beta

You're viewing our new website - find out more

Publication - Guidance

After-sale shared equity procedures: guidance

Published: 13 Oct 2017
Part of:
Housing
ISBN:
9781788513401

Guidance to cover after-sale procedures in relation to Scottish Government’s various shared equity schemes.

105 page PDF

681.5kB

105 page PDF

681.5kB

Contents
After-sale shared equity procedures: guidance
Annex 2 -€“ Change of Primary Lender and/or Primary Lending

105 page PDF

681.5kB

Annex 2 -€“ Change of Primary Lender and/or Primary Lending

Annex 2(A) -€“ Email / Letter to Owner on re-mortgage (See Guidance -€“ Section 11, Corresponding with Owners)

Dear

Insert name of owners (the "Owner")

Insert name of Existing Lender ("Existing Lender")

Insert name of New Lender ("New Lender")

Insert address of property (the "Property")

Thank you for your enquiry in respect of your proposed re-mortgage.

In order to proceed, I would be grateful if you could please complete the form overleaf and return to us. Please note that in order for us to deal with your request we will require to receive payment in advance of our reasonable administrative costs which in this case will be (£ insert) -€“ (inclusive of VAT at 20%). Payment can be made by telephoning debit/credit card details or sending / delivering a cheque (with name and address written on the back) made payable to ( insert name of RSL). This is our administration fee and is not refundable

{If already paid by debit/ card insert Thank you for your payment of £###}.

In the form you are asked certain questions about the amount of loan originally taken out to acquire the Property and the amount you wish to borrow from your New Lender including in each case any fees included in the loan. I suggest you request confirmation of the accuracy of this information from your solicitor and/ or financial adviser as any discrepancies could cause delay and even additional expense.

Please note that if the new lending is more than £2,000 higher than the original lending we will need to obtain a Valuation and apply for consent from Scottish Ministers. We will accept a copy of the Valuation instructed by your New Lender provided that it is properly extended to us/ Scottish Ministers ( i.e. that the surveyor who carried out the survey confirms in writing in satisfactory terms that we/Scottish Ministers can rely on the report).

If that cannot be arranged, we are required to arrange a Scheme 1 valuation report and you will be required to pay for this in advance.

On receipt of the form (and your cheque) and, where appropriate, consent from Scottish Ministers, we will contact Scottish Ministers' solicitors, Harper Macleod, in order to progress matters with your solicitors and your Primary Lender.

Legal fees and costs will depend on how your lenders will require the matter to be documented and you are advised to ask your solicitor to discuss the matter with the lenders and Harper Macleod as soon as possible in order to obtain details of all legal and funding fees as well as the cost of all searches, registration dues and all other outlays for which you have to pay separately.

On receipt of a completed form from you, we will contact Harper Macleod in order to progress matters with your solicitors.

Please contact me if you wish to discuss further.

Yours sincerely

Shared Equity Officer

(If email insert details of address and telephone number etc)

[Note to RSL -€“ if this is a property which was purchased under the NSSE with Developers Scheme, the Developer's interest will have to be taken into account]

Annex 2(B)

Form for Change of Lender (with or without additional loan)

Please complete this table and return to [insert name of the RSL.] If emailed please reply to email address of Sender.

Insert Name of Shared Equity Owner and Property Address

Please complete your solicitor's name, address, contact number and email address:

Name:

Address:

Tel:

Email:

Who is your current lender?

What was the original amount of the loan taken out in order to buy your property including any fees included in that loan? ( please consult your legal and / or financial adviser if you are unsure)

Who is your new lender?

Name:

What is amount you propose to borrow from your new lender, including any fees which are to be included in that loan? (please consult your legal and / or financial adviser if you are unsure)

£

If the new loan is more than the existing loan what is the purpose of the new loan?

Insert

If you have not already done so, please provide us with payment of (£ ) together with VAT ( £ in total). You may do this either by telephoning us with your debit/credit card details at the telephone number shown in the covering letter/email or providing us with a cheque (with name and address written on the back) made payable to us.

You are advised that a further sum may be required if we need to instruct a new Scheme 1 survey valuation.

