Sole mortgage holder but no financial interest in a property likely to be reposessed

HugotheHack

Hi all!

I joined this forum to see if I can get any advice on a fairly complex problem I have been left with as the result of a very messy divorce. So apologies in advance for such a tedious first post.

I got divorced in 2007. Pre divorce the property was in my sole name as adding my wife to the mortgage application would have diminished what we could borrow as her income was very low compared to mine. The divorce was a prolonged one and some elements regarding child issues are still ongoing. I have lost count of the number of court hearings I have had but it would be between 15 and 20. My ex-wife has refused mediation throughout and so we have been repeatedly forced back into court.

The financial settlement left my now ex-wife living in the house with 60% of the title. Unfortunately she refused to go on the mortgage. Despite many attempts to persuade her including legal efforts she refused and eventually I was forced to add her to the title but not the mortgage. My divorce had been an expensive one and I just couldn't afford the legal fees any more. I had been paying the mortgage and the terms of the divorce left me doing this. The repayments varied from around £1600 per month up to £2300 per month.

Subsequent to all of this and largely as a result of the divorce and the costs of supporting 2 homes I went bankrupt. Post bankruptcy my ex-wife approached the official receiver and, without informing me, bought my beneficial interest in the property. She was able to do this as she was the one who was resident in the house and had arranged valuations. I didn't find out this had been done until several months later.

All of this left me in the position of having sole liability for the mortgage but none of the title. Throughout all of this I kept the mortgage company informed as to what was happening and, when they refused to get involved or to take any steps to enforce their own mortgage terms, sent them a letter explaining that they were failing in their duty of care to me.

Post bankruptcy my ex-wife back-tracked on her refusal to go on the mortgage and asked me to arrange to have her name added. Of course by this time our situation meant that the mortgage company would no longer agree to add her name.

Shortly after my bankruptcy the mortgage payments were switched to interest only. This brought the payments down to a level that my ex-wife could afford. This was necessary as I was no longer in a position where I could afford the repayments. The mortgage is due to revert to a repayment basis in a 2 months and neither my ex-wife nor I will be able to afford the payments. I informed my ex-wife of this and her response was simply to say I needed to ask to have the interest only period extended. This I refused to do without both of us seeking advice first. My reasons for this were both pragmatic, I doubted that the mortgage company would extend the interest only period as neither my wife nor I (any longer) had incomes that would support the mortgage, and also personal as I didn't want this to hang over me indefinitely. At any rate the situation is a mess and my feeling is that we'd both be best served by getting sensible advice.

My ex-wife has since refused to seek advice or to discuss anything other than extending the interest only period. She simply ignores any of my attempts to communicate. There is probably now some equity in the house if she sells but if the mortgage is allowed to go unpaid arrears and legal fees will erode this to nothing. The price realised by repossession is likely to make this even worse.

I need advice on what I should do about this or suggestions as to where I can go to get help. I can no longer afford the legal fees needed to get a property lawyer involved and obvious routes like the Citizen's Advice Bureau, Shelter etc. have been tried and proved fruitless. The situation is simply too complex for them to know what can be done.

I don't want to simply leave this to fall apart as can't see how anyone can benefit from having the house repossessed rather than sold.

I've probably forgotten detail that is relevant so please feel free to ask for explanations or clarifications.

Many thanks!

ACG

Even if the lender will extend the interest only period, will your ex put the house up for sale? Sounds unlikely.

In which case your going to be stuck bowing to her demands for the rest of your life. I would personally refuse it and let it get reposessed. Is not ideal but you can then put the whole thing behind you and move on with your life - bar any shortfall there may be.

The negative to this is that your child will be affected - but it might be short term pain for long term gain?

Thrugelmir

HugotheHack wrote: »

I don't want to simply leave this to fall apart as can't see how anyone can benefit from having the house repossessed rather than sold.

Not your decision. Suggest you let go and get on with your own life.

HugotheHack

ACG wrote: »

Even if the lender will extend the interest only period, will your ex put the house up for sale? Sounds unlikely.

