We'd like to remind Forumites to please avoid political debate on the Forum. This is to keep it a safe and useful space for MoneySaving discussions. Threads that are - or become - political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.

Voluntary Repossession Advice

Hi, just wanted some advice from anyone who had been through voluntary repo.

We are in arrears and it is likely we will be repossessed, is it better to just ring the mortgage company, explain that you can't afford to pay the arrears and say you will send them back the keys, if we have done it voluntarily would we still have to go to court? I didn't think we would have to since we are ok about losing our flat?

Also are the mortgage company likely to find out about any savings we may have and take them, even if we need them to move into our new place? Can they send baliffs round before you leave to take your personal possessions like sofa, tv etc?

Any advice would be appreciated.
«1

Comments

  • opinions4u
    opinions4u Posts: 19,411 Forumite
    edited 31 August 2009 at 9:19AM
    We are in arrears and it is likely we will be repossessed, is it better to just ring the mortgage company, explain that you can't afford to pay the arrears and say you will send them back the keys
    Shelter have some useful information on their web site.

    "If you can't pay your mortgage, you may want to leave and give your keys to your lender (voluntary repossession). Your lender may suggest this if you are unlikely to be able to pay off what you owe. However, it's not advisable to do this without getting independent advice first."

    There is also a risk that the local authority will see you as being intentionally homeless and push you to the back of their housing list.

    Maybe this BBC article can point you in the right direction too.
    Also are the mortgage company likely to find out about any savings we may have and take them, even if we need them to move into our new place?
    There is something about that question that makes me feel uncomfortable.

    Is this a case of genuine hardship, or are you simply trying to get somebody else to sell the property for you?
  • slipthru
    slipthru Posts: 611 Forumite
    Part of the Furniture 500 Posts
    opinions4u wrote: »


    There is something about that question that makes me feel uncomfortable.

    Is this a case of genuine hardship, or are you simply trying to get somebody else to sell the property for you?

    It does sound like they have saved up enough cash to pay the deposit for privately rented accommodation and moving costs.
    In Progress!!!
  • peachyprice
    peachyprice Posts: 22,346 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Hi, just wanted some advice from anyone who had been through voluntary repo.

    We are in arrears and it is likely we will be repossessed, is it better to just ring the mortgage company, explain that you can't afford to pay the arrears and say you will send them back the keys, if we have done it voluntarily would we still have to go to court? I didn't think we would have to since we are ok about losing our flat?

    Also are the mortgage company likely to find out about any savings we may have and take them, even if we need them to move into our new place? Can they send baliffs round before you leave to take your personal possessions like sofa, tv etc?

    Any advice would be appreciated.

    Have you taken into account what you will do about the arrears and potential shortfall if they flog the flat at a knock down price at auction?

    They can chase you for 12 years for mortgage debt, it won't go away just because you no longer own the flat.
    Accept your past without regret, handle your present with confidence and face your future without fear
  • Mrs_Bumble
    Mrs_Bumble Posts: 1,028 Forumite
    What sort of arrears do you have currently?

    Can you not sell the flat yourselves?

    How/why did the arrears occur?

    If you have savings why haven't you cleared the arrears?

    Who is your lender?

    How can you say that you are ok about losing your flat?

    Handing the keys back in to the lender is not the end of the story, it is just the beginning, arrears will continue to amount until a buyer for the flat is found, all the costs incurred with selling the property will be added to the debt and then if the flat is sold for less than is owed there will be a shortfall and so then all that debt is added up and guess what you still owe it and they will pursue you for it.

    The best options surely has to be to try and work it out if possible not to just chuck the keys back in and hope for the best?

    With a property taken into a possession whether by court order or voluntary it will black mark your credit history for many, many years to come.
    I am a Mortgage Adviser

    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • We currently have £3,000 in arrears and they happened as my husband was made redundant and we couldn't afford to live on my wages, he did get jobseekers, a fantastic £250 a month, wow, but it still wasn't enough to keep up the repayments.
    I spoke to the mortgage company and they unofficially, off the record, told me the only way I could get out the mortgage would be to stop paying it and get repossessed.

    When I said we had savings I meant my dad has some money in an account for me that he was going to give me for my 30th birthday in a lump sum but was thinking of giving us some now to help move into a private rented house (owned by a friend)....we are ok about losing our flat because we stupidly jumped into the mortgage without living in the area first and we hate it, I wouldn't even fight to keep the flat as we get so much trouble from our neighbours and people in the area it is causing us much more stress to stay here. We can't sell it as we have only been here a year and would have to pay a redemtion fee, plus its in a small amount of negative equity.

