johnetoobad

[johnetoobad]

Hi New to Forum,

 

Sorry for the abstract request, I appreciate all the hard work and all the headaches out there!

 

I am NRAM negative equity; old house worth now about 75,000, my remaining interest only mortgage four years later from inception is still 107,000 and counting.

 

I need to move, I have exhausted the possibilities of renting it waiting for equity to emerge as it needs work and the market rent is lower than mortgage, I have had it up for sale for over 6 months and the estate agents tell me the entire area is static.

 

I have no other debts but worry about the shortfall from handing the keys, I have for 2 years considered handing it back and the route of bankrupcy to clear the 30-40,000 likely shortfall if the bank auction it, but worry that I would not be allowed to petition for bankrupcy as this hypothetical shortfall is all I have as debt (i know it is not even debt till the shortfall is even arranged).

 

What do I do? I feel I am wasting time waiting for the inevitable hike on the SVR next September, I would like to get on with my life, my lovely partner has grinned and beared it but hates the area and wants to move, we now have a little-chick in tow who I want to get benefit of getting out of this mess!!

 

Please can you tell me if I would be 'allowed' to petition before the shortfall exists just to start proceedings; the old rent a house and move everything in a flash is with my means, I have no real attachment to the house and just want shot... do the courts punish you for this? I am worried additionally about attachments to earnings.

 

NRAM's offer of debt management made me laff and I really don't want to part with anything... other than the house!

 

thanks for any help and advice, i need it

[Lea_HTH]

Hi New to Forum,

 

Sorry for the abstract request, I appreciate all the hard work and all the headaches out there!

 

I am NRAM negative equity; old house worth now about 75,000, my remaining interest only mortgage four years later from inception is still 107,000 and counting.

 

I need to move, I have exhausted the possibilities of renting it waiting for equity to emerge as it needs work and the market rent is lower than mortgage, I have had it up for sale for over 6 months and the estate agents tell me the entire area is static.

 

I have no other debts but worry about the shortfall from handing the keys, I have for 2 years considered handing it back and the route of bankrupcy to clear the 30-40,000 likely shortfall if the bank auction it, but worry that I would not be allowed to petition for bankrupcy as this hypothetical shortfall is all I have as debt (i know it is not even debt till the shortfall is even arranged).

 

What do I do? I feel I am wasting time waiting for the inevitable hike on the SVR next September, I would like to get on with my life, my lovely partner has grinned and beared it but hates the area and wants to move, we now have a little-chick in tow who I want to get benefit of getting out of this mess!!

 

Please can you tell me if I would be 'allowed' to petition before the shortfall exists just to start proceedings; the old rent a house and move everything in a flash is with my means, I have no real attachment to the house and just want shot... do the courts punish you for this? I am worried additionally about attachments to earnings.

 

NRAM's offer of debt management made me laff and I really don't want to part with anything... other than the house!

 

thanks for any help and advice, i need it

 

You cannot go bankrupt until you have the debt, so you would have to allow the house to be repossessed (or hand it back) and wait for it to be sold/auctioned and any shortfall to be notified to you before doing so. Otherwise any bankruptcy will only include debt owed at the date of the bankruptcy hearing.

 

My suggestion is put the house on the market for what you think it will sell for and negotiate with the mortgage company that whatever you get for it will discharge the debt you owe them. They might not agree, but that doesn't matter. If they refuse, you sell it anyway, they get what is there and you then file for bankruptcy to discharge the rest of the debt which then becomes unsecured.

[johnetoobad]

Thank you for that quick reply, very comforting.

 

So the house is unlikely to sell, my investment originally was minimal with it being 100%, do I simply instruct the bank then sit tight for the demands for the shortfall?

 

This will take time I understand so I am preparing myself for the insecurity of waiting around for things to happen, I sometimes read that repossessions (even voluntary) can take years to happen.

 

In the meantime credit is shot to bits and that? I'm kind of trying to preempt what will happen about the short fall... does anyone have knowledge or experience of banks accepting to write off this shortfall if no assests are available, or do they always push bankrupcy?

 

cheers for your time

[Lea_HTH]

Thank you for that quick reply, very comforting.

 

So the house is unlikely to sell, my investment originally was minimal with it being 100%, do I simply instruct the bank then sit tight for the demands for the shortfall?

