Mortgage Lender actions threat bankruptcy/reposession

Kerstin_2

Hello everybody,
I am trying to sell my house in order to avert bankruptcy and reposession. Unfortunatly, my mortgage lender insists on a sum of £2600,00 above the agreed sale price £95,000,00 (I am getting no money out of this whatsoever!) due to the Early Repayment Charge. Is my lender acting unreasonably? And if so can I complain to the Financial Ombudsman about this? If the sale is not going through the house will be reposessed and/or I have to go bankrupt.
Is there any advice out there?
Regards.
Kerstin

Richard_S

Kerstin wrote: »

Hello everybody,
I am trying to sell my house in order to avert bankruptcy and reposession. Unfortunatly, my mortgage lender insists on a sum of £2600,00 above the agreed sale price £95,000,00 (I am getting no money out of this whatsoever!) due to the Early Repayment Charge. Is my lender acting unreasonably? And if so can I complain to the Financial Ombudsman about this? If the sale is not going through the house will be reposessed and/or I have to go bankrupt.
Is there any advice out there?
Regards.
Kerstin

Hi Kerstin,

They're certainly acting unreasonably but I would guess it's within the terms of the mortgage. It's always worth lodging a complaint and it would be interesting to hear what the outcome is if you go ahead and do it.

I can't think they'll halt the sale though as long as it's a reasonble price and they don't suspect you of selling the house cheaply to a friend or relative. They'll almost certainly chase you for any shortfall and penalties but they can't take what you haven't got.

Please keep posting and let us know what's happening.

Best regards

Richard

Conor_3

They're not acting unreasonably if there was an Early Redemption clause in your mortgage when you took it out, as most have. Whether or not they choose to waive it is up to them and there's no automatic right to the waiver.

Just remember that mortgages and secured loans are not included in bankruptcy.

silvercar

Its not clear in your post if the outstanding mortgage+ the repayment charge exceed the sale price. If they do then the mortgage lender won't allow the sale to proceed unless you have first reached agreement with them. If this is the case your only option is to speak to them first and get them to agree, probably by agreeing to a repayment schedule for the redemption penalty. Without doing this the sale won't happen.

If you are "merely" unhappy that there will be so little equity left after the sale, then you can try and negotiate but you may be on weaker ground.

It may be worth taking credit elsewhere to allow the sale to proceed.

If bankruptcy is a serious option then consider the timings carefully. If you are going to be repossessed you want it to be before bankruptcy not after.

Remeber bankruptcy doesn't mena repossession and repossession doesn't have to lead to bankruptcy.

Good luck.