    I have spoken to the mortgage company and they have advised that they would sell it, inform us of the shortfall and then contact us again sometime within the next 6 years to arrange for us to pay them back, either in a lump sum if we have it, or in the form of a monthly arrangement. They will not chase us because we are quite happy to pay back any shortfall.

    I am abit surprised that most of the comments on here seem to be judgmental, I thought this was meant to be a non judgmental advice site, at the end of the day there are many people on here losing their homes because of stupid mistakes & some that are just selfish like gambling away their money, having a shopping addiction etc. We are stuck somewhere we hate so why should we fight to stay?
  • opinions4u
    opinions4u Posts: 19,411 Forumite
    I am abit surprised that most of the comments on here seem to be judgmental
    I see questions seeking clarity. Which comments were "judgmental"?
  • You mentioned that one of my questions made you feel uncomfortable and asked if we were in genuine hardship or just wanted someone else to sell the property for us.....then someone else commented and said that it seemed like we had saved up the money to pay for a private rented property, if we had savings why couldn't we just pay the mortgage etc.

    I'm sorry if my judgmental comment sounded harsh but I posted on here really to find info from others who had been repossessed and knew the answers to my questions...I'm getting alot of hassle from my family telling me I'm being stupid, we should pay the arrears and sell in a couple of years when the prices have gone up so we're not in neg equity but we can't stand living here anymore and just want out.
  • peachyprice
    peachyprice Posts: 22,346 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    I have spoken to the mortgage company and they have advised that they would sell it, inform us of the shortfall and then contact us again sometime within the next 6 years to arrange for us to pay them back, either in a lump sum if we have it, or in the form of a monthly arrangement. They will not chase us because we are quite happy to pay back any shortfall.

    I sincerley hope that it does work out like that for you but please, please don't rely on that happening. They'll tell you want you want to hear right now, but once the security of the flat has gone mortgage lenders can turn very very nasty.

    If it were really that simple there wouldn't be half so many people being forced into bankruptcy due to repossession shortfalls.

    Who is your mortgage with btw?
    Accept your past without regret, handle your present with confidence and face your future without fear
  • When you say you are quite happy to pay back any shortfall, you obviously have no idea how much this could all amount to. You will be talking about tens of thousands of pounds, interest on interest, arrears, fees on top, and this will follow you around for many years. Handing the keys back is a really bad idea, you should listen to your family. You will both be credit blacklisted and you are only in your twenties - this will cause you untold problems.

    Have you thought about coming to an arrangement re the arrears and then renting the place out? That should cover the mortgage and you can move into rented yourself.
  • Mrs_Bumble
    Mrs_Bumble Posts: 1,028 Forumite
    £3000 or arrears is not huge arrears, and allowing the property to either go into voluntary repossession or be repossessed is just going to add further costs to any debt that you are likely to end up owing the mortgage lender as all costs will continue to be added to the debt, including the continued mortgage payments due whilst the property is sold, legal costs, estate agent costs etc.

    When they say they will contact you in 6 years in connection with the debt left outstanding, they mean that they have 6 years to contact you, they are likely to chase from day 1.

    The lender has a duty to act responsibly in connection with the arrears and should make an arrangement to pay with you.

    when you say the arrears occurred because your partner lost his job and he was on JSA, how long was he out of work for? Was it long enough to claim the income support mortgage interest relief payments?

    It may seem easy to throw the keys in and get right away from the problem but that won't be it, because you will have a credit history that is shot to pieces because of the arrears and any repossession action, and any form of repossession will stay with you for a long time into the future.

    You will get further information about dealing with arrears here:

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

    Speak to the lender, make an arrangement to repay the arrears, get the property on the market and sell it that way, at least then even if there is any negative equity the amount left outstanding to the lender will be considerably less than if the lender takes the property into possession and sells it that way.

    Who is the lender?
    I am a Mortgage Adviser

    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 348.3K Banking & Borrowing
  • 252.1K Reduce Debt & Boost Income
  • 452.4K Spending & Discounts
  • 240.8K Work, Benefits & Business
  • 617.1K Mortgages, Homes & Bills
  • 175.6K Life & Family
  • 254K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16K Discuss & Feedback
  • 15.1K Coronavirus Support Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.