Govt Mortgage to Rent Scheme/Will it save my house?

Sunnylooloo

Ah Angie - big hugs in order. I think they have been a lot of lurkers here (like me!) who have read what has been happening but not sure if they can offer any advice so just stayed quiet, but you can see from the views how many have visited so you got a whole heap of support - even if some silent.

You have come so far - you will get this - don't think of this as a hurdle - think of it as a small hiccup and you will do this!!


x

Angiepange

Before I update, thanks to everyone who has gone out of their way to support, advise and help me with this. I have spent the last 3 days trying to find out as much as I can about how to move forward with the latest hurdle.

Ok, so we had the survey and valuation done last week by the Housing Assoc. A couple of issues with the house were picked up to do with Building Regs approval (which was not in force) and I had to arrange for a building inspector to have a look and the relevant paperwork etc to be organised. This was stressful, costly, but I have done what was asked of me and the local building control were really efficient to deal with. The valuation has come in within the 120%loan to value for houses in NE, like ours so I could breathe a sigh of relief at that!!

Then we had the face to face meeting with the HA. I was so nervous but they were very amiable and clearly explained the MR in much more detail, told us what the rent would be set at, explained how the tenancy works, gave us an info sheet etc. It just reinforced to us that this scheme is ideal for our situation.

Then the bombshell. They told us that because there will be a shortfall ( just not too sure how much at the moment, but likely to be several thousand pounds), the bank would expect us to sign a Shortfall Liability Agreement before they let the rescue go ahead. My response was 'surely that will be covered by our bankruptcy, once it becomes an unsecured debt'. The HA response, well no, the bank will expect you to sign the form but dont worry it will only be set at what you can afford. Fine, as if the prospect of paying £25 a month for the next 120 years was an attractive one!!! And here is the problem, yes if we were to walk away from the house and it was repoed, went to auction and sold at probably a greater loss, the shortfall would be included in our BR. But the bank can refuse to remove their charge on the house unless the shortfall is signed for. So, they have us over a barrell !!

We did not go and are still going through all the stress and difficulties of bankruptcy to make ourselves liable for thousands of pounds of more debt that we have no way of paying off on a limited income. I really wonder why the MRS scheme was set up to help vulnerable families stay in their homes and avoid repossession if at the end of it some of those families, like us, get all this way through to be find themselves potentially facing huge debts. Its crazy.

So I have spent the last 3 days in contact with everyone I know who might be able to help us here. I have found out that there have been cases where the bank will agree to write off the shortfall, cases where the local authority may step in and contribute financially to secure the rescue (in their interest really as if the rescue fails we will become a burden to the council to be rehomed) and I have done nothing but eat, sleep, talk mortgage rescue to the point where I feel like I am going mad.

Luckily I have tremendous support from my local CAB who are preparing to negotiate on our behalf. I also am lucky enough to have a contact, a mortgage rescue officer, from another local authority in the midlands who has been invaluable. She has provided names and contact nos of people much higher up the chains than I could ever have dreamed of reaching. She knows of cases where the shortfall was written off, so it can be done. Whether we will be fortunate I dont know yet. But I feel like I have all the contacts in place if we are going to need them, because I am going to fight for this. Most of you know it has been a long and painful process and for us to fall at the last few hurdles I cant bear to think about.

So next stage is, wait for the offer, see what the bank will do and take it from there. I feel out of my depth, but have to carry on.

Sorry for the long post and thanks for reading.

Angie x

confused76

hi angie
thanks for the update
my heart sank when i read about the shortfall...good to hear you have some contacts and there is still hope of it being written off
i so want this to work for you....i have everything crossed for you
lots of love x

IF

Hello Angie, well, got to be strong for a bit longer and were all with you. Like confused said we all want this to work in your favour. Lot of love and big big hugs xx

skylight

*Cough* *underbreath*

Depending on what the bank set the payment rate at, there is always the possibility of going BR again in the future cos then this debt would be a provable new debt and therefore applicable to any new BR order in place.





Sorry? Did someone say something.

Sunnylooloo

O Angie... what a set back!!

But as has been said you have good support around you and as uncomfortable as it maybe.... I'm keeping everything crossed for you.

xx

debtinfo

Hi angie, sorry to hear your bad news, just thought i would share this link with you it is the OR's guidance about MRS schemes.

paragraph 33.206 is where it seems you are at, and it looks like the only way it can more forward is if the mortgage company agrees to write of the debt

http://www.insolvency.gov.uk/freedomofinformation/technical/TechnicalManual/Ch25-36/Chapter33/part9/Part%209.htm

Angiepange

Thanks all

Skylight I understand what you are saying, if you declare yourself BR after signing any shortfall liability agreement then the shortfall would be considered as any other unsecured debt in the proceedings, However having had to go BR once I just couldnt bear the thought of going through the process a second time. But thank you.

Debtinfo, thanks for the link, knowledge is power and to see it all in black and white is a great help, hadnt seen this before.

And thanks to all others for replies, much appreciated. Once the offer is 'on the table' from the LHA then we will be in a clearer situation as to shortfall amount. I am prepared to go high up with this if I have to.

Will keep updating as and when.

Angie x

Angiepange

:mad: For the last 2 weeks have been waiting for the offer on house to arrive in the post.

Every day I am rushing home to see if its come so today I thought I would ring my CAB adviser, ask him if he had heard anything yet. He kindly rings the LHA to see whats happening.

The hold up is to do with planning document. This was all sorted out by us nearly 2 weeks ago but seems like its crosswires with the information and as soon as its sorted again the offer letter will come out to us !

My first reaction is annoyance that red tape and officialdom keep getting in the way of this process and it shouldnt be down to me to be 'piggy in the middle' between all concerned. But thats what I am and once again I want to give up, im tearful, upset and feel like I cant take much more of it.

My second reaction is hope, they will be putting an offer on the table, yes, thank you.

The offer, which has taken us 9 months to get will be the start of the next battle. The shortfall. No way we are we putting ourselves in debt ever again. So no way we will sign for liability.

I just keep asking myself is it really worth all this stress, but inside I know it will be so I keep soldiering on.

Sorry havent posted with much constructive news but just needed to vent the feelings

IF

Angie, hang on in there and vent away......you've been so strong and patient, and you have my full admiration. Lots of love you can do it lol x