Voluntary Surrender of Mortgage - Northern Rock

rollercoaster_2

Hi,

I'm a new member of the site, but have been reading everyones post/threads for weeks and have found it really helpful and nice to feel that I am not the only one!

My situation is: End of last year 2007 we started in financial difficulty, and have tried everything to make ends meet. We vacated out house in January 2008, to move in with my Mum and try and save money on bills to make the mortgage payments. We have sold all our furniture, and tried every other avenue.. credit cards, borrowing from family etc. So we held our hands up in May and explained this all to NR in a letter and defaulted on our mortgage for the first time in June.
Now the mortgage is in my name and for her sins my poor mothers! She kindly put her name to it so we could secure it in the first place (please note we have managed to make payments towards it for the last 3 years - but its only now due to personal circumstances we have run out of options!). My husband and I are now living with my Mum, who is fretting for the safety of her own home because of surrender, AND to top it off... I'm 6 months pregnant...!

NR called a few weeks after receiving my letter and were actually quite nice saying we understand that you have tried everything etc etc, So we suggest you go through the Voluntary Surrender route and we will send you the forms. Two weeks later no forms - I called them and they said they would resend, about a week later I received them.

After reading so many comments on here I decided not to sign the surrender forms and instead took a template letter off of the site (I believe it was on Scarlett1974 thread). I sent that this week and am anxiously waiting for a reply.

I would appreciate any comments, hints or experiences posted here.
Many many thanks
Rollercoaster

AMILLIONDOLLARS

Pay mortgage first, credit cards, loans, any unsecured debt leave last. Cancel Sky, gas, electric, water as you're not living there anymore. Why not try to rent it out, making up any shortfall the rent does not cover to pay the mortgage. Lastly, have you been over to the debt free wannabe board, they have loads of suggestions for people like you. Hop over and post a Statement of Accounts and they guide you through saving some money and your house.

AMD

TonyMMM

Your mum is right to be concerned ...when the house is surrendered/repossessed, the debt doesn't just go away and as she has signed as a guarantor she is jointly liable for it.

You don't give any figures, but as an example ... if the mortgage is for £75k and the mortgage company end up selling the house at auction for £60k - you and your mum will still owe £15k and they will come asking for it at some stage. Your mum will be "jointly and severally" liable for the outstanding debt, which means the whole lot (if you have no way of paying).If she can't pay the NR could look at getting a charging order on her house and ultimately forcing her to sell.

She needs to get some independant advice on her position.

rollercoaster_2

Hi,
Thanks for your replies. As I have mentioned I have moved out of the property. I have cancelled all utility bills etc, and have defaulted the mortgage for the first time this month. I understand that the mortgage was the most important thing to pay so hence why we moved out asap and sold all furniture.

I have called CCCS this morning who were helpful. They tell me it is likely that Northern Rock will accept my letter to avoid court costs, and that it is now a legal requirement for them to get as close to the market value as possible otherwise you can appeal against them. CCCS say they no longer sell at actions and now go independantly to two or three estate agents.
CCCS said it is possible that my Mum could have a charge put on her house if I refuse to make any downfall payments after the house has sold, but that it would be a long way down the line as they have to accept any resonable offer I make them.

I will keep you posted!
Thanks

maninthestreet

If you moved out of the house in January 2008, who is living in it now?

silvercar

Is the house for sale?

What is it worth and how big is the mortgage?

rollercoaster_2

No-one is living in the house now. It's empty.
The house has been on the market since last December, but we haven't had any offers.
It is up for £150k, mortgage £146k, we took a 100% mortgage at the time.

rollercoaster_2

I sent my voluntary surrender letter (amended so not to make me liable for just about everything they can) 3 weeks ago, but still nothing. Is this normal??

benood

What could you rent it for unfurnished?

HelpWhereIcan

I really cannot understand why you have not marketed the property yourself and/or tried to rent it out to help with the mortgage costs.

I take it you have had the mortgage put onto interest only while you try and sort things out (this will reduce the amount you need to pay).

Voluntary Repossession is not any better than a 'normal' repossession other than the amount being added as costs.

Your credit record (and your mother's) will be damaged for at least 6 years; your house will still be sold at less than (even current) market value as it will be made clear by the agents sellling that it is a distressed sale; you will still have to pay any shortfall and the mortgage interest due and agent's fees will still be added to the mortgage until it is sold.

Please make sure you get the mortgage on interest only and try to sell it yourself and/or rent it before letting NR have it back.

I am actually surprised at the CCCS advice - yes they have to get as close to market value as possible, but that figure will always be less than you could possibly get for yourself. ie the price to sell in 3 months will always be less than the price to sell in your own time - especially in the current market.

rollercoaster_2

I wish people would actually read my post properly before offering their judgement - I did actually just ask for experience or advice!

The house is empty, I have sold all furniture, the house needs a new boiler and lots of health and safety tests done before we could even think of renting - tests that we cannot afford to do. We have marketed it ourselves for the last 7 months! We certainly haven't taken this lightly and thought it was the easy option, we are in financial hell. We have cancelled all bills just so we could make the mortgage.

Please can people only respond if they have been in this situation instead of people just passing judgement and telling me things that I already know!

Many thanks