Negative Equity NI

flads

Hi
Has anyone heard of this company? Basically we have a property in major negative equity and they say if we sell they can negotiate with the mortgage supplier to reduce the shortfall that we have to pay (by quite a significant amount) It would be a way out for us cutting our losses but they charge £3000.
Circumstances are that we have an£185000 interest only mortgage costing us approx £820 per month but the property is probably only worth £120000 now. They say they are confident that if we could get an offer of £120000 they could get the lender to reduce the amount we owe from £65000 to maybe £10000??
Is this possible??

qwert_yuiop

Seems too good to be true, and therefore probably is too good to be true.

Just my first impression.

flads

Qwert that was my initial thoughts also, hence trying to find out more.

ladeeda

Is this company also offering to buy your house and rent it back to you? Be careful, have a chat with Housing Rights first on 028 9024 5640 or 0300 323 0310. Perhaps they could enlighten you to some info concerning shortfall payments and the likelihood of a significant reduction.
Hard to negotiate a shortfall when it doesn't exist yet.

warmhands.coldheart

They are a "trading" company of
CD Fairfield Capital
24 Mount Charles
Botanic Avenue
Belfast
BT7 1NZ.

"CD Fairfield Capital is a specialist property investment and debt restructuring company based in Belfast."

Still sounds too good to be true... Do they charge "Up Front" or do they only charge when the "negotiations" are completed and a deal agreed????

someadvicereq

I know a good bit about all this as I have been through it all. I went to see that company and what they offer is entirely possible. They don't charge much upfront, a couple of hundred ££ maybe. I didn't use them in the end, and did it all myself by negotiating with my mortgage company.

But you have to sell your house, as its really only for people who want to move house and can't due to heavy negative equity.

That company (Negative Equity NI) basically negotiate with your mortgage company and you agree to pay a % shortfall on the amount remaining after the property is sold. Its not a scam or anything, although they do charge for it (hence why I did it myself).

The company works on your behalf and they look especially for any signs of 'mis-selling' of your mortgage when you originally took it out. Perhaps your lender was somewhat irresponsible when they gave you an interest only mortage etc

You will have to fill out some forms with how much savings you have, and your monthly outgoings (you can put everything down - dvd rentals, haircuts - whatever you can think of) and you will have to write why you need to move house (growing family/house too small - causing stress etc).

There *seems* to be some pressure from the government on mortgage lenders to get rid of their bad debt and this is how they are doing it. A lot of mortgage companies have dedicated teams who deal with this.

Note that if you do go through with this and your mortgage company offer you a settlement of say £10k then:

- you should try and pay it off in a lump sum, otherwise you will be put on a scheme to pay it off every month and this can affect your credit rating

- once its paid, the mortgage company are then supposed to mark your mortage as a 'partial settlement'. Often they do not and they just mark it as fully settled. Partial settlement just means that the mortgage/loan was settled and that you came to an agreement to pay a certain amount back. This may or may not affect your borrowing in the future. Do a google search on partially settled mortgages and you will find that more often than not it won't have any impact on future borrowing. The reason being that you behaved responsibly by contacting your lending and coming to a mutual agreement.

Now - you do not need to use this company at all, you can do all this by yourself - but its not for the fainthearted, as your mortgage company will try and get every penny they can out of you. They will want to see payslips, bank statements (for every account that you have). But they saiod to me they preferred to work with customers directly rather than these third party companies.

If you can get through to the right department then you could start the ball rolling - but they generally don't start the process until you have an offer on your house. They will also send surveyor out too, to make sure you get a fair price for your house. But you will need to find out if this is something that your lender will do.

Its tough to go through, but there is light at the end of the tunnel. I did it all myself but it wasn't easy. The mortgage company was even suggesting I borrow money from family etc to help pay back some of the shortfall. They told me they have a certain minimum % they have to get.

In the end we had a £170k interest only mortgage, we sold our house for £100k. We paid £20k to the mortgage company. So they wiped out £50k of debt.

Everyone will have their opinions about this, and its not something I am particularly proud of or ever talk about. But it allowed me and my family to get out of a hole which we never though we ever could and my mortgage company were only too happy to do it.

ladeeda

someadvicereq

Good to hear from some one who has done this themselves rather than pay a company thousands to do what many lenders now expect, especially in NI.
I have no doubt whatsoever that lenders are writing down shortfalls, indeed I have, on others behalves helped negotiate several of them myself. Never for a fee though. It is something that most can do themselves.

You got out of the hole

flads

Thanks all, sounds a bit more promising. Must say I am very nervous of doing it myself, and as mentioned above not proud of being in the position.

duggan1

flads wrote: »

It would be a way out for us cutting our losses but they charge £3000.

Do you need to sell? If not then you haven't lost anything. Negative equity only becomes an issue if you want to realise your house as an asset.

flads

duggan1,
probably didn't explain well at the start, this was supposed to be an investment property (buy to let) a really badly timed investment that is now just a mill stone. It is not the house we live in.

ladeeda

flads, a BTL in negative equity will be treated differently than an owner occupied house.

Do you have equity in the house you live in?