Joint Mortgage / Negative Equity / Transfer of Equity Solutions

andyquid

The mortgage is currently £78,000 so yes you are correct there may be less negative equity, i have just assumed worse case scenario for this thread.

StuC75

The fairest approach is to pitch it to the ex in the first instance to see what her expectations are, and timescale as to when this will be done and fees \ what it will cost.

You may need to put a deadline to say, "And that if unable to complete the TOE at that time that you agree to put on market to sell & you would cover any further shortfall should it need to be sold & a further loss is incurred beyond what it is valued now".. How 'safe' are the current tenants? what would happen with the mortgage if they were to leave and you had a period of time of it being empty??

andyquid

I have initially sent the proposal to my ex via email requesting a swift response to settle things asap. I did note a number of areas where an agreement would have to be in place before proceeding with the TOE;

- she continues to pay her monthly contribution towards the bills until the TOE is approved
- we will have 3 valuations carried out on the property or a home report to establish the current valuation
- from that valuation she will pay me 50% of the negative equity
- she will contribute towards 50% of any legal costs and early repayments charges imposed.

I will be issuing a letter detailing the terms of the agreement through my solicitor. Hopefully this will help get things moving.

My concern is that she has noted on her last email that she no longer wishes to have any further communication with me regarding the property. How on earth am I able to resolve the situation is she wont communicate!

My current tenant has been in the property for 8 months and has decorated, replaced our furniture with her own, and recently request to decorate further. So thankfully the tenant is happy in the property and shows no sign of intending to move in the near future (of course that can change at any point). The property has never been empty for more than 2 weeks during the time it has been up for rent and it holds a very good rental value.

Really appreciate the help here, its a difficult and worrying situation to be in. Makes me angry that people are allowed to get away with this kind of action!

StuC75

When are you intending to complete the TOE? is that Now? or in 2014 when the early repayment charge ends? Not sure if you made it clear in the earlier posts?

She may only agree to continue covering if the house is being marketed. Or happening now..

Best of luck (in the midst of doing a TOE myself)..

Thrugelmir

andyquid wrote: »

I- she continues to pay her monthly contribution towards the bills until the TOE is approved
- we will have 3 valuations carried out on the property or a home report to establish the current valuation
- from that valuation she will pay me 50% of the negative equity
- she will contribute towards 50% of any legal costs and early repayments charges imposed.

I will be issuing a letter detailing the terms of the agreement through my solicitor. Hopefully this will help get things moving.

Not an agreement it's your demands.

In no way taking sides. However if I was her. I would do nothing, as I want out of the situation, just want the property sold. I'm happy to settle my half of the negative equity. So my weapon is to do nothing. Make no financial contribution.

andyquid

Thrugelmir wrote: »

Not an agreement it's your demands.

In no way taking sides. However if I was her. I would do nothing, as I want out of the situation, just want the property sold. I'm happy to settle my half of the negative equity. So my weapon is to do nothing. Make no financial contribution.

You would do nothing? So you would be happy to default on a mortgage by doing nothing instead of taking responsibility for your finances? If you are happy to settle then why not settle rather than having the much higher costs and risks of selling?

Selling would be a problem. We would be lucky to get £60,000 for our 1 bedroom flat. A 2 bed flat in our block is currently on the market for £62,000 and has been for months. Also if we decide to sell we would have to notify the current tenant who would no doubt be keen to move out asap which would result in higher monthly contributions until the property is sold.

Even if she does decide not to make any contribution towards the property, I simply cannot fund it all on my own so the mortgage wouldnt be paid and this would effect the both of us.

I can see her point if I had plenty money and could afford to pay the mortgage on my own but the facts are I cant.

PS. The TOE would be applied for ASAP.

StuC75

Sounds like a plan then..

Get her 'agreement' to want to buy herself out for £10k - but factor she will have solicitors fees in dealing with this as they would need to act in her interests to ensure the £10k is paid to the mortgage company as her responsibility is relinquished. so may want to negotiate..

Do bear in mind she could change her mind and just want out,, so you may have have to be rather tactfull with regards to how & what you request \ demand...

andyquid

I think it's a possibility. The problem will be her reluctance to communicate.

I'm keen to take the property into my own name purely as a future investment, but i wont agree to it unless she pays her share.

Can anyone tell me the benefit to her not paying a penny? I would be prepared to default on the mortgage - certainly not prepared to be held to ransom on this one! As soon as I pay her share she will never pay another penny or agree to anything!

StuC75

The problem here is likely to be who budges first. You are presently both Joint & severally liable for the full debt. You do have the enviable benefit of a tenant covering the bulk of the mortgage - so its only the admin side to cover.

At the moment she is 'doing' more of a favour for you, than you are for here.. i.e. She has already made the statement regarding selling and paying the shortfall, you are looking to avoid writing off the 10k.

So even just having her released and you taking the full liability on is more beneficial to you, then selling and paying out 10k.

You may need to be a tad more diplomatic, if she doesnt want to openly discuss it with you, then just ask for her solicitor details for sending through the Transfer of equity paperwork..

andyquid wrote: »

I think it's a possibility. The problem will be her reluctance to communicate.

I'm keen to take the property into my own name purely as a future investment, but i wont agree to it unless she pays her share.

Can anyone tell me the benefit to her not paying a penny? I would be prepared to default on the mortgage - certainly not prepared to be held to ransom on this one! As soon as I pay her share she will never pay another penny or agree to anything!

tidesendtown

@andyquid: I'm curious, have you made any progress on this?