Building society wants missed capital paid after illness, facing eviction

[Lucyweeks]

Due to illness we've been paying interest only on our mortgage. It's been a year due to operations and chemotherapy.
The building society want us to pay the missed capital payments or sell the property.
This we've tried to do. We've now got a new agent and some interest. We're happy to move to something smaller.
The building society are threatening us with eviction if we don't bring our account to date.
Has anybody else managed to overcome this?
All advice welcome.

Yes this is tricky to follow. You didn't pay for 10 months and then did for 2 - interest, capital or both?

I suspect they are worried about the long term viability of you being able to pay the remaining 70%+ plus interest. I'm out of date now but when I looked into it there were rules about giving interest only mortgages - the applicant needs to give evidence of how they are going to fund paying off the capital. I suspect they know you don't have this and so legally they should not sell you an interest only product.

For the next house are you looking buying outright, getting a mortgage or going into rented?

I paid interest and capital. I have enough to pay this for another three months.
I stated up thread I didn't pay for ten months. I was in hospital for a large part of this time. Twelve admissions last year.
My partner will take a mortgage and I'll use what ever equity I have.

If you feel unable to advocate for yourself can you take all the correspondence and a clear timeline of events, payments and estate agent to the CAB.

Its not clear if you can have a plan for a way through this, such as a job or loan or if selling is the only option. If its been a year then perhaps selling is the only route?

What has changed that's allowed you to make payments? If you can show a realistic plan to get up to date, fairly quickly the bank is likely to respond positively. However if your health means large mortgage repayments are unlikely going onwards put all your efforts into selling. Keep paying what you can however as it will go towards the final mortgage balance so you will have more equity for your new house.

You mention retirement pot, if you are over 55 is there an option for 25% withdrawal to clear the balance?

I think having a 3rd party person looking over everything might be best for you and help to reduce the stress

Could your partner take on the mortgage or is he unable to work? If you had a terminal diagnosis did the insurance payout?

If you feel unable to advocate for yourself can you take all the correspondence and a clear timeline of events, payments and estate agent to the CAB.

Its not clear if you can have a plan for a way through this, such as a job or loan or if selling is the only option. If its been a year then perhaps selling is the only route?

What has changed that's allowed you to make payments? If you can show a realistic plan to get up to date, fairly quickly the bank is likely to respond positively. However if your health means large mortgage repayments are unlikely going onwards put all your efforts into selling. Keep paying what you can however as it will go towards the final mortgage balance so you will have more equity for your new house.

You mention retirement pot, if you are over 55 is there an option for 25% withdrawal to clear the balance?

I think having a 3rd party person looking over everything might be best for you and help to reduce the stress

@Unijourney
We are happy to downsize. However I need a bungalow and they are very expensive.
As it's my house my partner hasn't been involved.
He's offered to take a mortgage and will have a pension lump sum in two years. My equity will be my share.
My mortgage is too big for him to take on. I am investigating pensions.

Ah ok. It seems that the bank wants a plan quickly as they have waited 12 months. You will need to be clear about the path you are following and work on the most realistic and timely plan so that the bank are reassured this isn't drifting, otherwise they will pursue eviction.

Avoid eviction wherever possible as you will be charged the costs associated with it and house will be sold for whatever is the quickest sale and you will incur any loss.

From the banks point of view, you have a contract with them and you have broken the terms, it isn't personal as they have a duty to shareholders

The solicitor has stated I need to pay the interest as a minimum so the debt doesn't increase.
He is planning to enter a n244 tomorrow if I can agree a plan but won't guarantee it will work for me.
I just wanted to make sure I don't have Bailiffs here as my DD is autistic.
I believe they need an order to come to the house?

I'm still not sure if you have to pay just the arrears (the missed payments) or the full balance.

I think you need 1-1 advice as it is hard to advise without details.

The arrears.

Make a complaint that they haven’t fully considered your circumstances and offered enough support.

Then after you get the final response refer to FOS. They will pause the legal proceedings whilst this is being investigated by FOS and this could buy you another 6 months.

You really want to avoid eviction and associated costs. Your best way forward is to drop the price so the house shifts fast. It’s always price. Someone will buy it if it’s dropped enough and they feel they’re getting a good deal.

I know it will go against your instincts but look at it this way: if it goes to eviction (which is the alternative) then you’ll rack up the court costs associated with that. Then it will be sold at a real knock down price because the building society will only be interested in covering the loan value.

If you are talking pensions are there "over 55" properties nearby?
What can you get with the 25% equity?a ground floor flat?

How are you hoping to fund your next property? There is a real chance you will not see the full equity againto use as a deposit and your credit score will not be high.

@crossedlines We're relaunching the house tomorrow at a £100k reduction. It's cheaper than anything of it's size and in the same location. I've told the agent I'm doing this for a quick sale due to my health. If you saw me you'd know why I'm selling! I look like hell. I shall keep out of the way.

@LIZS My partner will take the mortgage.

Can you not take a loan, as the arrears will only be 10 months of payments? Then repay the loan when the sale does go through.

That I hope to do but they've trashed my credit rating. I can get bridging at 12% but they want to do the whole lot. Very risky and expensive

If you’re dropping 100k I imagine it’s a sizeable property and/or in an expensive location. Have you considered moving somewhere cheaper when you do sell? I know it’s not easy with jobs and schools to consider but it would remove some of the pressure going forward. If you’re not able to work and are relying on one income, it may make things more manageable as you don’t want to buy a bungalow and then find you’re still struggling to meet monthly payments.

In the last three months I've got some pension payments and a small lump sum. It's not enough to pay the arrears in full.
My money in this house and some shares in a private company.

When you say your partner is not on the mortgage does that mean he hasn’t been paying anything towards it at all?

Hopefully you get a sale soon OP. Maybe ask the building society what happens if you have an offer but the buyers have a chain - what happens while you’re awaiting completion?

I agree with you on this: a bridging loan is a massive expense and risk. I would focus on selling, clearing the debt asap and ensuring when you do buy again, it’s something manageable. It might be an idea to move into rented when you sell as no one really knows what’s going to happen now with house prices and it would mean you can stay in the local area and not jump too quickly at buying.

If you own 25% of a property where you can drop the price by 100k I would consider massively downsizing and moving to a cheaper area if your health is unlikely to improve. You may be able to buy somewhere outright or with a very small mortgage which will give you both security and peace of mind.

My partner pays his share.
I was the bigger earner by many multiples.

We will not buy anything large and put ourselves at risk. I have a DD to support due to ASD.

As I said up thread I have life insurance but not critical illness.
What I didn't know until recently was I could have had UC.

I'm thinking maybe drop the price of the hose significantly...which would be better than losing all of your equity if they repossess. Maybe drop price with a condition that price drop is for immediate sale. Cash buyer preferred/Only? State urgent sale due to illness to allay suspicion that there is something wrong with the house 🤔
I am sorry you find yourself in this position op and I'm wondering if it is legal to evict you on these circumstances? 💐