New offer from mortgage lender

bigjl

I haven't posted much on this part of the board as I had pretty much paid everybody off and caught up with my mortgage arrears.

However just over a year ago my health packed up and my mortgage arrears have built up due to the lovely way the NHS treats long term staff that become technically disabled (In other words Disabled for the purposes of the Equalites Act).

I had all the court dates in 2008 when I made an arrangement to pay the arrears back, however I informed XXXX about my health and my interntion to pay the arrears with part of my pension lumpsum, the get a less physical job.

Obviously I breached this order for many months, so after I went back on full pay when I eventually got some light duties they tried to enforce the order, coincidentally when XXXX became XXXXXX XXX, I had this delayed by appealing the order and going back to court, the judge agreed with me.

This is were things got wierd, I have been phoned up (By the Mortgage Company) and offered a sum of money to hand back the keys!

Obviously I have asked that they confirm in writing that I will not be responsible for any financial shortfall, and when the house goes my secured loan should then become a debt in bankruptcy, at least from what I understand from conversations with the OR.

Now, I though I may aswell ask for a larger figure if I don't have any responsibility for any shortfall, as they obviously want to dispose of the entire GMAC mortgage portfolio.

I should point out that we paid £250k for the house in 2007 and they have been hit hard in the recession, two houses nearby that are exactly the same sold for £175k late last year, a nice deal for them but would leave me owing £75k!!! Ouch!!!

Interestingly those two were also reclaimed and they were on the market for over 6 months, when they dropped the price to £175k they sold within a month, obviously there will always be winners in a recession, my neighbour is a young IT bod and I think he was waiting for prices to drop before buying, and good luck to hiim.


Anyway, what do the forum members think about this offer?

Ineedaname

Are you saying your mortgage lender is offering to buy the property from you? Or have you received an offer from an outside company to buy the house?

I don't really understand the details, sorry.

bigjl

No, the Mortage company tried to evict last month, went back to court and got it delayed, to comlicated to explain quickly, but in essence they had agreed to the arrears increasing in the short term whilst I was on half pay, but then decided to enforce the order just as I started to pay again.

The Judge stopped the eviction till July subject to me making the mortgage payments plus something towards the arrears.

This has been going fine, until the AM when I was phoned out of the blue by the Mortgage Lender who offered me a sum of money to hand back the keys, I enquired if I would have to sign anything and they said yes, so i have asked for confirmation that I am not responsible for any shortfall.

I have never heard of such a situation, but think the company are just trying to get rid of the assets as XXXX are no longer in the mortgage business.

I have paid nigh on £70k in mortgage payments into the house so I don't really want to walk away, but then again the house is worthless, and if I go back to renting and my Ill Health retirement comes through i can get my rent paid if I am unable to secure work. It being a lot more complicated to secure Mortgage Interest payments than it is to get Housing Benefit is my thinking, I may be wrong on that though.

I didn't realise how ambiguous my post was at the crucial point, I have edited it now.

Ineedaname

I don't think there way anything much wrong with your original post, just thrown me as much as you regarding the lender offering you money to hand the keys back when you still owe them money in arrears.

Hopefully a more experienced board member will be along shortly, or maybe even a mortgage advisor as I know there are some who pop in here.

bigjl

Thanks anyway, i have amended it to make it easier to understand, you know what it's like when typing a long post, it makes sense to you when you type it, but when you reread it, suddenly if makes slightly less sense.


And before he or she shows up with the usual pointless one line post, Scooby Doo I don't want your opinion and am not interested in it.

silvercar

I have seen lenders wanting rid of the mortgages to offer borrowers discounts to take their business elsewhere. They are generally of the form that they will take 90% of the mortgage as payment. So if your mortgage was 250k, they would take 225k to write off the mortgage.

I haven't heard of lenders giving you money to allow them to repossess. That makes no sense for them at all. At the very, very least I would expect them to do a valuation before making you this sort of offer.

If your mortgage has been sold on, it may be that the new lender bought it for less than you actually owe, so can afford to take a hit on it.

I am totally suspicious of this, I can't see why anyone would pay you money to repossess. It just doesn't make sense. It also creates some odd situations particularly in regards to the second charge - your secured loan. Could they take legal action to try and get their hands on the money given that the mortgage people are giving money to you and not clearing the second charge?
It sounds something that one of the dodgy sell-me-quick house buying people do; con you into handing the keys over for a sum of money - maybe they haven't realised the valuation. If you've been to court, then all sorts of people could find out that you are in a bit of a financial situation and try and take advantage. The first thing I would do is find out if these people really are who they say they are; wouldn't put it past some to pretend to be your lender when really they are just trying to cut themselves a deal.

