Lender has initiated solicitor to repossession proceedings

wobblymummy

Hi there,

I am a bit of a lurker as opposed to poster and always get good advice on here so thought I would ask

My husband and I (and our two small kids) moved out of our mortgaged property in January due to financial difficulties and dreadful neighbours, we had been on the waiting list for social housing and got offered a house at Christmas (The HA were aware of our situation)

Our property has been up for sale since June and we've had no offers. It is a bit of an unusual property (detached in a an area of inexpensive terraces) so its a bit of an anomaly.

We have been trying and failing to service both mortgage and rent and have fallen behind with the mortgage to the tune of about 3k now.

We told our lender we had moved out but were actively marketing the property but our estate agents have advised us to drop the price to make it more attractive and we are now in negative equity with the lender chasing us, we got a letter yesterday saying that they will pass the account onto a solicitor to commence repossession and today we each got a letter from the solicitor to confirm this.

We have been considering a 'we buy your home fast' scheme in order to secure at least a fairly decent sale. The lender has given us the option of voluntary surrender of the property forms too in case we decide on this option, obviously this means the house will end up being auctioned for far less than what is it worth though and we will be left with the shortfall.

We accept that we will be left with some shortfall we just want to keep it as low as possible. For our sanity we had to move out of the house and we thought it would sell better with no chain and empty but sadly this was not the case.

Where do we go from here ? We are not trying to hang onto the house to live in it, just so it fetches the highest price possible. The lender is aware of this and we have kept them informed all along.

What should we do. Even if we secure a fast but cheaper sale than we'd like - is the lender likely to block the sale ?

Also, when it does sell are they likely to try and force us to go bankrupt or just accept a payment schedule to repay the shortfall ?

Thanks in advance for your help - totally stressed by this

[Deleted User]

So what is the situation regarding payment of the mortgage.

vax2002

This may not help, but in time it is how you see the situation.
You are the mice, they own all the wheels.
They want this one back.

You now have a wheel and the family is happy.
they can never take that happiness away, so let them squabble over the scraps.

fatbelly

National Debtline have recently produced a guide to Mortgage Arrears

In this, it says that handing back your keys is not normally a good idea. The main reason for this is that Councils will find you intentionally homeless if you apply to them for help. But you don't need that help.

You are going to find it difficult to sell the house for a price that does not discharge the mortgage. If you are not careful, you will cause a lot of inconvenience to a potential buyer.

I think you need to bite the bullet and accept that there will be a shortfall debt, then work out how best to address the debt issues.

If the best strategy turns our to be bankruptcy for instance then there is no point trying to minimise the shortfall. If you're borderline for a DRO or you have to do a debt management plan, then there might be.

teeni

fatbelly wrote: »

National Debtline have recently produced a guide to Mortgage Arrears

In this, it says that handing back your keys is not normally a good idea. The main reason for this is that Councils will find you intentionally homeless if you apply to them for help. But you don't need that help.

You are going to find it difficult to sell the house for a price that does not discharge the mortgage. If you are not careful, you will cause a lot of inconvenience to a potential buyer.

I think you need to bite the bullet and accept that there will be a shortfall debt, then work out how best to address the debt issues.

If the best strategy turns our to be bankruptcy for instance then there is no point trying to minimise the shortfall. If you're borderline for a DRO or you have to do a debt management plan, then there might be.

Thsi is good advice, if you are going to be in negative equity any way you need to minimise the remining debt.

option 1) return the keys the property will be sold, they are legally obliged to gain the best possible price- by choosing this route you will be spared the additional costs of actually takking court possession proceedings which can amoutn to thousands of pounds ( dependant on the lender)

Option 2) reduce the price and keep trying to sell whilst the mortgage company seek possession, You need to contact them when an offer is made and ask for permission to sell at that price, They may refuse if it doesnt cover the cost of the mortgage and closing costs but you can apply to court and ask them to order the sale ( more legal costs) and likely to put your buyer off unless it really is a brilliant deal.

Which ever route you take when the property sells you will probably owe the shortfall but with the first option you will no longer have to keep the property insured, have the worry of paying council tax after any exemption period is over and worry about whether you get squatters taking up residence if the property is empty.

The route you take is up to you as only you know how much of a shortfall you will have and whether bankruptcy may be the best way for you. If that is the case the amount of shortfall is irrelevant.

Perhaps the time has simply come to move on especially as you have secured social housing now.

teeni

Also, when it does sell are they likely to try and force us to go bankrupt or just accept a payment schedule to repay the shortfall ?

sorry missed this bit they will not force you to go bankrupt that is your choice , they will howver expect you to make an offer of repayment that is affordable to you. They can chase you for 12 years after the last time they contact you unlike any other debt where the time limit is 6 years

vax2002

teeni wrote: »

They can chase you for 12 years after the last time they contact you unlike any other debt where the time limit is 6 years

this is true "them" that own the country always get twice as much of everything.