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    • Simba-ali34
    • By Simba-ali34 15th Apr 19, 9:36 PM
    • 190Posts
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    Simba-ali34
    Random question about shared ownership
    • #1
    • 15th Apr 19, 9:36 PM
    Random question about shared ownership 15th Apr 19 at 9:36 PM
    Hello,

    This question is not based on any personal situation but more on intrique.

    What would happen to the mortgage on a shared ownership property in the event of rent arrears and repossession by a housing association?

    I was reading an article referencing a case like this which never mentioned the mortgage. surely the mortgage loan would be tied to property meaning the housing association would take responsibility of the loan?

    Anyone have any opinion on this?

    Regards
Page 1
    • cjv
    • By cjv 15th Apr 19, 10:07 PM
    • 462 Posts
    • 238 Thanks
    cjv
    • #2
    • 15th Apr 19, 10:07 PM
    • #2
    • 15th Apr 19, 10:07 PM
    I believe the Mortgage lender would usually step in and pay the arrears adding it to what the borrower owes, then sell the property to recover their money.

    Interesting article here about the danger of falling in to arrears when having no Mortgage lender:

    https://www.theguardian.com/housing-network/2013/sep/03/hidden-dangers-shared-ownership
    Last edited by cjv; 15-04-2019 at 10:09 PM.
    • Simba-ali34
    • By Simba-ali34 15th Apr 19, 10:25 PM
    • 190 Posts
    • 9 Thanks
    Simba-ali34
    • #3
    • 15th Apr 19, 10:25 PM
    • #3
    • 15th Apr 19, 10:25 PM
    The situation I was kind of imagining is having a shared ownership which you can no longer afford, trying to sell unsuccessfully due to any number of reasons and falling into rent arrears and the property being taken back by the housing association.

    The mortgage surely must be with whoever has control of the property?

    I understand what you are saying about the mortgage provider stepping in, but what use would they be in the long term if paying the bills is unsustainable?

    Could a shared owner ever find themselves in a position of having no property and a mortgage to pay off? Almost like the mortgage is transferred to different type of loan?

    Kind regards
    • cjv
    • By cjv 15th Apr 19, 11:22 PM
    • 462 Posts
    • 238 Thanks
    cjv
    • #4
    • 15th Apr 19, 11:22 PM
    • #4
    • 15th Apr 19, 11:22 PM
    The Mortgage lender (in my case) has the option to pay off any arrears and also staircase to own 100% of the property, then it becomes theirs and they can sell it to recover their funds.

    Anyone can end up having no property and a Mortgage (debt) to pay, not just shared owners, as the sale of a property might not be enough to pay back the lender what they are owed. Negative equity for example.
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