Negative equity, other party wants of the mortage

Tash1984

Hi, after some advice so here goes....

My boyfriend brought a house with his friend 6 years ago, 100% mortgage currently owe £105 thousand, house currently worth £75-£80grand, anyway after a year of owning the house his friend decided he no longer could afford mortgae, and just moved out not caring who was paying mortgage, he agreed to sign house soley over to my partner but the mortgage company would let this happen.

Anyway i moved in and have lived here for 4 years now, me and my partner have paid the mortgage no problems since then, whilst his friend has paid nothing at all since moving out, we have tryed several times now to take his name of the mortgage and put mine in but as there is negative equity the mortgage company wont allow it.

Ill add the friend has more debt so even being of the mortgage he still wouldnt be able get another mortgage or anything.

Anyway after us keep trying we have come to the conclusion were n
Not going to get his name of it for a while, which thats fine with us were quite happy for it to continue like this until we can get his name off it fine with us.

Anyway the friend has come to us again and said he wants his name off it, which he knows isnt possible with mortgage in current state.

My partner has put to him that we see if the mortgage company will accept me on the mortgage if we reduce it by 20grand 10grand from him and 10 grand from the friend, he has agreed to this but where hell or well get the 10 grand from we dont no but wed ask family for help if it meant getting his name of the mortage

If this fails the only other option is he takes us to court and forces us to sell, as we dont want to or are prepared to sell, we would be homeless and i have a baby due in september so its very stressfull.

My questions are if he took us to court is it a long process, would the friend be liable for the costs, and would the court force us to sell with the mortgage having so much negative equity and us paying mortgage without fail? Its just a big mess and seems crazy he wants put himself and my partner in debt if they had sell it

Thanks

Radiantsoul

How is your partners friend planning to fund this legal action(forcing you to sell?
And to what ends as there would presumably be a shortfall on the mortgage to which he is jointly and severally liable? And would the mortgage company be party to this action(as they would be unlikely to release their charge)

I don't see a court forced sale as likely, presumably it is more of an issue if there comes a time when there is equity in the property.

Tash1984

God nows how he plans of funding taking us to court!!! Hes doesnt think of these things!! But theres noway were prepared to sell theres just no point as both would be liable for the short fall in neg equity, im unsure if mortgage company would be party to this, i have been told by mortgage advice burea that the mortgae company may not even agree to the sale, as mortage is being paid every month etc, i understand when there comes equity in the house there could be a problem, we try every year take his name of but unsuccefull so he can see were trying, there probably wont be any equity in house for a while in which by that time i hope his name would of been long off it, it annoys me how you take a mortgage out as a long term commitment, and hes just expecting thins to happen there not so he should accept it, he made mistake of taking mortgage out in first place with a friend so he should live with it, i guess i just wanting to no if we wont sell it what can he do? Were not prepared pay any court fees as we dont want to sell it?

Radiantsoul

You have a problem as you cannot remove him from the deeds whilst there is no equity in the property, and once there is equity in the property you may be able to remove his name but it is hard to see why he will agree to this.

I would check the valuation as I guess the original loan was for £120k(assuming it is a 25 year repayment) you would have £105k outstanding. It is quite a big fall to be £75-80k over that period.

Radiantsoul

I guess one option is to stop paying, allow the mortgage company to repossess and then either come to an arrangement for the shortfall or declare bankruptcy.

Tash1984

Yes think it was for 120k, bankruptcy isnt a option for us, the friend did consider himself going bankcrupt at one point as he has alot of debt but now hes decided not to do that, he has said if the mortgage will accept me
On the mortgage if they both pay 10grand each off he will do that, but the mortgage company have got to agree that and both parties have got to find 10grand each which wont be easy, as i said its a big bloody mess! If the mortgage company wont agree to that then were out of suggestions of what to do other than him stay on mortgae for meantime, but he says hell take it to court and force us to sell, the whole situation at the mo is very amibical but of course if it goes to court it probably wont be, but i cant see really how hed afford court costs etc, and if taking us court would
Make any difference to the situation

Radiantsoul

Even if the court order a sale the mortgage company would not allow it. And therefore I suspect the court would not order it. This is not going to be a problem until there is equity in the property and even then the court would consider you and your child and the source of the payments.

A big issue for me is in 19 years time you will have repaid the mortgage. The house might be worth £150k and will be jointly owned by your partner and his ex-friend. So you risk having to give him £75k or going to court in order to force a sale.

I don't think the mortgage company will feel hugely attracted to £20k as they will lose a source of repayment and still be in negative equity. I doubt they would entertain it, especially if you are currently up-to-date with payments. The customer service people/bank manager may sound friendly, but they probably lack the discretion to agree it.

Tash1984

Rightio thanks for the info, yeah mortgage is kept upto date never missed a payment, so i thought they may not allow the sale anyways, it is a worry that there may become equity in the house and his friend will come after that equity, were going to have to try resolve that some how! How i dont no!! But for now all we can do is ask mortgage they say no, then if his friend wants to attempt to take us to court let him in the hope the court wont allow it, just so we dont become homeless with a baby etc!! Would another option be if we brought mortgage down 20 grand, his friend paying some aswell to bring it down, then me and my partner go elsewhere and try and remortage through a different company for me and him for 85 grand? Or are they likley to say no aswell? That was another option we thought off?

Radiantsoul

You could probably remortgage elsewhere, but that depends on the valuation of the property. You will need to clear the full balance of your existing mortgage though.

Tash1984

So for example we owe 105k now, we brought the existing mortgage down to say 76k and the house was worth 80k we could go elsewhere and try to remortgage in both mine and partners name, problem
Would be finding money from both parties to bring it down to that amount but that would be a option,

If there was equity in the property we would of sold house long time ago when he first moved out to avoid all thos, and wouldnt be refusing to sell, but as theres no equity it seems silly for one to put both parties in debt, and 2, wed be homeless and wouldnt be able buy anywhere else as partner would have debt from this house, plus were paying this mortgage fine its doesnt seem fair he makes these demands which arnt even posdible todo hes just itrespobsible and should of never of gotten a mortgage in first place but whats done is done!

Thrugelmir

With no equity in the property then selling doesn't appear to be a viable option for any party.


Is the mortgage on a repayment basis?