Bradford & Bingley sues over low-cost mortgages
The Bradford & Bingley Building Society is to bring a £30m claim against one thousand law firms that it alleges acted negligently in advising it on mortgages for low-cost housing for teachers and nurses.
The Bradford & Bingley Building Society is to bring a £30m claim against one thousand law firms that it alleges acted negligently in advising it on mortgages for low-cost housing for teachers and nurses.
The solicitors are alleged to have wrongly advised the society in the mortgage agreements between itself and the purchaser.
Under these agreements the buyer, usually a low-paid professional, will have purchased the property with a special 'affordable' mortgage plan, giving them joint ownership with a housing association.
The Bradford alleges that the solicitors, acting for both the buyer and mortgage company, failed to obtain consent from the housing association to allow it to repurchase the whole property if the buyer defaulted on the mortgage.
James Tickell, assistant chief executive of the National Housing Federation, said about 100,000 people had shared-ownership properties with housing associations, and many of these could be affected by the alleged negligence.
He estimated that only 20 law firms were specialist in this kind of conveyancing. "Some high street solicitors may not know what they are doing and mistakes may have been made."
The scheme was first introduced by the Conservatives in1990 to enable low-paid state sector workers to buy their own homes. The Labour Government has continued it.
Mr Tickell said he hoped the solicitors would not attempt to pass the liability on to the teacher or nurse who has been unable to keep up with their mortgage repayments.
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