Debt Liability

[newuser2011]

My wife had a friend who recently lived with us, that had a loan against the house for over £20k, both my wifes name and her friends name are on it, but her friend has done a moonlight and left without paying anything or saying anything, who is liable for the debt?, both names are on the mortgage but the friend cannot force her to sell the house but is elgible to either 15-25% of the profit if the house was ever sold. Where do we stand on this issue, how do we procede to get her name off the mortgage, and surely if my wife is still paying her loan then surely she is not entitled to her percentage if the house was ever sold, as she has forfeited on it.

Any help or advice would be much appreciated

[scotman]

You should contact a solicitor.

[ojread2]

Agreed, you need a solicitor
If your wife's name is on the loan agreement then both she and her *friend* are liable for the total amount

It is unlikely you can remove her name from the mortgage
The mortgage and loan are 2 separate issues here. Just because your wife is paying the total amount of the loan does not mean her friend isn't entitled to any share equity should you sell.

Has she stopped paying her share of the mortgage? Was she ever paying towards the mortgage?

[boxtops]

If it's in joint names then the lenders will look to your wife for the payments. Is this a mortage or a loan?

[newuser2011]

The loan and mortgage is in both names, the mortgage my wife pays, and the loan was her friends, but she has failed to keep her commitment.

[redcrx]

i cant quite work out if your wife and friend are only ones who bought the property and they both own or whether the friend and you wife took an additional loan out. Its the fact that you say "lived with us" makes it seems as if she stayed at a house that you and wife own.

if the friend and wife have a joint mortgage then to get friends name removed you would need her agreement and also your wife (or you and wife) would have to prove to mortgage company that you can support a mortgage.

If in joint names the friend can look at getting a sale forced.

[boxtops]

Can we be clear, as it's confusing?

Who bought the house in the first place, whose names are on the deeds and on the mortgage?

This loan of £20K - is it secured on the house, was it taken out as a further advance on the mortgage? If so then I would be very worried that the lenders have a charge on the house - it's not the friend who could force your wife to sell, but the lenders could, if the repayments aren't made on time.

When this loan was taken out, what formal agreement was reached about the friend contributing towards payments? (I hope you're not going to tell us that there was nothing in writing covering this, as she was a friend...)

[boxtops]

^^ Is the loan ONLY in the friend's name, but was borrowed using your house as security?

[newuser2011]

As I understand it, my wife had a house she owned before, she sold it, she then saw another house she wanted to buy. So she had £X amount of money to put down which was hers, and then needed so much for mortgage, well they said to her if you had someone else down it would be easier to get a mortgage, so she put her friends name down. My wife paid the mortgage, she entrusted her so called friend with the money, but her friend had been spending the money elsewhere, then back in around 2002 my wife found out and told her she had to pay the arrears or she was going to lose the house, so a company wouldnt lend her the money unless my wifes name was also on the loan, so thats why her name is on there, but my wife was paying the mortgage. My wife said there was a clause made out that her friend was only eligible for 15 or 25% if the house was sold at a profit. Do you get a better understanding now, sorry for the confusion, but Ive been onto her not to trust her. Should I contact the Halifax for the original agreement etc., who should have the deeds, etc. ?, Im new to all this, and she has obviously been naive.

[redcrx]

I now dont understand how either of them got a loan against a house that was in arrears with the mortgage.

[bednobs]

can she afford the mortgage and loan? If the loan is joint then i'm afraid your wife will b e liable for the whole amount unless you can track down the friend and make her pay

[themas]

Let me see if I can understand your (rather unclear) post:

1. Your wife wanted to buy a house but needed a mortgage she couldn't get unless someone else was also on the mortgage. So she arranged for her "friend" to be on the mortgage.

2. Your wife gave the money for the mortgage payments to the friend, who used it herself & didn't pay the mortgage.

3. The mortgage went into arrears & - to prevent repossession - a loan of £20K was taken out jointly by your wife & friend to pay off the arrears. This loan is secured on the house.

4. At some stage (?when the loan was taken out) an agreement of some sort was made by your wife & friend entitling friend to either 15% or 25% of any profit of/when the house is sold. Your wording implies you think this was part of the loan agreement or mortgage, but I don't see how or why it would be so. It appears your wife doesn't have a copy of this agreement.


If the above is correct it raises issues:

1. Is friend also on the title deeds? I assume she must be but you don't say so.

2. Has friend ever paid anything to the mortgage or loan?

3. If not, why did your wife agree to give her some of the profit? Was the agreement conditional on friend making payments after it (i.e. the agreement) had been entered into?

4. Who prepared the 15 or 25% agreement? Was it a solicitor?

If the above is wrong, please say in what way.


What I think you must do now:

1. Your wife must make the payments on mortgage & loan as otherwise the house is liable to be repossessed.

2. You need to find the 15 or 25% agreement document. If your wife really doesn't have a copy then contact the solicitor who prepared it (if there was one) or ask the mortgage lender for a sight of the deed package (which should include all the title deed documents & anything else the lender has). Don't trust the lender to try & find the document you want - they may do a cursory search & say they don't have it, so get hold of the deed package & go through it yourself, even if they charge a fee.

3. Once you have the 15 or 25% document you may be able to see whether there is any chance of avoiding any payment to friend. This will probably depend on the wording of the agreement. You may well need legal advice on this.