account from the beginning. However this just shows money as a credit or debit. There are £10 debits going out all over the place. Also every time i paid £97 through CCCS they have added £285 in interest. At this rate i am just owing more and more. They have not sent me a copy of my agreement or anything else.

They do however keep asking me to sign a new loan agreement every time i ring to make a payment.

Then i received my agreement


Could someone tell me if this is enforceable? This is all they sent me though despite this sheet saying it is sheet 5. It was in response to an SAR so surely i should have got more. There are numerous charges on my statement so shouldnt i have been sent copies of all letters sent to me in the past?

As i have said this loan has now become unsecured as the property has been sold. I would like to know what my legal situation is as this is a secured agreement and i have not seen anything that tells me the new terms and conditions.

Regards

Felix

[LuggerBugs]

Re: felixthecat v welcome finance

As far as I remember, they send out a pack with everything in it, so it is quite feasible that this is in fact page 5. They have sent you the pertinent page, ie the actual agreement. This is all they are required to do, and if they tried to enforce it, no doubt they would be able to produce the whole pack.

As to its enforcability, I'll leave that to someone else to answer as it certainly seems so at first glance to me.

The 19% and 15.4% bits confuse me somewhat though. Hopefully someone will be able to explain better.

[TANZARELLI]

Re: felixthecat v welcome finance

Hi felix,

I am no expert on agreements and its always a tricky road to go down to prove its unenforcable.

Not 100% so hopefully someone else may be able to offer their thoughts on this bt if the original agreement was a secured loan agreement and you no longer have a property to secure it on then surely they would need to provide a new agreement as surely the terms of a unsecured loan vary than that of a secured loan.

With regards to the short statement of account, this is something that lenders are now required to provide to customers and I had one around about the same time if I remember rightly.

Have they fully complied with your SAR yet?

The £10 amount I think you will find these are charges. I would total these up and whack them into a spreaddie and request they refund these. WFS have refunded my charges for loans taken out post Jan 2005 when they became regulated by the FSA. Your loan will come into this jurisdiction and therefore the FOS will look at a complaint of this type.

Whack the charges into a spreaddie and request they refund these with interest.

I take it there was no PPI as you have said you were self employed when taking out the loan, is this correct?

[scoobydoo]

Re: felixthecat v welcome finance

Did you think that when you had the agreement of £90 per month that the interest had been frozen and you were actually repaying just the debt?

[LuggerBugs]

Re: felixthecat v welcome finance

A quick tot up of the APR seems to indicate that you were possibly being overcharged. I'm not sure that this would be enough to have the whole agreement declared unenforcable though.

[felixthecat]

Re: felixthecat v welcome finance

They have sent the statement i mentioned and the page 5 of the agreement i posted above. Does this mean they have complied with my SAR or are they still in default. They have also sent a letter saying they have charged me £10 for each letter they have sent in response to my SAR.

Someone mentioned the fact that they have added the fees to the total amount. Is this not allowed?

Also, does anyone know the legal position regarding secured to unsecured loans. I cant quite get my head around the fact that my agreement is for a secured loan but my loan is now unsecured. Surely there must be a whole new set of terms & conditions. I would like to read whatever it is that says my secured loan will become unsecured if the house is sold. Would this have been on the original agreement or is it just a law that is written in the consumer credit act?

If it is in the original agreement then surely they should have at least sent me that page as well. I have not seen anything from them regarding new terms and conditions. They are trying to get me to sign a new unsecured agreement though. Should i do this?

Regards

Felix

[scoobydoo]

Re: felixthecat v welcome finance

Bumping this thread up is there anyone that can help?

[LuggerBugs]

Re: felixthecat v welcome finance

This seems ratherstrange. Technically, if Welcome have a charge on your property, but you then sell it, then I would have thought, although I don't know, that Welcome would have been entitled to ask you to pay off your debt from the proceeds, if there was sufficient equity.

However, it's obviously in Welcome's best interests for you to carry on paying over the remaining term of the loan, as they'll get full benefit of all that extortionate interest. Hence, I suspect, their request that you continue as if the loan was unsecured. Obviously in must be unsecured, since they do not now have a charge on a property that you own.

BUT. Where does that leave the new owners of the house? They now possess a property that DOES have a charge on it, albeit in someone else's name, ie you. I am very surprised that this was allowed to go through.

I would think that if you don't play ball with Welcome, this could get a bit nasty. I wish I had an answer, but it's all a bit too twisty for my poor brain to grasp.

[felixthecat]

Re: felixthecat v welcome finance

Hi

The reason the proceeds of the sale didnt cover the loan was because the house went for alot less than it was valued at. It was sold under a power of sale by the mortgage lender the Halifax. Basically i was in arrears and was looking at repossesion. I found a buyer so Halifax forced the sale through. I have now received my SAR pack from Welcom and in it there is a letter from the Land Registry saying that as a consequence of the sale the charge on the property in Welcomes favour has been cancelled.

So, i now owed Welcome around £14,000. The secured loan was surely now cancelled as there was nothing to secure it on. I never signed a new unsecured agreement. How therefore can they keep charging me the extortionate interest every month. I would gladly pay back the £14,000 monthly if they would stop charging me interest but they are adding £290 a month. This is more than i can pay and the debt is just getting bigger.

I really dont understand how this works. Surely the interest rate was for the secured loan which is now invalid.

[TANZARELLI]

Re: felixthecat v welcome finance

I really am not up on secured loans and mortgages, charging orders and the like. I have never had a mortgage as have always rented.

If nobody is able to offer a comment on this then why not try writing to the FSA for clarification on the secured to unsecured situation. WFS should have been regulated by the FSA in 2005 so you might get some answers from them.

I wish I could be more help on this and will try to get some other peeps to visit this thread for comment.

Tanz

[LuggerBugs]

Re: felixthecat v welcome finance

I wouldn't have thought that much changes apart from the fact that Welcome now have no property to rely on in the event that they want to enforce the loan. Unless there was anything in the contract that stipulated what would happen in this scenario, then they cannot force you to sign a new agreement.

To do so would probably be to your detriment anyway. With nothing to secure the loan against, the interest rate would probably be considerably higher than you are paying now. Unless you can successfuly negotiate an agreement that suits you better than the arrangement that was in place before.

By the sounds of things, since your house was forcibly sold, things are not good for you financially. So look at it this way... even if Welcome finally default you on this loan, what difference does it make? Even taking you to court would be counterproductive, as the court would only tell them to accept what you can aford to repay.

I don't know your circumstances; what other debts you have, or whether your problems are short term or long term. But I think you need to accept the reality that Welcome have an enforcable agreement, even though they now do not have a charge on your property, and so could try to enforce this in any case. What THEY need to realise is, if they don't play fair, they could end up merely getting drip fed for ever.

I see you are with CCCS, so I assume a DMP? It doesn't appear that Welcome are paying a blind bit of notice if this is the case. If they were, they would not be adding huge chunks of interest every month.

Unless anyone has any ideas to the contrary, I would be tempted to write to ask for them to draw up a new agreement based on what YOU can genuinelly afford to pay, otherwise you won't be paying them a bean. They will then have to default you, and either sell the debt on, or try to get a court to enforce it. The second may be the best option, as you won't be asked to pay more than you can afford. If the debt is sold on, you'll just be back to square one with the new owner.

I do hope somebody has better ideas than me.