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House Repossession - How does it work?
Andrew_Ryan_89
Posts: 530 Forumite
Hi guys,
Despite a last minute effort, it sadly looks like my mum's property is going to be repossessed. She had a interest only mortgage which expired back in 2010 and it was only around the beginning of this year the bank started taking action towards repossession. I don't want this topic to be sidetracked too much so I'll get it out the way and say it's entirely her fault, she should have known better and it is quite, for a lack of a better word, pathetic it has got to this stage.
The property is partly over commercial residence, has a short lease, is in need of refurbishment and my mum has a terrible credit rating and all these factors have played in why we have struggled to remortgage the place despite it being worth at least £290k with only £34k outstanding. We did recently find a lender who agreed something in principle, but that does not look likely to go through in time.
So, 3 months or so ago the case went to court and the judge granted the lender permission to apply for a bailiff. When my mum got this mortgage in principle, as instructed she updated the lender and it was pretty much 2 days later she got a letter saying that the bailiff has been applied for and she should make arrangements to move.
I want to know -
- When the bank takes possession of the property, how is it sold and do they have to sell it at market value?
- If on the day of eviction, and by some miracle, my mum comes across the money to pay of the loan, can she still do this?
- Does she have to cover any fees from the bank, bailiff, etc?
- Does she receive the full sell price minus what she owes once the property is sold?
- Is there any rights, appeals or useful tips she should know about?
Many thanks guys.
Despite a last minute effort, it sadly looks like my mum's property is going to be repossessed. She had a interest only mortgage which expired back in 2010 and it was only around the beginning of this year the bank started taking action towards repossession. I don't want this topic to be sidetracked too much so I'll get it out the way and say it's entirely her fault, she should have known better and it is quite, for a lack of a better word, pathetic it has got to this stage.
The property is partly over commercial residence, has a short lease, is in need of refurbishment and my mum has a terrible credit rating and all these factors have played in why we have struggled to remortgage the place despite it being worth at least £290k with only £34k outstanding. We did recently find a lender who agreed something in principle, but that does not look likely to go through in time.
So, 3 months or so ago the case went to court and the judge granted the lender permission to apply for a bailiff. When my mum got this mortgage in principle, as instructed she updated the lender and it was pretty much 2 days later she got a letter saying that the bailiff has been applied for and she should make arrangements to move.
I want to know -
- When the bank takes possession of the property, how is it sold and do they have to sell it at market value?
- If on the day of eviction, and by some miracle, my mum comes across the money to pay of the loan, can she still do this?
- Does she have to cover any fees from the bank, bailiff, etc?
- Does she receive the full sell price minus what she owes once the property is sold?
- Is there any rights, appeals or useful tips she should know about?
Many thanks guys.
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Comments
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The bank has to sell on the open market and get the best price reasonably obtainable. If they haven't exchanged contracts they will generally accept a full redemption of the loan (and all their costs) - in fact they're probably obliged to. No matter what stage they reach, she'll need to pay the banks costs. She'll get any surplus. And probably a bit late to be thinking about appeals if she's got this far without defending the action, best if she consults a solicitor if there's anything relevant you haven't told us about.0
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She can try 'phoning Shelter, 0808 800 4444 - but expect a wait with this overwhelmed charity..
They are the experts in all housing matters, especially repos...
Good luck.
Be aware she will be unlikely to be rehoused or helped by council as she will be being evicted for not paying her mortgage so (in law - forget what is fair...) "intentionally homeless"...0 -
On the plus side she has a AIP and can buy elsewhere0
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Andrew_Ryan_89 wrote: »Hi guys,
Despite a last minute effort, it sadly looks like my mum's property is going to be repossessed. She had a interest only mortgage which expired back in 2010 and it was only around the beginning of this year the bank started taking action towards repossession. I don't want this topic to be sidetracked too much so I'll get it out the way and say it's entirely her fault, she should have known better and it is quite, for a lack of a better word, pathetic it has got to this stage.
The property is partly over commercial residence, has a short lease, is in need of refurbishment and my mum has a terrible credit rating and all these factors have played in why we have struggled to remortgage the place despite it being worth at least £290k with only £34k outstanding. We did recently find a lender who agreed something in principle, but that does not look likely to go through in time.
So, 3 months or so ago the case went to court and the judge granted the lender permission to apply for a bailiff. When my mum got this mortgage in principle, as instructed she updated the lender and it was pretty much 2 days later she got a letter saying that the bailiff has been applied for and she should make arrangements to move.
I want to know -
- When the bank takes possession of the property, how is it sold and do they have to sell it at market value?
- If on the day of eviction, and by some miracle, my mum comes across the money to pay of the loan, can she still do this?
- Does she have to cover any fees from the bank, bailiff, etc?
- Does she receive the full sell price minus what she owes once the property is sold?
- Is there any rights, appeals or useful tips she should know about?
