Paragraph 5 Application by qualifying lenders of any amount which exceeds liability

(1)

Where—

(a)

a direct payment is made to a qualifying lender under regulation 17(1); and

(b)

the amount paid exceeds the claimant’s liability to make owner-occupier payments to the qualifying lender,

the qualifying lender must apply the amount of excess in accordance with sub-paragraph (2).

(2)

Subject to sub-paragraph (3), the qualifying lender must apply the amount of excess as follows—

(a)

first, towards discharging the amount of any liability of the claimant for arrears of owner-occupier payments in respect of the qualifying loan or alternative finance arrangement in question;

(b)

if any amount of the excess is then remaining, towards discharging any liability of the claimant to repay—

(i)

the principal sum in respect of the qualifying loan or alternative finance arrangement; or

(ii)

any other sum payable by the claimant to that lender in respect of that qualifying loan or alternative finance arrangement.

(3)

Where owner-occupier payments on two or more qualifying loans or alternative finance arrangements are payable to the same qualifying lender, the lender must apply the amount of the excess as follows—

F1(a)

first, towards discharging the amount of any liability of the claimant for arrears of owner-occupier payments in respect of the qualifying loan or alternative finance arrangement in respect of which the excess amount was paid;

(b)

if any amount of the excess is then remaining, towards discharging any liability of the claimant to repay—

(i)

in respect of the loan or alternative finance arrangement referred to in paragraph (a), the principal sum or any other sum payable by the claimant to that lender; or

(ii)

in respect of any other loan or alternative finance arrangement, any sum payable by the claimant to that lender where the liability to pay that sum is not already discharged.

Annotations

Textual amendments

F1: Sch. 4 para. 5(3)(a)(b) substituted (6.4.2018) by The Loans for Mortgage Interest and Social Fund Maternity Grant (Amendment) Regulations 2018 (S.I. 2018/307), regs. 1(2), 2(17)(d)