To let house be repossessed?!

[Bloodynorthernrock]

I have NC for this as could be outing. If anyone has any advice at all I'd really appreciate it...

I could have repossession started next month and I'm not sure what to do or where I stand. Long story but here are the main factors, trying to be brief!!

-"bought" house in 2007 before the financial crash. Naively took financial advice and got 100% finance, 90% mortgage and 10% unsecured loan with Northern Rock fixed for 5 years. Shortly after they folded...

• relocated in 2011 for work reasons and house had dropped significantly in value, about £20k so decided to rent it out
• Northern Rock gone so debt with NRAM at that point, had to apply for consent to let annually at a fee that went from about £200 to £385 per year over 6 years and the debt now with Whistletree. I wasn't usually in a position to pay the fee outright so it got added on to the mortgage, which I didn't realise until speaking to one of their advisers a couple of years ago meant that after interest, in real cost it was over £600! I complained at that point but they said I had no grounds.
• looked into remortgaging a few times over the years but trapped by negative equity and even now house valued at least £15k below what I paid
• Comms from Whistletree regarding consent to let have always implied I should move back in or sell. We will never live back in that town and are nowhere near it.

-Decided in February to try to sell. They we positive about it and helping me to manage the outcome. Estate Agents put it on the market and I had to serve 2 months notice to my tenants. As a result, I had a concession agreed for May-July for reduced payments as without the rental income I couldn't maintain the full repayments -Fast forward to now, Estate Agents, having spoken directly to Whistletree have said they can't sell the house. It won't get an offer that will cover the full amount of the outstanding mortgage so it will take 8-12 weeks for a decision on an offer, which Estate Agents say no buyer will wait out. I can totally appreciate that as I wouldn't be impressed! -in the meantime, Whistletree had denied any further period of reduced payments. I spoke to them about the Estate Agents decisions and they won't budge. I said that I still can't meet full repayments and they said in that case, after 2nd August I'll be in arrears to the amount that they will start repossession.

So if you made it this far then thanks for reading and if you have legal/financial knowledge or have been through something similar, please advise?! Should I let them go ahead and if they do, what happens and would they sell it for half nothing and I'd still be responsible for the outstanding debt? Or should I rent it out again and continue to pay their ridiculous annual fee? I would really rather be rid of it as it's been a thorn in my side for nearly 10 years. Please help?!?!

I would try to avoid letting it be repossessed. You don’t know how much will be owed once sold and fees paid. It could be upwards of 50k. The only way out of that would then be to declare bankruptcy and this would make renting incredibly difficult if you ever moved because your credit rating would be through the floor.

I would try to work with your mortgage company. Will they allow you to go onto a buy to let product on interest only? That would mean you will always owe the outstanding balance until the end of the mortgage. So say it’s 100k plus 1k to transfer the mortgage in 25 years you will still owe 101k. I know it doesn’t really sort out your issue right now. But rental values will increase if only in 10 years and with mortgages you generally have the option to overpay annually by 10% when in a fixed rate deal.

If they do allow you to go on a fixed rate deal, the initial interest payment may be less than you are paying now but more in a buy to let. They probably won’t allow it. But it is worth a try.

If they won’t let you do it. I’d continue to let as is and ask your tenants if they will stay and you have decided not to sell for the foreseeable future. Good tenants are worth their weight in gold. It will go up in value eventually. The only caveat to this is Brexit. This is the great unknown for house prices.

Wow thanks so much everyone, really appreciate the advice!

I will get back on specific points but just to clarify, I haven't yet asked if they would grant consent to let again, the rental income previously left a shortfall of about £100 per month.

I also probably should have mentioned that we are moving to Ireland at the end of August, so my husband, who was in a similar situation but not as severe as he remortgaged with his provider, is currently selling to his long term tenant. Whistletree just manage old debt, they don't sell mortgages

I am Irish, hubby is English, house is in Wales (and also has a knotweed problem but I won't go into that minefield here!!) I have been earning a reasonably good salary but work 85% hours, pay 4 days full childcare plus before and after school care 4 days per week so the reduced payment of £205 was all I could manage without rental income

I think you should just rent it out again. You can save a bit by not using an agent (if you do) We use Open Rent. You get to meet the tenants so you have a bit more control.

A condition of rental last time was that it was managed. We also live nowhere near and will be even further away soon!

OP a condition of letting it is also that you have CTL from them, see my previous post. If you're contemplating breaking one of their rules I would not be so worried about breaking a more minor one!

