Negative equity, other party wants of the mortage

Tash1984

And hey weve even offered he moves in here and well move out and he can have the place well sign it all over to him, but suprise suprise he wont do that,so hes had that option so dont come saying you feel sorry for him to me cos its utter crap!

Radiantsoul

I feel sorry for both parties to be honest.

He cannot move into the house and sign it over to him, for the same reason he cannot sign it over to you. The mortgage company would not allow it.

Tash1984

Exactly they wont allow it, but he could move in and do what were doing couldnt he pay like we are and well go rent but no hes not stupid enough do that unlike us! I fail to see how anyone can feel sorry for him, hes the one who took on a mortgage and then walked away from it, irresponsible you get a mortgage and its a commitment which hes fail to do so how anyone can feel sorry for him ill never no this is all his doing if you ask me, if hed continued to pay mortgage instead of walking away then fair enough but he never he literally left in a week and that was it never paid no owing utility bills left a overdraft of £1000 on a joint account which may i add myself and other half paid so he deserves everything if hes stuck on the mortgage for a long time then tough

somethingcorporate

Where do you propose to get the £29k to reduce the mortgage value from £105k to £76k?

Unless you are really squeaky clean you'll not be able to get a 95% mortgage and even then you may have to pay to get out of your long-term fixed mortgage rate (ERC).

Tash1984

Both parties pay half each, wed have to lend of family, if we cant we wont be doing it as i said just a option and looking at ways to solve this mess, were aware of the fees dont think the friend has thought about all these charges as he doesnt think he thinks things just happen like that

wannahouse

Tash1984 wrote: »

Its a very bad long term deal! Big fat mess!! Think thats northern rock for you!! Its always been on interest only, as i say itl be going onto repayment once ive had baby and back at work, where would i find the mortgage advisors on here? Cant see any quick fix to this mess which is what his friend wants!!

i can't believe the cheek of that fellow to think he has the right to call all the shots here, when he has created the mess!
does he just expect you should put your name on the mortgage and take over his negative equity and he can walk away scott free?

squeeks

Tash,

I appreciate it is a difficult situation, but it doesn't look like you are in a position to change anything in the short term.

Keep in mind that the ex-friend is still liable for the mortgage as much as your boyfriend is. He also has as much right to occupy the property as your boyfriend.

In your position I would hold tight at present, and see how things pan out. I would also do the following:

• Personally save like mad so you at least have some options in the future. If possible save in your own name and avoid joint accounts. You don't want to be financially linked to your boyfriend if it all goes wrong. You do want to have relatively free cash to put down for deposits etc... in future.
• Explain to the ex-friend:
  • He is jointly responsible for the mortgage, any missed payments will equally affect his credit history as it will your boyfriends. The mortgage company can also pursue both of them for any payments missed.
  • Currently you can't remortgage or sell the house due to negative equity and if he wants out, he will need to stump up the cash for the shortfall.
• Keep an eye on the value of the house & keep contact details of the ex-friend. If the house price ever matches or at least get close enough to the mortgage value try to re-mortgage and offer to remove ex-friend.

If you ex-friend is considering going bankrupt due to other debts, remember that the house may get repro'd to settle some or all of his debts. Also while the ex-friend is still on the mortgage he can also take out additional loans secured against the property.... Fortunately the house at present is a liability rather than an asset, so you are a little safer, but may be well worth making sure the relationship with the ex-friend stays amicable, regardless of your personal view of the guy.

squeeks

wannahouse wrote: »

i can't believe the cheek of that fellow to think he has the right to call all the shots here, when he has created the mess!
does he just expect you should put your name on the mortgage and take over his negative equity and he can walk away scott free?

I have some sympathy with the ex-friend. He didn't cause the negative equity and currently doesn't reside in a property he equally owns with the OP's boyfriend.

Putting his probably numerous character floors aside; It doesn't seem too unreasonable to want to be removed from the mortgage, if he isn't permitted to live in his own home. He is probably also incurring a higher cost of living by living elsewhere by himself.

Two sides to every coin and all that.

epz_2

Think of it like this, you are paying the interest on a property that provides you a place to live.

Unless the interest rate is mental then you would likely need to spend something similar in rent so in the short term things ain't so bad. The complication comes when you want to actually sort this mess out.

Firstly I would be reluctant to pay back any equity as not only is it buying a devalued asset but it will initially just be reducing the other guys exposure. I would be looking at other investments like shares to put the repayments into that should grow. That way when you finally sort it out there is no issue over who owes what or amount of equity.

If the other guy was smart he would let you pay down the negative equity then walk away or worse ask for his share after the house is paid off so find a way to protect yourself. As it stands you are safe as there aint much he can do while the negative equity is there.

MOONDUST_FRST

I totally sympathize with your situation, as I too was in your shoes 4 years ago. Myself and my ex friend got a 100% plus mortgage in 2007 , house value £124.500. Things were OK for a couple of years, but then our friendship turned sour and I was the one to leave. However I continued to pay my half of the mortgage. My ex friend couldn't continue to afford the bills and couldn't get a logger so she then moved out. The house lay empty and I continued to pay the whole mortgage as she refused to pay a penny. My partner and I were expecting our first baby in the September and I was desperate to move back into the house as we were staying at my boyfriends mums house. The only issue was we wanted the security that she could not move back in, force the sale of the property etc. I tried everything to remove her from the mortgage, but the mortgage company wanted £30 grand as a deposit to start a new mortgage with my boyfriend and my name on. I contacted the Financial Ombudsman and the Money Advice Bureau and they both couldn't offer me any advice which helped my situation. I was trawling the net for advice when I came across an American blog regarding mortgages. The words TRUST DEED came up. Its a document agreed by both mortgage holders which gives you the security of having a roof over your head but at the same time giving the other party security that you agree to remove his/her name from the mortgage within an allotted time. This is not all you can put in the Trust Deed, I had a list of about 20 conditions which my ex friend has to abide too. For example, she can't enter the house without invite, all keys to be handed over, if we decided to rent it out she couldn't profit from it, if she dies her family can't profit from it, if I died she couldn't profit from it, if we sell and there was profit she wouldn't be entitled to it, once remortgage has been achieved, her legal title over the property will be transferred to me and my boyfriend, the list goes on. Her conditions, that we remove her from the mortgage in the agreed time (5 years in our case), that we maintain the property to the standard that it was left in, carry out no major alterations without her say so, we continue to pay the mortgage, keep it insured etc. If my boyfriend and I couldn't remove her before the time is up, then the house would have to be sold and we would be responsible for any shortfall on the mortgage.
It was a long process, because solicitors like to take their time and your money, but the security and peace of mind it gives you especially when you have the worry of a baby on the way, its worth it.
I hope this helps, its worth looking into, if your partners old mate is willing. If you can agree a few things on paper with him first before seeing a solicitor it would make sense to do this first to keep costs down, all three of you would need separate solicitors. Try to think of every eventuality when making your list, everything that worries you.
Hope you can sort things out, try to keep calm during your pregnancy, I know its hard, but you have enough to worry about without this hanging over your head.
Good Luck