NRAM Negative equity

perdusys

My son has an NRAM Together Mortgage, current balance approx. £53K mortgage and £13K unsecured loan ( Original purchase rice was £74K, original loan value). The property is in negative equity, and he is now divorced from the joint mortgagee, mortgage still being in joint names. Because of the state of the place, I doubt the property will fetch more than £45K, but he is waiting for it to be seen by an EA for a valuation for sale.
The problem is he has been living at home for the last year since before his divorce, as he couldn't afford to pay the expenses from the failed marriage on his own, mortgage payments and council tax cost him over £600 per month.
His ex is not in a position to pay, and anyway, they came to a verbal agreement that he would take on the debts from the marriage. ( Not a good idea in hindsight!)
He had originally approached NRAM to change to interest only but they would not agree, and he has since asked for consent to let, but as they require his ex's name to be on the landlord agreement, and she will not agree, that isn't going to happen.
He cannot go on paying £600 a month for an empty flat, and I wondered if anyone has any thoughts on his options.
Is it better to be repossessed, or hand the keys back and what will happen if he sells with the shortfall on the mortgage? I understand that NRAM do an AVS, but had heard that fees are more than the average EA.

silvercar

Is it better to be repossessed, or hand the keys back and what will happen if he sells with the shortfall on the mortgage? I understand that NRAM do an AVS, but had heard that fees are more than the average EA.

Handing the keys back would be a voluntary repossession. It may save on some costs (eg the costs of the lender going to court to force possession) but otherwise little different.

With a AVS, the lender will be agreeing to the sale price, so accepting that the mortgage won't be cleared. If you sell yourself for less than the mortgage you will need to agree how you are going to pay back the shortfall eg borrowing elsewhere.

Incidentally, repaying the mortgage but not the unsecured loan is an option, but the interest rate in the unsecured loan will increase dramatically.