NB -€“ A new Scheme 1 survey valuation will only be instructed if the surveyor who carried out the survey valuation report for your lender does not provide consent to us/Scottish Ministers to rely on it.

I/We hereby provide authority for <insert name of Administering Agent> to discuss my/our personal information with the above Representatives.

First Name
Second Name
Date

Annex 2(C) Shared Equity -€“ Change of Lender- Email from the RSL to Harper Macleod -€“ No Additional Secured Loan (" ASL")

Insert name of owners (the "Owner")

Insert name of Existing Lender (the "Existing Lender")

Insert name of New Lender (the "New Lender")

Insert address of Property (the "Property")

I enclose completed Proposal Form for change of Lender demonstrating there is no new lending in excess of £2,000 above the amount originally borrowed from the Primary Lender. In accordance with After Sale Shared Equity Guidance there is accordingly no requirement for a Valuation.

I also enclose copy of Shared Equity Agreement, Standard Security [and Ranking Agreement]. You will note that the documentation is in the name of [insert name of the RSL]/ Scottish Ministers.

OR

The documentation was dealt with by you and completed on [ insert date].

[Note to RSL -€“ if this is a property which was purchased under the NSSE with Developers Scheme, the Developer's interest will have to be taken into account and the position explained to Harper Macleod]

Please confirm to us when matters are complete.

Annex 2(D) - Shared Equity -€“ ASL - Change of Lender - Email from the RSL to Owner's Solicitor re Valuation.

NB Ensure all valuations are either addressed to the RSL (if pre- 6 April 2008) or Scottish Ministers c/o the RSL (if post- 6 April 2008)

Insert name of owners ("your clients")

Insert name of Existing Lender ("Existing Lender")

Insert name of New Lender ("New Lender")

Insert address of property (the "Property")

Proposed Additional Secured Loan of £[ ]

Equity Share of [insert] % ( "Equity Share")

We enclose copy Application Form by your clients confirming that they wish to (a) remortgage the Property from the Existing Lender to the New Lender and (b) increase the amount by which they will rank ahead of us/ Scottish Ministers above the £2,000 threshold.

Please confirm to us by email that this represents your understanding of the position as any discrepancies may cause delay and even additional expense.

We require the consent of the Scottish Government More Homes Division area team before any such arrangement can be authorised and in order to progress matters will require a copy of the Valuation provided to the Primary Lender together with confirmation addressed to ( us/Scottish Ministers c/o ourselves insert as appropriate, dependent on whether pre- or post- 6 April 2008) that the Valuation may be relied on by us / Scottish Ministers in terms of the attached letter of reliance, a scanned signed copy of which should be emailed to us with a hard copy to follow by post.

Please note that until such time as we obtain such confirmation in satisfactory terms we will not be in a position to proceed further with your clients' application.

Shared Equity Officer

(If email insert details of address and telephone number etc)

[Note to RSL -€“ if this is a property which was purchased under the NSSE with Developers Scheme, the Developer's interest will have to be taken into account]

Annex 2(E) - Draft Letter of Reliance from Valuer referred to in Annex 2(D) (please email scanned signed copy with hard copy to follow by post)

To ( insert name of address of RSL ) OR (the Scottish Ministers c/o insert name and address of the RSL) dependent on whether Agreement pre- or post- 6 April 2008.

Dear Sirs

Insert name of owners ("Owners")

Insert name of New Lender ("Primary Lender")

Insert address of property (the "Property")

We confirm that the valuation report (the "Valuation") of the Property, a copy of which is enclosed and signed as relative hereto, may be relied upon by you to the extent of your interest as shared equity provider secured by a standard security in respect of the Property.

In relying upon the Valuation you accept that you are bound by the terms and conditions of the Valuation including without prejudice all qualifications exclusions limitations and others save to the extent that any are inconsistent with your ability to rely on the Valuation.

For the avoidance of doubt, in the event of any amendments to the Valuation being made and intimated to you, the Owner and the Primary Lender and/or your or their agents prior to the entering into of binding commitments between you, the Owner and the Primary Lender in connection with their re-financing of the Property reference to the Valuation shall mean a reference to the Valuation as so amended.