 

This will take time I understand so I am preparing myself for the insecurity of waiting around for things to happen, I sometimes read that repossessions (even voluntary) can take years to happen.

 

In the meantime credit is shot to bits and that? I'm kind of trying to preempt what will happen about the short fall... does anyone have knowledge or experience of banks accepting to write off this shortfall if no assests are available, or do they always push bankrupcy?

 

cheers for your time

 

Banks do not 'push' for bankruptcy - it is not in their interests to do that. They can chase you for up to 12 years for any shortfall, so they'll be in no hurry to have you go bankrupt, after all, you might win the lottery!

 

You cannot 'instruct' the bank to do anything. You can inform them that you wish to return the keys to them as you have tried and failed to sell the property. They may be willing to accept this. My suggestion remains that it is better for you to sell the property, for whatever price you can reasonably get - put it up for auction with a reserve price that will cover the mortgage if possible. You are not helpless and it is up to you if you 'wait around for things to happen' - on the other hand you could simply take charge and dispose of the property as quickly as you can, for as much as you can get and then negotiate with the mortgagee to reduce whatever shortfall there is. Only negotiation will give you the answers you are looking for - success by others will not necessarily indicate success for you. You have to try it and see.

 

If you have defaulted on the mortgage your credit score will be crap anyway, so don't worry about it. It really isn't your first priority at present. Selling the house is, preferably before any possession proceedings are begun. You mentioned bankruptcy as an option, so if you short sell the house (i.e. for less than the mortgage) then you can always go bankrupt thereafter and include the shortfall (as it will be unsecured at that point) in the bankruptcy proceedings.

[johnetoobad]

Thanks Lea, that's great..

 

I don't have the time facility or money to risk auctioning, when I discussed short sale last with NRAM they basically stated they will only agree short sale if i assure the balance can be paid by loans plus other monthly payments (i.e before sale is agreed)... this is not tenable with rebuilding a life! Thus handing the keys back seems to me the only way to get the shortfall addressed.

 

I was interested in anyones experience with going though this, I understand that individual case will vary and that outcomes must be very different as each side bargains, and i would not expect a predicted outcome in terms of costs and agreements that may be made just wondering what peoples experiences are with chucking the house rather than achieving a private sale... seems at the moment I could put a diamonte ceiling in with plasma screens on every surface possible and no one would tek a lookin!!

 

cheers

[johnetoobad]

what does the admin team recommend around negotiating shortsale when you have no assets to bargain with anyway?

 

ta

[Lea_HTH]

Thanks Lea, that's great..

 

I don't have the time facility or money to risk auctioning, when I discussed short sale last with NRAM they basically stated they will only agree short sale if i assure the balance can be paid by loans plus other monthly payments (i.e before sale is agreed)... this is not tenable with rebuilding a life! Thus handing the keys back seems to me the only way to get the shortfall addressed.

 

I was interested in anyones experience with going though this, I understand that individual case will vary and that outcomes must be very different as each side bargains, and i would not expect a predicted outcome in terms of costs and agreements that may be made just wondering what peoples experiences are with chucking the house rather than achieving a private sale... seems at the moment I could put a diamonte ceiling in with plasma screens on every surface possible and no one would tek a lookin!!

 

cheers

 

NRAM are not going to give you the best advice for YOU, they will give you the advice that means they will get their money back (understandably). Go ahead and sell the property for as much as you can raise. They will get that money towards the outstanding mortgage and you are free to then file for bankruptcy. They are not likely to gain more on the market than you are, so materially the difference is going to relate to what they end up charging you to do that work - which increases your shortfall.

 

Since you mentioned bankruptcy, it seems that this would be your quickest option to getting back on your feet again in the not too distant future. It sounds like this house is a mill stone around your neck. My best advice is as indicated - sell it, as quickly as possible for the most you can get for it, and deal with the shortfall by way of bankruptcy. You do not need NRAM's permission to sell for less than the mortgage IF you ensure you get as much as the current market (and the state of the property) will bear - that is precisely what NRAM would be expected to do if they repossessed the property, but they would be entitled to pass all of their costs in doing so onto you (thereby increasing your shortfall).

 

Your best interests appear to be served by selling now, for as much as you can get. Is the property on the market? What has it been valued at? Is it priced for quick sale? Have you reduced the price at any stage?

