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how is negative equity paid back?
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Chances are you will not be able to sell due to the shortfall. Only way out of it is go bankrupt and let them repo the property or come up with the funds to pay it off!"Banking establishments are more dangerous than standing armies." Thomas Jefferson
"How can I believe in God when just last week I got my tongue caught in the roller of an electric typewriter?" Woody Allen
Debt Apr 2010 £00 -
Chances are you will not be able to sell due to the shortfall
I am pleased that most posters on this thread do not totally rule out the possibility of negotiating with the lenders about repayment of the shortfall.
I am currently financially sound, and meeting all my commitments quite easily, but all that will change in the middle of next year when my main contract comes to an end, and it is likely that I will be unable to carry on with the mortgage. At the moment I am in a negative equity situation, but who knows what will happen by mid-2011.
My plan is to put the house on the market in early 2011, and contact the lenders to inform them of the situation. I would like to think that they might be willing to at least dicuss some contingency arrangements to use in the event that I am unable to sell the house without incurring a shortfall.
Ditch.0 -
When I started working for a Building society in 1999 we covered an area of Bedfordshire that still had a high level of neg equity. We never allowed them to change the amount to unsecured. Its very risky."Banking establishments are more dangerous than standing armies." Thomas Jefferson
"How can I believe in God when just last week I got my tongue caught in the roller of an electric typewriter?" Woody Allen
Debt Apr 2010 £00 -
How will the lender prevent a sale? What right do they have to do so?VIGILANT22 wrote:Then they wouldn't be ALLOWED to sell the house..."Never underestimate the mindless force of a government bureaucracyseeking to expand its power, dominion and budget"Jay Stanley, American Civil Liberties Union.0 -
WhiteHorse wrote: »How will the lender prevent a sale? What right do they have to do so?
The fact you have borrowed a sum of money that you can't repay!
Why would they agree to removing the charge on a house sale going through if the sale price did not cover the outstanding mortgage???0 -
Because they realise that they are not going to get all their money back and that is actually the cheaper option. That's 'cutting your losses'.VIGILANT22 wrote:The fact you have borrowed a sum of money that you can't repay! Why would they agree to removing the charge on a house sale going through if the sale price did not cover the outstanding mortgage???"Never underestimate the mindless force of a government bureaucracyseeking to expand its power, dominion and budget"Jay Stanley, American Civil Liberties Union.0 -
WhiteHorse wrote: »Because they realise that they are not going to get all their money back and that is actually the cheaper option. That's 'cutting your losses'.
and who said???
http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=11_mortgage_shortfalls
WARNING
You can still be asked to pay back a shortfall a long time after you left the house as mortgage lenders may try to pursue a shortfall debt for up to 12 years afterwards.0 -
WhiteHorse wrote: »Because they realise that they are not going to get all their money back and that is actually the cheaper option. That's 'cutting your losses'.
A lender can remove a charge at any time he chooses (obviously, if the debt has been repaid, then he no longer has any choice, he has to remove the charge). The removal of the charge however does not cancel the outstanding debt.
In normal circumstances (ie with ever-increasing property values, and with the banks' god-like powers) the issue does not arise.
Last time there was massive negative equity, the banks still retained their god-like powers, but this time around they are under some pressure not to victimise unnecessarily the victims of the collapse in the property market which was engineered by the banks themselves.
The banks have the freedom to negotiate alternative ways to make good any shortfall in mortgage debt but they will not do so willingly for fear of opening a floodgate. They will certainly not advertise any such negotiability!
But that doesn't mean to say that they will not, on occasion, be open to offers....0 -
When I started working for a Building society in 1999 we covered an area of Bedfordshire that still had a high level of neg equity. We never allowed them to change the amount to unsecured. Its very risky.
O butter, that isn't at all what I wanted to hear...
I will get my Teach Yourself Bankruptcy book and study it this autumn, and I will have it with me when I come out of my interview....
Ditch0 -
More of your obscure ideas .......negative equity does not change the sum you borrowed....0
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