Mortgage woes with split partner (sorry if its long)

xmaslolly76

Hi

My partner has a joint mortgage on the house he occupies with his astranged wife. She has not lived there in over 12 months and has not paid a single penny towards the mortgage.

He is now in a situation where he can no longer afford the mortgage alone and has decided to allow the property to be reposessed as its value would not cover what is owed on it so selling is futile and would add extra costs which he can ill afford. We know reposession is not an easy option but at this point in time weighing up all the pros and cons it is the best option.

I only rent and if his house would have been bigger i could have moved in with the kids and helped him pay the mortgage, however i am adverse to doing this because the simple fact of the matter is the house is to small for 2 kids and us and also that his wifes name is still on the mortgage and why the hell should i pay for her share.

Anyway we are deviating from the problem here she has now heard that he is not paying the mortgage and is going absoultely loopy at him about it saying it will affect her ability to get a mortgage with her new man. Our responce was tough its your own fault you shouldnt have just walked out and left him to it. He didnt hear anything from her at all for over 6 months then she called saying she knew about me and didnt want me in the house and she was skint and couldnt help with any bills. To behonest this new round of contact only seems to have been fuled by the fact that she found out i was pregnant then a new mistry man appeared on the scene that she suddenly wants to buy a house with all in the space of a month. I however lost my baby but she is not aware of this we try not to tell her anything about our personal state but she always seems to find out.

Ok what we would like to know is can she forcably remove my partner from the house and take it over he does not want to give the place up to her and let her walk away with everything when she has paid nothing towards it whilst his name is still on the mortgage and the deeds. If she can get a mortgage, which we doubt as she only earns 14k a year and her new partner is tied into another mortgage with his ex who has a child and earns not much more than her. Then he is willing to move out and let her have the house no questions. He would how ever like to see if he can claim back the half of the mortgage he has paid over the last 18 months which would total around the 3.5k mark and would allow him to set himself up again in a new home once she takes this over if she does. I forgot to mention he did offer to have her removed from the mortgage the first time she contacted him again as he was in a much better position then (he was later made redundant and now has another job but not as well paid and due to the never ending circle of charges he hasnt been able to catch up) he also offered to give her a sum of money as a payoff for the loss but she refused at the time.

I hope this all makes sense I know I waffle but where does he stand please help he is not used to this bickering and fighting

alwaysonthego_2

Because it is a joint morgage both of your dp and his wife are responsible for the mortgage. At the cab we do not advise clients to let their houses get possessed and would try and promp them to either
1) sell the property
2) rent

When a house get repossessed the mortgage company will sell it for rock bottom price, whatever they can get for it. This may lead to a shortfall which means that your dp and his wife could be billed for thousands if the property is in negative equity. Also the building society could bill them for solicitors fees, property selling fees and any maintainance to the property to make it more sellable and this will not be cheap. So once the property is sold, the debt does not go away. Your dp should seriously think of letting his ex buy the house and wash his hands of it. Is it worth trying to get the extra money he has paid, it may be like getting blood out of a stone and if he doesn't act quick he could be in a worse finacial position qhich could affect you both in the long run.

pinkshoes

As she is on the mortgage and deeds, she is quite entitled to live there.

Not paying the mortgage is very foolish, as not only will he end up with a terrible credit rating, meaning he'll find it near impossible to borrow money, or only at a very high interest rate, the lender will also force the sale of the house, then will chase after him and his ex for the balance between what the house sold for, and what was owed on the mortgage.

A sensible solution would be for the two of them to SPEAK to each other, put the house up for sale, then take out a loan to pay the rest of the money owed.

xmaslolly76

She cant do that as i have said there financial situation at the moment and in the current financial climate there isnt a lender on the planet that would lend her 115% of the propertys value which is what she would need to buy it from him, she also doesnt have a deposit. She seems to live in cloud cuckoo land as far as getting a mortgage is concerned which is why we are not taking it as a serious option from her.

to give you the figures

House value now £90,000
Outstanding mortagage £88,000
There is also a £9,000 interest free loan the builders gave them at the time of the sale to make the house more affordable which is payable in ten years or when the house is sold she would need to find that as well. there is the £3.5 k that she owes him for back mortgage and also and early redemption on the mortgage of over £8000

Even without his £3.5k which he is willing to forgoe just to get it out of his name that comes to £105k no lender is going to touch it with no deposit and arrears on her current mortgage ?

This is also the reason why he cannot sell the house himself, he has tried to rent out the property but niether tenants he has had has paid their rent correctly and he has been forced to evict them costing him more money and leaving him out of pocket again by another £2k in lost rent and costs.

All in all he is stuck between a rock and a hard place and the choice he has been left with was to let the house go or risk all his other credit and be forced into bankrupcy which would be much worse. He understands that he would have to pay any shortfall from the mortgage and is willing to do that.

I hope that gives you a clearer picture its not her getting the house he is worried about its her being able to pay the current mortgage with his name still on it and force him out the house. he doesnt mind her having the house he just wants it out of his name first before she moves in.

pinkshoes

So you're saying she's not willing to sell, and wants to buy him out? He should give her 14 days to get a mortgage approved (she won't be able to!), and then if she can't get one, then she should agree to sell the house. Perhaps she'll be happy with this and agree?

When you say it's valued at £90k, who did this valuation? In the current market, people are offering 10% or 20% below asking price, so realistically they might only sell for £75k.

£88k (mortgage) + £8k early redemtion + £9k loan + £1k solicitors fees = £106k.

Looks like they'll have to take out a loan of potentially(£106k - £75k = £31k) £31k, so £15.5k each.

£15.5k isn't that bad, and they definitely wouldn't let him go bankrupt over it. Letting the house go is a stupid idea, as if they price it low to sell, then they'll get a higher price than if they let the lender sell it at auction or something.

has he spoken to CAB? I'm sure there's some way he can force the sale of the house...

arthur_dent_2

To me it looks like trying to sell the house (not rent) maybe the only option. True you would end up owing half the remaining debt but at least you could try and get the best price for it. If you were willing to move in, you would have to get her to sign over her responsability which under the current climate doesn't sound like a good idea. Whatever happens make it absolutly clear that your OH is not going to be paying out any more mortgage payments until this is resolved. They are jointly liable for prodit or debt. She cannot just walk away and leave the legal responsability solely to your OH.

Of course if she is silly enough to let your OH sign away his responsability then that would be by far the best option for you. I would not pay the mortgage and then see what she says.

xmaslolly76

Thanks for all your help i have spoken to the other half who in turn has spoken to his ex she is coming to look at the house tomorrow to make sure her new OH likes it if so they are going to try to buy it. So fingers crossed that some one is soft enough to give them a mortgage and he can walk away from it unscathed. I have told him not to pay anything more though and also not to agree to move out until everything is signed on the dotted line :-)

xmaslolly76

To pink shoes

The valuation is based on other houses in the street which are on the market for just over the 100k mark i have said 90k as a realstic figure for offers as i know the market is on the downturn and gone are the days when you can expect anything near asking price for anything :-)

arthur_dent_2

I hope all goes well for you and she likes the house enough to buy it (again).