Can The Keys Be Handed In?

chambta

A friend has asked me for some advice. I pointed her in the direction of the CCCS but she says that they were unable to offer specific advice.

She is many months in arrears on her joint mortgage and for the last 6 months has left the property vacant to move in with family, anticipating repossession. Her husband is not on the scene and has not been in contact for over a year, whereabouts unknown. The property is on the market several thousand pounds below the mortgage debt with no interest and no sale likely.

She is unemployed and wanting a swift resolution to the matter took the keys into her bank branch. Her intention was that this would force the bank to take possession thus saving herself unwanted court costs.

The bank have actually sent the keys back to her now stating that without his written consent nothing further can be done other than let the matter take it's natural, expensive and obvious conclusion.

All she wants is a swift end with, she expects, possible bankruptcy as a result due to a £15000+ shortfall if and when the property gets sold at auction.

Is there anything else that can be done in the circumstances?

Mrs_Bumble

If the property is in joint names then the bank can't accept the keys and it will have to proceed the legal route, unless your friend can get hold of the absent husband as he is party to this debt, if he is happy to hand the keys back in then they could do that.

Otherwise if the bank gets nowhere with either party in obtaining an agreement to pay or contact then they will start proceeding and if neither party contests this then a repossession order will be issued.

Other organisations to contact for mortgage specific advice can be found in this leaflet

http://www.moneymadeclear.fsa.gov.uk/pdfs/mortgage_cantpay.pdf

It is a big step for your friend to accept that this property is going to be repossessed (handing the keys in achieves the same outcome) she may never be able to be named on another mortgage again.

ALIBOBSY

Was just reading this being nosey, but is that right. Once repossesed you will NEVER get a mortgage again?

Surely this means swathes of people after every recession who will never be able to buy?

Given how the banks like to lend in the boom years, surely they allow for this. Isn't there a period after which you can buy again?

ali x

ginandtonic1988

Untrue, I and my husband was re-possessed in 1991 and we have a mortgage now.

Mrs_Bumble

ginandtonic1988 wrote: »

Untrue, I and my husband was re-possessed in 1991 and we have a mortgage now.

Did you obtain the new mortgage before the 'credit crunch'?

In the current market lenders do not like missed mortgage payments and won't entertain clients that have had a previous property repossessed.

Mrs_Bumble

ALIBOBSY wrote: »

Was just reading this being nosey, but is that right. Once repossesed you will NEVER get a mortgage again?

Surely this means swathes of people after every recession who will never be able to buy?

Given how the banks like to lend in the boom years, surely they allow for this. Isn't there a period after which you can buy again?

ali x

This recession is slightly different in that the banks themselves have nearly gone bust.

They are now lending on a restricted basis and cherry picking clients, as the above post says, they don't like missed mortgage payments so how do you think they view a client that has had a property repossessed?

They want the best clients they can get, no risk.

ALIBOBSY

Ah I see what you are saying is no mortgage in the current climate, not never as you originally said.

The reality is loads of people are unable to get a mortgage NOW. But may well be able to in the future.
Given that HPI and the whole housing market are in both the banks and the governments interest (whether or not that is the best for the country is another question lol) I cannot see the mortgage situation staying like this forever.

But I agree for the immediate future she would be stuffed, perhaps 6 years? or maybe 10?
Not something to be taken lightly at any rate.

ali x

Mrs_Bumble

Ok I have amended the original statement to say may never be able to be named on another mortgage again.

My feeling is that as the banks/lenders etc have nearly crumbled under their own stupidity they will always tread lightly in the adverse market in the future and a client that has previously had a property repossessed????

So my personal opinion is not to bank on it.

chambta

Mrs_Bumble wrote: »

If the property is in joint names then the bank can't accept the keys and it will have to proceed the legal route, unless your friend can get hold of the absent husband as he is party to this debt, if he is happy to hand the keys back in then they could do that.

Otherwise if the bank gets nowhere with either party in obtaining an agreement to pay or contact then they will start proceeding and if neither party contests this then a repossession order will be issued.

Other organisations to contact for mortgage specific advice can be found in this leaflet

http://www.moneymadeclear.fsa.gov.uk/pdfs/mortgage_cantpay.pdf

It is a big step for your friend to accept that this property is going to be repossessed (handing the keys in achieves the same outcome) she may never be able to be named on another mortgage again.

Thanks for the advice-what the bank is telling her is right then.

There is no other option other than repossession sadly. Mortgage payments are £650pm and she is only in receipt of JSA. As she no longer lives in the property, due to being unable to meet living costs, she is unable to claim benefits that may otherwise have allowed her to remain in the property.

To put the proverbial cherry on top the negative equity make a way out impossible. What concerns her most is how the bank will deal with her once the shortfall is known. She has no means to pay anything and feels she will be left to deal with what should, in theory, be a joint problem.

To further confound matters she heard via a 3rd party her errant husband was bragging about being made bankrupt to indemnify himself against claims from the bank.

RufusA

chambta wrote: »

To further confound matters she heard via a 3rd party her errant husband was bragging about being made bankrupt to indemnify himself against claims from the bank.

If she has contact with this 3rd party, can she use it as a way of contacting her ex to seek permission to return the keys?

If the errant husband is bankrupt this will complicate matters! If the property was declared to the official receiver, then they may have registered an interest, and permission may be needed from them prior to reposession.

If the property wasn't mentioned then on respossesion the debt becomes an unsecured debt after bankruptcy and the husband will still be liable to repay it as it won't be included in his bankruptcy.

All I can suggest is your friend gets proper (legal) advice. The National Debtline might be a good starting point. If bankruptcy is likely for your friend, then will need to ensure the repossession, and bankruptcy are properly timed to minimise their exposure. Asking a friend to post on an internet forum may sadly not be sufficient in these complex matters!

HTH - Rufus.