Repossession help desperately needed please.

shell-collector

Hi all,

I am after a bit of non-judgemental help for a friend who is understandably upset and worried. For simple reasons I'll call the friend Susan and the Husband, Sam. Background history -

My friend (female) seperated last October from her Husband. He walked out on her and their 2 children who are now aged 6 and 11. He left everything apart from a few clothes, and went to another woman. In time my friend found this information out, but initially it was a huge shock.

The house they lived in was mortgaged, and the one name on the mortgage was Sam. This was because Susan had never been added, although she had worked part time periodically between bringing up the children. She stayed in the house with the kids.

A verbal agreement was drawn up between Susan and Sam that they would pay 50% of the mortgage per month, and that Sam would also pay maintenance (and see the 2 children regularly). For the first couple of months this happened. However, after Christmas last year, Sam dissapeared altogether. He didn't see the children, didn't pay the mortgage, and only paid maintenance as it was done through a direct debit. Susan couldn't afford to pay it all, so no payments have been made this year.

Susan and Sam have now managed to get on speaking terms for the sake of the kids. However, this is where we need the help please. Unfortunately, the house has gone to repossession. Sam got a letter to the house last week from a Solicitor on behalf of the bank, asking him to contact them urgently about the repossession. Susan gave him the letter - and now Sam seems to have dissapeared again (not answering phones, and work say he is on 2 weeks holiday). Susan is beside herself with worry.........she knows the letter is saying that the case has already gone to court (unbeknown to her) - yet can not speak to the bank or the solicitor because she is not named on the mortgage.

Can someone offer any help please? What she needs to know is, how long does the repossession order take? How long realistically do they have left in the house? What actually happens? Is there any help to her from the housing associations or council before she physically IS homeless, as she has proof that the house is being repossessed? Is there anything at all that she can do? Arrears are appx £4k on a mortgage of appx £35k, and the house is worth appx £110-£115k. If the house is repossessed, how much from the value of the house will they get as a settlement, if anything? (They are in the process of a divorce now, and obviously she's entitled to something I presume due to her contributing to the house over the last ten years?)

Any help is most welcome, please don't judge, help is what is being asked for.

Many thanks,

shell-collector.

jamesd

For a repossession sale the house would probably end up being sold for 10-20% less than its market value even though the lender has an obligation to get the best price. One step to take is get valuations now to support legal action against the lender if the sale is far below market value.

After a repossession sale the mortgage, legal costs and estate agent and/or auction house costs will be deducted. Also possibly the insurance premium for any mortgage guarantee required by the lender when the mortgage was taken out (even if the lender paid the premium they sometimes charge the borrower after a repossession).

So, perhaps 110k * 80% (reduced sale price) - 39k (mortgage plus arrears) - 10k (legal and other costs, could be more) = 39k would be paid to the husband after a repossession sale. Possibly more, possibly less, depending on sale price achieved and lenders costs.

Ideally if the mortgage isn't being paid the owner would be doing the selling, not the mortgage lender. That lets the owner get a better sale price and avoids many of the costs. But if the husband isn't talking and doing anything, that 30-40k is going to be thrown away because of it.

She should seek advice from the solicitor handling the divorce, in case it is possible to have a judge suspend the repossession or persuade the lender to delay to give time for a sale by the owner as the divorce is resolved. It's the single most important and urgent step to take.

She should also contact her local council to make sure that they know what is happening and that they may have a family to put up in a cheap and nasty B&B soon.

If the husband was talking and selling the place there'd be no repossession. It's still conceivable for that to happen if he apologises to the lender and pays the costs incurred so far, if the repossession order hasn't been granted yet. Or even if an order is granted and suspended by the judge to give time to sort things out. If nobody represents him or her at court then eviction could happen in a few days, depending on just where in the process things are.

