Mortgage advice needed please

snugglepet20

Ok long story short SIL has broken up with her husband. She is going to move back into the family home with the children and try to pay the mortgage. They are currently in negative equity (about 25k short) and 3 years into a 5 year fixed deal with payments of £800. On standard variable rate these payments would be £400 which she can afford. Her ex has refused financial support towards the mortgage at this stage. The lender (Nationwide) has indicated that they may be able to help due to financial distress. She has no funds to pay early repayment charges.

The question really is how likely the lender is to let her switch to standard rate and what obligations they have to help her. What would a court think if they tried to repossess and she had offered the standard rate payment? She has not retaken possession of the house yet so she cannot get a concrete answer by applying. So far no payments have been missed but ex is planning to default next month. What are his responsibilities?

Do you think the bank would rather have the payments from her than gain possession of a valueless house? I realise I cannot get a definite answer but does anybody have experience of this sort of situation?

Thrugelmir

Has your SIL consulted a solicitor? If not should do so.

The primary concern at the moment is the welfare of the children. So providing the mortgage payments can be met , the issue of the house can wait. As it can be sold at a much later date.

The NW will be flexible in handling this matter.

snugglepet20

Thanks, she has a solicitor but it is slow getting anything done because her ex stalls replying to letters and isn't really providing his solicitor with information etc (struggled to take instruction was the phrased used) and obviously this situation needs sorting asap. The best thing for the children is to be in their home and I have encouraged her to fight for it. It is just nice to have some reassurance this is possible.

opinions4u

snugglepet20 wrote: »

The question really is how likely the lender is to let her switch to standard rate and what obligations they have to help her.

They have no obligation to allow her out of the agreed contractual rate.

What would a court think if they tried to repossess and she had offered the standard rate payment?

This would mean that she wished to breach the agreed contract. The court would not be remotely interested, imho.

So far no payments have been missed but ex is planning to default next month. What are his responsibilities?

Whoever is named on the mortgage is personally liable for the full payment. If two people are named, they are both individually liable for the full payment. If one doesn't pay, the other has to pay the full amount!

Do you think the bank would rather have the payments from her than gain possession of a valueless house?

If the payments don't cover the interest, the debt, and the lender's potential losses, are rising.

Relationship breakups and mortgages can be horrible even when there's equity. While lenders can be patient for a time (and Nationwide are probably at the nicer end of the spectrum), sooner or later that patience will run out.

The only winners here will be solicitors. And you need yours to fully brief you of the potential outcomes.

SouthCoast

From Shelter:

As a homeowner, you can only be evicted if your lender or freeholder can prove there is a legal reason for evicting you and if the correct procedure is followed.

http://england.shelter.org.uk/get_advice/repossession

Thrugelmir

snugglepet20 wrote: »

Thanks, she has a solicitor but it is slow getting anything done because her ex stalls replying to letters and isn't really providing his solicitor with information etc (struggled to take instruction was the phrased used) and obviously this situation needs sorting asap. The best thing for the children is to be in their home and I have encouraged her to fight for it. It is just nice to have some reassurance this is possible.

Has she contacted the CSA?

A failure to respond will count against your BIL. As ultimately a judge can rule if the the parties concerned fail to come to an agreement.

That's why previously I said the children come first. That'll be the judges primary concern too.

snugglepet20

Yes she has contacted the CSA this is why he says he won't pay anymore because he has to pay child support. She is better off having them deal with him than trying to get money off him herself though as initially he refused to pay a penny. He threw her out of the house initially but now he doesn't want it anymore. She is moving back because it is the only decent home available (rented places are dumps around here). Fingers crossed it works out but at least she has somewhere to live for now.