Almost completed, now sellers mortgage company refusing to let sale happen?

WLITC

Okay, just trying to get an insight to what's happening with the house I live in. Basically I share a house with a friend, he's been trying to buy a house off someone he knows for the past 6 months. As he knows the guys, we have been living there for about 4-5 months and paying him rent while the sale goes through. The have been loads of delays due to the lease hold, etc and my friend has been worried for months because the owner hasn't been paying bills (letters still come to the house) including the mortgage. Anyway, it was all finally due to complete this week, but he just called me now to saying the seller's mortgage company is now refusing to allow the sale because he (the owner) owes so much. Now I don't have details, but I'm guess because he hasn't paid the last few months.

Surely they are shooting themselves in the foot stopping the sale? The owner has been in arrears for the last 3-4 months worth of payments so surely the only other option for them is to repossession? Given the lack of new buyers, falling house prices and talk of a recession, surely its crazy for them to kill this deal?
As I said I don't know all the details, I guess I'm just a little worried how it'll effect us (if they repossess, how quickly that might happen? can they chuck us out?). Anyone else had their sale stopped by the mortgage company, and if so, did you manage to resolve it and complete?

payless

My guess the arrears aren't the problem, its more likely that he owes ( including late fees / redemption etc) more than its selling for.

I would image it needs owner to chat with them and prove its the best sale price he is likely to get and arrange something over any shortfall.

WLITC

payless wrote: »

My guess the arrears aren't the problem, its more likely that he owes ( including late fees / redemption etc) more than its selling for.

I would image it needs owner to chat with them and prove its the best sale price he is likely to get and arrange something over any shortfall.

okay, thanks ... I guess its a seperate issue, but if the mortgage company does repossess the property, how quickly can that happen? and where do we stand if we are renting it from the owner, can they throw us other immediately?

jonesMUFCforever

It could also be that he has a second or third mortgage on the property and the selling price might not be enough to pay everyone off.

WLITC

ejones999 wrote: »

It could also be that he has a second or third mortgage on the property and the selling price might not be enough to pay everyone off.

ah right, but surely, either way, they are better off getting some of the money now. As far as I know he's buying it at pretty much exactly what it was evaluated at, so if he owes way more than that then short of them holding on to it for a few years in the hopes it will rise in value, there is no way they or he can cover the entire debt from the sale? so why hold it up and get nothing and then have to try and sell it themselves?

homer_j_3

can they chuck you out? Thats a good question - I am guessing its an informal agreement and no tenancy agreement. It may be worth speaking to the CAB if there is even a whiff of repossession.

poppy10_2

welshladinthecity wrote: »

ah right, but surely, either way, they are better off getting some of the money now. As far as I know he's buying it at pretty much exactly what it was evaluated at, so if he owes way more than that then short of them holding on to it for a few years in the hopes it will rise in value, there is no way they or he can cover the entire debt from the sale? so why hold it up and get nothing and then have to try and sell it themselves?

If he sells now, and the mortgage company agrees to his, then any shortfall changes from a secured loan to an unsecured loan - not good for them, as your friend can easily default without any serious repercussions.

If on the other hand they go for repossession, they can continue to chase him for the outstanding shortfall till kingdom come.