Mortgage after Bankruptcy

ChrisHoll · 18 March 2017 at 10:56AM

Hi all

This is my first post on the forum so apologise if my questions gave already been answered but was hoping for some guidance/advice.

Unfortunately following a relationship breakup, I was declared bankrupt in April 2010. My ex moved out leaving me to pay the bills and mortgage.

The house was finally repossessed by NRAM in July 2012 after the OR determined they had no interest in the property due to negative equity. It was finally sold with £65k owing which NRAM continued to chase me for.

Fast forward 7 years, I am now looking to obtain a new mortgage with my new partner, the bankruptcy is no longer on my experience credit file and no debt at all. However, the repossession is showing and will not drop off until July 18. Credit score is Fair 791.

From reading the forum and other research, I believe that the shortfall and repossession should have been included within the bankruptcy and NRAM or Landmark as they are now should have removed this from my credit file. Would this be correct?

We have applied and been offered a mortgage but at terms of 6.1% despite a 25% deposit. If NRAM have to removed (or are forced to remove via Financial Ombudsman), would this have a positive or negative impact on my credit rather and ability to obtain the mortgage? The length of credit agreement seems to be a positive on the credit file?

I hope this makes sense and explains the facts. Any assistance or advice would be gratefully received

Many thanks

GDB2222 · 18 March 2017 at 11:00AM

I'm astonished the lender was chasing you for the shortfall even though you were bankrupt. Have you asked them to explain?

ChrisHoll · 19 March 2017 at 1:27AM

They were really unhelpful and despite numerous calls to advise of the bankruptcy, they kept calling and sending letters.

Should they have to remove from my credit file? Does it matter that the debt has passed fro NRAM to Landmark?

GDB2222 · 19 March 2017 at 9:47AM

Make a formal complaint, and go to the Financial Ombudsman if necessary. You are entitled to an answer, and it looks like harassment.

They had the right to repossess the house much sooner than they did. How come they left you in place until 2012? By that time, had you been discharged from bankruptcy?

silvercar · 19 March 2017 at 10:28AM

A popular NRAM product was the together mortgage, that was part mortgage and part unsecured loan. The unsecured loan would have fallen straight into the bankruptcy - other than NRAM retained the right to secure the loan on the property if you defaulted.

Either way the shortfall on the mortgage should have fallen into the bankruptpcy unless you signed anything after you were made bankrupt taking responsibility for the mortgage. This will include any paperwork transferring the mortgage from joint names to your name or any new deal eg fixed rate they were offering.

It is common for lenders to not accept the keys being handed back if the borrower is not prepared to sign anything and bankrupts are generally advised not to sign anything that could be interpreted as acknowledging the responsibility for the debt. So repossession can take as long as the lender wishes. You can't complain that they were too slow to repossess.

If they repossessed in 2012 then that's what will show on your credit file. The answer would be to take a mortgage without redemption penalties and remortgage to a cheaper rate when you can.

ACG · 19 March 2017 at 11:42AM

I can not help re the bankruptcy, but I am surprised you have been offered a rate of 6.1%. I would expect there to be better options out there but I suppose it depends on how it all appears on your credit report.

The_Real_Cheddar_Bob · 19 March 2017 at 5:22PM

get yourself an independent broker. This might mean paying for their advice. My mortgage is 1.9%. Cost of advisor £2000. The "free" ones didnt even come close.

good luck

ChrisHoll · 19 March 2017 at 5:39PM

rjwr wrote: »

get yourself an independent broker. This might mean paying for their advice. My mortgage is 1.9%. Cost of advisor £2000. The "free" ones didnt even come close.

good luck

Thanks for the reply - do you mind me asking who your mortgage is through and did you have a previous repossession? Thanks

ChrisHoll · 19 March 2017 at 5:44PM

silvercar wrote: »

A popular NRAM product was the together mortgage, that was part mortgage and part unsecured loan. The unsecured loan would have fallen straight into the bankruptcy - other than NRAM retained the right to secure the loan on the property if you defaulted.

Either way the shortfall on the mortgage should have fallen into the bankruptpcy unless you signed anything after you were made bankrupt taking responsibility for the mortgage. This will include any paperwork transferring the mortgage from joint names to your name or any new deal eg fixed rate they were offering.

It is common for lenders to not accept the keys being handed back if the borrower is not prepared to sign anything and bankrupts are generally advised not to sign anything that could be interpreted as acknowledging the responsibility for the debt. So repossession can take as long as the lender wishes. You can't complain that they were too slow to repossess.

If they repossessed in 2012 then that's what will show on your credit file. The answer would be to take a mortgage without redemption penalties and remortgage to a cheaper rate when you can.

Thanks fir the reply. They did want me to sign a Notice of Assidnment (from memory?) but was advised not to by OR. NRAM refused to accept keys back

Slightly confused though whether NRAM should forced to remove by FO or its on until repossession falls off? I understood default date should be date of bankruptcy? Does the property not become owned by OR?

Thanks again

GDB2222 · 19 March 2017 at 6:21PM

ChrisHoll wrote: »

Thanks fir the reply. They did want me to sign a Notice of Assidnment (from memory?) but was advised not to by OR. NRAM refused to accept keys back

Slightly confused though whether NRAM should forced to remove by FO or its on until repossession falls off? I understood default date should be date of bankruptcy? Does the property not become owned by OR?

Thanks again

That's completely logical. Which is why I suggested complaining right up to the Ombudsman until it's sorted out, or they give you an explanation you are satisfied with.

silvercar · 19 March 2017 at 7:18PM

ChrisHoll wrote: »

Thanks fir the reply. They did want me to sign a Notice of Assidnment (from memory?) but was advised not to by OR. NRAM refused to accept keys back

Slightly confused though whether NRAM should forced to remove by FO or its on until repossession falls off? I understood default date should be date of bankruptcy? Does the property not become owned by OR?

Thanks again

The property is owned by you until the repossession date. From the repossession date it is owned just by the lender.

In the case of a bankrupt, the beneficial interest (usually the equity in the property) is due to the Official Receiver until it has been dealt with, the property still belongs to you.

The official receiver will never own the property, at least not a residential property that is (or was) your home.

Mortgage after Bankruptcy

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free