Negative Equity - Lender Refuses Permission to Sell

[brokebutnotbeatn]

Hi

- anyone out there with knowledge/experience of the following situation:

 

I secured a divorce a year ago on the grounds of ex's unreasonable behaviour.

 

Part of this was that he walked away from all debts, including the house.

 

I am now on a debt management plan and the house is in negative equity. It's also bigger than I need and I am concerned moving forward about my ability to maintain it and also my mortgage payments shoot up in october 10 fold as I'm on a tracker and will move to a variable of 4.99%.

 

I need to sell and move closer to the kid's schools and my work, but the mortgage company have said they will refuse me permission to sell. If I add the shortfall to my DMP I will have this paid off in 7-5 years (currently 7 but as things improve at work etc plan to bring it down to 5).

 

They have said in order to get my ex husband off the deeds I have to apply for a new mortgage, which they would refuse to grant.

 

So, any bright ideas anyone?

[atmywitsendiam]

Hi there

 

Am also in process of seperating for ex (who's financially incompetent).

 

I've been phoning around my mortgage and secured loan people today and have also tried selling this house last october.

 

The secured loan puts my house in negative equity so I asked if they'd give a personal loan for the difference - they wouldn't even talk to me about it until I had an offer on the house, so I had to go through 12 week process of selling house, paying for HIP, and disappointing a lovely couple who really wanted to buy it (and pay a top price for it too) just to be told by bank 'Nah - its not enough - you can't sell it'.

 

I've also spoken to GMAC (mortgage) today who say it is possible to take ex off mortgage and deeds, for a fee. However it maybe that the loan has to go back to underwriters to establish if I'm able to manage the whole repayment on my own.

 

So its is possible to get ex removed from mortgage/loan but only if you can prove you can manage payments.

 

You have my sympathy - as far as I can see I'm stuck in my too-big-for-me-and-60-miles-away-from-where-i-work-house for the next 15 years at least!

[atmywitsendiam]

Actually thinking about it, you could try calling your mortage company again and asking to speak to someone more senior who might know what they're talking about and finding out if that's true. It might just be that the person you spoke to was a muppet who didn't know the difference between underwriters reviewing an existing loan and applying for a new one.

 

You should be able to change your current mortgage without applying for a new one.

 

If they say no, ask them why and post their response up here?

[brokebutnotbeatn]

I have been talking to 5 different departments. Their next step is to value the house.

 

They steadfastly refuse to take my ex off - even though when we took out the mortgage we did it on the basis of my salary and him not working. They have to move me to the SVR (4.99%) but to take out another mortgage I have to start from scratch and will be refused.

 

They have said they have 2 people to 'go after' if we default, but he doesn't work and has a court order to say is not liable for any debts, I am!

 

The mortgage payments have always been managed by me and that was the basis under which we took the mortgage out.

 

My HIP is now 12 months old - what a rip off!

 

Also, I'm now in debt management so any underwriter is not going to look on me at all favourably!

 

Awwww. Now I'm starting to feel sorry for myself, that won't do!

 

My next step is

1) write a full letter outlining all my points and

2) get the house valued and see what their response is to my letter and their valuation.

[atmywitsendiam]

Again, you have my sympathy and I really really don't understand their position at all. I can't believe that they have grounds for this but I'm not sure what to suggest except keep going - I hope someone else here can come up with something more concrete.

 

You've tried citizens advice bureau? Solicitors? I was told by GMAC that I'd have to instruct a solicitor to get the ex removed from deeds etc.

 

I can't believe it, as you sound like you're more likely to pay/try to pay and that your ex is no good for any of it and is more of a liability and risk exposure for them?

[brokebutnotbeatn]

Thanks. And you have mine too (sympathy I mean)! The 'human' I am now dealing with can't believe it either; the problem is they don't have a box to tick for me so no-one seems to know what to do! I'm able to see the funny side of it so I'll keep going and see how it pans out. BTW - I recommend homeopathy to see you through. Shouldn't work, pile of clap trap really - but working for me!

[rickyd]

Hi I have some experience of mortgage underwriting and can offer this advice which I hope you'll find useful.

 

There is no legal reason why your ex can't be removed from a mortgage loan so long as you can maintain the repayments. Most lenders will make a charge for this to cover the extra work involved and the change to the security records. If the second party died they wouldn't remain on the mortgage would they!

 

All it takes is the agreement of the party to be removed, a credit check and financial assessment of the remaining mortgage borrower to establish tha the loan is affordable and a change to the security record.

 

With regard to the no-selling argument, its clearly not in the lender's interest to allow borrowers to dispose of the tangible asset as this weakens their position dramatically. I am struggling to find a reason for their decision not to allow you to switch to a better mortgage though as this seems to fall foul of the recent "Treating Customers Fairly" legislation? There's also the outside chance that you could get enough money to repay the mortgage, surely they wouldn't object to that?

 

You are probably correct in your guess that underwriters wouldn't be queueing for your autograph for a move to another lender, especially in negative equity, but what about lengthening the term of your loan to reduce the monthly payments?

 

I think you need to take a trip to one of their offices/branches for a sit down chat with a manager to show that you are trying to resolve this but need their help.

 

If its any consolation, you're not the only one in this position and the big lenders have finally realised that reposession isn't the answer especially when there are fewer buyers around.

 

Keep your chin up!

Edited July 22, 2009 by rickyd
other point added

[atmywitsendiam]

I tried the remortgage route this week, but everywhere I phoned said Not a chance of lending if the property's in negative equity, which is a shame (of course being with GMAC i can't switch to another of their mortgages - and why would I want to?! - because their book's closed).

 

I think your idea of talking face to face with someone in the bank is a great idea, I did that recently with Barclays over a couple of fraudulent transactions made against my account in March and they did nothing - then spoke to a nice person in the bank branch and problem solved in 2 days.

[brokebutnotbeatn]

ah. My lender is headquartered in Cardiff, I live on the Hampshire-surrey border. But thanks Rickyd. I remain positive and your advice is useful, especially regarding the ex!