bagpuss_fan

What an awful situation, shame she didn't go to court, as the Judge would have been sympathetic i'm sure and given her more time. My sister split from her Husband, she only works part time, and has managed to buy a house on a self-cert, interest only mortgage. This is a short term plan, until her children are older and she can work full time, when she will change it to repayment. My point is, as long as she is still working (all-be-it part time) check out the possibility of a re-mortgage, in her name only. £40k is not a big mortgage she will pay more for self-cert but better that than the alternative. It sounds like "Sam" is burying his head in the sand, and wouldn't have a problem signing over the house to her bearing in mind the other prospect is repossession.
On the repossession side, has she been to the council about housing? If not, she needs to go - tomorrow! Explain exactly what's happened and get herself on the housing list. The council have a legal obligation to house you, as long as you can prove you haven't deliberately made yourself homeless. ie. they will probably ask her to account for all her incomings over the last year, she'd need to show not to have "wasted" any on holidays and the like.
Unfortunatley if she sells the house, even because of the debts, I think you'll find this is classed as 'deliberately making yourself homeless'. To get a council house she will probably have to let them repossess it.
I think she too has been burying her head in the sand, unfortunately it's her and the children that are affected by this, not Sam! She needs to sort this out urgently, her confidence needs a big boost. Perhaps you can look at self-certs with her, or offer to go with her to the council.
I hope this helps, she will sort it out and she'll feel much better just getting things going, and knowing what's going on. I'm sure at the minute she's just worrying herself silly, and getting know where.

BobProperty

shell-collector wrote: »

The house they lived in was mortgaged, and the one name on the mortgage was Sam. This was because Susan had never been added, .....

Did he own it before they were married? This may be significant to these matters as she acquires rights on marriage.

shell-collector wrote: »

Unfortunately, the house has gone to repossession. Sam got a letter to the house last week from a Solicitor on behalf of the bank, asking him to contact them urgently about the repossession........she knows the letter is saying that the case has already gone to court (unbeknown to her) - yet can not speak to the bank or the solicitor because she is not named on the mortgage.

I'm confused by your terminology. The process (AFAIK) is a court hearing in the county court where the lender puts their case for possession. If no one turns up to defend the case, they are going to win and be given a date for possession by the judge. I can't remember if the property is still occupied at that date, they apply to the court for the bailiffs to obtain possession or whether they can request that at the court hearing once they obtain a possession order. Hopefully someone can clear up that point.
If "Sam" got a letter last week off the lender's solicitors, it is likely to be documentation and witness statements of the current state of the mortgage. It is also likely that the court has set a date for the hearing but it hasn't happened yet. She can phone the County Court and ask when the hearing is taking place, using "Sam"'s and the lenders names as references. Hopefully the hearing hasn't taken place and she can attend it and explain the situation.
Is "Susan" still working? Is she getting all the benefits she is entitled to?

SquatNow

She needs to go to the county court and explain what has happened.

Chances are a deal can be arranged... she is entitled to housing benefit and other stuff. If she sees a solicitor (CAB?) they can advise her but I don't thk she will be evicted.

silou

Can I also suggest that in addition to all of the above Susan should contact the land registry, I was looking for some info on their website recently and am sure I read something about a form that can be completed to register a marital interest in the property. From what I recall it seemed to be in place for cases such as this, maybe someone else can shed some more light on whether this might help.

silvercar

silou wrote: »

Can I also suggest that in addition to all of the above Susan should contact the land registry, I was looking for some info on their website recently and am sure I read something about a form that can be completed to register a marital interest in the property. From what I recall it seemed to be in place for cases such as this, maybe someone else can shed some more light on whether this might help.

This should have been done as soon as Sam left, but can be done at any time. It registers (under the matrimonial homes act of xx) the right of Susan to live in the home. It means that should anyone try to put a charge on the property or Sam tries to borrow more money on the property or a lender tries to repossess, they immediately see that the home isn't just owned by Sam on his own but that Susan has a right to live in the property and could be entitled to some share of its value.

If a repossession did occur it would stop the lender just writing a cheque for the balance straight to Sam AFAIK.

Susan needs to phone up Land Registry; if she needs a solicitor to do this they will advise her.

HugoSP

silou wrote: »

Can I also suggest that in addition to all of the above Susan should contact the land registry, I was looking for some info on their website recently and am sure I read something about a form that can be completed to register a marital interest in the property. From what I recall it seemed to be in place for cases such as this, maybe someone else can shed some more light on whether this might help.

There is.

The phone number can be found here: http://www.landregistry.gov.uk/regional/offices/

We did this recently, you don't need a solicitor to do it for you. The LR will even talk you through the form. The cost is around £40.

IIRC you need forms TR1 and AP1