Hand house back to Mortgage company and now owe £25k short fall.

fredsmith55

In short I handed back the keys to my mortgage company because it was impossible to live in the flat because the other flats in the block were owned by a rouge land lord who had moved in drug dealers.

Today I find out that I owe them a short fall of £25k. The orginal loan was for £120k of which I had already paid £10k and the property sold for £85 hence £25k short fall.

So I have two options

a) My mother has offered to pay off the loan for me and then to repay her back.

b) I go bankrupt (not really an option I want to take).

So my question is if I have my mum pay off the shortfall will the loan company take an offer to clear the shortfall? and if so how much is a good figure to start the ball rolling? I was thinking of offering £15k to clear the bill? Has anyone got any experiance on this matter ?

Thanks Mr Fred Smith.

ACG

Have you asked the lender whether they would accept a monthly repayment? That would save getting your mother involved.

fredsmith55

They more than likley would however I would have to pay the full amount then and the aim is to reduce the amount I have to pay them back.

silvercar

The short answer is 20% initial offer, but no harm in negotiating a monthly repayment plan, the offer from a third party to clear it can come at any time. In fact once you can establish that all you can afford is a small monthly repayment, they are more likely to agree to a lump sum payment.

fredsmith55

The issues is I think I can afford about £600 a month as I earn £35k a year.

Am I legally obliged to disclose how much I make a year? when I took out the mortgage I was only earning £23k

Mark2727

Hi all,

I have considered handing the keys back on my property, having relocated to another country, as unfortunately I am not allowed to let the property out due to negative equity. I was advised by the bank to get a buyer and they would then consider a shortfall sale application. Unfortunately they said no (after going to the expense of marketing the property) as they deem my circumstances as 'affordable' so will not allow any sale - even though i have offered to pay a significant shortfall in full. I am now taking legal advice to see what I can do next - although the bank have indicated there decision is FINAL. However I am on an interest only mortgage - a significant one - with no savings to supplement the capital owed - is it uneasonable to say the bank is taking the greedy approach on this one rather than genuine logic to correct a bad situation. The house now sits empty and unused. Please provide advice - if there is any in this case.

Thrugelmir

Mark2727 wrote: »

is it uneasonable to say the bank is taking the greedy approach on this one rather than genuine logic to correct a bad situation.

You are the one that handed the keys back and left the country. Rather late to be seeking legal advice when you've simply tossed away your rights. The contract you signed will cover such eventualities. Have you read it?

Mark2727

No keys handed back bud - and yes contract read. I am fully up to date and never missed a payment and I am continuing to pay. Just simply looking to do right by the house and mortgage and move on - didnt say i handed the keys back. Trouble is my orh was taken over by a new firm...

kingstreet

Mark - there is confusion due to you hijacking another thread instead of starting your own.

We had five posts on one subject then you changed it to another.

Hopefully, one of the board admins can split this off into a thread of its own?