Giving my house back to the bank?

PasturesNew

It is 12 for mortgages, but there's some agreement some lenders signed up for to say they were the Good Guys and wouldn't chase it after 6 even though they can.

Not sure if that allows them to sell the debt on at 6 years or not though.

But there are definitely lenders out there who can and do chase for the full 12 years. The longer they leave it, the more chance they can come back and take what you've rebuilt of your life.

silvercar

Council of Mortgage Lenders policy:

From 11 February 2000 the policy 9on outstanding debt following repossession) is as follows:

The CML says anyone whose property was repossessed and sold and who has not been contacted by their lender within six years from the date of the sale will not be asked to pay the shortfall.

But from the insolvency website:

"How long can I be pursued for the debt?

Lenders think that mortgages can be pursued for 12 years under the Limitations Act. Most other debts can only be pursued for 6 years. The time period starts running from the last time the lender contacted you and you agreed that you owed the money ("acknowledged" the debt ) or you made a payment to the lender (or someone who owned the house jointly with you made a payment).

Following the cases of Paragon v Banks and Halifax v Grant, The Court of Appeal has made a decision. They say the limitation period for mortgage lenders trying to recover mortgage shortfall debts is 12 years (Section 20 of the Limitation Act 1980).
This means the lender has 12 years from the last time a payment was made on the account or you acknowledged the debt to start action to recover the capital owed on the mortgage. It appears that the lender has 6 years to start action to recover interest added to the debt.
This decision means that you will not be able to argue that lenders should have started action within 6 years."

Remember they only have to track you down and get the debt acknowledged or a payment made within the 6 /12 year timescale, the repayments can carry on with no end date.

Snooze

In that case I stand corrected! Learnt something new there.

Rob

happybroker

ruben_sen wrote: »

My partner has been given a Job offer down under and we really want to take it. We have put the house for Sale but in the current climate we have had no interest. It is a simple 2 up 2 down in West Yorkshire. A family member mentioned a idea of giving the house back to the bank? Is there anybody out there who could advise if this is possible and what the repecussions of doing this is?

We only brough the house 3 years ago and have invested a little extra in improvments. We are worried about asking the bank direct at this point incase it looks bad/ raises sus!!!!ions. So any help at this research stage would be good.

Thanks

R

If you owe less than 85% of the value of the property there are people out there who will offer up to that as a "distressed sale". These tend to be the more reputable "cash for houses" firms but be careful.

good luck

GDB2222

happybroker wrote: »

If you owe less than 85% of the value of the property there are people out there who will offer up to that as a "distressed sale". These tend to be the more reputable "cash for houses" firms but be careful.

good luck

I think that the watchdog programme looked at one of these companies. They charged a pretty large up-front valuation fee and then made derisory offers that nobody ever took up. They were just scimming off the valuation fees they generated. I don't know if that's fraud, but certainly morally reprehensible.

Dithering_Dad

Why not have a little fire?

silvercar

GDB2222 wrote: »

I think that the watchdog programme looked at one of these companies. They charged a pretty large up-front valuation fee and then made derisory offers that nobody ever took up. They were just scimming off the valuation fees they generated. I don't know if that's fraud, but certainly morally reprehensible.

The more honest operators won't ask for valuation fees from the seller, some even pay the sellers legal costs.

BettiePage

They can chase you abroad too. Borders are no limit.

Snooze

Dithering_Dad wrote: »

Why not have a little fire?

Rob

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ruben_sen

Thanks for the advice. The problem is we are recent graduates and got a 100% interest only Mortgage 3 years back. So judging by what has been posted, we don't have too many options. Also we arn't sure about when we want to come back as the inital contract is for a minimum of 2 years. Then there is also the fact that we have never been to Oz, so we're not sure if we like it. However we may look at the auction option.

In summary, I don't think we will persue the giving the key's back option as the idea of being chased around the world for dept doesn't sound appealling.

Thanks to all. If anyone has any other idea's they are welcome to impart them here.