equitygreenspun.com : LUSENET : Repossession : One Thread
Lender: The Mortgage Business
I am three months in arrears and have taken on an arrangement to make higher payments. Owing to a shortage of business recently (I am self employed) I may have difficulty meeting the new repayments. I have quite a lot of equity (up to 70,000). Naive question: if the property is repossessed does the sale price of the house less the mortgage revert to me, and if so what are the complications involved in this? Also what is the average time between the company's threatening to repossess and the matter coming to court?
-- Greg Holmes (email@example.com), September 06, 2002
If the property is repossessed and sold you should get the surplus, once the mortgage and legitimate costs have been taken off. The legal costs, administrative and sale costs will mount up - and there is little incentive for the mortgage company to contain these especially as some of these are them charging you for their own staff's administration.
Beware of the contrick practiced by some (eg Abbey) who will present a document as a receipt - before sending you any money form the sale - which is nothing of the sort but includes the all important phrase to the effect that you accept the sum they propose "in full and final settlement". In other words they will attempt to withold your money until you have signed away any rights you have to challenge their figures. They count on you being desperate to get your hands on the equity.
The Mortgage company is supposed to get a fair market price for the property - they have a duty of care to do so - but as the CAB information states - actually disputing the sale price is difficult. There would be the possibility of complaining to the Obudsman on this but I have not seen any information on likely response.
Because of your equity the Mortgage company will not treat your case efficiently - they know they can get their exposure recovered and it is unlikely that will be remotely bothered about how little you are left with - afterall they aren't anticipating any further earnings from you - even though they will have lost not a penny on your business. Such is the principled business practice of our banks.
But why don't you put the house on the market before they repossess and sell it yourself?
-- Rick (Ducatiric@yahoo.co.uk), September 06, 2002.
Sell your property if you are sure that you can't meet your obligations. From bitter and lengthy experience I can tell you repossession should be your very last option. This is *not* a quick solution to your cash flow situation. Take out a home equity loan if there is that much "true" equity tied up in the property - extend your mortgage term and pay off your debts and the arrears.The BS will take what they are owed and then some - yes you will eventually get the rest but it could take months.They can and frequently do sell for far less than the market value, leaving you still owing them. Is that really what you want?
-- Too scared to say (firstname.lastname@example.org), September 06, 2002.