Yours faithfully

Annex 2(F) - Shared Equity -€“ New Lender ASL -€“ email from the RSL to Scottish Government More Homes Division area team

Insert name of owners (the "Owner")

Insert name of New Lender ("New Lender")

Insert name of Existing Lender ("Existing Lender")

Insert address of property (the "Property")

Proposed Additional Secured Loan of (£ )

Equity Share of (insert) % ("Equity Share")

We enclose copy completed Application Form from the Owner to (a) refinance the Property from the Existing Lender to the New Lender and (b) increase the amount by which they will rank ahead of us/ Scottish Ministers above the £2,000 threshold. We also enclose copy valuation together with copy letter of reliance duly addressed to [insert whether RSL or Scottish Ministers.]

I would be grateful if you could confirm whether the proposed Additional Secured Lending is acceptable.

I would be happy to discuss further with you.

[Note to RSL -€“ if this is a property which was purchased under the NSSE with Developers Scheme, the Developer's interest will have to be taken into account. In particular both Scottish Government and the Developer will require to accept the application]

Reply from Scottish Government More Homes Division area team to RSL

[insert details]

We have reviewed the foregoing application and valuation and would confirm that Scottish Ministers propose to accept/reject the foregoing application.

[If rejected please give reasons]

Annex 2(G) Shared Equity -€“ Change of Lender - Email from the RSL to Harper Macleod -€“ New lending

Insert name of owners (the "Owner")

Insert name of Existing Lender ("Existing Lender")

Insert name of New Lender ("New Lender")

Insert address of property (the "Property")

I enclose completed Proposal Form and consent from Scottish Government to the remortgage and additional lending. I would be grateful if you could action.

Either I also enclose copy of Shared Equity Agreement, Standard Security [and Ranking Agreement]. As you can see the documentation is in the name of [insert name of the RSL]/ Scottish Ministers.

OR The documentation was dealt with by you and completed on [insert date].

The Valuation has been extended by Letter of Reliance in approved form.

OR (if Letter of Reliance cannot be obtained) A Valuation was instructed by us and is addressed to [insert RSL or Scottish Ministers as appropriate].

[Note to RSL -€“ if this is a property which was purchased under the NSSE with Developers Scheme, the Developer's interest will have to be taken into account and the position explained to Harper Macleod] Annex 2(H) - Shared equity -€“ Same Lender / Additional Loan - Email/Letter to Owner (See Guidance -€“ Section 11, Corresponding with Owners)

Dear

Insert name of owners (the "Owner")

Insert name of Primary Lender ( "Primary Lender")

Insert address of property (the "Property")

Thank you for your enquiry in respect of the proposed additional lending by your Primary Lender.

In order to proceed, I would be grateful if you could please complete the form overleaf and return to us. Please note that in order for us to deal with your request we will require to receive payment in advance of our reasonable administrative costs which in this case will be (£ insert) (inclusive of VAT at 20%.) Payment can be made either by telephoning details of your debit/credit card to us or providing us with a cheque for that amount made payable to ( insert name of RSL) This is our administration fee and is not refundable

(If already paid by debit/card insert Thank you for your payment of £###.)

In the form you are asked certain questions about the amount of loan originally taken out to acquire the Property; the amount of your proposed new lending including in each case any fees included in the loan; and the amount which will then be due under your mortgage taking into account any capital already repaid. I suggest you request confirmation from your solicitor and/or financial adviser as any discrepancies could cause delay and even additional expense.

Please note that if the new lending is higher than the original lending we will need to obtain a copy valuation from a surveyor and apply for consent from Scottish Ministers. We will accept a copy of the valuation instructed by your New Lender provided that it is properly extended to us/ Scottish Ministers ( i.e. that the surveyor who carried out the survey confirms in writing in satisfactory terms that we/Scottish Ministers can rely on the report). Please note that if that cannot be arranged, we are required to arrange a Scheme 1 valuation report and you will be required to pay for this in advance.

On receipt of the form from you together with payment we will contact your solicitors in order to progress matters with the valuation.

Additional lending of this nature may give rise to various costs and you should ask your solicitor for an estimate of all legal and funding fees and outlays for which you have to pay separately. Scottish Ministers' solicitors Harper Macleod will be happy to discuss their own costs with your solicitors.

