Lender won't consider shortfall repayment

tiredandconfused

Hey all,

After a breakup a couple of years (with my joint owner) I'm finally trying to rid myself of the house that has nothing but pain and bad memories. I'm currently paying the mortgage by myself as my ex is refusing to pay (he says he's a student now and can't afford anything). It's causing me to live hand to mouth and the stress is getting to me now. But there are no arrears. I'm living off baked beans, but there are no arrears.

The property just sat there empty for 18 months while I pulled my jumper over my face and tried to ignore the situation. But now I'm trying to deal with things.

I've had to move out of the country as well, as I was offered an opportunity in Europe that I had to take. I'm therefore paying for a mortgage on a place I don't live in, and rent on an apartment in the EU.

However, the property seems like it will only get £70k of the £84k that it is still mortgaged for - rising damp has been discovered and has damaged the selling price. (Real rising damp, not contractor-induced rising damp - I had an independent surveyor in to look at it). I can't afford the repairs needed (could be up to £10k as it requires extensive specialist replastering) and even if I could, I've still not guarantee that the place would sell. If the place didn't have damp it would probably sell for £90k.

I want to sell the property as quickly as possible, as the place is causing me emotional and financial pain. I've been getting mentally ill - I suffer from anxiety and OCD anyway. But I'm willing to pick up any shortfall that might occur, as I believe in paying my debts. (and anyway, the shortfall repayments might well be less than the mortgage repayments, and I wouldn't be paying council tax).

I've contacted the lender (Halifax) and explained the situation, but they've really blanked me on this. They say that I don't qualify for negative equity. I apparently have to be thousands of pounds in arrears to be considered for a shortfall loan. "It's meant for people who are in real financial crisis - not people who are managing their payments" as the woman on the phone said. It essentially means I can't sell the property - as I need their permission to sell in the event of a shortfall.

I'm really gobsmacked, as it seems like they'd rather I have the property repossessed than try and make the most money on the property and gradually repay the difference. If the place gets repossessed then surely the amount they'd be able to sell the property for would be less, and the shortfall would be bigger? They'd also have no guarantee that I'd even pay back the shortfall if it became a huge (well, huger) amount. How can that make sense to them?

Is the best way forward really just cancelling my mortgage direct debit and letting repossession occur? Or have I really misunderstood something?

Sorry that this is long and rambling. I'm just at my wits end and I'm having to brain dump.

G_M

I can't really see a way out beyond the obvious - borrow elsewhere to make up the shortfall in sale price.

But to add in to the mix, how about forcing your ex to take some responsibility, student or not?

If arrears build up, he will be affected as will you. He is equally liable for the repayments, so his credit rating will be hit just as yours will be. And if the property IS repossessed, he'll be unable to apply for a new mortgage ( or credit card, loan etc) for years (like you). Possibly that threat might make him consider helping out (eg getting family to contribute - aftr all, the debt is half his).

Guest101

You could attempt to get consent to let which may mitigate for a year

G_M

It's cerainly an option, though OP's tenant might be here in a month or so asking what to do about his landlord who claims not to have enough money to fix the damp problem........

tiredandconfused

G_M wrote: »

I can't really see a way out beyond the obvious - borrow elsewhere to make up the shortfall in sale price.

It's one I'm going to have to investigate. But it'll be hard, as I don't reside in the UK and I doubt that I have enough history here in EU to get a loan. My own family are poor and probably wouldn't be able to help.

G_M wrote: »

But to add in to the mix, how about forcing your ex to take some responsibility, student or not?

If arrears build up, he will be affected as will you. He is equally liable for the repayments, so his credit rating will be hit just as yours will be. And if the property IS repossessed, he'll be unable to apply for a new mortgage ( or credit card, loan etc) for years (like you). Possibly that threat might make him consider helping out (eg getting family to contribute - aftr all, the debt is half his).

Would you be amazed to know that he's studying property law? The irony burns.

He's disowned by his family and parents - turns out they realised he was a psychopath about a year after he emptied our bank account and left me. I doubt he'd be able to get money or pay right now. I suspect that stopping mortgage payments would be the only thing that made him even notice. Perhaps he'd get a job a that point.

tiredandconfused

Guest101 wrote: »

You could attempt to get consent to let which may mitigate for a year

The damp would put any tenants off, and if they found out later then I'm a bad landlord. Plus at that point I'd find myself in a position where I can't enact any repairs with people living there, and absolutely couldn't sell the property, as it would have sitting tenants. Plus, it just prolongs the pain of being attached to the property.

Thrugelmir

You may need to go down the voluntary repossession route. Will destroy your UK credit rating. Though if you live and work abroad maybe of little consequence.

G_M

would a repossession or bankrupcy affect his future job prospects as a property lawyer........?

sheff6107

Do a cheap patch up job on the damp and rent it out.

I'd rather rent it out and not tell my mortgage company instead of going into arrears personally.

tiredandconfused

G_M wrote: »

would a repossession or bankrupcy affect his future job prospects as a property lawyer........?

Yes, because of his intended career, you'd assume that he'd be jumping all over this situation, trying to solve it, wouldn't you? Really not sure what his thinking is.

tiredandconfused

Thrugelmir wrote: »

You may need to go down the voluntary repossession route. Will destroy your UK credit rating. Though if you live and work abroad maybe of little consequence.

Do you have any more information on this? (can't see anything immediately on Google) Is voluntary repossession an actual legal process, or does it more mean deliberately stopping payments?