repossession question

foot_loose

if you get repossessed and the house is in negetive equity what happends to the owner of the said repossessed house and how does the loan company/bank recover the money it lent on the house. does it write the loss off or do they persue the outstanding payment fom the owner??

homer_j_3

If there was a deposit of 25% or less put down, there may be an insurance policy attached to the mortgage sonewhere (this was called a MIG or Mortgage Indemnity Guarantee but now is known as a HigherLending Charge)

If there is this in place then the lender will make a claim with the insurers to claim any losses that they have. The insurer in turn will chase the person/s responsible for the money that they have had to pay out. They can try and seek recovery for upto 6 years.

If no MIG/HLC is in place then I presume the lender will have the same period of time to make recovery.

The person/s responsible for the debt will be evicted from the property following a court order.

foot_loose

thanks homer..

can they force you to pay the lost money ie take it from your bank account . or is it just tough cheese for the lender that you have no money to pay

ManAtHome

If you have no money they can't take it from your bank account... (keeping an account with your mortgage provider may not be a good idea).

They can pursue for the debt - you borrowed £x, effectively handing back the keys doesn't change that.