Problems removing name off joint mortgage

footballchick

Hi all,

I really hope there is somebody on here who can offer me some advice.

My boyfriend's aunty split from her boyfriend about 6 years a go and was unable to take on the mortgage in her own name. My boyfriend wanted to move out from the property he was living in so he went on the mortgage with her and paid his aunty 'rent' to live there. The mortgage is drawn up that he own 50% of the property but verbally they agreed that my boyfriend doesn't own anything - he just wanted a place to live.

I met my boyfriend 3 years a go and he moved into my property with me (that I own). He continued to pay his aunty rent to begin with even though he no longer lived there. He spoke to her about this saying he couldn't afford to pay for a place that he no longer lived in so she agreed to let him stop making any payments to her (but his name has remained on the mortgage).

We are currently expecting our first baby so we decided to sell my place and buy a place together (my place is not big enough for 3 of us!). We went to the bank to inquire whether we could take out a mortgage together. We were approved a mortgage but IF my boyfriend stayed on the mortgage with his aunty, we would have to put a 25% deposit down - they would class it as a buy to let mortgage as he would own one property already. This is not possible as we can only afford to put down a 10% deposit (we would be allowed to do this if we both only had the one mortgage together!)

My boyfriend has spoke to his aunty about this and said he would like to get his name removed from the mortgage. He pays her nothing anyway. She spoke to the bank and they will not take my boyfriend off the mortgage as his aunty is not financially able to take on the mortgage in her own name. She has a lodger who pays towards the mortgage but obviously that cannot be used as a guarantee that she can afford the mortgage payments. My boyfriend told his aunty that if she cannot afford to take the mortgage on her in own name she would need to sell - she reluctantly agreed and put the house on the market... at a ridiculously high price that nobody is interested in. It has been on the market for nearly 9 months and has not sold - she refuses to lower the price of the house. She has now said she wants to take the house off the market and that she will wait till her lodger builds up his credit rating so that he can go on the mortgage with her.

Can my boyfriend demand get a court order or anything to force that she sells the house at a reasonable price? If she refuses to sell he said that he is more than happy to demand that he takes 50% of the house... even if it was 'verbally' agreed that he owned nothing.

He was stupid in the first place to go on a mortgage with her and obviously realises this now. My boyfriend doesn't have a great credit rating anyway so if she makes one default on the mortgage she will completely wreck his credit.

Any advice would be greatly appreciated!!!

tipsymcstagger

Unfortunately the mortgage company won't help, all they care is that the mortgage is being paid and even if she's doesn't meet their financial criteria to take it on alone as it's still being paid they don't care. Having your B/F name on the mortgage means another person to come after should the payment not be met. I think maybe you do need to seek legal advice as you and your B/F want to get on with your lives now. Also if his name is on the mortgage then he is entitled to take half the equity. Maybe you should get a few valuations of your own then you have some evidence as to what a good marketing price should be?

footballchick

tipsymcstagger wrote: »

Unfortunately the mortgage company won't help, all they care is that the mortgage is being paid and even if she's doesn't meet their financial criteria to take it on alone as it's still being paid they don't care. Having your B/F name on the mortgage means another person to come after should the payment not be met. I think maybe you do need to seek legal advice as you and your B/F want to get on with your lives now. Also if his name is on the mortgage then he is entitled to take half the equity. Maybe you should get a few valuations of your own then you have some evidence as to what a good marketing price should be?

Thank you for your advice. We went to CAB and they were no help at all - they said it was a very difficult situation to be in. Like you say, we want to get on with our lives... especially with a baby on the way. It is also a difficult situation with it being somebody in his family but he has got to the point now where he doesn't care - he just wants his name off. His aunty is an alcoholic so his nan said she wanted him to talk to her who would approach the situation with his aunty. His nan is telling us we need to wait for the lodger to get a better credit rating but that's not good enough. We are currently renting out my property and renting out a bigger property. We have had to do this as our baby is due in 10 weeks. We would ideally like to put my property on the market at the start of next year and be able to buy a property around July 2012.

footballchick

Also just to add, his aunty is SO sneaky... she has asked my boyfriend in the past for his wage slips saying the mortgage company wanted to see them - she was really re-mortgaging the house!!! The price she has it on the market at would give her a bit of profit. When my boyfriend spoke to his nan and said that his aunty should have lowered the price by now she said under no circumstances should she lower the price... she should be given the amount it is on for!!

:mad:

tipsymcstagger

I agree, it's not good enough to wait for the lodger to get a better credit rating. You have yourselves and your child to think of and this comes first. I suggest getting some valuations yourself and approach aunt with a more reasonable marketing price. Should she refuse you are then in a position to instruct her that you will be going to court for an Order of Sale. Inform her that this can be quite costly but you will be using your proceeds from the sale of 'her' home to pay these. HTH

holly_hobby

In the first place, the bank are abstolutely wrong in stating that any mortgage they effect between you and your BF, would be a BTL mortgage - as he will be residing in the property and as such it is NOT a BTL (which is a unregulated mortgage), but becomes a regulated mortgage, notwithstanding the fact that the application for a BTL as promoted by them would be in fact fraudulent for the same reasons.

What it would be classed as is a 2nd mortgage - which if his income is sufficient to service all commitments would be perfectly acceptable and lawful.

