Urgent help - reposession of part owned property .

[Jezzy]

Hi there - really hoping for some advice here as cant seem to find any real information on this anywhere. I will outline the problem as best I can .

 

Originally my husband and I were both self-employed and we wanted to invest in something other than a pension plan to provide us with something for the future .

 

My parents were looking to move house and are getting on in years (now 81 & 78 )and with mum being disabled it was beneficial for them to be closer to us for care needs . They sold their house , put all of the proceeds ( approx 95k)- down as deposit on a new property close to ours. We then took a mortgage out for the remainder of the value of the property (approx 60k) - this being our investment for the future . I must point out that Halifax knew my parents were were providing the deposit and would be living there . We have made the correct mortgage payments up until last August when my husband could find no suitable work .

 

I am now not working due to ill health and have closed down my business and my husband his and has had to take a far lesser paid job closer to home to help care for me and the children (he worked away previously ) . So , from last August to mid December we were unable to meet the full mortgage payment on our portion of the property and the Halifax arranged a reduced amount . We could get no help with making these payments from any benefits , and the total mortgage protection policy which we were sold , would not pay out as technically our company still existed until removed from Companies House register . We are still in the process of dissolution of the company as this cannot be completed until after the accounts are filed for the period up to April 09 - it then takes 3 months for it to complete - so are looking really towards October 09.

 

Obviously we are now in serious arrears and the Halifax will no longer make payment arrangements with us & we cannot afford the full amount due . They say they can and will reposess the property in which my parents live and would be prepared to see two elderly people out of a home . (such a nice advisor I spoke to !) lWe have lots of other debts , both business and personal , and also our own mortgage which we are struggling to pay . Our income has halved and I am on Incapacity benefit so are in defecit each month with income and expenditure !

 

Does anyone know what the position is with this ?? Can they take the whole property - force a sale , even though it is legally part owned and paid for by my parents . We have solicitors documents stating their interest in the property , but Halifax dont want to know. It is breaking my heart and causing me so much stress , thinking that this could happen to my parents . I could never live with myself if they lost their home .

 

Any help or advice appreciated and thanks for reading all this !

[jansus]

Hi

 

sorry to hear of your situation - it must be really difficult.

 

can I just clarify are you and your parents living in the property?

Are all your mames on the mortgage and deeds?

Do your parents contribute to the payments at all?

 

Is there equity in the property now?

 

What benefits would you be entitled to when the business is wound up and will the mortgage protection policy definitely pay out eventually?

[Jezzy]

Hi jansus - thanks for your reply !

In answer to your questions :

 

Just my parents live at the property in question - we have our own property

 

Just mine and my husbands names are on the deeds - we were advised this would be best as they would have no means of paying the mortagage if we defaulted .

 

My parents do not contribute at all - they pay all the bills , council tax , insurance etc - we just pay the mortgage .

 

I think there is equity there now - but doesnt seem like we can access that because of the mortgage arrears .

 

We are already receiving incapacity benefit , child benefit , family tax credits (for me) and my husband works . The business has not been trading since last August 09 - there were no profits /monies left at this point except for tax, VAT etc which .

 

The morgage protection policy will not give us an answer on that one - so we just dont know if they will gie us anything . I already tried to claim when I became ill 18mnths ago and they refused that too - seems they always try their hardest to NOT pay you ! We paid £70 a month for that too - seems like we may hae wasted our mony .

 

I think thats answered everything - any help appreciated - I know this is a difficult one .

[jansus]

Ok I am a bit out of my depth on this one - you really need some help from Ell-enn or really if possible form CAB or shelter.

 

As far as I can see your parents are probably regarded as sitting tennants.

 

Have you now actualy made a claim on the mortgage protection policy because I think that if they do not pay out and it is a case of mis-selling then that might at least buy you some time.

 

I hope someone comes along with some mre help - but I guess the first immediate priority is to see if the MPP will pay out and if so how much.

[pedross]

First of all they can force a sale of the property if you are not making the payments and you would be expected to at least cover the interest due to avoid them doing so. If they forced a sale the balance of the money achieved over the mortgage amount (equity) would be paid back to you or to your parents depending on the legal status that your solicitor arranged. If the halifax knew at the time the mortage was arranged that your family intended to live in it they would have asked your parents to sign a form agreeing to the mortgage and waiving any rights to remain in the property if you did not keep up the payments.

 

The reason for this is that you borrowed money from the halifax and promised to pay it back and the debt is secured against the property. If you do not make the payments the only way they can recover the money is from the sale of the property.

 

Therefore, we need to look at the ownership position. If you own all or part of the property your parents should be paying you rent and have a rent book. Ideally the rent would be at least as much as the cost of the interest only payments on your mortgage. If your parents cannot afford to pay the rent then they should be entitled to benefits to cover the cost of the rent in the same way that anyone else at their age renting a home.

 

So the first step is to find out if your parents qualify for help with the rent which they need to pay you. If they are you use the rent you get to pay the morgage with the halifax. If this works out you then need to make the monthly mortgage payments on a regular basis and if the halifax still try to repossess you ask for advice on that.

 

I would not hold out too much hope that the mortgage protection policy will save the day because of the circumstances. The property is not your main residence but is an investment property in the same way a buy to let property is. I will be surprised if the policy was intended to cover investment properties. The following questions are relevent:

 

Did you give them the full facts when you took it out

Did you take it out through the halifax.

You also said you paid £70 a month for it don't you mean you are paying £70 a month.

 

Well thats a start.

 

Pedross

Edited August 29, 2009 by pedross
spelling

[jansus]

eference equity - I was thinking more of if you have to sell do your parents still have enough money to be able to rent -in other words wil they get their deposit back?

 

thanks Pedross for the help.

[pedross]

reference equity - I was thinking more of if you have to sell do your parents still have enough money to be able to rent -in other words will they get their deposit back?

 

thanks Pedross for the help.

 

Good point jan

 

That opens up more options. Lets say the property sold for £130k assuming it was bought in the last 3 years (they paid about £155k) it would still leave about £65k for the parents.

 

However, there could be a way to use equity release so that the mortgage with the halifax could be repaid and the parents could continue to live in the property rent free.

 

These would be Plan B if my first post Plan A failed.

 

Pedross