A sole owner of a property with a current mortgage of £210,000 obtains an extension to this mortgage of a further £210,000. The sole owner is married, his wife is in occupation of the mortgaged property. Is the mortgage lender under a duty to make enquiry of her interest before the mortgage extension is granted, albeit that her interest is equitable?
Province/Country relating to question : London, England
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Are you the owner or the owners wife please?
Neither, it's just an enquiry
Thanks. The position is that the owner will need to disclose the fact of his wife's occupation of the property and the lender will then have the wife sign a deed of postponement that puts her rights behind the lenders and lenders will often ask that she is seperately advised as to her rights to ensure she understands that she is surrendering some of her rights in the property vis a vis the lender.
Is tis a standard term on all mortgage contratcs?
If the lender fails to obtain the above it can be difficult for it to enfore its rights to repossess if it become necessary to do so if the wife refuses to leave
I have not come across a mortgage that does not require consent to obtained as above for the simple reason that the lender can find it difficult to evict an occupier if it has not obtained this consent.
Is there anything else I can help you with?
Ok, supposing there is a dispute during a divorce. I.e. that the husband claims the additional mortgage as a liability
that he expects the wife to bear half of, the fact that the wife did not agree to the mortgage extension in the first place (because she had no knowledge of it) does this stand as a joint liability or can this liability be ring fenced for the husband to bear?
This is beginning to stray outside of my expertise I am afraid. My expertise centres on property. I believe you are going to need a family lawyer to assist you with this. If you post this as a new question for the attention of my colleague Claire she will be able to give you detailed advice relating to any divorce proceedings as she specialises in this area. Subject as above however wife would not be responsible for the mortgage unless she was a party to the mortgage loan itself which from what you say she is unlikely to have been as very few lenders will allow borrowers who do not also own the property. Consent as referred to above does not lead to liability for the debt itself. For liability to arise, she must have been a party to the mortgage itself.
is there anything further I can help with on the above?
No, you've been extremely helpful. Thank you.
If you have no further questions for now I should be very grateful if you would kindly remember to click ACCEPT in order that I am credited for my time. Kind regards
LL.B (Hons), Prof Dip Law & Practice. 9 years experience in private practice in England
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