Once you are in Ireland you will presumably be earning in euros so would fall under stricter lending criteria now in force to protect you/banks against Forex risks should you ever want to remortgage, by the way. Not good news for you but at this point you need to collect all the facts before choosing how to proceed.

When your DHs sale completes will this release any cash that can be used to bridge the gap between your anticipated redemption total and funds from your potential house sale so you can chip off your mortgage and either sell it or refinance with an alternative provider (if latter, preferably before you leave UK)?

I wasn't planning to let without their consent anyway, I meant I would rent if given consequence again. I am hoping they would prefer that option Vs repossession...

Unfortunately hubby's sale won't generate much, what's it does will help with moving costs with a bit left to get set up in Ireland but definitely not enough for the gap. Sale doesn't feel like an option now - what buyer would wait 8-12 weeks for a response to an offer?!

*consent not consequence, bloody auto text!!!!

I rented a house with knotweed 20yrs ago, naively had it dug over and burnt it only for it to reappear.

Are you not eligible for any compensation from the FSA. BBC Watchdog and Martyn Lewis are 2 advisors I can think of. If the debt is in your name don't make it joint.

Hope you get authorisation to relet the property and that everything improves once you get to Ireland.

They dont need a Possession Order from the court, they can appoint a receiver as you are not resident in the property. There isn't enough info on here to help you, if you pm me with info of monthly repayments due, whether it is interest only, how much you can afford to pay each month, how long till the full term of the mortgage expires and the amount of arrears I can advise you. Also need to know whether the letting permission fee is written into the original mortgage deed, so you need to check the paperwork.

Why aren’t you carrying on renting?

I still don't understand though op. You must be in significant arrears for them to be repossessing in two weeks, normally it's nine months to a year of not paying your mortgage before repossession occurs.

How can you have been paying the mortgage for ten years and still be in negative equity?

Jonbb thanks someone's else has offered advice privately but will get back to you if needed - appreciate the offer.

They just said that after the next repayment date I will have accrued 3 months arrears and they would start proceedings. Can't remember the exact words used. I have never previously missed a payment or gone into arrears.

Regarding the negative equity, Milliegrant, the house is currently valued at £80k (original total debt £95k) just enough to cover the mortgage debt leaving just the outstanding on the unsecured loan but after months on the market and many viewings there was only one potential offer and it was for £70k

Is it an interest-only mortgage, OP? Because if it was a repayment mortgage the balance would have reduced over the 10 year period.

Assuming it is interest-only, do you have any way of repaying the capital at the end of the loan?

I’d get all your info together and see and advisor.

How have you not paid any principal off in 10yrs?
What is the interest rate?
How much rent do you get?

I’m surprised you have a shortfall in rent unless the interest rate is very high.
Get your statements together and try to work out why they think you’re 3mths in arrears, that can’t be right if you never missed a payment! Or ask them to prove it if you don’t have the records.
See a broker about getting a mortgage with a proper lender to pay them out.

Are whistletree a reputable firm? It sounds a bit dodgy

No it's not interest only. I had a fixed rate for the first 5 years and it has varied since, can't recall exactly what it is currently will have to check.

Whistletree aren't a mortgage company, they exist purely to manage Northern Rock debt, which was initially with Northern Rock Asset Management (NRAM)

Rent was £450, after management fees etc I got £385, monthly repayment is currently £510

I will be in arrears become of the concession that was in place for 3 months of reduced payments. I got them to cancel my DD for August as I can't pay the full amount and they offered no alternative. I aim to figure out my best option in the meantime and vet back to them. Really appreciate some of the advice that's been offered here, thanks!

Whistletree is actually part of TSB Bank.

The principal has reduced by about £15k

Hope I am answering everything (or at least the things that don't mean I'm repeating myself)

Why haven't you tried to remortgage at a lower rate?

This doesn't make sense and I suspect They are behaving illegally, what you're,saying is you have missed one mortgage payment ( two months concession was met) and they are repossessing in two weeks?

That's highly unusual behaviour. They legally i think need to look at your repayment options. They can't repossess after missing one payment.

If your not bothered about losing the property, speak to the company with who you owe money to against the house (mortgage) and offer to surrender it. It then fast forwards things but does leave you with a settled debt amount. My partner bought a property years ago and payed minimum payments, he didn't maintain the house well and an electrician told us it was a ticking time bomb as the electrics were starting to self destruct. He spoke to the bank, explained he couldn't afford it no more and they sent him the paper work to surrender it, once signed and sent back they sent out a lock Smith, changed the locks and a few weeks later put it up for auction. The amount gained from auction was taken off debt (left a short fall of 15k), bank handed debt over to a recovery comapany and we now pay £80 a month towards the outstanding