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25/03/2009 2:43 pm
Hi
Further to my recent posts, my husband and I both have TDs which are due to conclude at the end of April 2009. We remortgaged in year 2 and released ?ú23K equity into our TDs. We originally estimated to creditors when signing our TDs that the avail equity was ?ú25K although when the valuation was done in year 2, the house prices had shot up and the avail equity was ?ú40K. Hence our Trustee is looking for us to release the remaining ?ú17K equity. I contacted them as i was concerned about the fall in house prices and likelihood of us obtaining additional monies. They have suggested a new valuation which I am happy to proceed with but am concerned as our existing lenders have advised that they will not provide additional borrowin until 36months post TD. My existing mortgage has an early redemption charge (Fixed period due to end in July) and therefore if we remortgage, we will need to pay this out of the equity. I have asked for advice from my trustee on whether they would pursue our creditors to see if they would accept the difficulty of us raising the remaining equity given that it was only estimated we had ?ú25k equity and they were happy to go along with the Protected TD on that basis.
I know a bit long winded but i would really like some advice. Can I push my trustee to pursue this option or do i just have to go along with what they say. Is there a possibility that my TD could be extended? Incidentally, my husband's debts were a lot lower than mine and could it be possible that he could be released even if I am not as we have seperate tDs. Is there a chance we could be forced to sell?
Thanks in advcance for replies.
25/03/2009 5:42 pm
Hi Mags
It depends on the terms of the proposal.
Slightly worried why it took 2 years to do the valuation. There is some justification is requesting that the valuation is retrospective and be set at the date the TD was signed. The argument I suppose with the valuation would be will he do a newer one in the current climate to see if the value has come down.
Selling the property really would be a last option. In 25 years doing this job (since I was 11!) I have never forced the sale of a property. There are always other options, with the extended TD period being the easiest.
You should ask the IP the question re the equity, why it is not retrospective.
Hope this helps and please keep the forum posted on the response.
Mark
Mark is not posting regularly in the Trust-deed.co.uk forum.
26/03/2009 10:16 am
I would echo Mark's concerns as to why the valuation was not done until year 2. Guidance issued to insolvency practitioners states that equity in property should be dealt with at the start of the trust deed where possible - though you may have signed your TD before this guidance was issued.
However, if the trustee has offered to get a new valuation done I would think this may solve your problem to a large extent. Given the fall in house prices, the property may well be valued at a figure not too far away from what was estimated 3 years ago. Fingers crossed!
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Topic starter
28/04/2009 2:42 pm
Thanks Mark and Kevin
I have had a further valuation carried out which has resulted in the same valuation as previous which would mean there is still ?ú17K equity in property (less the early redemption charge from my current lender. This was over 3 weeks ago and I am still awaiting info from my trustee on how i should proceed. I feel there is little urgency on their part to move things forward and this is frustrating me as I am in limbo land. Our 36 month TD period has now passed and I continue to make contributions but hopefully we will be given a steer soon. I will keep you posted.
Thanks again
