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Possible Mortgage Overlend? (2002)
Hi,
I am by no means an expert so bear with me but I'd like some rough guidelines on steps to take here.
My parents purchased their house for £70,000 in 1997. The property is a leasehold due to expire in December 2065. All the following are joint agreements but my father made most of the decisions.
In 2002, they remortgaged the house for £126,000 with Standard Life Bank, to cover:
- Arrears on mortgage, at ~£85,000
- Credit card debt for ~£30,000
Now this money was lent presuming a house valuation of £140,000. After a GDPR request I recieved documentation for this mortgage showing that my father was borrowing the maximum amount he could: £126,000, seemingly capping out at a 90% LTV ratio.
The issue is, I also obtained the valuation report for this remortgage, which has the property marked as freehold, not leasehold, potentially inflating the house's value, and lending my parents too much as a result.
The remortgage breakdown refers to the house as a leasehold worth £140,000, so the bank was definitely aware.
It seems like the bank didn't employ due dilligence looking over these records to find what is seemingly an obvious fault, and my parents were allowed to borrow too much money at once?
(My parents financial situation did suffer following this:
- £58,000 firstplus loan in 2004. (yeah, I know. what a mess)
- My dad went bankrupt less than a year later.
- My mother basically had no idea what was going on and suffers from mental health issues stemming from her relationship breakdown and financial situation.
I'm not explicitly blaming this loan because as you can see, there was a pretty dire excuse for money management evidently going on at the time. Just incase it's relevant)
What I would like to know is, do you guys think it's worthwile to:
1) write to Barclays (who since acquired the mortgage via Woolwich) asking if the house was valued accurately, and if they made a mistake.
2) try and ask for a partial writeoff to reduce the current value of the mortgage: ~£120,000 to where it should be had they only lent my parents how much they should have done at the time.
I understand that this is a long shot and would appreciate some advice
Thank you for your time.
I am by no means an expert so bear with me but I'd like some rough guidelines on steps to take here.
My parents purchased their house for £70,000 in 1997. The property is a leasehold due to expire in December 2065. All the following are joint agreements but my father made most of the decisions.
In 2002, they remortgaged the house for £126,000 with Standard Life Bank, to cover:
- Arrears on mortgage, at ~£85,000
- Credit card debt for ~£30,000
Now this money was lent presuming a house valuation of £140,000. After a GDPR request I recieved documentation for this mortgage showing that my father was borrowing the maximum amount he could: £126,000, seemingly capping out at a 90% LTV ratio.
The issue is, I also obtained the valuation report for this remortgage, which has the property marked as freehold, not leasehold, potentially inflating the house's value, and lending my parents too much as a result.
The remortgage breakdown refers to the house as a leasehold worth £140,000, so the bank was definitely aware.
It seems like the bank didn't employ due dilligence looking over these records to find what is seemingly an obvious fault, and my parents were allowed to borrow too much money at once?
(My parents financial situation did suffer following this:
- £58,000 firstplus loan in 2004. (yeah, I know. what a mess)
- My dad went bankrupt less than a year later.
- My mother basically had no idea what was going on and suffers from mental health issues stemming from her relationship breakdown and financial situation.
I'm not explicitly blaming this loan because as you can see, there was a pretty dire excuse for money management evidently going on at the time. Just incase it's relevant)
What I would like to know is, do you guys think it's worthwile to:
1) write to Barclays (who since acquired the mortgage via Woolwich) asking if the house was valued accurately, and if they made a mistake.
2) try and ask for a partial writeoff to reduce the current value of the mortgage: ~£120,000 to where it should be had they only lent my parents how much they should have done at the time.
I understand that this is a long shot and would appreciate some advice
Thank you for your time.