[johnetoobad]

Thanks Lea,

 

It is on the market, I have had no viewings in the last 6 months, with the only offer coming from an Investor (presume is a land lord who knows and owns other property in the area), a price of 60,000 has been offered. My Mortgage as it stands is around 107,000. I would obviously prefer to hold out for a better sale from another party, I havee drop from 80,000- down to 75,000. The 60,000 offer from the investor was questioned by NRAM, and it was at this point that they started talking about only allowing sale if the short-sale would be accounted for..... also the other additional costs for vending and selling would not be provided out of the sale costs... they are asking for the other fees up front, I can not do this and provide a rental deposit at the same time.

 

so... in this respect I do not hold out much hope for selling under my own steam within the time frame I require

 

it's a rushed mess I know, but needs must!

[johnetoobad]

Hi,

 

anymore thoughts and ideas for people to share about negotiating short-sales? any good tactics advised?

 

cheers

[Happyhippy1959]

John,, I am following this with interest. Simular position myself,,, ex gone leaving me with mortgage and secured loan to pay all by myself. Though I may break even with selling or just a little short I really do sympathise with your position.

 

I think Lea advice is very very sound. It is something I may have to do in the future. I have £38k of unsecured debt being paid by token £1.00 at the moment. No good going BR yet as if I lost my job I would be stuck with a shortfall on mortgage... So the best advice mate is just let them reposes the house and go BR for the shortfall.... You have tried for 6 months they would under the code have to get the best price possible for the property and if you feel it has been sold for peanuts you can have it looked in to...

[brokebutnotbeatn]

unfortunately the mortgage company can (and by the sounds of it probably will) refuse to agree to a sale. I am not sure what your options are other than renting it out (will that cover the mortgage?) or handing the keys back and renting privately.

[johnetoobad]

Guys!!

 

you are stars, Happy Hippy thanks (fellow Medic, yeh man big shout out) and BrokeButnotB, many thanks, me keyboard had got dusty and I was about to rent it out to another posting!!! he he he cheers for your responses

 

Yep, can't rent it as don't meet the 120% financing of it, or the headache of chasing people as I work full time supporting to feed the bairns bananas. So that option is exhausted and not an option.

 

So really I think handing the keys back to that poor charity case NRAM (theatrical sighs pleez) will be the swiftest way to deal with it.

 

I posted originally, and this is my main concern, about pending shortfall... the maths are owed 107,000 pund, likely auction price 40-50,000. Thus when they come head hunting I was interested in peoples experience with

a) asking the banks to write it off

b) challenging irresponsible lending in the first place.. and allowing a naive fool like me to go straight into negative equity

c) outcome of Bankrupcy to write the shortfall off.

 

guys we live and breathe and are a long time dead so here's a beer coming your way

[brokebutnotbeatn]

No worries. The path won't be easy - but could it be any harder?! Onwards and upwards - you'll get there I'm sure. And let's face it re the shortfall, they can't have what you haven't got! But let them do the BR work as it costs money...

[Happyhippy1959]

John mate, you seem to have come to terms with what you plan to do... Mate, best of luck... I am trying to hold on as long as I can,, but sometimes it makes me so bloody ill,,, ended up in AE myself Friday morning before me long day shift started.... I am going to rent a room out or house share,,, put it on the hospital intra-net,,, loads of replies so fingers crossed.

[brokebutnotbeatn]

Hippy - stay well. Hope you find a great housemate! x

[Happyhippy1959]

thanks broken,,, just writing a complaint letter to my GP practice, they are bloody useless.....

[Mrs E Blackadder]

John, have only just come across your thread, but I am another one in a similar position.

 

Please think carefully about handing back the keys, as you will still be responsible for the house, and could still be expected to pay things like the council tax. I have spoken to the National Debtline about this (suggest you call them too if you are still trying to make a decision as they might be able to offer you further information). After speaking to them, and giving the situation much thought, I came to the conclusion that letting the house be repossessed was a better way of going ahead if I can't sell. The mortgage company will still add on all their charges, but at the end of the day they can't have what you aint got and as the house has been taken back via the courts it makes the situation clearer than just handing back the keys. Also, if you are looking for help from the local authority with housing, if you have handed back the keys you could be deemed as having made yourself homeless and they are less likely to offer any assistance (not that they seem to offer much assistance anyway!) As you have found, selling the house isn't easy a) because of the current housing market and b) because of your shortfall. My solicitor told me that when there is a shortfall it is unlikely that the mortgage company/any other creditors with an interest in the property will allow a sale to go ahead because of not getting their money back. There are charging orders on my property which have to be cleared when the house is sold, and if there is insufficient equity to clear everything then I am effectively stuck in a house that I can't afford anymore but can't sell (or even attempt to sell) either. As you are aware, if you don't have the money to pay solicitors/estate agents fees then they also need to be deducted from any equity, thus shoving you even further into the do-do. I'm sure you know the feeling well!

