My House

Mike_St_Helens

Morning guys,

Im looking for as much advice as poss here.. so my appols if you might have read this elsewhere.....

Today I have had a letter from my OR. They want 2 valuations on my house and the balance of the mortgage, not the settlement figutre, even though I permanantly have a 1% repayment charge ??? So the mortgage is in the rigion now of 72K. The valuation will be i the reigion of 75-77k. When we initialy started dealing with the OR they dsaid they would take any fees etc into account. The mort curr is Interest only.

Now we have equity of 3-5k instaed of the 1-2k we had expected. Now we aint got the brass. Any ideas with this guys... (I have 2 vals arranged for this week)

I have been looking at rental properties today, now my idea is if they want stupid money, stop paying the mortgage, save the money for a house back in Liverpool... I think I said something similar a bit ago... Now the thing is, i love owning my own home, but so so want to move back to Liverpool... but cant really get back on the ladder can I ?

If I stopped paying the mortgage, and officially wrote a letter stating to the mortgage firm that I dont acknowlege the mortgage as a post bankruptcy debt, could the arrears (or what will be by the time we move) be added to the bankruptcy ?

Cheers guys....:p

Richard_S

Hi Mike,

A couple of things spring to mind, firstly I would have the house valued by as many local estate agents as you can put up with, six maybe :eek: and then choose the two with the lowest valuation. Secondly, if there still appears to be more equity than you can afford to purchase, make the O.R an offer that you can afford, there does seem to be an element of negotiation in dealings with the O.R.

With interest rates, bankruptcies, insolvencies and house repossessions going up there’s more than a good chance that house prices will remain stable or even fall and if the O.R has a chance to accept a £1k now rather than a potential £3k-£5k in a years time he/she may well accept your offer.

I’m not 100% certain but I think any debts you incur after your bankruptcy date are not included in your bankruptcy so any mortgage arrears that accrued you’d be liable for. I know that’s no big deal if you ultimately go into rented accommodation but they could still pursue you and go for an Attachment of Earnings through the courts. It would also have a negative effect on your credit rating should you ever want to purchase another property.

On the other hand, if you sell quickly and go into rented accommodation and then house prices take an absolute tumble you’ll be in a good position if you want to buy again. I think on balance you’d be better off staying where you are and negotiating as hard as you can to drive the amount down that the O.R will accept. Pretend they’re a Premier Travel Inn Mike; you’ll have them begging you to settle for £500 :beer:

Rich

silvercar

With the figures you post, the OR would not necessarily be looking to sell, "just" to register their interest.

Without a sale

Equity 3-5k, OR registers his interest in this money. Years later he returns and asks for the money, either you can afford to make him an offer or he could review pursuing for a sale then.

With a sale
Equity 3-5k, say the price achieved actually gives £4k, out of this you will have to pay estate agents (say £1,130 @1.25% +vat), legal fees (500+). 1% redemption fee (720). The OR is already only left with £1,500 - could be lower.

So from the ORs point of view, it doesn't make sense to pursue a sale now as he will get relatively little. Therefore it would be in his interests to register the interest and wait.

From your point of view, use the fact that the OR would get very little now to persuade him to settle for a low value to buy back the BI. Once you buy back the BI, you are in control again with no risk of the OR demanding money at a later date.

Why you can't allow repossession
Repossession sales are always at lower than market value. The lender has a duty to get the best price but also a duty to sell quickly to avoid the build up of arrears. Once you have allowed for lender's legal costs (£1,000+), estate agent fees (£1,300), redemption costs(720) plus any arrears you have allowed to happen your mortgage will be in shortfall. This is a new debt post bankruptcy and the lender can chase you for 12 years for it. It would be cheaper to find the money for the BI than to allow this to happen.

So I would say your choices are to arrange the sale yourself or to stay put.

silvercar

Reading another thread and just had a thought. Do you live with your partner? If so, they may be able to claim a beneficial interest in your home, in which case some of the equity should be theirs and untouchable by the OR. Meaning you (or actually someone on your behalf) could buy out the OR's BI even cheaper.

Though on your original figures, I would only be offering £5!

Conor_3

Mike_St_Helens wrote: »

If I stopped paying the mortgage, and officially wrote a letter stating to the mortgage firm that I dont acknowlege the mortgage as a post bankruptcy debt, could the arrears (or what will be by the time we move) be added to the bankruptcy ?

Cheers guys....:p

No. Mortgages and charges on your property, such as secured loans CANNOT be included in bankruptcy and neither can any arrears.

The only thing you can include would be any shortfall in paying back the mortgage BUT ONLY IF IT WAS INCURRED BEFORE YOU WERE DECLARED. So for example, if you had the house repossessed before you banked and it was sold for £3000 less than the outstanding mortgage, then that £3000 can be included.

Mike_St_Helens

Thanks guys, The advice is greatly welcomed !

Just one q though.. so i stop paying the mortgage, and offer the OR the house. then he sells it and makes say 3/5k on it.. now he will have his own fees, estate agent etc etc to pay including my mortgage.. now would the arrears have to be paid back from the profits the OR will gain by the sale ?

Thanks again.....

Remmer

The mortgage has to be paid off Mike, from whatever source

silvercar

Mike_St_Helens wrote: »

Thanks guys, The advice is greatly welcomed !

Just one q though.. so i stop paying the mortgage, and offer the OR the house. then he sells it and makes say 3/5k on it.. now he will have his own fees, estate agent etc etc to pay including my mortgage.. now would the arrears have to be paid back from the profits the OR will gain by the sale ?

Thanks again.....

Your not offering the OR the house. You are surrendering the house to the mortgage lender. They sell it, pay off their own repossession fees, legal fees, the estate agents fees etc. This then produces a final amount. Either it will be a small amount of equity, which would go to the OR or it would produce a negative amount which they could pursue you for, for the next 12 years.

Conor_3

Mike_St_Helens wrote: »

Thanks guys, The advice is greatly welcomed !

Just one q though.. so i stop paying the mortgage, and offer the OR the house. then he sells it and makes say 3/5k on it.. now he will have his own fees, estate agent etc etc to pay including my mortgage.. now would the arrears have to be paid back from the profits the OR will gain by the sale ?

Thanks again.....

You don't offer the house to the OR. The keys are given back to the mortgage company if you stop paying.

The only time the OR has any interest is if it is sold or he orders it to be sold in which case any profit / part profit if joint owned becomes his. Any arrears would be taken out of the sale price before the OR got their money.

Mike_St_Helens

Thanks guys,

I know im not offering, thats just a euphonism i used (sp) i guess.

I have the valuers coming this week, I guess i cant really make a decison till thats happened and then we can think figures. I think all the stress of it makes me want to just give it up and move away, that and the thought of a new start after all the crap weve had....

Mike_St_Helens

Guys,

Looking at it from another angle here...

If I no longer wanted to purchase my BI and the OR now wants the equity in the house. What would you suggest the best course of action. Bear in mind we need to save a hefty deposit and rental up front etc etc....

Thanks again.

Mike