The ethics behind repossession

newbie_emma

So a lot of people have been asking me about how I feel buying a repossession? Would you ever buy one?

I'm due to complete on a repo on 9th July, if all goes to plan. It's certainly been a roller coaster with the many uncertainties and risk that's involved with purchasing such a house, and all within 28 days to add to the pressure!

I did certainly feel a tug on the heart strings when I realized this was a family home once (before it was gutted, and I mean EVERYTHING). I felt like I was cashing in, grabbing a bargain at someone else's expense. But now I have my own emotional attachment to the property (I know, I shouldn't!), I can see that actually, this poor family need to settle their debts, and our purchase is going to go a long way to helping them do that.

Now so far in and financially committed to seeing this purchase through, I'm becoming closer to the mindset of 'can't pay, can't stay!' to make myself feel a little better.

I don't suppose anyone else is currently having such dilemmas?..

onlyroz

A friend of ours was reposessed because he was an idiot. He lied about his income to get a mortgage, lived a more lavish lifestyle than he had the funds to pay for, and as a result lost his flat. At the end of the process he ended up with about £10k in equity which he has subsequently frittered away on cr*p.

I would not in any way feel sorry for the former owners of your new property.

jjlandlord

A property is repossessed because the owner cannot pay his mortgage.
Moreover, he will remain liable for any shortfall if the proceeds of the sale do not cover the debt (plus fees related to the sale).

So, if you feel bad and want to help buy at the highest price possible.

onlyroz wrote: »

I would not in any way feel sorry for the former owners of your new property.

Your friend is an idiot. It's does not mean that everyone whose house is repossessed is also one.

newbie_emma

The house is worth approx 45k more than we're buying it for, and than it was advertised for. Original ad was for £170k, then it was gutted and left in such awful condition, we're paying under £125 for it but we will have to spend at least £15k to get it half decent again after the damage etc that's been done. I can't offer anymore for it because it's not worth it until the works been done (plus I can't afford to). The shortfall is gonna have to be their problem to solve, I'm afraid!

Your friend with the flat sounds really irresponsible, owning a property probably wasn't the best move for him! But I can understand how people get into difficulty.

jjlandlord

newbie_emma wrote: »

The shortfall is gonna have to be their problem to solve, I'm afraid!

What's the point of this thread, then?

mustang121

onlyroz wrote: »

A friend of ours was reposessed because he was an idiot. He lied about his income to get a mortgage, lived a more lavish lifestyle than he had the funds to pay for, and as a result lost his flat. At the end of the process he ended up with about £10k in equity which he has subsequently frittered away on cr*p.

I would not in any way feel sorry for the former owners of your new property.

A little harsh. Your friend might have been a idiot, but sometimes life throws a unexpected twist. Repossession could potentially happen to any one no matter how careful and well organised you are.

newbie_emma

jjlandlord wrote: »

What's the point of this thread, then?

just curious how other people deal with this situation...:)

JencParker

newbie_emma wrote: »

So a lot of people have been asking me about how I feel buying a repossession? Would you ever buy one?

I'm due to complete on a repo on 9th July, if all goes to plan. It's certainly been a roller coaster with the many uncertainties and risk that's involved with purchasing such a house, and all within 28 days to add to the pressure!

I did certainly feel a tug on the heart strings when I realized this was a family home once (before it was gutted, and I mean EVERYTHING). I felt like I was cashing in, grabbing a bargain at someone else's expense. But now I have my own emotional attachment to the property (I know, I shouldn't!), I can see that actually, this poor family need to settle their debts, and our purchase is going to go a long way to helping them do that.

Now so far in and financially committed to seeing this purchase through, I'm becoming closer to the mindset of 'can't pay, can't stay!' to make myself feel a little better.

I don't suppose anyone else is currently having such dilemmas?..

Was it a bargain? A repossessed house in my road went for pretty much market value at that time - the bank published latest offers and invited more so it must have been quite stressful for the buyers who changed several times until completion - a ready made bidding war as the bank will have no morality on sticking with a buyer if a better offer comes in. In that case it was a single mother who had buried her head in the sand and got into difficulties but had enough capital after the sale to buy a small flat for her and her daughter. It was actually probably a good outcome - just a shame that she didn't act before and save herself a lot of solicitors and court costs.


Just because a house is a repossessed property it doesn't mean it's a bargain - the bank are legally obliged to get the highest price that will be able to proceed quickly.

davidmcn

newbie_emma wrote: »

The house is worth approx 45k more than we're buying it for, and than it was advertised for.

It isn't really, though is it? Any property is only worth whatever it can be sold for after being advertised on the open market.

newbie_emma

well I've not a clue on house values etc, just going off the most recent ad prices for it and the value of the surrounding houses. I suppose you're right though, the same can be said for anything that you buy, cars etc only ever worth what someone will pay. I'm reasonably confident that if we did some work to it we could increase the value, but that's not really my aim, I just want a nice family home and no intention of selling it any sooner than in 10 years time

princeofpounds

Whether you buy it or not, it's not going to become their home again, so it's not really your concern.


Even if it was, the agreement between the borrower and lender was that repossession was an option in case payments could not be made. This was not a course of action that was not consented to from the outset.