Friends house repo - I'd quite like to buy it.....but HOW ?

[k13 wjd]

So, let me set the background.

 

A friend of mine has some serious issues, owns a house with his wife ( who has left him for some 4 years). mortgage well in arrears ( now intrest only payments taken from his benefits)

 

He's getting letters asking him to have a valuation done by the mortgage company ( they have been in talks for over a year)

 

If i wanted to purchase the property, and my friend agreed, how would i go about that?

 

This is a circa 220k house, with an oustanding mortgage of 145k including arrears.

 

If i simply called the lender, and offered to take a new mortgage out in my name, for the amount owed, and have the property signed over to me......That clears the debt, and everyone is happy ?

 

any advice welcome

[rdm2006]

If the property is valued at 220k and you buy it for 145k what happens with the remaining 75K ?

 

If you wanted to go into shared ownership i would recommend seeing a solicitor (it would be a 66/34 split - you would own 66%, he would own 34%) - it would be unfair to your friend to just expect him to loose 75k (not that, that is what you are asking)

 

edit: - you would also have to find out what rent such a property would attract and your friend would have to pay you 66% of that figure

Edited June 11, 2013 by rdm2006

[Newborn]

Your friend jointly with the person they jointly own the property with is at liberty to sell any asset they have to anyone they choose for any price they like. That is unless the house has been taken into possession by the lender. But bear in mind that this would be complicated if there are other creditors involved who could argue that by getting the market value for the property (as opposed to the knock down offer you make) that they would then also have their accounts satisfied.

 

So there are issues when there are any other creditors who could argue that they've been diddled when your friend sells the house to you at a knock down price. If it's been repossessed the mortgagee (lender) also has a duty to the mortgagor (borrower) to get market value for the house. Could you imagine the furore if a bank repossessed the house then sold it off to one of the directors for a song just to get the mortgage money back?

 

Also, when the house gets sold the other joint owner (wife) has the right to ensure the house is sold at the market value to ensure they get their share of any equity left when the mortgage debt is satisfied.

 

At the end of the day you would be expected to pay full market value.

 

Why doesn't your friend just sell to whoever for the best price?