In which case your going to be stuck bowing to her demands for the rest of your life. I would personally refuse it and let it get reposessed. Is not ideal but you can then put the whole thing behind you and move on with your life - bar any shortfall there may be.

The negative to this is that your child will be affected - but it might be short term pain for long term gain?

That is the conclusion I have reluctantly come to. I certainly won't try to extend the interest-only period.

It just seems totally pointless though as there seems to be no benefit even for my ex-wife in this route. I am totally at a loss as to what she thinks will happen if she does nothing or why she thinks this is a good route to take. Is there something I am missing here?

I also feel as though there should be some way to escape what is essentially financial abuse. I am effectively being forced back into debt.

My other worry is not knowing what NRAM is likely to do downstream. My understanding is that a mortgage company can pursue a mortgage shortfall even after many years. This is one hell of a thing to have hanging over you.

ACG

Can you not move back into the property?

Might be reallllllly awkward. But tell her your moving in whilst you put the property up for sale?

HugotheHack

ACG wrote: »

Can you not move back into the property?

Might be reallllllly awkward. But tell her your moving in whilst you put the property up for sale?

Not a hope in hell alas Apart from anything else we separated about 7 years ago and I have a new relationship and another child.

Regarding selling, this is what I think she should do to get at least something out of this. As she refuses to talk I can't see how I could make it happen.

I think she is either expecting me to cave to avoid repossession or she has some idea that she can somehow benefit from having the house repossessed. Perhaps she expects to be able to cut a deal with the mortgage company.

ACG

If thats the case, it would be easier for you both for her to just buy it for the outstanding amount. Saves you estate agent fees and all the rest of it. Shes in profit from day 1.

Theres also no risk then of her not being able to keep it.

Just look after number one. Do whats best for you, maybe tell her if she doesnt deal with you now then the next she will hear is when the house is being reposessed? The money your paying now, put to one side for any shortfall and then make a deal with the lender if there is a shortfall.

Can you not charge your ex rent? That would surely solve all your problems.

HugotheHack

ACG wrote: »

If thats the case, it would be easier for you both for her to just buy it for the outstanding amount. Saves you estate agent fees and all the rest of it. Shes in profit from day 1.

Theres also no risk then of her not being able to keep it.

That would work but she couldn't possibly afford the house. There is no way that she'd qualify for the mortgage she'd need.

ACG wrote: »

Just look after number one. Do whats best for you, maybe tell her if she doesnt deal with you now then the next she will hear is when the house is being reposessed? The money your paying now, put to one side for any shortfall and then make a deal with the lender if there is a shortfall.

I am not paying any money now - bankruptcy put paid to anything I could do there - and my own circumstances have changed so much that I can't afford to buy either. Nor can I afford to put aside anything to cover a shortfall.

ACG wrote: »

Can you not charge your ex rent? That would surely solve all your problems.

That would be interesting but as she has the title and effectively owns the house I don't see how I could charge her. All I have is the mortgage and the liability.

ACG

I cant get my head around that - seems strange but ill go with it.

If she doesnt pay rent, the house gets reposessed? If she does then it doesnt?

HugotheHack

ACG wrote: »

I cant get my head around that - seems strange but ill go with it.

The whole situation is strange but which particular bit can't you get your head around?

ACG wrote: »

If she doesnt pay rent, the house gets reposessed? If she does then it doesnt?

She has the title but can't afford to take over the mortgage. If she could afford to pay enough rent to cover the mortgage then she could probably afford to take out her own mortgage and own the house properly. i.e. Title AND mortgage.

She'd need to be able to pay almost £2000 per month. I doubt that she could support half of that.

ACG

Whenever i do a mortgage, the people on the mortgage have to be on the deeds - otherwise there is no incentive for whoever has the mortgage to pay it back.... for instance i couldnt go and take a mortgage out on my dads house.
To be fair - its late, im hungover and im knackered. I might be able to get my head around it tomorrow but will see.

Anyway, speaking of being knackered im off to get the beauty sleep im in so desperate need of.