Voluntary Posession

nattymorris

Hi, I have a property which is jointly owned with my ex-partner. We had the roperty on the market for 18 months and didnt achieve a sale. I had moved out of the property when we separated at the beginning of 2007 and he stayed in there until August 2008 after which due to work relocaion he had to move out. We continued with the mortgage payments as long as we could but as neither of us was able or wanted to stop in the property and needed to rent other properties to live in we made the decision to voluntary surrender the property to Northern Rock.

They have now put the property on the market at £137,500 (it was on for £155,000 before we handed it over) and a property very similar on the same estate has just sold having been on the market for £165,000.

This is going to leave us with a shortfall on the mortgage, but do we have any rights as it was their decision to put the property on for under the amount required t clear the mortgage. I have contacted them to ask them waht will happen and they have just told me that the shortfall will be passed on to the indemnity dept but not much info from them.

does anyone know anything about situations like this?

Robert_Sterling

They are required to get as much as they can from the sale of the property.
One way of satisfying this requirement and at the same time gat a uick sale is to sell the property at auction.
This is why repossessions often are sold at auction.

silvercar

It would help to find out what the property advertised at 165k actually sold for.

Remember your property will be sold as needing a quick sale (and without some solicitors standard questions being answered as it is a repo). This does effect the price achieved. Not only will it not be spruced up and dressed for sale but in this market buyers will be aware that a low offer may succeed.

The lender can justify getting a quick turnaround as each month that the property is not sold incurs an increase in the arrears costs for you.

Also remember that you couldn't sell the property at 155k or you would have done so. An 11% reduction allows for the price drop since you first marketed the property and that that price was too high to achieve a sale.

nattymorris

Thanks for your replies.

I understand that prices have gone down. The annoying thing is that I had an offer just before we decided to hand it back to the bank for £149,000 and the estate agents told me that the offer was too low and I should accept it, I wanted to get as much as possible to pay the mortgage.

What concerns me is is what happens to the shortfall, we already have a lot of debt and this is going to increase it. The last thing I want is to have to go bankrupt or have an IVA because of the consequences it will have on me geting another mortgage.

silvercar

I wouldn't think about a new mortgage just yet. A repossession, though not as bad as bankruptcy, is going to make it difficult to get another mortgage soon in the current climate.