I am in the process of divorcing my husband after he stole money from me, and currently find myself stuck in an impasse in relation to our mortgage.
My ex admitted to stealing from our joint business account and personal accounts, and was found guilty of fraud by abuse of position.
Years earlier, we bought a cottage via a joint mortgage with a building society, initially on a five-year fixed deal. In 2016 we remortgaged to another five-year fixed deal.
Although the mortgage remains in joint names, my husband has failed to contribute to the mortgage or the property’s upkeep since 2017.
As the fixed-term mortgage is about to come to an end, I would like to remortgage.
If I went on to the lenders’ standard variable rate, my monthly payments would increase by around £300 per month which I cannot afford on my own.
The building society has said that, as it is a joint mortgage, they require agreement from my ex-husband to permit the mortgage change.
He will not engage with my requests, which I believe is a classic example of economic abuse.
As a short-term measure, the lender has agreed to transfer the mortgage to a two-year interest-only deal, which will keep my payments around the same as they are now.
But this situation will come up again when that term ends, if my husband still refuses to co-operate – and the fact still remains that I am paying the entire mortgage on a home that he jointly owns.
When I have spoken to economic abuse charities, they have said that lenders are able to make changes to a mortgage without the consent of both parties.
Please can you advise what I can do?
Grace Gausden, This is Money, replies: Firstly, I am sorry to hear about your situation and the financial difficulty it has left you in.
After you found your (hopefully soon to be) ex-husband had fraudulently emptied your joint personal and business accounts, he was arrested and found guilty of fraud by abuse of position.
He was sentenced to several years in prison, as well as being barred as a director for 6 years.
Due to this, your work contract with an investment bank was terminated as you advised them of the fraud, which you were required to do for compliance reasons.
Since then you have struggled to find work, while also paying the full mortgage on your property.
Your ex has refused to pay anything, leaving you in a difficult situation.
Your current fixed rate mortgage, with an interest rate of 2.09 per cent, ended last year and it should have reverted to the standard variable rate of 5 per cent.
However, in 2021 as you were not working, you were forced to request a mortgage holiday and thereafter a transfer of the mortgage from repayment to interest-only, which your lender agreed to for a period of six months. This is due to end on 31 January 2022.
After that, your mortgage repayments were set to increase from £300 to £700 a month.
You are currently on an income of £1,200 a month and say the new rate is unaffordable.
Despite being in regular contact with your lender and making them aware of the issue, it initially said it needed both parties to agree to any changes.
The problem is that your husband has failed to engage in any dialogue in relation to how the mortgage will be paid, or how required maintenance will be funded.
Your lender has since agreed that, as of the beginning of this year, the mortgage will be transferred into a two-year interest-only deal with a rate of 1.99 per cent, which is more affordable for you.
However, this does not detract from the fact you are still paying for two portions of the joint mortgage.
If your ex-husband continues not to contribute, you will find yourself in the same situation again after the two-year interest-only deal is up.
This is Money spoke to experts in the mortgage industry to find out exactly what the terms of your contract mean and whether there is any solution to this ongoing issue.
Elena Todorova, associate director of mortgage broker SPF Private Clients, replies: It sounds as though the reader has had a tough few years.
With the mortgage and property in joint names and since there is no financial settlement and decree absolute, the house is still owned by both parties.
Legal advice would need to be sought in terms of rights, obligations and in light of the allegations of economic abuse.
Remortgaging in any circumstances without a source of steady income is difficult. It appears as if the lender has been sympathetic so far, agreeing to a mortgage holiday and converting the loan to interest-only.
I would advise that she goes back to the building society and requests an extension of the interest-only period due to financial hardship and difficult circumstances.
Hopefully, the lender will continue to be helpful if she asks for a retention rate in the same manner as they offered the interest-only option and six-months payment holiday, based on her sole instructions.
I would also suggest that, if the borrower has applied for a six-month payment holiday, she needs to check her credit report.
Lenders often mark these payment holidays as arrears, even though they aren’t, and if this is the case, re-financing won’t be feasible.
Mena Ruparel, chair of the Law Society’s family law committee, replies: In my experience, the mortgage is a contract with the parties and the bank or building society and they would need consent from both before they make any changes.
Both would be liable for repayments and so I can’t see why they would allow a change with the instructions of only one party.
My view is that she really needs to try and push on for a conclusion of matters in the family court so that she can be free of her husband’s continuing abuse.
Ideally this should be dealt with by the same judge going forward, so they’re aware of repeated requests for delays and are hopefully able to move matters along to a conclusion, whether the reader’s husband engages with the process or not.
If the husband served his prison sentence this should put her in a good position with the court to make a case against her husband for economic abuse.
The reader may also want to contact SEA (Surviving Economic Abuse) for support and help.
Mark Heptinstall, partner and head of family law at Slater Heelis solicitors, replies: The court’s powers in this regard can be found in the Matrimonial Causes Act 1973.
It should be noted that the court cannot force the lender to give the reader a payment holiday or another mortgage product without the ex-husband’s consent, a formal application being made and undoubtedly a credit check.
The reader says they have paid the mortgage for a considerable period of time and their husband has not paid very much, if anything.
They can ask the court to take this into account when deciding how to allocate their assets in the financial proceedings.
The court will look at any capital, debts, properties and pensions. The court can also make maintenance orders where appropriate, on a short term or a long term basis, but each case is fact specific.
The reader may wish to look at this option to secure money to assist with the increased mortgage payments – or at least use it as a threat to secure his agreement.
The reader may also ask for the court to take into account his ‘conduct’. However, this must be pleaded early on in the case so if it has not been done, they should take independent legal advice before the case comes to an end.
If the former husband is now working and earning significantly more than any maintenance requested, this is perhaps something else to discuss with a solicitor.
The reader’s allegation might very well amount to economic abuse, and the reader should speak to their local police force about reporting such potential offences.
However the fact there is a potential offence does not mandate the building society to make unilateral changes to mortgage accounts, nor to provide other mortgage products where a property is in joint names.
Consent of all parties to the mortgage would still be required, both generally and probably as a condition of the mortgage itself. Some temporary relief seems to have been gained, possibly due to the pandemic, but that is exceptional.
As a final point, the reader may need to check the title documents to the home to see if they own the property as ‘joint tenants’ or ‘tenants in common’. They will need professional help to establish which way it is owned.
If they own the property as joint tenants, and if the reader was to die before their husband – even after decree absolute – and before the house was sold or there was a final financial order dealing with the house, then he would stand to inherit their share of the property.
This can be dealt with swiftly but the reader will also need to take a will out at the same time. They really need to pay for an hour of a solicitor’s time; it will be money well spent.
Source: Thanks msn.com