Any way around this mess? - Mortgage shortfall if to sell

cottlad

The re-mortgaging is a little unclear even to my wife. She says she expected around 220k but tbh she doesn't know anywhere near an exact figure as he was the money man. She just knows at least 1 remortgage was forged by her ex partner. We don't think there's anything that can be done about this so haven't really persued it. It could even be that she signed the remortgage without ever knowing what it was. So we don't really think it could be proved or used as leverage. Yup she knows how silly she's been

We have considered renting the property and the rental would cover the mortgage. The reasons for not renting at the moment are a) we just want shut, b) we would need to spend 3-4k to make it rentable, c) If the interest rates increase we would be struggling again, d) we don't forsee a price increase that would make a sale profitable in the near-mid future.

theartfullodger

Sell house, declare yourselves bankrupt, start again with a clean sheet.

cottlad

theartfullodger wrote: »

Sell house, declare yourselves bankrupt, start again with a clean sheet.

Surely we can't just sell the house with such a shortfall?
Do you mean go down the route prescribed by GB and silvercar which is firstly ask bank if we can sell and clear the debt and have shortfall written off..... if that fails have the property voluntarily repossessed followed by bankruptcy. I only ask so i'm sure in my own head the optimum route.

Cheers

silvercar

cottlad wrote: »

The re-mortgaging is a little unclear even to my wife. She says she expected around 220k but tbh she doesn't know anywhere near an exact figure as he was the money man. She just knows at least 1 remortgage was forged by her ex partner. We don't think there's anything that can be done about this so haven't really persued it. It could even be that she signed the remortgage without ever knowing what it was. So we don't really think it could be proved or used as leverage. Yup she knows how silly she's been

We have considered renting the property and the rental would cover the mortgage. The reasons for not renting at the moment are a) we just want shut, b) we would need to spend 3-4k to make it rentable, c) If the interest rates increase we would be struggling again, d) we don't forsee a price increase that would make a sale profitable in the near-mid future.

Renting it out means you would have to maintain two properties plus the hassle of finding tenants, dealing with problems etc. Doubt you really need this.

cottlad

This is a letter i've drafted. Any comments? Should i send this initial letter or hand details to a solicitor to act on our behalf?

Dear Sirs,
I’m writing to inform you of a significant change of circumstance and would welcome your comments and suggestions regarding the above mentioned mortgage. The mortgage is in my name and that of my ex partner (Mr X.) He moved out some time ago after we split up. He had made multiple re-mortgages (not all known to me at the time) before moving out and ceasing to contribute further. The final re-mortgage was made with the promise that an interim loan i had been asked by him to take out to cover mortgage payments would be immediately repaid along with some extra cash. I never saw any of the money and was left with a £5k personal loan which i'm still trying to pay off as well as the responsibility to pay the mortgage. His situation at the moment is that he wants nothing more to do with the property and is unable to contribute. He has no job, no money, and has no job prospects and is living at his Mums. I am however still in contact with him should you require more details. Furthermore, he unfortunately has Huntingdon’s disease which is a terminal illness.
I have been paying the mortgage with my now husband for the past few years. I haven’t worked since leaving my last job on maternity leave so we have been living off my husband’s savings and family help. We never had intention of staying in the property and wanted to move out as soon as the property sold. Unfortunately the property has been on the market for 4 years without any interest. We have recently reduced the price further to £279,950 but are still finding it difficult due to the £250k stamp duty threshold that people don’t want to cross. We have been advised by the estate agents that we shouldn’t reduce the price further as it would draw it even closer to the stamp threshold. We have even looked at the possibility of splitting the property into 2 separate flats which should return over £320k total but all of our funds have been spent paying the mortgage and we now find ourselves in the position of having nothing left with which to either renovate the property or pay the current mortgage. My husbands own property has been vacated by its tenants meaning we simply can’t afford 2 mortgages. I feel I inherited a big mess when Mr X moved out but was determined to see things through in order to protect my name and make sure the mortgage was always paid on time until the property sold. The last thing I wanted was defaults, bankruptcy and/or repossession. Unfortunately the money has now run out and all of my husbands savings have been spent. I am therefore looking for a solution that will suit us both to sort this mess out ASAP and once and for all.

