Mortgage shortfall - Need assistance please

Mrsbrightside

My husband and I purchased a share in a shared ownership scheme at the height of the housing market. It didn't take long and the flat was in negative equity. This was fine as we were happy where we were and figured we would just wait until the market went back up. All was well until when my husband was told he would be made redundant. Due to the fact that we were in the country on his work permit, this meant we had to leave.

We did not want to leave and especially did not want to lose our house, but there was no way we could afford to make the payment abroad due to the exchange rate and our income being cut in half. We discussed it with the housing association and they told us that we could not sublet due to it being shared ownership and we would have to sell and bring the shortfall to closing. This was not an option for us as we did not have those kinds of funds. After speaking with CAB and the mortgage company, we decided our only option was to hand back the keys when we left the country. We paid the mortgage up until the day we left. We have pulled our UK credit reports and were very surprised to find it was not listed.

Has anyone had a situation like this? Years later and it is still not showing on your credit report?? Any suggestions on what we should do?

Many thanks for your assistance!

CKhalvashi

Land is a specialist area, and I'm sure someone will be with you soon.

I am good with consumer debt, but mortgages are something I refuse to touch with a barge pole.

CK

Mrsbrightside

I understand. Thanks!

Mrsbrightside

Bump. Thought I would try this one more time. Thanks!

kingstreet

I'd spend some times reading about "mortgage protection clauses" as they are applied to shared ownership. You may find the lender purchased the remaining share from the HA and sold the lot at a loss, leaving that shortfall on your doorstep - all of it.

I may be wrong, as I don't know your individual circumstances, nor those of your lender nor HA.

Mrsbrightside

Thank you so much for the reply.

I do in fact believe that is what happened. In my understanding the MPC would mean that the mortgage company sold the flat and took their portion which left the shortfall with the Housing Association, who would then look to collect the shortfall from us.

When we discussed all of this with the mortgage company, they encouraged us to hand back the keys and stated that they would not be chasing us as the HA would be responsible and that they may chase us for the shortfall. Unfortunately, the HA did not want to discuss any of this with us other than to tell us we could not sub let and would need to sell and come up with the difference.

Unfortunately there was nothing we could do about it due to the visa situation and our lack of funds at the time. We are just very surprised that no one has contacted us regarding this shortfall and payment.

We are not sure where to go from here. Should we contact the HA and offer nominal payments? (although I read that this could start the clock over?) Do we just wait until they actually chase us for it? I have read sometimes they wait awhile to come after you as they want you to get back on your feet again. We are just very shocked that it has been so long and there is nothing on our credit at all.

Mrsbrightside

Maybe I am misunderstanding the MPC. So you are saying it could be possible that we are responsible for the entire shortfall plus fees, etc. and not just the shortfall on our portion of the flat?

kingstreet

TBH I really don't know. I have no great experience of the issue, but thought I'd suggest something.

Mrsbrightside

Thank you. I really appreciate your comments. I'm just not sure where to go from here.

danielanthony

The UK is going down the toilet, I'd happily swap passports with you.

The debt will still be registered somewhere, and a collection agency will just be waiting for you to pop your heads up when you register for council tax/utilities etc as your previous address will be linked to your new one should you move over (assuming you tell anyone you lived here before).

Debts are statute barred after 6 years, so as long as you don't acknowledge the debt for that length of time it can be written off. So you can either:

a) Stay in the US for six years then come back.
b) Come back to the UK and watch your back for six years.

See here for further info: https://forums.moneysavingexpert.com/discussion/2606811

kingstreet

Mortgage shortfall is twelve years, not six.