Voluntary Surrender of Mortgage - Northern Rock

rollercoaster_2

Ps the house is on interest only

silvercar

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!

We don't know exactly what you do know. It is rare for people to go for voluntary repossession without being months behind with mortgage payments, which makes people question whether you have had good advice upto now.

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.

The lender does not have to accept any offer you make them, they often do so when they are chasing for funds from people who appear to have nothing. In your case, your Mum has a property so they are likely to demand the full amount and will probably go for a charging order on her property to ensure they get full funds.

If your mum is shown as a joint owner of the property, the repossession will put a big black mark on her credit rating, making her ability to remortgage and gain credit harder. Presumably you mum was involved in the decision to hand the keys back.

CCCS say they no longer sell at actions and now go independantly to two or three estate agents.

If this is true, they will price it for a quick sale and the mortgage payments will continue to acrue until the sale completes. If a sale isn't made in a few months, they could then decide to go to auction.

I can appreciate that this is a difficult time for you, but do take note of the advice given, even if its not what you would like to here.

benood

Have you any idea how much you need to drop the price to get some viewings? Have any similar houses nearby sold recently - IMO you need to try and try and get some facts at your fingertips to be able to make rational decisions.

Have you been able to paint the house to get it looking as good as possible empty - you might be able to afford magnolia. I understand you probably don't want to cross the threshold but your best chance of a positive result is to take action, (easily said I know).

HelpWhereIcan

rollercoaster wrote: »

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

Do you mean like the experience I have of dealing with people facing repossession every week? Do you mean experience like going to court with someone to offer moral support even though I am possibly unable to say anything (even as a 'McKenzie Friend') and will not be receiving a fee?

Do you mean like having the experience of saving people from repossession when they thought all was lost?

I know the answers have not been what you want to hear and, no, I have not personally faced repossession; but I do understand how the system works and have seen enough people at their wits' end because they face being homeless.

The last couple I tried to help were 7 months in arrears, on reduced hours at work due to the downturn (caravan manufacture) and facing dossing on a friend's floor while their 2 kids went to another friend.

I have seen the tremendous stress a number of times, I have also seen people not take advice and cost themselves their house and thousands in collection, legal, agent and interest charges.

Telling you what you want to hear is not helping you. Giving you the facts about the downsides of voluntary repossession and some options to avoid it is.

If you do end up having to go into repossession then at least do it knowing you tried everything. Advising you to hand the house back after missing two payments is not good advice.

rollercoaster wrote: »

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.

This, of course, has to be a consideration but make sure you will be able to honestly look back in a couple of years and know that you tried every way to find a way to sort these out before giving up.

If your mum has access to the cash she could be better to loan you the money than face the damage of repossession.

Absolute worst case scenario - if your mortgage payments are say £700 you could miss 3 and get £2100 together to cover these costs.

I rent a couple of houses out - the last gas check I got cost £80, the last appliance test £50 ish. The health and safety tests are nothing compared to the amount you could cost yourself in interest and other charges involved in a repossession.

rollercoaster wrote: »

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.

If you have marketed it for 7 months and got nowhere how much does that tell you about the amount the lender will sell it for? They will not hang around. They will want it sold within 3 months and will generally send it to auction after being marketed through an agent for a month or two.

All the while you will still be liable for interest and charges (they will just be added to the debt); you be accumulating a shortfall quicker and (as Silvercar says) they have your mum and her house to pursue for the shortfall so what do they care?

Again, look into buying yourself some time to sell by renting the house out. Even if the rent is £200 less than the mortgage it is easier to cover than the full mortgage.

Most people do not face respossession until around 6 months have been missed (although the lender starts the collection process after around 3 months), handing the house back after one month just comes across as a potential over-reaction.

rollercoaster wrote: »

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

No-one is passing judgment and those that have bothered to respond will only be doing so out of a genuine desire to offer something constructive.

Just because it is not what you want to hear and sounds harder than just handing it back does not make the advice wrong or the people unfeeling.

I have seen many people in the same position and quite a few with a lot more arrears with no way back out. You have options. Whether you want to believe that or not is up to you.

I truly feel for you, but you have to accept that sometimes the right advice is not what you want to hear.

Wish I could remember conrad's 'tea & sympathy' line.

rollercoaster_2

Hello All,

Thank you for your responses.
They really have helped.
We have honestly tried everything, and the house is in immaculate condition, and we had dropped the price but to no avail. I'm in the last few months of a high risk pregnancy and think my hormones got to me that day I posted the reply. I'm in tears everyday, you know when you feel so stupid to let it get to this point and where to turn!
Although we hadn't got to the point of missing a payment, we had sold a lot of personal possessions in the coming months before we realised we literally cannot survive, and with the added pressure of an extra mouth to feed - and no offers in the 7 months on the market - we had to move.
If any charge is made on my mums house, in which we are living in at the moment. Do you know if I could transfer it onto another house later down the line once we are able to set up again? This being in my husband's name, and with a deposit .. long way down the road but eventually that would be our plan.

I have learn't my lesson now, so much so. Before this, and with all other payments i had never previously missed a payment on anything. Both me and hubby work full-time, no fancy clothes, no fancy meals every week.. nothing extravagant. I guess it can happen to us all. I just wish the ball would start rolling, we haven't heard anything back from Northern Rock as yet
xx

HelpWhereIcan

rollercoaster wrote: »

We have honestly tried everything, and the house is in immaculate condition, and we had dropped the price but to no avail.

