Handing keys back to mortgage company

mrsdarbs

Bit of strange advice needed.

I own a shared ownership flat which I was renting out due to moving around with my husband who is in the army. However, upon contacting the housing association regarding something else I was suddenly informed on the phone back in March that they were revoking permission for me to let it out. Right - thanks for the notice. I am now in the process of going through the courts to evict my tenant and hopefully property should go onto the open market next month. I cannot afford to staircase and cannot afford to keep it going with no rental income.

I have funds to cover the mortgage payments etc until the early part of next year, but then I will either have to return to work (I'm currently at home with my sons). I'm not overly confident that it will sell before my money runs out and returning to work will be a nightmare as the nursery fee's here are extortionate and we are due to move early next year too.

So after all that rambling, my main question is - if I decide to cut my loses, can I just hand the keys back to the mortgage/housing association?? If it does sell I'm looking at breaking even and not having any profit anyway, but don't know if I can just 'hand' the flat back??

Any advice would be appreciated.

harvey115

Giving the house back to the lender to reposes is a very bad thing to do as it damages your credit history very badly.

I would suggest you call your lender and ask them to put you on an interest only for a few months as you are going through to selling the house. They would hopefully help you by reducing the monthly payments to interest only which would possible half the amount. Once the tenants are out you can market the house in a good price to be sold quickly.

Best of luck.

getmore4less

What were the terms of the original concent to let from the HA and lender.

What sanctions could they impose if you continued to let on the current AST.

was going to eviction of the tenant the best action.

Gary123456790

Hi,

You've got to think - what will the mortgage co/housing association do with the property? They will probably sell it just like you would.

The only difference is they will do it as quickly as possible so may take a lower price, and all their selling costs will be added on to your debt at a handsome hourly rate, i.e. you'll end up paying thousands extra to cover their fees and time for selling.

Try your best to sell it yourself, even if you take a low offer you will be better off to be rid of it this way.

Even if there is a small shortfall, you will likely be able to make an arrangement to pay this off, like you would a loan.

The only other option is if the housing association might be willing to buy it???? Probably unlikely but worth asking.

Gary.

jamesd

Handing the keys back doesn't save you from possible debt. The mortage lender still gets to come after you for their sale costs and any resulting debt. Better to sell it yourself, you'll do it in better condition and with better motivation to get a good price.

mrsdarbs

Thanks everyone. It was something my dad mentioned to me - but I had no idea what it involved etc hence I posted on here. Definitely don't want to go down that route then as in the process of repairing our credit rating!

The estate agents are quite hopeful that I'll have a buyer in place by Christmas if it's on the market by mid Sept?! Unfortunately I don't share their enthusiasm lol.

I don't want to lower the price too much as I will have to find the shortfall to pay the housing association as they need their % of the valuation fee (or higher sale fee) even if I sell it below valuation, so would still cost me, but we'll have to see how it goes. One in my block sold with the same agents I'm going with for about £4k less than my valuation, but it was valued at a lower rate, so fingers crossed.

The HA won't buy it back as it's not 'their policy' and they had a 12 week nomination period to find a buyer from their 'books' and couldn't.

molerat

As asked by getmore4less, what was the original consent to let and why are they revoking it ? or did you not have permission from both interested parties.

What is the status of your tenant and why / on what grounds are you going through the courts ?

mrsdarbs

I was given permission to let as I moved to Northern Ireland with my husband as he's in the army. I had to apply every year. Been three years.

My consent to lease on my mortgage was coming to an end so the mortgage company contacted me to discuss my options etc. I needed the letter from the HA to prove I still had their permission. When I called to request I was told that I should have only been allowed to let for 12 months and they were being kind - I'm guessing it's because our army housing is now back in the area - so I'm not away.

I haven't been given a a specific reason just told I needed to give notice to my tenant immediately. My agent served notice and as the tenant is in receipt of benefits, the council do not classify him as homeless and will not rehome him until they receive the letter from the bailiffs with the date they are coming in, hence the court route.

I am putting in a formal complaint to the housing association with the way they have handled this - the stress it has put me under has been immense, I am on maternity leave and hubby is in Afghan - I didn't need this on top, but hey ho.

getmore4less

What are the terms in the original purchase agreement about letting, and the term on the agreement at the time is was first let.

if there were no time limit on any concent then as long s you don't break your agreement I cannot see how they can change their mind

What are the penalties for letting without concent if there were time limits imposed?

Why not move back in when the tenants leave.

I thinlk you probably could have dragged this out by challenging the HA before giving the tenants notice.

presumably you bought this place before you met and married an army man.

if there is a local army community and the families that move are getting bad treatment from the HA, being forced to sell and loose money, the local paper may be interested in a story