stopped paying the mortgage - now what?

mrsrwallace

Hi, hoping to get some info if possible from similar Norn Iron folk who have been in same boat.
Long story short is we have a joint mortgage and due to the recession and construction industry falling on it's rear the main income has disappeared and we have found ourselves unable to meet the mortgage payments. We have contacted the lender and kept them abreast of the situation from the moment we got into difficulty and they let us pay what we could afford in the hope that we would get more hours at our jobs or a second job etc etc. Anyway, it is now 6 months since we started making lower payments and the lender has now refused to accept this amount and understandably they have a point as in unless we get better wages any time soon we would realistically be unable to keep up the mortgage or ever pay it off in full.
So.....my question is this..what do we do now? We have written to them saying we definitely cannot increase the offer we have made and we have been turned down for mortgage interest help from the SSA who say because we are both in employment we are ineligible for assistance. We have no mortgage insurance as main income was through self-employment so they wouldn't insure us as it was high risk. So after much researching on the net it seems we have a few choices, either catch up on payments (impossible unless we win Lotto), voluntarily hand back keys or wait until lender repossesses. I had thought that we should just give up hope and move out to a rented house as strangely enough we would get help through Housing Benefit to pay for that yet strangely enough can't get help to stay in our own home but now there may be light at the end of the tunnel in that I have reached final stages of securing a new secure well-paid(ish) job and could afford the payments.

God this was meant to be a long story short but it's more of a rambling essay now! So, has anybody been in same/similar situation and if so is there a time frame to all this or is it different for each case? We have now stopped paying as we thought well, if they evict us that's dead money but at the same time if this job comes good maybe we should keep paying something so that they might let us stay on. I know we'd have massive shortfall to pay if we sold so we owe money no matter what we do but this job could take months yet to come good and there is no certainty I will get a job offer from it even though I am into final stages. Any suggestions???

Apologies for slabbering on!

RTNI

Sorry to hear about this.

Can you increase the term of the mortgage to lower the monthly payments?

redped

Is it feasible to take in a lodger? Not everyone would want to (or have the room to), but it would bring in some much needed cash for you.

Have you any friends who currently rent, but would be willing to lodge with you instead?

mrsrwallace

hi
thanks for replies, i should have mentioned we have children so no spare room for lodgers. We have already increased the term by another 5 years and looked into interest only mortgage for a short while but there was very little difference in our monthly payments so it didn't really help our situation.
We have spoken to a property rental management company too and they had suggested we move out into very cheap rented accommodation and rent out our mortgaged home but the rent we could charge is lower than what our mortgage is so we would have rent to pay on a house plus we'd have to pay the other £200 which the prospective tenant wouldn't cover.
We're also in negative equity so if the lender let us sell we would maybe get £40-£45,000 less than what is outstanding on our mortgage so we'd be left with that bill too. So do we have time to wait to see if circumstances improve or if the lender decides to repossess is it a case of right, pack your bags and get out or would we be given reasonable time to get sorted with a rental property? I don't want to cut off my nose to spite my face and give up so soon if there is a chance that things could improve financially. It's the age-old hum-dinger of "what if?" !!

saverbuyer

It can take years after the first missed mortgage payment before the final warrant of eviction would be issued. Lenders forbearance is very common and if your mortgage is with one of the Irish banks the process could take two years or more with children involved.

Be aware that as the process goes on, costs will continue to mount. You and you husband (depending on the mortgage relationship) will both be liable for all court costs for the bank and the shortfall between the mortgage and selling price (if it comes to that).

When it goes to court the Judge will listen to your situation fairly, but if it looks like your situation isn’t improving and you haven’t tried to address the arrears, he/she will issue a repossession order. You’ll have 28 days to move.

Lenders are only throwing people out as a last resort unless you really can't afford to live there and to be honest it sounds like you can't.

