Potentially complicated mortgage question

[Justabitconfusedreally]

Morning,

I'm not sure if this board or the property board would be the best to post on so hedged my bets on this one first.

I'm posting on behalf of my partner as they do not have an account, however I have had some very good advice from here in the past so there was nothing to lose by posing the issue on here!

I will try and sum up the situation the best I can but the longer it goes on it seems to grow arms and legs, so it is quite long.

My partner and his ex bought a house together (for context their two kids live there as well), they split up some years back (no I had nothing to do with it). There was no immediate talk of him coming off the mortgage even when we got together (he wasn't contributing to it he was on it in name only). I own my own place which he later moved into as he was renting.

When the mortgage came up for renewal, it transpired that his ex partner was in arrears of over 1k. She recieved money to clear this from a family member.

Durng the remortgage process the bank said he wouldn't be able to come off the mortgage. Other than being told he couldn't come off the mortgage all we know is her payments reduced by about £200 per month. So, we thought not ideal but we'll suck it up for the fixed term she has and he could then try to get off after that.

He has now started receiving letters (bank didn't have a current address for him before so he didn't recieve anything about previous arrears, he wasn't previously interested as he though it was all being paid etc) saying the monthly payments are not being made. She has not paid the mortgage for 5 months.

It has also come to light that her new partner moved into the house full time at least 4 months ago which she didn't say anything about and we only found out as one of the kids mentioned it.

So my questions are, is there anything he can do about her not paying the mortgage while he is still tied to it and can't come off? Other than continuing regular contact with the bank.

Also regarding the new partner moving in, should he have been consulted before this happened as he is named on the mortgage and does this now affect him being able to come off the mortgahe as it is now over 3k in debt despite the lower monthly payments and in theory more money coming into the household as I would have thought the new partner would be contributing in some way.

Unfortunatly we do not have information on her financial situation, (she did previously confirm with my partner that she could afford this new monthly payment) or much information about this new partner as communication between my partner and his ex is just regarding contact for the kids, as this is already set up and follows a set pattern they really don't talk that much. She has not been forthcoming other than to say she hasn't spoken to the bank.

Thank you for reading if you got through that!

Unfortunately he is jointly liable for the mortgage all of the time his name is on the deeds. I'm assuming she cannot afford the mortgage on her own which is why the mortgage lender will not let him remove his name from the mortgage.

It really is quite an urgent situation as if she continues to default this will impact his credit rating and his ability to take out any future credit and get another mortgage in the future. Also, if the house is repossessed he will be jointly liable for any monies owing.

Best thing to do is to sit down and talk through what's going to happen long term. No need to bring her new man in, (your partner has moved on with you) and come to an agreement.

This is an issue of joint and several liability. While named on the mortgage your partner is liable for the payments and his credit rating will be affected if the mortgage is in arrears.

He is not just "named on the mortgage" he is in a joint financial commitment with his ex. It is not a matter of removing his name, his ex needs to buy him out and get a mortgage in his name. He is potentially able to claim 50% equity in the property if it was sold or he could make an agreement to stay on the mortgage until the children are adults then require the property is sold. He will need to go through mediation or possibly court to get an agreement signed on what they are going to do.

In the meantime he is as liable for the mortgage as his ex is and the bank can pursue both his ex and your partner for the missing mortgage payments. This could affect his ability to get credit or a mortgage in future so he cannot ignore this.

Speak to the bank, get financial advice and legal advice on next steps.

He is liable for the payments. Sounds to me like he might need to look at getting a court order to force the sale of the property, then the mortgage can be cleared and he can have a clean break.

Likely the bank was saying he couldn't come off because she didn't have sufficient affordability on her own. But that doesn't mean the house can't be sold to get him off the mortgage.

Hi all thanks for taking the time to reply.

Sorry yes, when I said the bank said he couldn't come off the mortgage I should have been more clear and said it was due to affordability.

We are aware he is equally liable, which is why I sought advice from here on the best way to proceed as it has reached this stage and we are getting no answer other than she hasn't contacted the bank. He has tried to be a bit softly softly with it to avoid rocking the boat but obviously now that can't be avoided.

@mummabi the only reason I mentioned the new partner was if him moving in had any affect on the mortgage situation. I don't know so thought it was worth mentioning.

I believe he wanted to avoid forcing a sale as its the kids home, however, at this point I don't think he's ruling it out because of the affect on his credit.