Many thanks guys.
Maybe I am just missing something, or maybe I'm a bit thick LOL (I am sure someone will say I am!) But I find it so bizarre that there is only £34K owing, and the house is worth almost £300K and it's going to be repossessed!
Surely SOMEthing can be done? I mean, what about contacting one of those 'we buy your house' people. I know they never give you full value, and sometimes only 50-65%, but even with refurbishment needing doing, I am sure she could get at least £180-£200K. Then she can pay off the mortgage, and have over £150K left!
If the mortgage lender does repossess, and they raise £240/250K (or more) after selling the house, I am not sure if your mother will be entitled to any of this. After all, they repossess it, it becomes theirs right?
Seems a shame for her to lose her house AND all the equity in it! Why should the bank have it all when she only owes £34K?!
Try CAB maybe? What about a solicitor? It has to worth a shot to save losing all her equity. And as a few people have said, she won't be housed by the council, especially after what they will see as her 'throwing her property away' that had £260K plus in equity in it!Proud to have lost over 3 stone (45 pounds,) in the past year! :j Now a size 14!
You're not singing anymore........ You're not singing any-more!
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No they are just allowed to sell it to repay any outstanding debts. But their costs will also be take out of this (which can be quite high), and it may sell for a much lower price than you are expecting.., depending on what bids are made.
Can not someone in the family raise £34k?0 -
Andrew_Ryan_89 wrote: »Hi guys,
Despite a last minute effort, it sadly looks like my mum's property is going to be repossessed. She had a interest only mortgage which expired back in 2010 and it was only around the beginning of this year the bank started taking action towards repossession. I don't want this topic to be sidetracked too much so I'll get it out the way and say it's entirely her fault, she should have known better and it is quite, for a lack of a better word, pathetic it has got to this stage.
The property is partly over commercial residence, has a short lease, is in need of refurbishment and my mum has a terrible credit rating and all these factors have played in why we have struggled to remortgage the place despite it being worth at least £290k with only £34k outstanding. We did recently find a lender who agreed something in principle, but that does not look likely to go through in time.
So, 3 months or so ago the case went to court and the judge granted the lender permission to apply for a bailiff. When my mum got this mortgage in principle, as instructed she updated the lender and it was pretty much 2 days later she got a letter saying that the bailiff has been applied for and she should make arrangements to move.
I want to know -
- When the bank takes possession of the property, how is it sold and do they have to sell it at market value?
- If on the day of eviction, and by some miracle, my mum comes across the money to pay of the loan, can she still do this?
- Does she have to cover any fees from the bank, bailiff, etc?
- Does she receive the full sell price minus what she owes once the property is sold?
- Is there any rights, appeals or useful tips she should know about?
Many thanks guys.
I could be wrong, but I believe that any payment made at this stage would be looked on favourably by the courts, and that may buy time to pay off the rest? The mistake is in not making any payments, making some is better.0 -
Why would it become theirs? See my reply above.
Oh is that right?! Well that's good then. It would be a pity for her to lose all that equity. Even if she only gets £180-200K, that would be great.deannatrois wrote: »No they are just allowed to sell it to repay any outstanding debts. But their costs will also be take out of this (which can be quite high), and it may sell for a much lower price than you are expecting.., depending on what bids are made.
Can not someone in the family raise £34k?
I was wondering that. It doesn't seem like a lot, when you think how much the house is worth.Crashy_Time wrote: »I could be wrong, but I believe that any payment made at this stage would be looked on favourably by the courts, and that may buy time to pay off the rest? The mistake is in not making any payments, making some is better.
Yeah I agree...
Good luck to your mother Andrew. I hope everything goes in her favour.Proud to have lost over 3 stone (45 pounds,) in the past year! :j Now a size 14!
You're not singing anymore........ You're not singing any-more!0 -
deannatrois wrote: »No they are just allowed to sell it to repay any outstanding debts. But their costs will also be take out of this (which can be quite high), and it may sell for a much lower price than you are expecting.., depending on what bids are made.
Can not someone in the family raise £34k?
When I was still at the property, I would have quite easily been in a position to do so but by the time it got to this urgent stage, I was in the process of buying my own place. Managed to get my little sister a higher paid job (on minimum wage before) and that alone is the reason we got the AIP. Thing is, the max that can be borrowed unsecured is £25k and my sister does not have the salary or credit rating to borrow that amount. It will be great if my older brother, who lives their, could help but he's a bum.Crashy_Time wrote: »I could be wrong, but I believe that any payment made at this stage would be looked on favourably by the courts, and that may buy time to pay off the rest? The mistake is in not making any payments, making some is better.
We made an offer of £25k and they said no. What makes it worst my mum has been paying them £400+ a month for the past 5-6 years but that,s he has been told, has been fines and interest.0 -
Is it too late to put it up for auction or price it to sell at £250k or something?0
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