That is the point behind getting the property rented out. That way you get some help with covering most (if not all) of the mortgage costs and buy yourself some time to sort things out.

As i said before, Northern Rock will not sell it for as much as you could because their main aim will be to sell it as quickly as possible.

Please have a word with a couple of letting agents to at least see how the figures work (if at all).

rollercoaster wrote: »

I'm in the last few months of a high risk pregnancy and think my hormones got to me that day I posted the reply. I'm in tears everyday, you know when you feel so stupid to let it get to this point and where to turn!

You are being too harsh on yourself. Many people let things get much further before they admit there is a problem.

rollercoaster wrote: »

Although we hadn't got to the point of missing a payment, we had sold a lot of personal possessions in the coming months before we realised we literally cannot survive, and with the added pressure of an extra mouth to feed - and no offers in the 7 months on the market - we had to move.

You have done what you can to manage and sold things when others would have just allowed it all to collapse. Give yourselves some credit for that. Go the extra mile and take advantage of the steps you have taken (even unconsciously) that have given you more options than many would have.

rollercoaster wrote: »

If any charge is made on my mums house, in which we are living in at the moment. Do you know if I could transfer it onto another house later down the line once we are able to set up again? This being in my husband's name, and with a deposit .. long way down the road but eventually that would be our plan.

Possibly - but only if if the new lender agrees (and Northern Rock believes there is enough security in the new property). I would probably argue that the better way round would be to pay your mum off before using savings for a deposit. But yes, the charge could theoretically be transferred but whatever happens you would be able to to get the charge removed by repaying the debt.

rollercoaster wrote: »

I have learn't my lesson now, so much so. Before this, and with all other payments i had never previously missed a payment on anything. Both me and hubby work full-time, no fancy clothes, no fancy meals every week.. nothing extravagant. I guess it can happen to us all. I just wish the ball would start rolling, we haven't heard anything back from Northern Rock as yet
xx

I would argue that could be a blessing in disguise. You come across as someone with the right attitude towards your responsibility for debt and the way to approach it. I would hate to think that your present problems and current (understandably) emotional state and the possibly bad advice you have received to ruin that and cost you more than it need to. You may just have time to sort things out with you in the driving seat.

Thirty_2

Hi all,

I'm a four minute old member to this site and am really looking for any advice which may assist my looming predicament......

1) Went self employed 18 months ago into the financial sector (not FSA regulated due to my line of work which is a plus!!)
2) Mortgage came off fixed rate and jumped nearly four hundred pound per month making it unaffordable due to me starting to build a new business
3) Have small arrears on property but not defaulted on full payment (yet)
4) Have about 2 months left of money to survive and cover all my out goings but I am highly over geared with and on paper makes me actually insolvent but i've been living on credit to survive due to over haul of credit card and loan payments plus the mortgage is unaffordable and will only go up in the near future after recent cuts (I am on interest only by the way)
5) Have small amounts of money coming in and a fair bit in the pipeline so I could survive if I cancelled all un- necessery DD's and went to rent an affordable flat (this alone would reduce my outgoings by £1,400 per month!!)
6) Have partner and six month old baby
7) House is appox. £40 - 50k negative equity as of last weeks valuation
8) £35k of unsecured debt


Below are my first thoughts and what I feel to be an appropriate rescue plan as I really need to avoid bankruptcy because I think we can survive if I follow this action ( which is very much up for criticism, advice, agreement, dismantling etc etc.... )

1) Spoke to NR who have been very good and understanding in fairness to them and they think Voluntary Surrender would be a good option
2) Try to re-pay them a very small amount each month of shortfall (although it will be tiny to start with i.e £50)
3) Cancel all unsecured loan payments and enter a Debt Managment Plan (very small payments again i.e £50 per mth)

My crazy last thought is do the following: -

1) Volutary surerender property and simply move into rented accomodation and not pay back short fall arrears when they bill me after doing so (will they really make me bankrupt if they know I have nothing at all and am in rented accomodation ??)
2) Cancel all payments to unsecured creditors and not pay back a penny and just ignore silly letters & calls etc
3) Start a new life ignoring all the debt and silly threats, build up my business (which might I add is purely commission and you can earn from £1,500 - 5k per month )
4) Wait six years with a healthy deposit saved up and a clear credit history and buy a property that is worth its value and start the ball rolling again but in an affordable enviroment???

I am just so lost with all this and would really love to hear from anyone who has genuine thoughts to assist me in anyway they can. The clock really is ticking and I would do anything to avoid the public nature of bankruptcy and repocession. I want to do the right thing but keeping the house is my main burden and to rent it out is not an option because it will blow plan 'B'

Many Thanks

silvercar

Whichever plan you pick your credit rating is going to be stuffed. Voluntary repossession will be a big black mark on your credit rating.

Problem with plan B is point (4) your credit rating won't improve until all the debts are sorted. Arrears and late payments will continue to effect your credit rating until they are paid off, then you will need to wait 6 years.

Entering a DMP with large commission payments is going to be tricky. Creditors will reject your plan if you have payments of 5k coming in and are offering them pennies.

You need to balance "the public nature of bankkruptcy" against paying off 50k negative equity and your other debts for the next 20 (?) years. Seek advice, but being both plans include repossession I would be inclined to go bankrupt, start again with no debts and build up your credit rating from scratch. Much easier to do than starting from -50k.