Buyto let possible Repossession and massive mortgage shortfall

bornfree64

Essentially I am going to have a severe problem that I need advice on. I have 2 Buy to let properties in Scotland that I have had 10 years with 2 great long term tenants in them.
However, the mortgage rate has gone up to 5% so the monthly cost of both is over £3000 pm and I get €1500 in rent for both so massive monthly shortfall I cannot afford. Moreover both properties together are worth £320,000 , and the mortgages are £625,000 so I can’t sell or re mortgage due to this huge negative equity so I am trapped. As of today I have not missed a payment but will be next month. The mortgages are with the TMB who are closed to new business. Do anyone have any experience of how they deal with this sort of thing?
I have spoken to CCCS and Business debt line and I need some specialist advice as the properties are in Scotland and I live in England. I have exhausted all the advice lines recommended by money advice Scotland.
I want to know:
1. Should I try to sell them myself ( will cost me £2000 up front with the new compulsory Scottish Home Report and marketing fees )
2. Allow lender to repossess?
3. Should I hand back the keys?
4. I am not sure if implications of these are different
Any of these will still however leave a £300,000 ish shortfall. Can the lender then pursue me in England? Can they make me bankrupt?
I really need some advice but do not know where to go. It is complicated by the fact I live in England and the properties are in Scotland.
Can anyone help please or have experience with the TMB and mortgage shortfalls and if they pursue them?

ILW

Are you saying they have halved in value over the last 10 years?

The_Hurricane

I would just hand back the keys to be honest.

Euphoria1z

My personal thoughts-

if you want to keep the properties then carry on paying them, tell them your struggling, give them a income/expenditure and come to an arrangement of what you can afford.

if you dont want to keep the properties and want out, then stop paying them, dont even bother with handing keys back, dont bother selling it if its in such negative equity, unless you can find an estate agent who dont charge upfront (most do and will cost around £1k minimum with all the upfront nonsense).

it will take anywhere upto 1 year for them to repossess (give or take), i stopped paying TMB in april 2012 and they still havent repossessed.

once properties are repossessed you will now be liable for the shortfall.

this is where you go bankrupt and start afresh.

This is merely my opinion on the matter ...but i think it boils down to whether you want to keep the properties or not.

my property is also in scotland and i live in england.

bornfree64

ILW wrote: »

Are you saying they have halved in value over the last 10 years?

Well not exactly but they have gone down about 30% from 230k to 160K I capital raised on them so time ago

bornfree64

The_Hurricane wrote: »

I would just hand back the keys to be honest.

Thanks- but what i want to know is what the implications are if i do that as there will be a shortfall of circa 300,000 that I will owe the TMB and i am worried about that obviously!!
This is my first post so thanks.

bornfree64

Euphoria1z wrote: »

My personal thoughts-

if you want to keep the properties then carry on paying them, tell them your struggling, give them a income/expenditure and come to an arrangement of what you can afford.

if you dont want to keep the properties and want out, then stop paying them, dont even bother with handing keys back, dont bother selling it if its in such negative equity, unless you can find an estate agent who dont charge upfront (most do and will cost around £1k minimum with all the upfront nonsense).

it will take anywhere upto 1 year for them to repossess (give or take), i stopped paying TMB in april 2011 and they still havent repossessed.

once properties are repossessed you will now be liable for the shortfall.

this is where you go bankrupt and start afresh.

This is merely my opinion on the matter ...but i think it boils down to whether you want to keep the properties or not.

my property is also in scotland and i live in england.

Hello, Interesting you are with the TMB and ppty in scotland too. So you just stopped paying? Do you have tenants in there? have they contacted you at all in the nearly 2 years? Will you have a mortgage shortfall like me?

Euphoria1z

sorry, meant to say stopped paying the mortgage in april 2012.

The properties are empty, you get calls pretty much every day, letters every now and again. 95% of the time i dont answer the phone calls, but every now and again ill speak to them just to find out what stage of the repossession there at. They always ask the exact same questions, why are you not paying? are you working? can you pay a little? so you think your circumstances will change soon? your risking your credit file, you wont get any more loans/mortgages etc etc etc.

I will have a shortfall yes, but its not as much as yours. but if you are going bankrupt then the amount of the shortfall doesnt really matter.

300k shortfall is quite a lot, and unless your going bankrupt, youll have to make arrangements to pay that back, like a personal loan i think. if your going to pay the shortfall, then no point in letting the property get repossessed. if your not paying the shortfall, and your not bothered about going bankrupt, then go bankrupt (in my opinion).

somethingcorporate

*you're.

For that amount of money bankruptcy is probably the only viable long term option.

bornfree64

Euphoria1z wrote: »

sorry, meant to say stopped paying the mortgage in april 2012.

The properties are empty, you get calls pretty much every day, letters every now and again. 95% of the time i dont answer the phone calls, but every now and again ill speak to them just to find out what stage of the repossession there at. They always ask the exact same questions, why are you not paying? are you working? can you pay a little? so you think your circumstances will change soon? your risking your credit file, you wont get any more loans/mortgages etc etc etc.

I will have a shortfall yes, but its not as much as yours. but if you are going bankrupt then the amount of the shortfall doesnt really matter.

300k shortfall is quite a lot, and unless your going bankrupt, youll have to make arrangements to pay that back, like a personal loan i think. if your going to pay the shortfall, then no point in letting the property get repossessed. if your not paying the shortfall, and your not bothered about going bankrupt, then go bankrupt (in my opinion).

Bankrupty is something i wish to avoid- i would rather a DMP and sccond choice an iva. Have you taken advise and if so where from? I guess the TMB will have huge problems with people like us as anyone stuck with them with be on svr 5% and then lent tonnes on big btl. They had their 10 to let product which thankfully i didnt do. What happens after the repossession with your shortfall?

bornfree64

has anyone ended up with a shortfall with the TMB? If so... what do they do about it? Is there a possibility of negotiating with them?