need advice on repossession please

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Well, due to the fabulous credit crunch my house is now in negative equity and we can no longer afford to complete on the sale of it.

Bit of background is me and ex split at start of year, I moved out in may and mortgage hasn’t been paid since. We had a buyer for our house but because of the amount we owe which needed to be paid before completion we have now had to pull out of sale as neither mortgage lender or housing association will agree to us making a re-payment plan.

Repossession is now (it seems) our only option. I have googled repossession but there is so much stuff out there that I don’t even know where to start and would be really grateful if you guys could point me in the right direction of what needs to be done, what the implications are, how long repossession status will stay with me etc.

I have already spoken to mortgage people and said it looks as if we will have to go down the re-po route but I have read somewhere on here (not too sure where!) that there is a form that mortgage bods will send but I shouldn’t sign it - can anyone tell me what this form is and why I shouldn’t sign it?! If I can find where it is/what its called I will update!!

thanks
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  • msmicawber
    msmicawber Posts: 1,962 Forumite
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    I'm not knowledgeable about this, but others will be, so sit tight. I see that there's a housing association involved, so guess this is a part-buy part-let property. If so, what proportions (in case that's relevant)? I don't understand why they wouldn't let you complete the sale, since surely if it is re-possessed it will be in order to sell it and try and recoup as much of the money that you owe as possible.

    It must be a horrible time for you. Best wishes.
    Debt at highest: £6,290.72 (14.2.1999)
    Debt free success date: 14.8.2006 :j
  • newcook
    newcook Posts: 5,001 Forumite
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    msmicawber wrote: »
    I'm not knowledgeable about this, but others will be, so sit tight. I see that there's a housing association involved, so guess this is a part-buy part-let property. If so, what proportions (in case that's relevant)? I don't understand why they wouldn't let you complete the sale, since surely if it is re-possessed it will be in order to sell it and try and recoup as much of the money that you owe as possible.

    It must be a horrible time for you. Best wishes.


    thanks - its a 50% shared ownership property. I have spoken to the HA re the rent arrears (we have arrears on rent as well :( )but they are adamant they want the the outstanding for completion.
    I have tried to explain to them that by letting us arrange a repayment plan and going ahead with the sale would be the best option all round but they dont seem to see this.
  • msmicawber
    msmicawber Posts: 1,962 Forumite
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    Thanks, newcook. What a daft situation, but I suppose it's inevitable when there are two interested parties. Hopefully, someone will be along soon who can give some firm advice.

    It could be the most knowledgeable are at work at the moment, so make sure you check at lunchtime and this evening if you don't get another post soon. If the post gets moved down the forum list, there's no shame in adding a 'can anyone advise' type post to bump it up again.
    Debt at highest: £6,290.72 (14.2.1999)
    Debt free success date: 14.8.2006 :j
  • churchrat
    churchrat Posts: 1,015 Forumite
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    just a little bump
    LBM-2003ish
    Owed £61k and £60ish mortgage
    2010 owe £00.00 and £20K mortgage:D
    2011 £9000 mortgage
  • peb
    peb Posts: 1,805 Forumite
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    Hiya

    I'm trying to think this through. It is daft that they won't let you complete as obviously the debt will just increase and another buyer may not be found!

    As there is a Housing Association involvement the Lease will state what will happen in the case of a reposession- there are two or three main types of shared ownership lease and they are differerent but I don't think it makes a big difference in your situation.

    So far as the letter is concerned you may have read that you will be asked to sign to say that you will cover any shortfall once the house is sold (i.e - what you are trying to do now!) In a bankruptcy scenario this should not be signed as you want the negative equity to be included within the bankruptcy. Unfortunatley even if you don't sign it the Lender will still come after you for teh shortfall and this will include legal costs, penatlies etc.

    I'd keep plugging at them to see if they will accept a payment plan or can you and your oh each get a loan for this money?

    Good luck
  • Scarlett.1974
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    Hi newcook :)

    My house is in the process of being reposessed so hopefully I can answer some of your queries.

    The form you're probably referring to is for when people want to do Voluntary Surrender instead of the formal reposession route. This is basically 'giving the house back' to your mortgage lender. I'm assuming (correct me if I'm wrong) that you've seen mention of it on the Bankruptcy forum? The reason BRs are advised not to sign the form is because as a bankrupt any shortfall in the sale of the property goes into their bankruptcy and they are not liable for it - the form that they're asked to sign states that they ARE liable for any costs/shortfall/charges etc.... - this is why they're advised not to sign it.

    Unless you are your ex are bankrupt or planning on going bankrupt then I'm afraid that you both will be liable for any costs & charges and any shortfall to cover the mortgage once the property has been sold :(

    Regarding what you actually need to *do* - well, the answer to that is very little actually. If you are sure that reposession is what you want then really, you can basically just sit back now and allow the process to happen. You don't actually 'have' to be in contact with your mortgage company and you don't 'have' to attend court either.

    I'm sure you are aware that this will have a very adverse effect on your credit score, but for how long I'm afraid I don't know the answer to that. I'm just guessing here, but I'd say you were looking at a minimum of 6 years.

    If you have any further questions, please do shout up :)
    You can't control everything in life....... your hair was put on your head to remind you of that :p

    Proud to be BSC no. 103
  • newcook
    newcook Posts: 5,001 Forumite
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    thanks for that Scarlett - I knew it would look bad on my credit score (which is rubbish anyway!)

    with regards to bankrupcy, how long does that stay with you?
  • peb
    peb Posts: 1,805 Forumite
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    Repossession will affect your ability to purchase a new property for 12 years - I don't know why but a former work colleaugue found this out the hard way.

    It may be worth you hoping on to the Bankruptcy board (Scarlett often helps out on there) to see what options you have. How much is the shortfall and how likley is your ex to contribute? Unfortunately the debt is "joint and several" which simply means if you of you doesn't pay they will simply persue the other.
  • msmicawber
    msmicawber Posts: 1,962 Forumite
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    I think it's because mortgage debt doesn't become statute barred for 12 years, whereas it's 6 years or other debts, peb.
    Debt at highest: £6,290.72 (14.2.1999)
    Debt free success date: 14.8.2006 :j
  • peb
    peb Posts: 1,805 Forumite
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    Thanks - I know a former workmate got stung when her husband walked out in the last recession and was patiently saving in the hope of being able to get back on the latter at some point.

    msmicawber wrote: »
    I think it's because mortgage debt doesn't become statute barred for 12 years, whereas it's 6 years or other debts, peb.
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