Giving up House

davetheman

Have an interest only mortgage of around £183k, we borrowed £60k on the SL and the balance is around £62k according my credit report. House is worth around £200k, so yes the secured loan is the problem.

kepar

I thought as much, the SL lenders has equity in the property.

davetheman

sophistica, that a really good idea to see if the SL company will reduce the debt any suggestions on the best way to approach this?

davetheman

If the property went to auction however, I can't think it would achieve £200k

sophistica

Dave, my suggestion for you is to keep this simple and be very careful what you say
Ring the SL company and explain that the reason why the SL loan wasnt included in the bankruptcy was because you wanted to stay in the house. However, now the house is in negative equity and that you can no longer make the repayments on the SL loan and are therefore CONSiDERING retrurning the keys to the mortgage lender. IF you took this course of action the company with the secured loan would need to write off the debt as you have no assets and are a dischraged bankrupt. However the only other option is that your mother/brother/aunt/uncle MAY be prepared to buy out the SL but the maximum that they could afford is £xxx. Give a low figure. At this pointthey will probably a be recording your call and be ask you to put it in writing. Put the same in writing. Do not say who is giving you the money. And be prepared to offer more as this is a negotiation and they have to try to work the number upwards. Make sure you get any deal in writing before you send any money. Dont pay the SL loan in the meantime...thye will have to issue proceedings against you in court to get you put of the hous and they wont fancy that as at the end of it they will end up losing their money and incurring court costs. Mortgage company, again you havent got much to loses, write and explain that you are having difficulties and you are seekingmore favourable mortgage terms...again there only option is court proceedings which could take months before thye gain a posession order. I wouldnt give keys back without a posession order as that could take months and you getbto live there gratis!

kepar

sophistica wrote: »

Dave, my suggestion for you is to keep this simple and be very careful what you say
Ring the SL company and explain that the reason why the SL loan wasnt included in the bankruptcy was because you wanted to stay in the house. However, now the house is in negative equity and that you can no longer make the repayments on the SL loan and are therefore CONSiDERING retrurning the keys to the mortgage lender. IF you took this course of action the company with the secured loan would need to write off the debt as you have no assets and are a dischraged bankrupt. However the only other option is that your mother/brother/aunt/uncle MAY be prepared to buy out the SL but the maximum that they could afford is £xxx. Give a low figure. At this pointthey will probably a be recording your call and be ask you to put it in writing. Put the same in writing. Do not say who is giving you the money. And be prepared to offer more as this is a negotiation and they have to try to work the number upwards. Make sure you get any deal in writing before you send any money. Dont pay the SL loan in the meantime...thye will have to issue proceedings against you in court to get you put of the hous and they wont fancy that as at the end of it they will end up losing their money and incurring court costs. Mortgage company, again you havent got much to loses, write and explain that you are having difficulties and you are seekingmore favourable mortgage terms...again there only option is court proceedings which could take months before thye gain a posession order. I wouldnt give keys back without a posession order as that could take months and you getbto live there gratis!

Do you know anything about bankruptcy, the Secured Loan will only be included in the bankruptcy once the house is sold and there is a shortfall. The shortfall is what is included in the bankruptcy.

At the moment if the house was sold, the mortgage company would get there money back, so why offer better terms and the Secured Loan Lenders may get some of the equity they have in the house.

sophistica

Kepar, you are clearly an expert in bankruptcy. I am an expert in making money in property and negotiating down debt. The SL company may/will get nothung if the house is sold, that is why they may do a deal. Mortgage companies always have a variety of deals available for customers. Reposession is expensive and a hassle for them.

kepar

This situation is exactly what happened to me, I told the SL company that they would get nothing if we gave the house back. But their take was as in this case that they have equity in the property, therefore why would they want to give me that for basically nothing.

And as to the mortgage lenders changing the mortgage you are joking right, with br on the credit file it will be turned down. The mortgage company know that they will get their money with the value of the property when sold. No mortgage company will give a br a better deal.

sophistica

There is only £17k equity in the property if it sold for £200k. So as a reposession the SL are likely to get nothing.

tigerfeet2006

Yes...and?

Our experience on this board is the SL co. In general would rather force repo. instead of taking a reduced sum. But as you have said there is probably no harm in trying if he wants to, to negotiate with the SL co. and see if they will take a reduced sum. If they don't then as it stands at the present the OP can go for repo and the mortgage and SL will fall into the BR as long as he hasn't signed anything acknowledging the debt since BR.