Shared Ownership repossession

troubled12

Please help...

My husband and I bought our first home back in 2006 on a Shared Ownership basis. We purchased 50% of the property for £60,000 on a interest only mortgage. The property has depreciated and our share is now worth approx £35,000. 4 years ago we moved out due to work relocation and decided, with the housing associations permission, to sublet the property. Our overheads are approximately £200 a month more than the rental market value, therefore we are paying this shortfall every month. We cannot afford to switch to a repayment mortgage.

We have just received notice from our tenants and are swaying towards handing the keys back to the mortgage company as we can see no way out. However, there are a few things I am unsure of and was hoping that maybe someone could answer my queries;

Does the mortgage company usually agree a payplan for the shortfall? i.e is it likely they'd agree to the £200 I am currently paying?
Should I provide them with a forwarding address or leave it to them to track me down?
I believe that this will show on my credit file for 7 years, is this 7 years after the repossession is actioned or 7 years after the shortfall is cleared?
Am I ever going to get a mortgage again?

Any other tips or pointers would be much appreciated.

al1cep

Hi, I'm also considering voluntary repossession of my shared ownership property but am concerned about being left with a shortfall. I no longer live in the UK and have been stuck with the property for a few years now since I left the country. It's no longer in negative equity but could easily be if it gets sold below market value and you add on all the associated costs. I suspect its cheaper to just get it voluntarily repossessed rather than going through the process of trying to sell it thru the housing association whilst continuing to pay rent and mortgage on an empty property (I wouldn't be able to sell it with a tenant remaining in it due to housing association requirements) but I would really like some advice on this. I have seen similar shared ownership properties on the market for 12+ months without selling and I suspect a similar thing would happen if I tried to sell my share at the price the housing association forces you to sell it at. Which I cannot afford. If you get some good, professional advice or are able to provide an update with your situation when you decide what your best course of action is I would be very keen to see this. I have tried contacting a few solicitors for advice on my situation but they have all been hopeless or refused to give advice at all so far. Best of luck...

Melbryce11

I'm afraid I have no advice to offer but just wanted to send my sympathy. It seems whole heartedly unfair that the housing association of all places could leave you in such financial hardship! We were considering buying a share of a shared ownership property but im now reconsidering. Hope you can come to some solution.

csgohan4

Unfortunately Shared ownership seems too good to be true and in reality is something for the HA to make money off.


Hope it you get it sorted.

silvercar

Does the mortgage company usually agree a payplan for the shortfall? i.e is it likely they'd agree to the £200 I am currently paying?
Should I provide them with a forwarding address or leave it to them to track me down?
I believe that this will show on my credit file for 7 years, is this 7 years after the repossession is actioned or 7 years after the shortfall is cleared?
Am I ever going to get a mortgage again?

Lenders usually give you some time to get back on your feet and for the property to be sold. Then they will try to agree a repayment plan. There is also the opportunity to offer them a full and final settlement at a (relatively low) percentage of the outstanding amount.

Whether you provide them with an address is irrelevant, they will eventually find you.

Generally secured debts remain for 12 years not 6. The clock starts at the date of repossession.

You may be able to get a mortgage in the future, some lenders won't be interested in you but others will offer a mortgage. Time is a healer.

troubled12

Hi,

Sorry I have not acknowledged your replies before now, I did check in previously but didn't get chance to respond. Thanks very much for your replies. I thought I'd just give you a quick update for anyone thinking about going down the same route or if anyone has any further help to give...

So we bit the bullet and sent a letter along with the keys to the mortgage company on 9th Feb. We kept the letter short and sweet 'due to financial difficulties we wish to surrender the keys for....for you to repossess as you require' and provided a forwarding address. I received a call from the lender on 16th Feb asking why as the account was up to date. Lady I spoke to was very helpful and understanding of our situation. I then received a letter from them dated 18th March advising that the property had been valued & was now on the open market (I logged onto Rightmove and low & behold there it was!). I emailed them to confirm the official date they took possession and they replied 2 hours later advising 1st March. I'm amazed at the speed they've moved which hopefully keeps debts down.

I also wrote to the housing association on 9th February, however, they are yet to acknowledge it. It was sent via recorded delivery so I know theyre in receipt.

Thanks again for all of your advice.

siamesebengal

Check your lease - a lot of shared ownership leases provide the bank with the ability to recover any shortfall from a sale of your share from the sale of the HA's share, so you might not have any further payments to make.