Loan debt could lead to repossession
04/12/08
Even if you are up to date with all your mortgage payments, credit card and all sorts of loan debt may result in you loosing your home. Some aggressive lenders have taken advantage of a little known law and are changing unsecured loans and other debt into debt secured against homes according to new growing evidence.
Due to the sudden increase in repossessions, this prompted the Financial Services Authority (FSA) to send out a warning to loan issuers with regards to the way in which they treat borrowers when they miss loan payments.
For borrowers who have loans secured against their home, this acts like a mortgage and this loan or debt would be recorded with the Land Registry against the homeowner’s property and would act as “second charge”. In this instance, if your home was repossessed then they would be second in line to be due payments after the mortgage lender.
“Unfortunately, we can do nothing to stop the second-charge lender taking possession, it sometimes happens when our account is totally up to date,” commented a spokesperson for Newcastle Building Society.