Please contact me if you wish to discuss further.

Shared Equity Officer

(If email insert details of address and telephone number etc)

[Note to RSL -€“ if this is a property which was purchased under the NSSE with Developers Scheme, the Developer's interest will have to be taken into account] Annex 2(I)

Form for Additional Loan -€“ Same Lender

Please complete this table and return to [insert name of the RSL]. If emailed please reply to email address of Sender.

Insert Name of Shared Equity Owner and Property Address

A Please complete your solicitors' name, address, contact number and email address:

Name:

Address:

Tel:

Email:

B Who is your current lender?

C What was the original amount of the loan taken out to buy your property including any fees included in that loan? (please consult your legal and / or financial adviser if you are unsure)

£

D What is the total amount of the additional loan which you propose to take out with your Lender including any fees which are to be included in that loan? (please consult your legal and / or financial adviser if you are unsure)

£

E If your lender grants the additional loan what will be the new amount due to them under your mortgage taking into account capital already repaid? Please consult your legal and / or financial adviser if you are unsure)

£

What is the purpose of the additional lending?

[ please insert)

If you have not already done so, please provide us with payment of (£ ) (inclusive of VAT at 20%) . You may do this either by contacting us at the telephone number shown in the covering letter/email with credit / debit card details or providing us with a cheque (with name and address written on the back ) made payable to us.

You are advised that a further sum may be required if we need to instruct a new Scheme 1 survey valuation.

NB -€“ A new Scheme 1 survey valuation will only be instructed if the surveyor who carried out the survey valuation report for your lender does not provide consent to us/Scottish Ministers to rely on it in a form satisfactory to Scottish Ministers.

I/We hereby provide authority for <insert name of Administering Agent> to discuss my/our personal information with the above Representatives.

First Name
Second Name
Date

Annex 2(J) - Shared Equity -€“ Existing Lender providing ASL - Email from the RSL to Owner's Solicitor re Valuation.

NB Ensure all valuations are either addressed to RSL ( if pre- 6 April 2008) or Scottish Ministers c/o RSL (if post- 6 April 2008)

Insert name of owners ("your clients")

Insert name of Existing Lender ("Primary Lender")

Insert address of property (the "Property")

Proposed Additional Secured Loan of £[ ]

Equity Share of (insert ) % ("Equity Share")

We enclose copy Application Form by your clients confirming they would wish to borrow an additional sum of [£ ] from the Primary Lender and increase the amount by which their mortgage will rank ahead of over sums due to us/ Scottish Ministers from ( insert amount in Box B on the form in Annex 2(I)) to ( insert amount in Box D on the form in Annex 2(I)).

Please confirm to us by email that this represents your understanding of the position as any discrepancies may cause delay and even additional expense.

We require the consent of the Scottish Government More Homes Division area team before any such arrangement can be authorised and in order to progress matters will require a copy of the Valuation provided to the Primary Lender together confirmation addressed to ( us/Scottish Ministers c/o ourselves insert as appropriate dependent on whether pre- or post- 6 April 2008) that the Valuation may be relied on by us / Scottish Ministers in terms of the attached letter of reliance, a scanned signed copy of which should be emailed to us with hard copy to follow by post.

Please note that until such time as we obtain such confirmation in satisfactory terms we will not be in a position to proceed further with your clients' application.

[Note to RSL -€“ if this is a property which was purchased under the NSSE with Developers Scheme, the Developer's interest will have to be taken into account]

Annex 2(K) Draft Letter of Reliance from Valuer referred to in Annex 2(J) (please email scanned signed copy with hard copy to follow by post)

To (insert name of address of RSL) OR (the Scottish Ministers c/o insert name and address of the RSL) dependent on whether Agreement pre- or post- 6 April 2008.

Dear Sirs

Insert name of owners (the "Owner")

Insert name of Primary Lender ( the "Primary Lender")

Insert address of property (the "Property")

Additional lending by Primary Lender

We confirm that valuation report ("Valuation") of the Property a copy which is enclosed and signed as relative hereto may be relied upon by you to the extent of your interest as shared equity provider secured by a standard security in respect of the Property.

