Cosigned Mortgage

SisterSister

Hi all.

Need help please.

My Mother has a mortgage on a property in the UK and has my sister named on it so has to stop a repossession order a few years back. My sister hasn't any interest in the property. Now my Mother hasn't been able to keep up prepayments, she keeps falling behind. My sister is wanting to come off the mortgage but because my Mother is in arrears they won't let that happen and it's impacting on my sisters credit. My Mother lives overseas and is in trouble with finance over there, she basically used the equity on the UK house to build her foreign house.
Would my Mother be able to file for bankruptcy and keep the house and will this mean my sister has to file for bankruptcy too or would my sister legally be allowed to be taken off the mortgage?

Thank you in advance.

Annisele

Your mum and your sister are "jointly and severally" liable for the UK mortgage. That means they're both responsible for the whole of the debt - and so far as the lender is concerned, your sister is just as responsible for the arrears as your mum is.

Ultimately, your sister can only be taken off the mortgage with the lender's agreement. The lender will (generally) only agree if it's satisfied the remaining borrower(s) can keep up the payments, or if the debt is repaid (through sale or any other method).

Is there any equity in the property? Is your mum considering selling?

SisterSister

Thank you for your reply.

I think if any equity it's very little, not much more than 10k and yes she's considering selling to a commercial company.

holly_hobby

The mge is a joint debt of your sister and mother, if mother can't pay it, sister does.

H

getmore4less

so she has done this twice now(get behind).


who is living in the property.

who lives in the overseas property

Sell one or both of the places you mother does not need two houses she can't afford.

jamesd

Writing about selling to a commercial company is worrying. That may mean one of the guaranteed buyer types that pay much less than a property is really worth. If it's to be sold, best to do it in the normal ways, to get the highest available price.

There is no chance of a mortgage lender agreeing to remove a jointly liable person from the mortgage when there are arrears. That's part of their protection and this is when they are relying on it. The mother going bankrupt will make no difference at all to the sister, who will remain liable for the whole amount borrowed and all monthly payments, just as she already is.

ethank

Your sister would have had to sign off on taking equity out of the house to build a foreign home. If she couldn't afford the first home, how could she afford the second.

Your mum appears to be doing the right thing by trying to sell the property.

Thrugelmir

Who is currently living in the UK property?

kingstreet

SisterSister wrote: »

I think if any equity it's very little, not much more than 10k and yes she's considering selling to a commercial company.

This won't work. The "quick sale" brigade will only offer about 80% of market value, so the offer won't be enough to repay the mortgage.

The current lender probably won't allow a sale if it is not fully repaid from the sale proceeds.

TBagpuss

It sounds as though your mum needs to sell the property to pay off the mortgage, which is the only thing which will release your sister.

It will be better to sell it voluntarily than to wait until it is repossessed. In the short term, if your sister can clear the arrears then she may be able to negotiate with the mortgage company to put the payments onto a n interest only basis if the property is being actively marketed, to make the payments more manageable in the short term.