Advice re negotiating with mortgage provider to accept an reduced amount to close a/c

Essex_Maid

My sister had a lot of finance problems due to a divorce etc. Mortgage account was in arrears and has just managed to clear them, so back on track. Outstanding is now £20k. Family have said they could give £17k to reduce mortgage. A friend has said that due to the problems she has had the bank might accept this amount and close the account. She is nervous of contacting them, in case they think she is mad.! Is anyone else managed to negotiate a reduction with their mortgage provider. Her circumstances are very difficult, and would take too long to put all the info on.

silvercar

A mortgage is secured on the property. For this reason it is rare for lenders to negotiate on a reduced settlement.

You may find that there is a minimum amount that they will lend and so be unwilling to accept a large lump sum that leaves such a small outstanding balance. try finding your original mortgage agreement to see if there is a minimum.

I don't know whether some of the charges incurred for having mortgage arrears would now be deemed to high; there may be a case for some of the charges to be refunded.