Thank you all for your useful replies it's much appreciated

Was your partner married to his ex? If so, is he divorced and was there a financial settlement arrangement? How much equity is in the property?

First - make sure he is receiving regular information from the bank - is there an online account he can access? Also, could he opt into the government scheme for 6 months interest-only mortgage payments? This will at least mitigate further arrears.

If there is no financial settlement or they were not married - I think he has 4 options:

1..Continue to let the arrears mount up until the bank takes action to repossess. Any shortfall from the sale and accrual of fees from the repossession and sale he will still be liable for, and credit will be adversely affected.
This is a difficult route, but it might have some advantages - the 'bad guy' will be the bank not him as far as his ex is concerned, and it will end any financial commitments between them other than the children, plus the emotional toll in pursuing legal action is avoided.

2..Negotiate with his ex to put the house up for sale and pay off the mortgage. This is likely to be the cheapest option (and least damaging to his credit). If necessary, offer to pay her to move out and stump up a few months rent and the deposit - this is still likely to be cheaper and easier than other options, and the least damaging in terms of credit risk. It is also likely to be the one that enables the most amicable situation moving forward.

3..Offer to take on the mortgage in his own sole name, buying the house as a Buy to Let property until the children are 18; and from which she pays him rent - if he is able to afford this option and if his credit rating is sufficiently robust.
He will then have control over the mortgage and payments. Alternatively, offer to pay the full mortgage monthly payments in lieu of child maintenance.

4..Take legal action to force a sale. Weigh up the likely cost of this, against the cost of letting the bank do it.

The new partner shouldn't be living there as they could acquire rights of occupation. He should really sign a occupiers waiver form for your partner and the bank.

If it's the children's home then a court may not order the sale unless the mother can afford to re house herself.

Unfortunately if he doesn't want his credit rating completely screwed he is going to have to keep up the mortgage payments.
A lot will depend on his
future plans and whether this bother him?
Arguably the new partner needs to pay rent to your DH so that could be used.

What an utter pisstake though. 2 if them living there and not paying the mortgage I would be absolutely furious.

He needs to take proper legal advice as a matter of urgency so you can make a plan.

@seekingasimplelife , no they were never married. Thank you for your reply it was really helpful.
I'm not sure about the online account, I will get him to find out but it something we hadn't thought of, thank you for that idea as well as the interest only payments - I don't think this is something that has been mentioned either.

So far it has just be phone calls to the bank, and trying to get a date from her when she will contact the bank.
As other have pointed out he is equally liable so the situation really needs to be sorted out one way or another. Thank you again for your help.

@Blankscreen, is an occupiers waiver form something my partner can get fro. The bank? Sorry to sound naive, but neither of us have been in this situation before (thankfully)

The forced sale, unless it really has to happen isn't something he wants to pursue because its the kids home. However, that being said because of the situation I don't think it could be discounted if it were allowed to go ahead iyswim.

He couldn't afford to cover the mortgage there as well as cover his own costs and bills unfotunatly.

Thank you for taking the time to reply.

what is the CMS agreement? He has a responsibility to ensure safe housing for his children and so if their mum can’t afford to do this with her share of the proceeds from the house he will need to pay towards the mortgage.

the only way the courts can force the sale is if your house becomes the children’s main residence.

as far as the partner living there goes you need to speak to a solicitor to get something written up to state they have no rights to the house.

I believe he wanted to avoid forcing a sale as its the kids home, however, at this point I don't think he's ruling it out because of the affect on his credit

His wants are irrelevant tbh because if someone doesn't clear the arrears and start paying the mortgage soon, the bank are going to make that decision for them and repossess anyway.

The biggest problem is his credit rating. It's already going to have been significantly impacted and every month that passes without the arrears being cleared, the impact worsens. If it gets to repossession stage he'll have a default on his credit file for 6 years.

I would not be treading lightly in this. You're impacted too because if you want any joint lending in the next few years with him - or even a joint tenancy, which are credit checked - then that option is disappearing fast.

@Wolfpa , this is information I'll have to find out from him. The maintenance for the children is between them and I havent had any need to know the ins and outs as it hasn't concerned me. Thank you for your advice regarding the partner living there and getting advice on that.

@KangarooCapturer yes, because its now such a dire situation we are trying to find out his options. He is in regular contact with the bank and I posted here as I have had valuable advice in the past. Neither of us has been in this situation before and I've had very good advice on this thread which I will show him.

