Bank restricting my sale

SScott1970

Hi MSE Forum,

I'd like your views/advice on the following.

I have a 2nd property on an interest only mortgage which for the last 10 years I've rented out.

Unfortunately the value of the property is now less than the mortgage, not by a lot, but negative equity none-the-less (circa 5k)

I've decided to cut my losses and get rid of the property so have it marketed through a reputable estate agent for 70K (mortgage is for 75)

After 2 week of it being on the market, I have had an offer from a cash buyer for 3k less than the market price, which on balance I'm willing to accept.

My mortgage lender however is telling me that the property needs to be on the market for at least 3 months before it can sell, to ensure that it gets the best possible price - this to me makes no sense.

The longer the property sits empty, the more cost I incur, and I fully accept any shortfall will be my responsibility to cover with the bank - so I cant understand the banks stance.

I've been referred to their complaints department who have told me the bank will assess my case and provide a decision whether or not I can accept the offer within 8 weeks!! I highly doubt the buyer will wait for that long

The Ombudsman has told me they cant intervene until a decision has been made.

Does anyone have similar experience or expertise/advice they can offer to help me get this resolved?

Thanks all

ACG

The bank lent you money on the basis that it was secured against something.
Once the property is sold it will not be secured lending. If you do not pay, short of giving you a default there is very little they can do.

SScott1970

Thanks ACG - I understand that is the case, but I'm taking accountability for the short-fall. Whether it's 8k or 38k i understand the responsibility is on me to pay the bank back what they lent. My concern, is that what if after 3 months I dont get a offeror an offer lower than what I've received - this may be the best offer I get. The longer the property sits empty the more financial burden this places on me.

ACG

Without wanting to sound like an a**e, thats not the banks fault or problem.

To be honest, its not something I have come up against in person as such but when reading similar threads on here banks do normally accept a payment plan for the remainder.

There are T&Cs in place and I dont think you are going to get the ombudsman to insist that the bank accepts a payment plan...although I am sure they have made stranger decisions in the past.

kingstreet

Are you offering to settle the shortfall in cash on or before completion?

If so, the lender can't argue with whatever price you obtain.

If however you want permission from the lender to sell at a lower price than will repay the mortgage when they have to release the security to allow the buyer unencumbered title; they can determine the terms on which they grant you that.

Obtaining a loan to settle on completion will buy you the decision-making right you prefer.

ANDY597

Could you fund the shortfall to the bank of the 8K using a low interest loan or a 0% card ? as a one off overpayment, allowing you to then sell the property without the banks intervention?