Still paying for old house

dporter23

I bought a house some time ago and when the financial crisis happened I lost my job and was advised to hand keys back to the finance company my mortgage was with having missed several months of missing payments. The company sold it at a loss of £30000 I now need to pay this back and this is having a negative effect on buying a house even though myself and wife are working. I live in Scotland and feel that I'll never own another house which is completely depressing for someone at 38 years old. I would appreciate any help or ideas that anyone has, thanks

ACG

How much do you owe?
Can you offer them a lump sum as a settlement figure?

dporter23

Just less than £30000. The finance company went bust but the debt transferred. The company are unwilling to offer any discount and I don't have a lump some to pay.

PasturesNew

You've still time yet; there are two of you and you aren't 40 yet.
I bought my first house, alone, when I was 40.

When I bought that people were "forced" to buy MIG insurances, for about £1000, which would cover any shortfall should we ever be repossessed, something lenders put in place after the last financial crisis of ~1990... but then they stopped insisting people bought them and gradually they all stopped in order to remain competitive.

Focus on what you can do (get the debt paid) - and don't worry about what you think you won't be able to do in the future. The future is a place you'll come to, in time - and when you look around it'll all look different to how you imagined it'd look.

dporter23

Thanks it is important to remind myself that I am still fairly young but it's frustrating as I know the house was undersold at an auction and that I wasn't made aware by citizens advice that i would have been better keeping and speaking to lender as later told that they would have gave a mortgage break to help short term unemployment. I will get there.

BoGoF

Unfortunately with the Citizens Advice Bureau (and other such organisations) a little knowledge is a dangerous thing. Not knocking what they try to do but a lot of their staff are simply not qualified to give advice on more than basic debt matters. But that is done now...

Have you agreed any payment proposals with them? I know you said they wont offer a discount but assuming you could raise the funds you could make a formal full and final settlement offer of x amount.

JaneyLouWho

We were in exactly the same position. Repo in 2009, £30k shortfall which I thought was written off until I began applying for mortgages this year and began to get chased again due to my 'changed circumstances'. I've just been offered a mortgage by the same bank that we were repossessed by! Granted, I'm able to pay the shortfall off, but if you are in an affordable repayment plan you should be fine to get a mortgage given how long ago it was. And the lender should allow you to pay it back over the original mortgage term, so its not as though you have to sort it in the next couple of years.

If you think the under value sale was due to negligent behaviour by the lender you can complain to the Financial Ombudsman (so long as you do it within a certain time of becoming aware that you could make a complaint) and they will review the information to judge whether the sale price was fair.

Good luck with it all - there is light at the end of the tunnel!!

dporter23

Thanks. I'm going to get the paperwork out and contact the ombusman as 8 feel that something isn't right. Had lots of problems with this. They overvalued the house then sold at an unrealistic price so definitely going to give it a try. I've made an agreement to pay £10 per week but will take ages. I'm going to try ombusman first then if nothing I'll make a new agreement to pay more and get rid of it. A cloud over me with it

PasturesNew

JaneyLouWho wrote: »

... Repo in 2009, £30k shortfall which I thought was written off ...

I don't know if it's changed, but "in the olden days" of sometime in the last 10 years it used to be that while a lot of old debts were written off after 6 years, mortgages were 12 years.

What tended to happen was they went dead quiet for 11 years and 10 months, hoping that people's situations would change in that time, then they would suddenly reappear to ask for the money.

It might still be that 12 year rule if it's not changed in, say, the last 5 years or so.

kingstreet

It's still twelve, PN.