Last week we had the first offer on the property in the four years it’s been on the market. The offer was for £249,950. The potential buyer is not willing to cross £250k and therefore pay stamp duty. She is willing to proceed immediately and is not involved in any chain. We have no further prospects and have run out of money. Furthermore, my husband’s house is again ready for habitation and we plan to move in within a month.

I have recently received advice telling me that voluntary repossession and bankruptcy is a valid option which is something I have vigorously rejected in the past. I still vehemently dislike the thought of bankruptcy but am now looking at this as a real option and a last resort should we not be able to come to some sort of agreement with (the mortgage co.)

As mentioned previously I am currently not working and have no income. My husband is also not working presently and his savings have dried up. We will be moving into his house with our baby in the very near future. The co-owner (Mr X) is currently not working, has no income or savings, no prospects of work, is living with his mum and has a terminal illness.

We would greatly appreciate your thoughts regarding the only offer that has been made on the property. Would this be acceptable as a full and final settlement figure on the outstanding mortgage? If not, can you suggest another solution that will keep me from bankruptcy but will also keep me from having a large shortfall that I would not be able to repay?

Please let me know should you require any further details or documentation.
I would appreciate it if this matter could be dealt with in a speedy manner for obvious reasons.



Yours sincerely,

fathippy

In my opinion, there is way too much information in that. I know you are trying to be honest, but there is some stuff in there that may harm your case.

I would keep it to the bare bones, and maybe give more information in the future if required

pararct

Surely the Ex has committed fraud by forging a signature on the mortgage application (if done without wife's knowledge). Why does she have to prove the fact she didn't actually sign it?
Couldn't she shop the ex to the police who will then do the hard work for her?

A conviction will be all the proof she needs that the additional mortgage over and above the 220k is not her responsibility!! How could the mortgage Company enforce the remainder of the debt on her if this was the case?

House sells for its actual worth and she may actually get to walk away with a little over.

cottlad

fathippy wrote: »

In my opinion, there is way too much information in that. I know you are trying to be honest, but there is some stuff in there that may harm your case.

I would keep it to the bare bones, and maybe give more information in the future if required

What info would you take out?
I was just trying to relay all the facts and be honest but if there's something that could harm us there i obv don't want it in

cottlad

pararct wrote: »

Surely the Ex has committed fraud by forging a signature on the mortgage application (if done without wife's knowledge). Why does she have to prove the fact she didn't actually sign it?
Couldn't she shop the ex to the police who will then do the hard work for her?

A conviction will be all the proof she needs that the additional mortgage over and above the 220k is not her responsibility!! How could the mortgage Company enforce the remainder of the debt on her if this was the case?

House sells for its actual worth and she may actually get to walk away with a little over.

The remortgages go back years and she's unsure of the amount she's signed for. He was a FA and she showed him too much trust. She certainly doesn't have enough info to know for sure he forged any signatures. The last remortgage was the main problem whereas he asked her to get a personal loan to cover the payments until the remortgage came through. He would then pay off the loan immediately and give her a chunk of cash. He of course did neither and instead used to money for his own gain.

fathippy

cottlad wrote: »

What info would you take out?
I was just trying to relay all the facts and be honest but if there's something that could harm us there i obv don't want it in

In short, if you are trying to convince the bank that their best bet is to accept a settlement of £250k you dont want to talk about £320k or 295k or anything that could make them think it is worth sticking it out. They need to believe that if they don't act now they are risking more downside, so keep on that track.

Also, stick to only what is absolutely relevant. It is perhaps not relevant why a buyer may not want to pay stamp, or what your estate agent told you etc. Plus this makes the letter more boring to read and therefore reduces its impact.

As an aside - where do you get the 320k idea from. If this was really the case then surely you could do a deal with a developer to solve your problems. They would pay the mortgage payments for eg 6 months and do the work, in return for keeping all the upside.