I would suggest talking to Citizens Advice or a free session with a solicitor. Don't bury your heads in the sand. There will be help available.

x12yhp

I don't know the whole fact of the situation but I would be aghast if there is nothing in the system to help a working family with kids (after all there is plenty to help a non-working family with kids!). I would get all over your social services people and try to find out what help you can get. Getting you out and reposessed is not a quick and easy process but it does look although there is no sign that your situation will improve and I can understand the lender now taking this stance.

Can you not both take evening and weekend jobs in tescos or similar? Surely if you could both average 2 hours a day extra, you would be having 28 hours a week and at minimum wage that has surely got to cover your mortgage by the end of the month?

mrsrwallace

hi
yes "saverbuyer", you have hit the nail on the head, we cannot afford to live here and our finances are not improving so it does look to me like repossession is inevitable down the line. We took the mortgage out as a self-certified one as my husband was self-employed so it was automatically more expensive as they charged for the privilege and so it is higher than some mortgages around here in similar areas. On my husband's previous income this was not a problem and we always paid on time, however, now it is impossible to make ends meet.
"x12yhp", believe me there is little to no help out there for working families with children! I have looked! In fairness we do get some Child Tax Credit and Working Tax Credit but it's not enough to compensate for our once high income and so to remain living here is living beyond our means. We get Rate relief but no mortgage assistance. That is only for people in receipt of benefits and even then there is a serious delay before anyone gets actual financial assistance. I'm not expecting to be bailed out here, we took on the mortgage, it is our mess but all I can see is that no matter what we do we keep banging our heads off a brick wall.
We enquired about renting a home today and it seems that there is some kind of clause that if we just move out of here we'd not be eligible for Housing Benefit as we would effectively be making ourselves homeless? Is that correct? Does that mean then if we are evicted by the lender we're being made homeless by them and so eligible for Housing Benefit then? Or if we sell the house before repossession order is made are we still not making ourselves homeless? I am finding this all so confusing. I thought today we'd try and sell the house and if successful rent a property but now it seems that isn't even an option. Oh I don't know! Then there is the whole issue of renting a property and getting a deposit and a full month's rent in advance which amounts to about £1000, pray tell me please where do folk get that money?? I do not understand how people who do not work can secure a property and pay upfront!
Oh yeah, "x12yhp", your suggestion of getting 2 extra hours a day actually makes so much sense on paper as that is quite a lot of money in a month but the actual difficulty in getting ANY overtime at all these days is next to none, I can only get overtime in the summer or at Christmas to cover other staff's hols and my husband has had his hours cut in his new job already as there isn't the money there to pay staff. I have always said there is work there if you really want a job and have never been out of work BUT trying to get an evening job is near impossible, all the Tesco staff round our way seem to still be at school so I don't know if they get paid less or what but I have applied twice and STILL can't get in even though I have retail experience. I've tried selling stuff on ebay etc to try and raise extra cash but I don't have anything left to sell!

cat313

Hi, lots of people who are on the brink like you stop paying and save the money for a deposit on a rented house.

The hope of the new job might pan out and I'm sure you don't want to move until you have to. In this case could you continue to pay something and save a bit too. The repossession process does take ages and you are stuck until it starts as you can't make yourself homeless.

Good Luck

mrsrwallace

thanks cat313,
it seems i am just going to have to play the waiting game and see how things go. I don't want to jeopardise any future claim for Housing Benefit by making myself homeless and leaving myself even more out of pocket so I may just sit tight and let the lender set the pace. It's all so stressful!

Willyk

MrsWallace, You have only have admiration from me. You are tackling your problems head on and although it may all seem impossible at the moment I am sure with your determination things will look up sooner rather than later. If I could employ you I would, but alas I'm not in the position. Good Luck.

mrsrwallace

Thanks Willyk!
On the outside I appear relatively normal, though the stress is taking it's toll on my skin and i have aged about 10 years! but inside my head is seriously fried! Though i have to remind myself I do have a lot to be thankful for, good healthy children and food in the belly so there is a lot worse that could happen to me in the grand scale of things, though naturally I would be gutted to lose it all but if that's my fate then so be it.