Getting house reposessed deliberately?

Cantdance_2

Gorgeous_George wrote: »

It's a bad siutuation that will be made worse by repossession.

Is the ex living in it? If so, she should pay the mortgage or at least the majoriy of it. Otherwise, you may as well live in it. This is a JOINT problem.

If you don't want the house, sell it. You may need to drop the price to 125K to do so. That'll hurt but the pain now is nothing compared to what is likely to happen if you don't resolve the problem now.

In the States, hand the keys in and the debt disappears. Over here, the banks will chase both of you until you both die, or the debt is repaid. And the costs will just keep going up. Repossession should not be an option.

GG

Thank you for the considered response! I'm trying to figure out what the consequences would be of selling for, say £125K - we have no savings so we couldn't pay off the mortgage or pay for the solicitors or estate agents - I guess then the bank would force bankruptcy on us since we'd owe them £12,000 on a house we no longer had? Would they even release the deeds to sell the house if we didn't repay the mortgage in full?

James

poppy10_2

Cantdance wrote: »

what the consequences would be of selling for, say £125K I guess then the bank would force bankruptcy on us since we'd owe them £12,000 on a house we no longer had? Would they even release the deeds to sell the house if we didn't repay the mortgage in full?

James

You have to repay the mortgage in order to get the deeds.

You can't sell your house unless you pay off the mortgage, but your mortgage is worth more than your house is.

Welcome to Negative Equity.

If the house was repossessed and the bank sold it for less than the house was worth, they could chase you for the shortfall. Typically they would leave it a few years to let you get back on your feet, then start chasing you when you have built up some money again.

I wish you good luck, but if you chose to take out a 100% interest only loan and then borrowed £30k on top of that from your mortgage lender, you really have only yourself to blame for the situation you now find yourself in. All that money wasn't given to you for free. Sorry to be blunt.

Kez100

We sold for 4k less in the last crash. We had to save the 4k and fees to sell before we sold (as well as save for a new deposit because we were moving).

feclmum

my sister was in a situation very similar to you,they ended up doing a voluntary repossession,and then did an iva with the help of ccs for the rest of the money owing on the mortgage and other secured/unsecured debts, which means that all the debt will paid off in three years although her credit history is now rubbish,she has had no problem at all being able to rent through an agency

Joey122

Cantdance wrote: »

Okay, sorry, I picked a deliberately controversial heading to get attention, but it's pretty much what I want to ask!

Basically - wife and I split up in October and put the house on the market there and then. House is supposedly worth £150k, has been reduced a couple of months ago to £145K to try and sell but no luck so far.

I am now living at my parents, and till the house is sold I'm still paying half the mortgage and bills so I can't go and rent my own place. Pretty depressing!

Our mortgage is for £137K but with early redemption penalty of about £6K we just can't afford to drop the price any more. I'm kind of getting desprerate here and want to just go to the mortgage company and say 'Here, have the damn house...' -neither of us wants to live there and even if we did sell for £145K, we couldn't afford to pay the solicitors and estate agents fees.

So what are the steps that would normally lead to a house getting taken back by the bank? Could we potentially speed up the process by doing it voluntarily? And would it automatically lead to bankruptcy?

Any help gratefully received.


P.S. there's also the small matter of a huge pile of unsecured debts but I can still make the payments on those and rent somewhere if we can get shot of the house!

This is classic negative equity

So_Sad_Angel

Hi CD

Understand your situation perfectly...similar myself...neg equity, Sec loan ( Northern Rock ...who else!!!) unsecured debt..& the marital stuff on top!!! You mention bankruptcy so please post on Br board to get the `bigger picture`

There are many on there who will help!! Thy the debt charities as well..I found Nat Debt line particularly informative.

Angelxx

artherfouxache

If it were me ...... I'd get rid of it by any means.

In the last round when the market was sinking,1990ish, I instructed the AE to drop the price a set amount every month until sold..... I can't remember the exact figs, but I think it was a grand a month, and it soon sold for 60k . I guess that'd be around 3k drop per month now.

60K was eventually below market ......but I'd never have got that price just a few months later.

wellandpower

poppy10 wrote: »

You have to repay the mortgage in order to get the deeds.

You can't sell your house unless you pay off the mortgage, but your mortgage is worth more than your house is.

Welcome to Negative Equity.

If the house was repossessed and the bank sold it for less than the house was worth, they could chase you for the shortfall. Typically they would leave it a few years to let you get back on your feet, then start chasing you when you have built up some money again.

I wish you good luck, but if you chose to take out a 100% interest only loan and then borrowed £30k on top of that from your mortgage lender, you really have only yourself to blame for the situation you now find yourself in. All that money wasn't given to you for free. Sorry to be blunt.

Yeah. Yourself to blame. However in this occassion their is not an easy way out if you have no money. You are in the poo about up to your next and the only way to get out is to find some money from somewhere fast and sell up quick.

HOUSES ARE CRASHING - DO NOT GET CAUGHT.

So_Sad_Angel

Cantdance wrote: »

So what are the steps that would normally lead to a house getting taken back by the bank? Could we potentially speed up the process by doing it voluntarily? And would it automatically lead to bankruptcy?)



Hi CD..not auto bankrupcy by handing back keys (lenders rarely instigate BR due to the cost)... but the shortfall would become an unsecured debt (jointly). If the lender & SL Co sell then they will do this quickly & at a loss therefore the cost to you will be higher (& include legals etc).

Have you tried auction?? (or ...& this may have been suggested.) ..rent the property out to cover mtge until market is better to sell.

Its a nighmare & I`m in it too!!!

Angexx

Cantdance_2

poppy10 wrote: »

I wish you good luck, but if you chose to take out a 100% interest only loan and then borrowed £30k on top of that from your mortgage lender, you really have only yourself to blame for the situation you now find yourself in. All that money wasn't given to you for free. Sorry to be blunt.

Thank you - and I mean that, I'm not hiding from the fact that this is entirely my (our) fault.

Problem is when you're married and in love you make decisions based on what you think will happen and you don't even consider what would happen if you broke up.

If we weren't breaking up there would be no problem. We wouldn't even be thinking of moving, and we'd just wait until our salaries increased sufficiently to be able to pay off some of the unsecured stuff and get a much more favourable mortgage deal. That was the plan - life chucks some !!!! your way though doesn't it? As a couple you have two salaries coming in to make payments on one lot of rent, bills, loans, CCs - and if you've been living anywhere near to your means, as soon as you separate everything out you're in deep doo doo!

Whilst I take full blame for our situation, I would like to say that it all started when we bought our first flat in 2001 - our financial advisor wangled us a self-cert mortgage for about 4 times our joint salary and it's been ever spiralling debt since then. We were young and naive and bought into the whole 'everyone's doing it' thing and coulsn't see the risks.

I would love that to be a lesson to others but I think the days of that kind of thing
are possibly passed in today's market. Sure hope so anyway.

I know this isn't the bankruptcy board but can anyone explain what would happen if we did declare bankruptcy, in terms of being forever chased for the shortfall in the mortgage balance? Would that be written off as part of the bankruptcy or can mortgage debts not be included?

Thanks everyone.