Negative Equity NI

warmhands.coldheart

flads wrote: »

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.

Ahhhhhhhhhhhhh that's a game changer though I would think....... if you have other property in your name then there isn't a hope of doing this just because it was a bad investment and you don't want it any more..... Bank will look at ALL your assets, not just this property. The right down thing I believe is more for people who live in the house in question, have little or no other assets and are in financial dire straights and need to sell as they have no money to pay the mortgage....... I think you're looking for an easy way out of a bad investment and I don't think it'll wash with the bank !!

flads

warmhands
I take full responsibility for the bad investment I made and am not looking for an easy way out just a way out before my family home becomes involved.
Ladeeda, yes we have equity in our home not emough to clear the debt but significant amount.
It is for these reasons (ie we are not in desperation) that I am concerned if what this company is offering is dable??

someadvicereq

I guess it depends if the mortgage is a BTL mortgage or if it is a normal mortgage (and you haven't told them you are renting it out).

You could always go and see Negative Equity NI - first consultation is free, or even ask them over the phone how likely it is.

ladeeda

You have 2 houses, one residential & 1 BTL (or is there more?) are not in arrears with either mortgage and are not in a desperate financial situation?

I know that particular company look into the mortgage advice that was given and try to find fault with the process as a tool to negotiate shortfall reductions. But they can't do that with the BTL sales process as it is unregulated. Only come back that is even slightly viable with BTL is on the valuations you were given, for capital worth and rental valuation. And that's highly unlikely to work even in extreme cases as our market was just so mad for so long.

I can't think of what other bargaining tools they could come up with for BTL. If the mortgage is with Mortgage Express who actively want rid of BTL mortgages you can negotiate with them yourself (not for much).

I don't think there is any way around it, flads. Your own equity counts towards your ability to pay your outstanding debt. If you go back to NENI and find out different, will you come back and share?

Are there tenants in the property? On an AST?

warmhands.coldheart

flads wrote: »

warmhands
I take full responsibility for the bad investment I made and am not looking for an easy way out just a way out before my family home becomes involved.
Ladeeda, yes we have equity in our home not emough to clear the debt but significant amount.
It is for these reasons (ie we are not in desperation) that I am concerned if what this company is offering is dable??

Sorry, Flads, that last post probably sounds a bit harsh/blunt, didn't mean it to be........

I still recon though BTL or not, because you have multiple properties they are your assets in your name, they will still take all your asset value into consideration so will not let you just easily write a lump sum off one house when you have equity in another.... I really can't see that happening. they would just argue you could sell you're family home which has the equity in it and use that to pay the shortfall. and they would be well within their rights to say so......

Obviously you can still look into it but I'm afraid the potential only routes you have are to either sell it and cut your losses or hang onto it and rent it out long term until prices rise a bit more so any loss when selling would be less..

flads

Thanks for the discussion, I only have 2 properties. Family home, typical 3 bed semi and this #'**#y BTL.
I am taking it to the first step with this negative equity NI company and will see what they suggest. I will let you know how it progresses.

duggan1

Not sure it has been mentioned but would this plan not have a negative effect on your credit report? Surely it would be placed as a default by the existing lender?

qwert_yuiop

duggan1 wrote: »

Not sure it has been mentioned but would this plan not have a negative effect on your credit report? Surely it would be placed as a default by the existing lender?

That must surely be the least of his worries.

leskerr

Presumably when you bought it, the rental income exceeded the mortgage payments? If this is still the case, surely the best thing to do is to hold onto the house, and hope for prices to recover?

Les

minimoneysaving

someadvicereq wrote: »

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.

Out of curiosity, have you checked your credit report since or applied for credit? Any problem arisen?