Repossession

mrsmsport

Got a friend in a quandary. Her husband works abroad and owns the property. She left it as it fell into disrepair. Leaking roof has meant that it’s in a uninhabitable state. There is a power-of-attorney, estate agent acting on his behalf trying to sell it. The mortgage hasn’t been paid for a long time and he hasn’t contacted the bank. They want the house repossessed because it would be too much to repair and they don’t have the money to pay the mortgage.  Now he earns over £6000 a month. Yeah I know it sounds wrong doesn’t it. But his debts on credit cards and loans out there means he can’t afford the mortgage. Can it be repossessed? Can the power-of-attorney, and estate agent, act on his behalf for the repossession. Or will he have to prove his income and outgoings in order to have it repossessed. 

MovingForwards

Technically he can just hand the keys over to the lender and do a voluntary repossession.

If the house hasn't been snapped up its overpriced for what it is.

There's also the option of putting it in a traditional auction and selling it for enough to cover the outstanding mortgage, all auction fees and legal costs.

If it sells for less than what's outstanding on the mortgage he / they will need to repay the lender the difference. The lender has 12 years to pursue it.

mrsmsport

Im not sure that you can just hand back the keys to the lender and walk away? If he can afford the mortgage I’m sure they will pursue him for the costs of court etc

MovingForwards

Yes he can, regardless of whether he can / can't afford it the lender will still go for all their costs, fees and everything to do with the sale plus the outstanding mortgage from it. If there's enough equity in the property then that's it, if not he will have to pay it.

How much is the property worth and how much is the outstanding mortgage?

Alfie53

I need advice for a friend please. Does the new agreement for lenders to not start the repossession process for 12 months after Ist missed payment have a start date?
My friend has been paying reduced monthly payments as agreed with lender since December 2022 with the proviso that she would put her house on the market. This she did but had to remove it from sale last month after 2 large trees fell in her garden causing damage to her and her neighbours garden. The lender is now stating that repossession procedures will begin although she has requested to continue paying a reduced amount until repairs are complete to put the house back up for sale. The lender is refusing to take any offer of repayment this month therefore does this mean that this is her 1st month of non payment and that repossession procedures cannot start for 12 months even though they are threatening immediate start to repossession. She has received no repossession notice in writing just a phone conversation which she has recorded. 

MWT

Alfie53 said:

I need advice for a friend please. Does the new agreement for lenders to not start the repossession process for 12 months after Ist missed payment have a start date?

No, for those who have a mortgage with one of the lenders who have signed up to the Charter, the agreement is not to enforce a possession order, except in exceptional circumstances. It does not stop the lender from beginning the process of obtaining a possession order...

Alfie53 said:

My friend has been paying reduced monthly payments as agreed with lender since December 2022...

The effective date is 26th of June, 2023...  ... but from what you have said, her first missed payment was back in December last year. The payment is missed when it is not paid as per the agreement, it does not require that nothing is paid, or people would be paying £1 each month just to push the date out, and it is no less 'missed' just because the lender agrees to accept a lower amount...

Alfie53 said:

... with the proviso that she would put her house on the market. This she did but had to remove it from sale last month after 2 large trees fell in her garden causing damage to her and her neighbours garden.

Knowing the condition from the lender, she should not have removed the property from sale, and simply agreed with any prospective buyers to ensure repairs were made before completion of the sale.

Removing the property from the market has opened the door for the lender to resume the repossession process, and frankly doing that in response to 'damage to her garden' is going to feel like a rather poor excuse...

Alfie53 said:

The lender is refusing to take any offer of repayment this month therefore does this mean that this is her 1st month of non payment and that repossession procedures cannot start for 12 months even though they are threatening immediate start to repossession. She has received no repossession notice in writing just a phone conversation which she has recorded. 

As above, I see nothing in the Mortgage Charter that is going to stop the lender from proceeding with the repossession process.

It is still going to take some months to reach a conclusion, but the lender clearly has lost faith in her ability to get the property sold quickly.