Mortgage Debt and House Repossession

travelgeek

Dear All

My parents are heavily in debt and have only being paying interest on their loan for a long time and have been paying off their other debts with payplan. The bank they have their mortgage with have now informed my parents the mortgage has to be paid off next August otherwise we will lose our home. They are not understanding at all even though my parents have been making regular payments. My mother has just been diagnosed with a serious illness and is now constantly worrying that we will lose our home. the house is already in negative equity and would make no money if they sold the house. They also do not think they could afford the rent of a house on top of all their debts. They also wouldnt get another mortgage due to their negative credit rating. My mother does not know who else to go to for help and is making herself sick with worry.

Is there anything we can do? If the house is repossessed can they make us homeless? Does anyone have any advice?

somethingcorporate

Make an appointment with CAB to see what they suggest.

Thrugelmir

travelgeek wrote: »

Is there anything we can do? If the house is repossessed can they make us homeless? Does anyone have any advice?

Suggest you contact the National Debt Helpline

http://www.nationaldebtline.co.uk/

As the situation seems extremely serious and there's no obvious exit route.

holly_hobby

Why are they seeking a possession order ?

How long as the mge been on a repayment plan ?

Have your parents blighted an already (suspended) possession order ?

Possession orders are not automatically granted by the DJ - they will consider all the facts, but if you're already been before him to grant an initial suspension - it doesn't look good.

Getting the possession order suspended is priority, CAB are the best (fee free) people to initially speak to - they also have duty solicitors whom will give you advice and guidance as required.

Hope this helps

Holly

SouthCoast

And try Shelter:

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

travelgeek

thanks everyone.

The mortgage my parents have is with our bank, they have informed my parents that if they do not pay off the mortgage by next august then the house will be repossessed. the bank were the ones who put my parents on the interest free mortgage to make payments easier and they havent missed a single payment. but the bank have now told my parents they need to decide whether to find the money or start proceedings with the repossession

I will pass the info onto my parents

holly_hobby

Ah I see, they simply have a current interest only mortgage with no repayment vehicle in place.

If the threatened possession order is enitrely related to the lack of repayment vehicle or funds to repay the mortgage, upon the scheduled redemption date ( or shortly threreafter by arrangement) - then there is no answer other than your parents must either sell their property to repay the os mortgage, or let the bank effectively possess the property. A DJ will not reject a possession order simply because the mortgagor failed to make provision to repay an interest only mortgage (although dependent upon the individuals crics, more time may be given to vacate if there are specialist housing needs, complicating their rehoming).

The mge being placed on interest only for C&I, should have been temporary (if for financial assistance) and they should have considered/or made arrangement then, for how they intended to repay the unpaid interest element at redemption.

I'm sorry if this sounds harsh - but its honest.

Your parents have been given a head start by the lender, effectively giving them 9 mths to make provision. So they need to now start thinking about how they intend to manage the situation to their best advantage.

Hope this helps

Holly

RenovationMan

travelgeek wrote: »

thanks everyone.

The mortgage my parents have is with our bank, they have informed my parents that if they do not pay off the mortgage by next august then the house will be repossessed. the bank were the ones who put my parents on the interest free mortgage to make payments easier and they havent missed a single payment. but the bank have now told my parents they need to decide whether to find the money or start proceedings with the repossession

I will pass the info onto my parents

Have your parents come to the end of their 25 year mortgage term with the lender? Are they still working, what sort of age are they?

Have you looked into getting a new mortgage with a different provider? Can you help out by taking out a mortgage yourself?

holly_hobby

RenovationMan wrote: »

Have your parents come to the end of their 25 year mortgage term with the lender? Are they still working, what sort of age are they?

Have you looked into getting a new mortgage with a different provider? Can you help out by taking out a mortgage yourself?

The OP says they are heavily in debt and under a payplan arrangement - so it appears that sourcing an alternative mge provider may be an issue (of course it would depend upon the severity and amount of os debt), as will obviously repaying any mge effected !

The OP themselves could effectively look to purchase the property - but that brings its own complications.

Hope this helps

Holly

Tjrw1985

The CML (Council of Mortgage Lenders) is very strict in policy of repossession. Check to see whether their bank are members.

If they have not come to the end of the mortgage term the bank would find it very hard to seek repossession of the property if they had no arrears on their account, however, if they were placed on interest only and they have arrears on the mortgage the DMP they are in should have allowed them enough money to pay the arrears.

Obviously, if they have come to the end of the mortgage term the bank is within its right to advise them that they will have to redeem or sell the property to pay them back.