Moving to your BF arrangement with Aunt - unfortuantely this is stalemate. For the current mge lender to release your BF from the mortgage commitment, her own income will need to be sufficient to service the mortgage on its own - which we know it isn't. (her proposals for inc the lodger on the mge are fantasy and stalling tactics in my own opinion - to which I would put no reliance).

So, your BF is stuck on the mortgage I am afraid.

If the mortgage with his aunt, was effected on a joint mortgage basis, then legally they are both entitled to a 50% of the property and any share of the equity released on sale.

If Aunt won't sell, or is marketing the property at an un realistic price - then the only way forward to pressure the sale, would be by court intervention. This will involve the advice and practice of a Solicitor and the courts, and there will obviously be fees that accompany such intervention.

Sorry, but he is currently between a rock and a hard place on this one - unless you can raise the extra deposit requested by the bank. (which in effect should be written as a 2nd mge for your BF and NOT BTL)

Why not sell your own property, and rent in the meantime until you can get the issues sorted (which may be sometime after your babe arrives - so if you need more room start the sale process now, as the market generally slows right down Nov.

Hope this helps

Holly

tipsymcstagger

And to add if she was remortgaging the property he would have to sign paperwork for this, unless she has forged his signature?????

holly_hobby

Have just read the re-mortgage situation.

If this is the proven case, then the Aunt is guilty of mortgage fraud.

Should this be reported to the mortgage lender - they themselves may force the redemption of the mortgage i.e sale of the property - and seek legal prosecution of the Aunt.

Whether the OPs BF would wish to take this route and report this matter is for their considertion.

Holly

footballchick

holly_hobby wrote: »

In the first place, the bank are abstolutely wrong in stating that any mortgage they effect between you and your BF, would be a BTL mortgage - as he will be residing in the property and as such it is NOT a BTL (which is a unregulated mortgage), but becomes a regulated mortgage, notwithstanding the fact that the application for a BTL as promoted by them would be in fact fraudulent for the same reasons.

What it would be classed as is a 2nd mortgage - which if his income is sufficient to service all commitments would be perfectly acceptable and lawful.

Moving to your BF arrangement with Aunt - unfortuantely this is stalemate. For the current mge lender to release your BF from the mortgage commitment, her own income will need to be sufficient to service the mortgage on its own - which we know it isn't. (her proposals for inc the lodger on the mge are fantasy and stalling tactics in my own opinion - to which I would put no reliance).

So, your BF is stuck on the mortgage I am afraid.

If the mortgage with his aunt, was effected on a joint mortgage basis, then legally they are both entitled to a 50% of the property and any share of the equity released on sale.

If Aunt won't sell, or is marketing the property at an un realistic price - then the only way forward to pressure the sale, would be by court intervention. This will involve the advice and practice of a Solicitor and the courts, and there will obviously be fees that accompany such intervention.

Sorry, but he is currently between a rock and a hard place on this one - unless you can raise the extra deposit requested by the bank. (which in effect should be written as a 2nd mge for your BF and NOT BTL)

Why not sell your own property, and rent in the meantime until you can get the issues sorted (which may be sometime after your babe arrives - so if you need more room start the sale process now, as the market generally slows right down Nov.

Hope this helps

Holly

Thanks, that has helped!

I decided to rent my property out because my mortgage was £139 a month and renting it for £350 a month - the profit made on my place is going towards the £650 we are paying on rent at our new place. I am also paying off more of the mortgage while we try and get this situation sorted. I wouldn't want to sell my property and use the money made to live off and pay our rent. By renting out mine, the rent is cheaper and paying off mine in the meanwhile.

They may have said it would be 2nd mortgage and not BTL but they made out that if you have TWO mortgages, you will only be living in one so the other would be classed as you are BTL it.

I get so frustrated by this whole situation and I then moan at my boyfriend about it. I am very careful with money and he hasn't been in the past. I think it will have to get to the stage where we instruct a solicitor - even though this is not the ideal time with me starting maternity leave in next 6 weeks or so.

I am the main wage earner out of the two of us so we did find out whether I could get a mortgage in my own name - they said that was fine with the amount we wanted to borrow (obviously I couldn't borrow as much money as we could if we jointly did but we didn't want to borrow the maximum amount anyways).

The biggest worry is that she is going to default on the mortgage and mess our future of being able to get credit together. My boyfriend defaulted on a loan before he got together with me but that has been paid off and is now trying to rebuild his credit rating. We know it will stay on his credit history for 6 years (he's halfway through that now) but if she makes one late payment, it could really screw him over. His nan suggested that his aunt should go into rehab... well if that happens, how will the mortgage get paid?!?!

footballchick

He did know about the time she re-mortgaged (the first time!) She gave him £1000/£2000 of the money at the time and had apparantly told him that when coming to sell the house she would give him £1000 or something (on condition it sold for over a certain amount). The whole thing seems VERY complicated and all the verbal 'agreements' seem ridiculous!

However, just before he wanted to come off the mortgage, she asked him again for wage slips etc and when he said he wanted to come off the mortgage, she said her intention was to remortgage again - and was doing this without telling him.

All he wants to do is walk away from it all - it obviously isn't as simple as that!

DVardysShadow

Strangely, if there has been any fraud, this may be your BF's best hope! It means that he has a lever to get her to sell rather than pursue the fraud.