Negative equity and mortgage shortfall

sarahlouise1979

Hi there,

I've only ever posted on here a couple of times before, but had some good advice so am hoping to get some more!

Not even sure this is the correct board to post on, but here goes anyway...

I own a 50% share in a shared ownership flat. Have been here for 6 years (so bought at the peak of the market), and now want to sell (bad timing I know!) as I want to move in with my partner.

He has his house on the market and we are going to buy somewhere together (although I won't be able to go on the new mortgage as have bad credit history).

However, I am fairly sure that I am going to be in negative equity (probably to the tune of £5-8k).

I have no savings, and due to my bad credit history won't be able to get a loan to pay the shortfall.

I have spoken to National Debtline, and the lady I spoke with said that the lender (HSBC) would stop the sale of my flat if I couldn't pay the shortfall. However, she did say something about being able to treat the shortfall in the same way as my other debts (offers of payment etc). But if they stopped the sale how would I be able to go about offering pro-rata payments??

I'm aware that handing the keys back and going bankrupt is an option, but really want this to be an absolute last resort. I am happy to pay the shortfall back but obviously not all in one go, as no one will give me any kind of credit to do this!

Oh, and renting the flat out is not an option as it is not allowed under the terms of my shared ownership lease. Wish I could!!

So, just after ideas really- how do I convince HSBC that I need to sell the flat but can't give them their shortfall back instantly?! And I have been into my branch to speak with someone as recomended by the mortgage service centre, but the lady was very unknowledgable and rude :-(

Thanks in advance!

kingstreet

Nothing else you can do but try to get some kind of dialogue going with HSBC. Either that our you're staying put.

Thrugelmir

A personal view.

Sell your partners property. Then live in your property while addressing the issues of negative equity.

May not be ideal. But defaulting on your mortgage will create an unwelcome financial association with your partner. That will affect you both in the years to come.

sarahlouise1979

Thanks for the replies.

I have written to HSBC (my lender) to try and come to some kind of agreement regarding paying back the shortfall. The flat has been valued and there will be an £8,000 shortfall (the housing association will not let me sell for any more or less than the valuation). However, HSBC still haven't replied- I wrote to them three weeks ago, and sent the letter recorded delivery. I don't really want to go ahead and put the flat on the market for HSBC to then say on completion day- sorry but you're not selling it. But I do really need to get it sold, we can't get married and live in seperate houses! My partner can't come and live here as he has 2 dogs and my housing association don't allow pets (not that I would want two dogs living in a flat anyway).

Anyone have any alternative ideas on how to contact HSBC? I addressed my letter to the mortgage service centre, but when I rang the other day they said there was nothing on my file regarding a letter. Are they just ignoring me or should I try sending it again?

:mad:

Thanks!

beecher2

Phone them up and speak to them about it as soon as possible.