 

Have you had a free half an hour chat with a solicitor about your situation? I just wandered into my local solicitor one afternoon about 3 weeks ago and they saw me straight away. If you talk to someone who deals with house sales then they can tell you where you stand as they are dealing with this sort of thing all the time.

 

I hope my experiences might help you a little. As you can see, there are lots of us in similar positions and although we can't tell you what you need to do, we can at least tell you what we have tried to do!

[Happyhippy1959]

Well put Mrs B,, could not have summed it up better. John, stay put, let them take possession through the courts,,,, ( simples ) do not hand the keys in..... As Mrs B say's, all kinds of problems could occur...

[johnetoobad]

Hi guys,

 

sorry not been back for a while, I've been surfing in Australia and playing football with David Beckham, yes he really is a bastard if you ever wondered!!! (not really off course, although maybe right about David).. anyway,

 

I think (and this is C.A.B, National Debt Line and some old lady in the Market who reads palms for a quid... this is all bonfide) that there is little difference legally between a voluntary and conventional repossession, the only difference is that by volunteering you circumvent the Bank having to apply to the courts to oust you (not 'out you' that was Oscar Wilde), so really I'm viewing the Voluntary route as a way to speed up the process so I can benefit from the 6 months free concil tax before the 50% charge kicks in after 6 months.... how I scramble for the pennies!!

 

I haven't got the interest in the property to sell, I've had evil investor landlords round and most of them are chopped up out the back, otherewise I can't sell and can't afford to sell.... Hippy, the rented and shared living route sounds nice, get a foriegn student in through University schemes, these usually offer good 'lodging routes' so you may have someone live term time who will not 'max out' your living space, or do a nice interview process... get some cool cats in to drink beer and plot the downfall of capitalism... I don't have this option as rental market in my area is pretty ding and so is the spare bedroom to be honest!

 

So gulp, slurp and here I go, I'm off to ring the Bank and say ... 'sorry, but it's yours'

 

catch you all soon and don't stop til you get enough xx

[johnetoobad]

sorry just boosting my posts

[johnetoobad]

and again, oops

[johnetoobad]

hmmm... so they don't accept Voluntary repossession, even with my offer of Country Wine selection thrown in, damn

 

well its back to convention repossession then, I am instructing more estate agents as last ditch attempt to prove I can be bothered selling it, if only renting was an option, but the sums don't add up and I have no time to be a landlord really.

 

any thoughts? any thoughts?

[johnetoobad]

sorry, they 'don't accept it' because I refuse to accept responsibility for shortfall, this is economically daft of them since they will likely get nowt anyway

[Mrs E Blackadder]

I've had evil investor landlords round

 

I am getting so sick of these people. My house has been on the market for about 2 weeks now, have had 15 lots of people round to look at it and at least 12 of them have been 'investment buyers'. They are nothing but bl**dy time wasters. You stay in waiting for them, they show up and spend about 3 minutes in your property and show absolutely no interest in it whatsoever. Even my estate agent has apologised for a couple of them! Had one this afternoon who spent 2 minutes (yes, that's right, 2 minutes) in my house while his wife/girlfriend/partner/whoever sat in the car with the engine running. He didn't listen to anything that the estate agent had to say and did nothing but get my back up with his ignorant attitude. I have decided that he can have my house if he wants to put in an offer - over the asking price that is!!!

 

Sorry for the rant, but at least I know I am not the only one having my time wasted by these dreadful people.

 

Hope you get your situation sorted johne. Perhaps David Beckham could offer you a room in his mansion, what with you being great mates and all that

[johnetoobad]

Cheer'sMrsB,

 

What's your latest House Price predictions? I find the internet usefully predicts that they may rise, or fall? Wonderful help!