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?!?!

You cant if in negative equity @Walkingdeadfangirl

Oh dear I see the reason why it would be very difficult to get another mortgage. I think you either sell the house via auction or let it out again. I would try to avoid repossession because of your credit rating.

If you do decide to sell it at auction you do need to be prepared to finance a shortfall so you would need permission from Whistletree and an agreement in writing as to hoe you will pay the balance.

The thing is either way you’re going to have to service a debt. The advantage of selling is that you would no longer be at risk of any tenant not paying rent or trashing the house and being repossessed as you can’t cover these costs. The disadvantage of selling is that you will put a reserve price on the property and you will be waiting for a month or two until the next local auction.

What if the house then doesn’t meet the reserve price? You’d consequently have to enter into negotiation with any potential buyer and would not be in a strong negotiating position. If there were no buyer you’d probably then be automatically repossessed.

If you decide to relet perhaps consider just having buildings insurance unless it’s furnished. Kitchens and bathrooms are normally fixed to the walls, which therefore form part of the building. I can’t remember if carpets are buildings contents. I would also look into getting landlord insurance which will protect in the case of non payment.

Have you ever tried contacting and independent financial adviser?

I had fantastic tenants who even asked if I'd considered raising the rent rather than selling, wish I'd said yes now.

I think I need to speak to Whistletree again. I haven't missed any payments yet, concession was for three months. Most of the staff I have spoken to there have been really helpful but on reflection, the guy on Friday evening was a bit of an arsehole. I'll give them a call when I get a chance and report back on exactly where I stand and will ask about renewed consent to let...

Mummyoflittledragons it is unfurnished so I do have buildings only insurance. Wasn't aware of landlords insurance so will look into that if I let again.

Anyone know if can keep a UK bank account open with an Irish address if rental income would be going in?

Why don’t you contact your old tenants on the off chance they’d come back. Maybe they’re happy where they are but nothing ventured nothing gained. Maybe you could ask your partner to lend you some money to pay their fees to come back. Just a suggestion.

Would you be able to get more rent now than back then? How would you manage if you had to find 2k to replace the boiler for example? Dh and I have a few properties and have never had big problems with tenants but we have been exceptionally lucky and had some great long term tenants.

Of course you can keep your bank account! Dh and I lived abroad for years with bank accounts in the U.K. The advantage is that living in Ireland you won’t be earning in the U.K. and thus will not be subject to tax here. The way rental income is being calculated has changed as mortgage interest can not be offset in the same way -it’s staggered over 3 years but started last tax year.

Sorry I should say probably not be subject to tax. It depends on your income. But I suspect not.

I moved to mainland Europe for work for five years and kept my bank account open in the U.K., the bank just changed my address to the European one. Same for husband.

I do think you need to speak to them, there are legal steps they need to go through, however again they gave you a concession, you've not missed a payment, yet in your op it says they have said you'll be in arrears to such a level they will start repossession.

Maybe speak to citizens advice,as something isn't right here.

In 10 years of repayment mortgage you should have paid off done capital surely? Somethings not stacking up. Also your mortgage payments sound very high. Have you seen a financial adviser at all?

Try to avoid repossession if you can. The house would likely be sold at auction, you would lose control of the sale, and you'd still be liable for the shortfall

Thanks for confirming the bank thing would be ok!

As I've previously said, some capital has been paid but the house hasn't returned to anywhere near the value it was when I bought. I can't remortgage because of the negative equity. I sought advice in this twice in the past. I am trapped by what Northern Rock sold to me in 2007

Good suggestion about the previous tenants - they probably won't want to move again but nothing ventured nothing gained!

www.debtadvicefoundation.org/
Talk to experts, you are getting a mix of good and bad advice here. One thing I will mention - I'm managing selling a btl property in negative equity at the moment (not mine). That particular mortgage company will not force the owner of the property to sell the home they live in, and at the end of the sale they set up a negative equity agreement (unsecured loan) with affordable monthly payments based on regular monthly income only. It took a lot of talking to them on the phone to establish that, but well worth the effort. So don't let yourself be pushed into a corner at the moment, don't consider IVA's either, talk to the really brilliant people on that helpline above. Good luck.

We had our home repossessed. It was sold at just over half the remaining mortgage value which means we are still responsible for that sum of money. They have 6 years I believe, although it might be 12, to claim the outstanding debt and you need to provide ongoing addresses if you move.

If you can avoid repo, I would. It has caused us no end of hassle and upset, though we were living in our home at the time. However, I would take advice on the fee being added to your mortgage and therefore accruing interest. If it wasn't explained clearly you might have recourse on that aspect at least.

I don't think you can blame Northern Rock for this, OP - just that you bought at the height of the property prices in 2007 without a deposit, which has complicated things a bit.

Are the mortgage and the loan still separate? Because if the loan is unsecured, that means your house is not at risk from that element. And if the sale price would cover the mortgage owing, then there's just the unsecured loan to deal with.

I'm not "blaming" Northern Rock but I knew nothing about financial stuff and trusted the FA and mortgage company to give me the best advice. More fool me. Also, I think it's fair to be pissed off that they went under, sold their debt and left countless customers in this situation.

Yes the mortgage and loan are separate but as I've already said the best offer was £10k less than the outstanding mortgage. The estate agent has said they cannot sell the house because of the restrictions in place by Whistletree

Thanks flyme and minosoks

Which restrictions?

As I said in my original post, a buyer would have to wait 8-12 weeks for a decision on an offer (as it would be what they call a short sale, not fulfilling the value of the mortgage)

Oh yes. That would put off all but the most ardent of buyer. Hence the low offer.

From my experience in a professional capacity I’d avoid Christians against poverty like the plague!

Can you extend the mortgage term to reduce your monthly payments? e.g. if you have 15 years left to go and are paying £500 are you able to extend the payment term to 20 years and pay a lower amount per month?

Just to add, when my parents were facing repossession in the early 90's the court refused the application from the bank as my parents had been making every effort to repay and clear the arrears - I don't know if that's something that would apply here?

Thanks, Grimbles. As Whistletree are just managing the debt there's no flexibility. I don't know if what happened with your parents would apply - I have maintained repayments but haven't made any additional/extra payments or anything.

I spoke to them again yesterday and while I might get consent to let, it would continue to be at an annual fee and reviewed every 12 month. It was emphasised that it's not a long term solution. However when I asked what I am supposed to do when I can't meet the repayments without a tenant and have tried and failed to sell it what am I supposed to do I was just told they can't advise me on that. I haven't had a chance to contact Stepchange or other orgs yet but am also exploring with someone who has offered advice. Thanks for the continued interest and advice!

I would let without consent- fuck em

But, you need to be in 3 clear months arrears for repossession to be considered- they’re trying it on. You need to speak to a solicitor

Btw in terms of declaring bankruptcy and your credit file if you’re moving to Ireland I don’t believe it matters. It’s all U.K. based information. If you do let them repossess then you will also have to go bankrupt but you’re in a great position to do this since youre leaving the country