I'm making a few assumptions so correct any you need to....
Your house was valued in 2007 as having £30k equity,
you signed an agreement for £30k to be due on completion?

If you are being told the house will be revalued, this is likely to remove a lot of worry rather than be a source of worry, I would encourage KPMG to get on and get a current value if they have indicated that's the one which will apply.

I don't know of many areas in UK where houses have risen in value between 2007 and 2012.

In assuming £30k was from the historic valuation, a revaluation is HIGHLY likely to show you now have less equity.

Some pluses in a stressful time- less equity than assumed is good-if KPMG are willing to take current value for calculations.

If equity was agreed at £30k when remortgage was already known to be tough, it is certainly tougher now, with 5 years of reducing values and reduced lending. Hopefully KPMG offering to do a revaluation is a recognition that selling is unlikely to produce a sizeable surplus. With selling costs etc, it might be better for all to agree on a much smaller sum being paid by way of an extension. You stay in the house, the creditors get all that is realistically available and the trustees don't have to manage a lengthy house selling project.

thank you your assumptions are spot on, so when the say they will revalue the house you mean this will be to extend the trust deed and not to sell the house?

If so that would be a massive weight off my mind.

Chris.

Hi coco279 and welcome.

I'm afraid that the news may not be so positive. It sounds like you've been asked to deal with the equity which is assumed to exist but have not been able to do so.

The situation with mortgages has changed dramatically since early 2007 and the idea of releasing equity by way of a new mortgage while in a trust deed is now almost always a non-starter.

The problem is that you made your trustee responsible for obtaining the value of any equity in your home when you signed the trust deed. A lack of mortgage availability doesn't take this responsibility away from your trustee.

The new valuation may be to establish whether there would be a benefit to your creditors if the home were sold.

I hope that the property has declined in value to a point at which it would not be worthwhile selling, or to a point at which you could clear the sum relatively quickly via monthly installments.

You have my sympathy that this must be an extremely worrying time for you.

sorry if I gave false hope, as TDA says it is still the duty and obligation of the trustee to get all possible funds gathered in for the payment of all debts.
I just meant if the trustee was viewing the situation with today's realistic value as opposed to a 2007 one, there is likely to be less needed by way of further payment as the value will almost certainly be less now.
when you've enquired regarding remortgages lately, has it been assumed your home's value would be the same as in 2007, are you sure there is £30k equity now?

My Understanding-(help please TDA if I'm wrong?)
If, however, the sum agreed was based on an actual valuation and signed agreement in 2007 and no account is to be taken of current valuation then the sum agreed may still be sought even although the house sale is not likely to produce it. I hope the house wouldn't be sold with no prospect of cash being available afterwards as it doesn't achieve anything positive.
I'm not sure on the extension possibilities though-as in for how long or for how much in monthly payments it can be extended.

Hi Pamjo.

I think that the worry is that the equity has been sought for a year now but a solution is yet to be found.

You are absolutely right that a reduced valuation might help. There would be no purpose in selling the home unless it was beneficial to creditors. If the sum of equity were modest and manageable by installment it might be better for everyone that this happens rather than a forced sale taking place irrespective of what the original agreement was.

Forced sales of homes are an absolute last resort for all trust deed firms. Other options are almost always preferable if they are viable.

Thanks TDA-hoped that would be the case. So many mad financial decision-makers prove that common sense is not so common.

Hi

Just to let people kow that the Mortgage to Rent Scheme will possibly be used less in insolvency since the chage of rules regarding equity came into force in April. Previously Trustees could get all the equity available (less ay repair costs), but they have ow bee limited to £8,000. This means if there is £30k equity, the trustee would only get a maximum of £8k. This meakes it not such a good deal for creditors, ad therefore may be used less in insolvency cases.....sorry!
Don't be put off by tryig to negotiate with your Trustee though, if the value has fallen, you may be lucky.

Coco,

I am sorry to be the bringer of bad tidings but I feel I need to let you know this.

I have a similar Trust Deed with KPMG and signed 2 years ago with equity at that time being valued at 24k.

The small print in my "contract" states that if I cannot come up with the equity the house will be revalued and if the equity has dropped I will STILL owe the 24k as this was agreed at the time of signing the contract.

Sorry but check out your paperwork and see exactly what you have signed for

Regards and Good Luck !