Negotiating full and final settlement after short sale of house in neg equity

power2havenots

Just wondering has anyone any advice or success stories negotiating a full and final settlement on outstanding negative equity after a short sale of their house?

I am on the poor A&L variable rate of 4.99% for a house in negative equity (bought for £155K in 2006. Remaining mortgage is £147K. House is worth £90K according to Santander but could get £100K if we sell it - In Northern Ireland if that makes any difference). I am desperate enough to move as the current area we live is not suitable for our children. Rang Santander to ask what they offer neg equity customers (carrying neg equity to new property or offering a cheap rate loan to pay off the current neg equity). They said they offered nothing. I asked what the risks were of selling anyway. Then they put me through to a guy who deals exclusively with neg equity help (surprise surprise).

Guy at the bank said the bank would agree to a short sale of at least 10% higher than their valuation (90+9 = £99K in other words) and we must show a good attempt to sell it (he mentioned 6-8wks - none of this is in writing yet I may add). He then said Santander would pass the remaining balance to a company called "Enact" and they would negotiate a repayment plan (he mentioned potentially a full and final setllement would be possible but I would need to negotiate this with them). They told me this wouldn't affect my credit rating as it's a private financial agreement (do they not have to record it with credit reference agencies?).

This situation is precarious to say the least as I have no idea what i can use to negotaite with them before I sell my house - other than the threat of bankruptcy. However I am looking to get a new mortgage after this and I dont want to rent too long. Therefore I don't want any adverse affects on my credit rating.

I've read on the web, of instances where people negotiate to pay cash for 10% of their outstanding neg equity as a full and final settlement, and they are accepted. Does anyone know what hoops you have to jump through to get these sorts of deals?

Any help or advice on this greatly appreciated!

Thrugelmir

F&F settlement would be recorded on your credit file. So would prove a major block in obtaining another mortgage.

power2havenots

Cheers Thrugelmir. Just wondered as the guy in the bank suggested it was private and shouldn't affect me gettin another mortgage but again its not in writing. Don't want that scenario so am I best negotiating a repayment schedule? I assume this will be on my credit file and affect my ability to get a new mortgage too?