Loan problems

[Lindberg]

I posted here earlier this year, and circumstances have now changed.

My 91 year old father moved to live with my sister, but became increasingly unhappy, eventually asking to move away from her.

About a year after they started living together my sister took out a substantial loan to restore her new property. First tier financial institutions wouldn't provide money, so she took money at a high rate of interest from a secondary mortgage financier. My father's property, then already for sale, was part of the loan guarantee under the likleyhood that it would sell relatively quickly and pay off the loan. That this didn't occur is both blessing and curse.

I'm thankful my father still has his own property, although can no longer live there due to deteriorating capability. He now rents a property near me. I'd prefer my father's property was removed from the loan guarantee in order to secure his own future. My sister possesses enough equity to cover the loan as it now stands, but failure to repay would see her property repossessed. I have power of attorney, and my father has informed my sister that he wishes me to handle his financial affairs, yet she won't co-operate. She wouldn't provide copies of documentation to my father, and I've since discovered that she was negotiating an extension while he was in the process of moving out. It now stands at approximately two thirds the value of my father's property. Oddly, the loan company didn't require my father to co-sign the extension documentation.

I'm not asking for advice regarding family disagreements, and have already consulted a lawyer. Via the terms of the agreement the loan company's discretion and consent is absolute with regard to whether or not my father's property can be removed from the guarantee. Has anyone experienced a similar situation, and do they have any advice regarding options about saving my father's property?

 

[lin1]

Hello Lindberg
I am sorry you have not had any replies yet probably because yours is a rather unusual situation.
I hope others with more knowledge than I will be along soon

I wish I could be of more help, I think you are going to need the help of a solicitor which I see you have already done

I have no experience with this so may be wrong but dont think I am,
was your LPA for dad registered with the OPG (office of public guardian) at the time when your father first signed any documents to do with your sisters loan?
if it was registered, it to my mind means that your father may not have been able to legally sign for anything, as usually (but not always) a registered LPA means the person no longer has capacity to manage their affairs and your agreement and signature as LPA would have been required
I am definitely NOT saying you should have signed, quite the opposite in fact

I would advise you to contact the OPG asap about this

I am wondering if Age uk (formally age concern) and or Elder abuse could be of any assistance to you

You should be able to find Age uk and elder abuse in the phone book
I am sad to say I find what she has done is at least very underhand and possibly not legal

I do hope others with more knowledge than I will be along soon

 

[jenniferpa]

I know nothing about this but my feeling is that if your father agreed to guarantee this loan with his own property, and he had capacity at the time he made that agreement, then nothing that has happened afterwards is likely to make any difference.

You can only take professional legal advice about this: I think I can say in the seven years I have been here, this is the first time I've heard about something exactly like this.

 

[nmintueo]

the loan company's discretion and consent is absolute with regard to whether or not my father's property can be removed from the guarantee. Has anyone experienced a similar situation, and do they have any advice regarding options about saving my father's property?

So did your lawyer effectively say 'nothing you can do', then?

Haven't been in that situation, but it seems to me that, were your sister to default on the loan, resulting in your father's house being repossessed, she would have deprived him of assests he may need to pay for his care.

As attorney, advise your sister that you will hold her responsible should that occur, and you will seek to recover the assets from her. You say she has enough equity in her own property to cover the loan, so the situation should be quite avoidable. Can she remortgage to borrow at a better rate than the existing loan?

Oddly, the loan company didn't require my father to co-sign the extension documentation

That does seem odd: they altered the loan agreement without his involvement? Maybe there's small print saying they can do that.

Can it be established whether your father did or did not have capacity to enter into the loan agreement in the first place? [Later: oh .. looking back at older posts, I see you consider he did have capacity.]

 

[Lindberg]

Thanks for the responses. The POA was registered in Scotland, so is active from the moment it's registered, but my father knowingly, willingly and with capacity signed up to the loan, so I can't argue about that. I find it very dubious that it was extended without his knowledge or signature.

The lawyer wasn't quite as negative as 'nothing you can do', but didn't hold out much hope without my sister's co-operation, although this was before I discovered the loan had been extended. My sister has options, including taking a similar loan to pay off the first without involving my father's property, but is not inclined to do so. She believes (or at least is telling me) that come January her business will have been operating for a year and she'll be able to access money from more recognised sources. My opinion is that this is extremely unlikely as my father subsidised her business to the tune of £1000 per month until September. To date she is unwilling to co-operate in any fashion, even when it's pointed out how the loan she's taken out could impact on my father.

I have considered the threat of setting the local authority dogs loose in the fullness of time, but what I'd like is (should it be necessary) that we have the option of choice when it comes to a nursing home rather than just accepting allocation on the basis of limited funds.