One more thing, if you are or intend to be bankrupt, won't this sum of money be claimed by the OR?

bigjl

Thanks for the comments, yes i know who they are as i have had the same person dealing with my case for a while now.

Just a coincidence that they have changed name to XXXXXXX XXX, as the phone numbers and addresses are all the same.

Personally i have been thinking about getting rid for a while but we all need somewhere to live don't we!

We did call up XXXXXXXX Housing when we got the Eviction notice as we have been on the list for 12 years, when we phoned up they took us off in January, they reckoned they had sent us a letter, lol.

The most annoying thing about my current house is that some of the houses like mine were sold by XXXXXXX two years before I bought for £275000, we paid £250000(Feb 2007).

Now Bellway have a new development less than 3 miles away with solar panels on the roofs etc, etc.

They are selling the 4 beds for £225000.

These developers really have no morals.

Incidentally, my house is worth in the current market about £200k.

I am speaking to my case worker on Friday when I make my next payment, so hopefully I will know more, specifically that I will not be signing to accept the debt. Though I reckon I will aim high and ask for £15k, in the hope they knock me down to £10k.

I was discharged after 1 yr so have been free and clear for over a year now.

kepar

I thought that the OR via the Land Registry would have held your house for the three years from the time of your bankruptcy.
Then you would have to clear with the OR'S office and any money received would go to the OR.

bigjl

You are thinking of beneficial interest, in other words what is left after the the first charge is paid off in full, as my OR bloke explained it, basically your "equity".

My house has no equity and the OR has offered to sell me the BI for next to nothing, but I have no money to do so, not until I retire anyway.

If I wanted to keep the house I would need to buy the BI.

If I am repossessed then i owe nothing as i have signed nothing and it would become a debt in BR.

The mortgage co tried to enforce the repossession order from 2008, I was successful in getting set aside till July and have no doubts that as I am keeping to the Judges instructions there will be no issue in getting it further extended, I am getting a lump sum on retirement which I will use to pay off my arrears and buy the BI, obviously BI first!

However, they are offering this to hand back the keys, not asking for me to sell them the BI.

As far as I am aware the BI is nothing to do with the mortgage co, but I have posted here in case this offer is more common than I reckon it may be.

Though going by the lack of replies I reckon it is just a new tactic to dispose of these bad debts, in order to sell on the loans with equity as a package to other banks as investments or do they call them bonds?

You know what I mean, the parcels of debt that caused the economic meltdown, but they may be wanting to get rid of some of the more toxic debts, as an ex BR with arrears I must consider myself one of these "toxic" debts.

silvercar

You know what I mean, the parcels of debt that caused the economic meltdown, but they may be wanting to get rid of some of the more toxic debts, as an ex BR with arrears I must consider myself one of these "toxic" debts.

I know what you mean, but it is the debt that is toxic not you as an ex bankrupt. Its the loan secured on a property worth less than the size of the loan that makes it toxic - who they buy it from is irrelevant. If you want an analogy, think of buying manky fruit from the market, its the fruit that is manky that has been bought at too high a price, not the seller.

The mortgage co tried to enforce the repossession order from 2008, I was successful in getting set aside till July and have no doubts that as I am keeping to the Judges instructions there will be no issue in getting it further extended, I am getting a lump sum on retirement which I will use to pay off my arrears and buy the BI, obviously BI first!

Makes sense.

However, they are offering this to hand back the keys, not asking for me to sell them the BI.

Hmm, it is not yours to sell, given that you haven't bought it from the OR yet. Even if there is no equity, there is still the legal charge the OR has put on the property and to complete the legal work on this will cost them a few weeks delay.


Do they know there is a legal charge on the property? Do they know that the OR still holds the BI?

Though going by the lack of replies I reckon it is just a new tactic to dispose of these bad debts, in order to sell on the loans with equity as a package to other banks as investments or do they call them bonds?

You could be right, they may just want to rapidly reduce their mortgage book. One way that banks used to do this was to offer to reduce the debt for those that moved their mortgage elsewhere. Of course for a lot of sub-prime lenders, their customers found it too difficult to get a mortgage elsewhere. So this could be the next tactic - where going for repossession has failed, they could pay people to allow repo to happen, thus reducing their court costs and speeding up the process.

silvercar

The more I think about it the more sense it makes. So the question you have to ask is whether it is a deal for you.

short term:
So how much do you pay in mortgage payment + arrears now and how much could you rent for?

long term:
Then what will you want in the future, are you happy to rent in the longer term? How useful could that £10k be?

As part of the deal, you want to be clear that (a) the money is clearly yours to keep and you won't have to pay it to the OR - remember this is unchartered waters. (b) how it will effect your credit record - there will be a big black splodge marked repossession on your credit record that can make getting a mortgage in the future harder. I know your credit record is blotted by the bankruptcy now, but this will be a new mark dated 2011.