Can he afford to start making mortgage payments?

His credit will already be in the toilet if there are months of missed payments.

The only option will be to sell the house.
If she can't afford the mortgage with 2 adults living in the house she's not going to suddenly start paying now.

@MadeForThis no, he cannot afford to make payments on that property. When they split she continued to live in the house with the kids and they agreed they she would pay the mortgage.

Stupidly earlier in the post I said he was on the mortgage in name only. What I should have said is he is on the mortgage but they agreed between them that when he moved out she would pay for the mortgage and when pissible he would be rwmoved.

Only sometime later did it transpire that she was not making payments, which was initially (we thought) sorted. However, we now know she has not paid it for the last 5 months. What her financial agreed with her new partner is I have no idea, for all I know he may not even know she isn't making payments.

One of the things we can't understand is why so far she hadn't told the bank she couldn't pay, or make partial payments to show willing. She's not contacted them at all and so far hasn't said or shown that she will.

Do you know what's changed op? Has the ex lost their job or now working PT? As it seems odd that the ex managed to pay it at first but is now having difficulties?

@AnneElliott this is what makes it more confusing, after remortgage the monthly payments were lower. Also, now her partner has moved in you would think he would be contributing to the household too.... so on paper it looks like she should have more money available to her.

She works shifts and has always worked part time, but unless we ask her directly we don't know how many hours p/w she is working, also if she was asked I doubt very much she would give the answer. On the information we have there is no reason to reduce working hours.

Should the new boy friend be paying rent?
He could pay his rent in arears and put rent money towards mortgage catch up.

Yes as a joint owner of the property your DP could ask her partner to pay rent to him! He could use that to pay something towards the mortgage and arrears if she isn't taking anything from him

If he's moved into yours then presumably you could afford your place without him, so he doesn't need to contribute (although he should obvs) - he could therefore afford to pay his and ex's mortgage. Maybe instead of giving her CM he should pay the mortgage direct? But he would need to make sure mortgage company knew her new dp was also living there and get him to sign away his rights.

@user1492757084 you would think he should be contributing either towards the mortgage as rent or towards other expenses of the household but we don't know.

@Spirallingdownwards he's going to ask how he can go about doing this.

@titchy yes, that could be an option but I don't think anyone would think it's reasonable to pay a mortgage because two able bodied adults are refusing - but yes, before anyone points it out it may have to happen. She would never in a million years agree to the mortgage being paid instead of maintenance, and that's not me talking badly of her it's just a fact.

He should have been paying 50% of the mortgage for the duration of the time his name was on the paperwork, regardless of the arrangement they had come to. He now has a responsibility to clear the arrears and potentially suggest selling the house as it's clear it's not been affordable for her.

He should have been paying 50% of the mortgage for the duration of the time his name was on the paperwork, regardless of the arrangement they had come to.

That's not true. Even if they were still together and living in the house, one DP can pay all of it and the other pay nothing. Why do you think he should pay 50% if that wasn't the agreement and he's not living there and is paying CMS?

Regardless, I agree that sadly it seems like forcing a sale is the only option if the ex is not communicating and not paying the bills and he can't cover the debts either. If no one can cover the mortgage, the house cannot be kept and some other solution for housing the DC that's more affordable will need sorting out between them. There'll presumably be some equity to split from the sale and then the ex will have to rent, with or without the non-contributing partner.

Because it's the sensible thing to do when you've split, the bank will still have money being paid toward the debt and the asset wouldn't be at risk to the extent it now is. A forced sale is now their only outcome.

https://www.moneyhelper.org.uk/en/family-and-care/divorce-and-separation/dividing-the-family-home-mortgage-during-separation

This site gives good advice.

It's only sensible if both parties can afford that, which not everyone can. In this case, it sounds like the ex could afford the bills alone and has stopped paying for unknown reasons. In this scenario, she wouldn't have paid the 50% over this period either so the other party would have had to pay it all or force a sale anyway.

@Pinkdelight3 has pointed out what would I have said to @Newuser7592 he couldn't afford half the mortgage and rent for himself at the time. Staying in the property also wasn't an option.

We have no idea why she hasn't been paying what she agreed to pay, especially now the new payments are lower than before and her new partner should be paying towards the household. Partner isn't interested in getting anything out of the house, just wants to get off the mortgage.