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1st & 2nd Mortgages. 1 says can't rent out 2nd says can't sell!

Help...............House in Negative Equity with 2nd mortgage and unsecured loan too (back in the days of responsible lending). Tried to sell it at Auction today with reserve set so that only unsecured loan would be outstanding but it didn't sell. Not sold through estate agents either.
For personal reasons we moved to rented a few months ago and we are good people and want to pay off our debts but the main mortgage holder won't let us rent it out saying we don't earn enough to cover costs. 2nd mortgage company won't let us sell is for a shortfall that involves them (i.e. not the unsecured loan) without filling in too much paperwork to cope with.
Any ideas please?

Comments

  • Sorry I don't know about this situation but wanted to say, hang in there, things will get better.
  • Pixie5740
    Pixie5740 Posts: 14,515 Forumite
    10,000 Posts Eighth Anniversary Name Dropper Photogenic
    I know you say that you've moved into rented accommodation for personal reasons but rent + the mortgages + the loan seems like something's got to give. Either that or you'll have to fill in a lot of paperwork. Is there no way you can move back into the property and throw whatever spare money you've got at paying down the most expensive secured debt until you're no longer in negative equity?

    Then there's the issue of leaving your property unoccupied for long periods of time, it could invalidate your buildings insurance.
  • G_M
    G_M Posts: 51,977 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    As pixie says, you have too many commitments.

    You need to either greatly increase your income (ie so as to pay off debts) or reduce your outgoings.

    Maintaining an empty property and renting aother is just plain crazy....
  • AdrianC
    AdrianC Posts: 42,189 Forumite
    Eighth Anniversary 10,000 Posts Name Dropper
    Think about it from the lender's view. You sell the property, you need to repay more than you will receive - so you still owe them money, but they now have no security on that loan. That's not what they agreed to when they lent you the money.

    In the mean time, you've decided to let their security sit empty - invalidating the insurance you're required, under the terms of the mortgages, to have to protect that security on their loan.

    You're also deciding that your "personal reasons" are a higher priority than servicing your financial commitments.

    It's long-hard-look time.
  • SG27
    SG27 Posts: 2,773 Forumite
    So currently you are paying a mortgage and paying rent? Without knowing the personal reasons surely it's better to move back into the property and use the money saved on rent to overpay one of the mortgages enabling you to sell in the future.

    The other option is do the paperwork. A few hours, or even days spent filling out forms surely is better than paying for two houses!
  • SG27
    SG27 Posts: 2,773 Forumite
    You can always ask for help here with the paperwork.
  • davidmcn
    davidmcn Posts: 23,596 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    SG27 wrote: »
    The other option is do the paperwork. A few hours, or even days spent filling out forms surely is better than paying for two houses!

    Yes, I'm not sure what "too much paperwork" actually means - selling a house generally involves a fair amount of paperwork anyway!
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Any ideas please?

    Rethink your ideas. Move back into the property and pay down the negative equity as a starter. As it your problem not the lenders to resolve. May not be the perfect solution. However in life sometimes you just to accept where you are and make the best of it.
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