Security And A Mortgage

swanvill

Hi,

I am the happy position where I have paid my mortgage and the bank have just posted the deeds back to me. However there was letter in which it states that

‘ We recommend you instruct a solicitor to discharge the bank security on your behalf.’



The above sentence confuses me, does that mean the bank still hold a security/charge over our house? Has anyone had to do this before? What is involved & roughly how much did you have to pay?

I just foolishly thought once I paid the mortgage, completed the banks forms that I was free & owned my home. I also informed our insurance company that bank had no longer a right to be recognised on our household insurance policy.


Needless to say all advice & information on your experience would be gratefully received.



Thanks.

Marcusm

swanvill wrote: »

Hi,

I am the happy position where I have paid my mortgage and the bank have just posted the deeds back to me. However there was letter in which it states that

‘ We recommend you instruct a solicitor to discharge the bank security on your behalf.’



The above sentence confuses me, does that mean the bank still hold a security/charge over our house? Has anyone had to do this before? What is involved & roughly how much did you have to pay?

I just foolishly thought once I paid the mortgage, completed the banks forms that I was free & owned my home. I also informed our insurance company that bank had no longer a right to be recognised on our household insurance policy.


Needless to say all advice & information on your experience would be gratefully received.



Thanks.

If the mortgage charge has been registered it needs to be discharged or de registered. The bank will only permit a Solicitor to do this on their behalf, is it's not a DIYable matter. It's important as otherwise the continuing mortgage is an impediment to you raising further finance or selling the property. In the UK, it's often recommended to leave it in place because of fraudsters who track discharges and seek, fraudulently, to raise finance against them or to purport to sell the property. I suspect that is less of an issue in Ireland.

BlueLass

Marcusm wrote: »

If the mortgage charge has been registered it needs to be discharged or de registered. The bank will only permit a Solicitor to do this on their behalf, is it's not a DIYable matter. It's important as otherwise the continuing mortgage is an impediment to you raising further finance or selling the property. In the UK, it's often recommended to leave it in place because of fraudsters who track discharges and seek, fraudulently, to raise finance against them or to purport to sell the property. I suspect that is less of an issue in Ireland.

How would it be possible to use someone else's property to fraudulently raise funds? Surely the bank or whatever would require proof of ownership, ID and would they not post letters to house thereby alerting the owner? Not doubting you by the way, just genuinely curious how this would work.

Peregrinus

When you gave the bank a mortgage over your home, they registered it so that anyone contemplating buying your home (or checking the title for any other reason) would see that the bank had a mortgage. It's likely that nobody will buy your house (or, if you wish to borrow more money in the future, accept a mortgage of your house) as long as the bank's mortgage remains on title

A mortgage registered on title can't be removed from the register by the property-owner; the mortagee (i.e. the bank) has to agree. What the bank are saying to you is that they will agree. But it's up to you to take the steps to progress the de-registration. And there'll be a fee involved (payable to the registration authority, not the bank). And you'll probably want to retain a solicitor to do this, and you'll have to pay him too.

There's no mad rush. If you want to you can leave the mortgage on title until you actually want to sell or re-mortgage the house, and deal with it then.

Mr. Incognito

The mortgage is registered as a burden on the property.

The bank will vacate the mortgage which simply means sending you the mortgage deed with a stamp saying its paid off.

This vacate is lodged in the land registry with the appropriate form and fees and the land registry removes the charge.

Marcusm

BlueLass wrote: »

How would it be possible to use someone else's property to fraudulently raise funds? Surely the bank or whatever would require proof of ownership, ID and would they not post letters to house thereby alerting the owner? Not doubting you by the way, just genuinely curious how this would work.

All UK land is registered, a solicitor is not needed for a conveyance although most of the sale/mortgage frauds I've heard of have included a conveyancer and/or financial intermediary (ie broker) as part of the scam. It's fairly easy to access mail in multiple dwellings and, in the past, fairly easy to divert mail. Mortgages in the UK up until the crash rarely involved a relationship with the lender and increasing proportions were broker arranged. Frauds were common, using Unmortgaged property was one way of making sure it was not discovered for a period.