In relying upon the Valuation you accept that you are bound by the terms and conditions of the Valuation including without prejudice all qualifications exclusions limitations and others save to the extent that any are inconsistent with the your ability to rely on the Valuation.

For the avoidance of doubt, in the event of any amendments to the Valuation being made and intimated to you, the Owner and the Primary Lender and/or your or their agents prior to the entering into of binding commitments between you, the Owner and the Primary Lender in connection with the additional lending reference to the Valuation shall mean a reference to the Valuation as so amended.

Yours faithfully

Annex 2(L) - Shared Equity -€“ Existing Lender ASL -€“ email from the RSL to Scottish Government More Homes Division area team

Insert name of owners ( the "Owner")

Insert name of Existing Lender ( "Primary Lender")

Insert address of property (the "Property")

Proposed Additional Secured Loan of £[ ]

Equity Share of (insert ) % ( "Equity Share")

I enclose copy of Application Form in respect of the additional secured loan of [£ ] from the Primary Lender to the Owner which if agreed will increase their priority from £ ( insert from Box B in Application Form in Annex 2(I)) to £(insert from Box D in Application Form in Annex 2(I)) We also enclose copy valuation together with letter of reliance duly addressed to [insert whether RSL or Scottish Ministers.]

I would be grateful if you could confirm whether the proposed Additional Secured Lending is acceptable.

I would be happy to discuss further with you.

[Note to RSL -€“ if this is a property which was purchased under the NSSE with Developers Scheme, the Developer's interest will have to be taken into account. In particular both Scottish Government and the Developer will require to accept the application]

Reply from Scottish Government More Homes Division area team to RSL

[insert details]

We have reviewed the foregoing application and valuation and would confirm that Scottish Ministers propose to accept/reject the foregoing application.

[If rejected please give reasons].

Annex 2(M) Shared Equity -€“ Same Lender/Additional Loan

Email from the RSL to Harper Macleod

Insert name of owners (the "Owner")

Insert name of Primary Lender ( "Primary Lender")

Insert address of property (the "Property")

I enclose completed Proposal Form and consent from Scottish Government and would be grateful if you could action.

Either

I also enclose copy of Shared Equity Agreement, Standard Security [and Ranking Agreement]. As you can see the documentation is in the name of RSL/Scottish Ministers.

The Valuation has been extended by letter of reliance in approved form

I understand that you will check with the Owner's solicitor whether the Primary Lender wishes to deal with by way of standard letter rather than Ranking Agreement.

[Note to RSL -€“ if this is a property which was purchased under the NSSE with Developers Scheme, the Developer's interest will have to be taken into account and the position explained to Harper Macleod]

Annex 2(N) Shared equity -€“ Additional Loan

Additional Secured Lending Authorisation-

Owner Name
Mr A Customer

Address
1 Any Street
Any Town
EH1 !AA

Original Purchase Information £

Purchase Price: £100,000.00
Applicant’s total Contribution: £70,000.00
Grant: £30,000.00
Owner’s Stake: 70.00%

Additional Borrowing

Amount (incl any fees being added): £4,500.00
Purpose: Home Improvements
New Valuation: £120,000.00

Maximum additional borrowing allowable: £14,000.00

Is Additional Borrowing requested less than or equal to Maximum Additional Borrowing allowable? Yes/No

Application Approved/ Rejected by RSL

Application Approved / Rejected by Scottish Government More Homes Division area team.

Annex 2(0) email to Lender or their solicitors regarding Deed of Postponement

Insert name of owners (the "Owner")

Insert name of Primary Lender ( "Primary Lender")

Insert address of property (the "Property")

I refer to your letter / email of ( ) requesting that Scottish Ministers / the RSL sign Letter / Deed of Postponement.

Please note that

(a) the Owner will require to apply for any increase in the Primary Lender's priority over and above that which was originally agreed at the time of purchase of the Property when the shared equity funding was provided and the matter will require the agreement of Scottish Government.

(b) if approval is given the documentation will be based upon the form of Ranking Agreement provided for in the applicable Scottish Government Guidance relating to the relevant shared equity scheme, the terms of which have been approved by the Council of Mortgage Lenders. It will not be in any other form .

Should you wish to discuss further please contact Scottish Government's solicitors Harper Macleod


Contact