Why Repossess when negative equity

wthtodo

Hi Guys

First Plus are basically going to force repossession of our home, we have a 2nd mortgage with them of £112k (including interest) we are in arrears of £50k.

After a long time of them not worrying about payments, well they didnt chase them, we reclaimed a ppi which was taken off the total, since then they are after us.

Actual payments are supposed to be £599 a month

We had a suspended possession order with them and agreed to pay £200 a month in total.

Now after 6 months we have a review hearing, they want the full £599 plus £344 on top to clear arrears.

Theres no way we can do that, even going on to a prepayment meter and changing ever other debt to £2 token payments we can only go up to £480 a month.

If the house was sold for anything like its value in todays market, once the 1st mortgage was paid the 2nd mortgage would at best get £10k.

I have told them that if the repossess, they will leave us with nothing and we have been advised to then go for Bankruptcy.

Put they are insisting they want £943 a month or they will repossess.

Question

What is it worth to them repossessing knowing they will get a max 10k - as they know us going bankrupt will get them nothing?

rising_from_the_ashes

Really jut bumping for you - as not something I know huge amounts about ....

I'm a bit confused as surely if the payments are £599 / month then you must've not paid this for years to be £50k in arrears?

Or has there been excessive amounts of charges etc added?

I take it the first mortgage is with a different lender ... is this up to date & is this a smaller or bigger amount?

I'm wondering if the order that creditors get money back is in any way related to the outstanding amount left or the sale proceeds are divided on a percentage basic (rather than being date they were agreed)?

fatbelly

wthtodo wrote: »

What is it worth to them repossessing knowing they will get a max 10k - as they know us going bankrupt will get them nothing?

Because either the process forces you to pay the contractual amount or they get access to the 10k in your property.

Carol Vorderman has a lot to answer for.

wthtodo

So your saying it makes sense to get only 10k out of 112k, than to see that at £480 a month - which would get them 10k in a maximum of 22 months

harrys_dad

Even after they take their 10k you would still owe them the 102K and they can chase you for it is my understanding. others will correct me if I am wrong. I am also wondering about the state of payments for the first mortgage, and if that is up to date? To get the best advice on here (from those more knowledgeable than me) you need to post more information.

fatbelly

That's correct. And a 102k debt would be worth something to a debt buyer even as a mortgage shortfall.

First Plus are taking some heavy losses but it's all about getting as much in as quickly as possible now and reducing their numbers of bad debts.

There's around seven years of arrears there - surprised they haven't acted sooner.

[Deleted User]

OP contact shelter NOW for advice

broad-sword_2

Savvy enough to claim PPI back (or was it because of another advert on daytime TV?) but did not worry about paying back what you borrowed... seems you did not have much idea about what you were getting into (the alternative response is not intending paying the debt back at all as it's all pretend money and it paid for x,y and z). If nothing else the result of the banking fiasco is that they will not lend willy-nilly again....

wthtodo

broad-sword wrote: »

Savvy enough to claim PPI back (or was it because of another advert on daytime TV?) but did not worry about paying back what you borrowed... seems you did not have much idea about what you were getting into (the alternative response is not intending paying the debt back at all as it's all pretend money and it paid for x,y and z). If nothing else the result of the banking fiasco is that they will not lend willy-nilly again....

Makes me laugh how people are quick to jump to put people down.

Guess you forgot to ask about the illnesses we have had, about how First Plus refused to pay out on the PPI due to already being ill before , tho happy to refund the paltry £1800 on the PPI, before any other sarky comments, yes it was paid off the arrears..

Then being so far behind we had to clear 1st mortgage arrears before we could start paying on this one. Yes they only chased us once we applied for the PPI refund - funny that.

Having to look after my partners mother as theres no where else for her to go which means extra costs, time required to make sure shes ok as she has a number of illnesses and disabilities.

Sorry maybe u do, but i dont have a crystal ball to see whats gonna happen in the future

And yes we will go for Bankruptcy - as we would be no better off being homeless and owing all that money, our credit record already shot to pieces - so FP will get at best 10k after the sale, whereas they would have got that 10k in 18 months and much much more as we worked forwards.

wthtodo

harrys_dad wrote: »

Even after they take their 10k you would still owe them the 102K and they can chase you for it is my understanding. others will correct me if I am wrong. I am also wondering about the state of payments for the first mortgage, and if that is up to date? To get the best advice on here (from those more knowledgeable than me) you need to post more information.

Yes we are just finishing bringing the first mortgage up to date in the next few months

ILW

Moral Hazzard.
Let one person off and loads of others will stop paying.