Negative equity - negotiating with lender

SherlockNomes

Does anyone have any experience of marketing their negative equity property in Northern Ireland (or elsewhere) and then negotiating with the lender to do a deal on the shortfall? If so, which lender? This is something I am considering doing to address c.£70k negative equity - I know lenders do it behind closed doors, but want to avoid middlemen/negative equity companies (plus their hefty fees) and negotiate directly.

All experience gratefully received, thank you

foxy-stoat

Friend of mine was kind of in the same boat, only he was only £25K down, he handed the keys back to the lender and went bankrupt. Ended up renting instead.

Is this property your home and where would you intend on living after your lender agrees to sell?

foxy-stoat

https://forums.moneysavingexpert.com/discussion/5453843

Just seen you asked a similar question and this property is your home.

If you can afford to save £350-£400 a month for the next 15 years you will have enough to clear the shortfall once the 25 year term is over. Can you rent out the property and live somewhere else until things improve?

amnblog

Very occasionally the 'owners' of the mortgage are keen to get cash in and may negotiate.

You can but ask, you cannot sell it unless they let you anyway.

glentoran99

Ulster bank may let you move and take the negative equity with you

foxy-stoat

glentoran99 wrote: »

Ulster bank may let you move and take the negative equity with you

If Ulster Bank are lending at 200%LTV mortgages you may have a hope, I bet you have 2, "Bob" and "no".

Thrugelmir

Are you making an effort to repay the debt owed? Or simply sitting on an interest only mortgage.

glentoran99

foxy-stoat wrote: »

If Ulster Bank are lending at 200%LTV mortgages you may have a hope, I bet you have 2, "Bob" and "no".

Ive an AIP with them for 115% mortgage

regprentice

foxy-stoat wrote: »

If Ulster Bank are lending at 200%LTV mortgages you may have a hope, I bet you have 2, "Bob" and "no".

Ulster are allowing their customers to switch to a 10 year fixed tracker if their ltv is up to 200%, but the ltv will be fixed at the current mkt value of the house at transfer. Its not really intended to allow people to mortgage for more but you can change property as long as you can manage the price difference and any negative equity component within the 200% price threshold. for example downsizing to reduce mortgage, or upsizing to accommodate growing family. I don't believe the product is open to new customers.

Unfortunately OP is in the same boat as many people. Given the state of the NI housing Market (Where Mkt values dropped up to 50%) I can't see mass foreclosures, but there doesn't seem to be any political drive to find a solution to the problem.

Sadly I think this is where the rest of the UK will find itself eventually. There really doesn't seem to be any will from the government to help people in negative equity from a bubble the govt actively perpetuated (and continues to do so) for years at all costs.

ETA - unfortunately banks would rather keep your non performing mortgage on their books than write it off. If they accept the loss now (which they have already written down in their accounts) they wont see any more cash in future from your potential to repay more or for house prices to increase.

hildosaver

I'm a bit wary of those negative equity companies tbh and you are probably wise to try and avoid them.

Are you in danger of becoming bankrupt due to not being able to make the mortgage payments? If so then there could be some room for negotiation with a bank. The bottom line is that if it looks like you will default and go bankrupt then that would lead to a loss for the bank and they may be willing to do something.

If you are able to afford the mortgage (even though it is more than your house is now worth) I doubt there is anything you can do other than try and overpay to bring the amount owed down and hope for house prices to increase.

I was in a similar situation to yourself (although at worst I was about £35k in negative equity) and I made the decision to overpay my way out of it.