Help & Advice Required - Please

[Mr Exasperated]

Our situation goes like this...

 

We bought our current home 9 years ago and took out a mortgage with Northern Rock. We never missed a payment until last year and then took a 3 month break with their blessing we are still paying this mortgage every month and do have a small (less than one months payments) amount of arrears and am paying a small amount in addition to cover this every month, I have no other issues with them or them with me.

 

In 2006 we took out a second mortgage with Kensington to put money into our business to help expansion, You know what's coming next.... Business in the current climate has collapsed and we have run up arrears of £16K on this mortgage. We have been trying for months to get Kensington to agree to a reduced or accept a lower monthly figure until we sell some land that is attached to the property and is on the market for £115K which will more than cover all of this mortgage and leave us a small amount to sort out some other debts. It goes without saying that Kensington have done nothing but drag their feet through this process and they have finally pushed it to the courts and issued a "Claim form for Possession of Property".

 

I have made arrangement with the help of my Mother and with cashing in a policy I had forgotten about that will allow me to pay off all the arrears before the court date (13th Dec).

 

We cant afford to meet the full second mortgage payment with what we both earn at the moment along with the 1st mortgage payment. Doing a I&E we have offered them £350.00 a month.

 

I have never been in this situation before and need any help that I can get please...

 

The last thing we want to do is lose our home... with both mortgages we only owe £225K and the house and land is worth £400K at least...

 

Thanks in advance...

[Sand-Dancer0191]

First charge is NR...Kensington i believe need agreement from NR for repo of property.And with house prices well down that is not likely..Kensington MUST consider your offer as per mcob and pre-action protocols etc...

There is NO neg equity so their money is still safe...Judge would prob laugh at this and throw it out..Looks to me that you,ve done everything OK to resolve this temp money issue...BALL is in their court (pardon the pun)

[Mr Exasperated]

First charge is NR...Kensington i believe need agreement from NR for repo of property.And with house prices well down that is not likely..Kensington MUST consider your offer as per mcob and pre-action protocols etc...

There is NO neg equity so their money is still safe...Judge would prob laugh at this and throw it out..Looks to me that you,ve done everything OK to resolve this temp money issue...BALL is in their court (pardon the pun)

 

Thanks for the reply... That eases our worries...

 

I have been thinking about getting legal advise - do you think that is a wise choice?

[Lea_HTH]

Our situation goes like this...

 

We bought our current home 9 years ago and took out a mortgage with Northern Rock. We never missed a payment until last year and then took a 3 month break with their blessing we are still paying this mortgage every month and do have a small (less than one months payments) amount of arrears and am paying a small amount in addition to cover this every month, I have no other issues with them or them with me.

 

In 2006 we took out a second mortgage with Kensington to put money into our business to help expansion, You know what's coming next.... Business in the current climate has collapsed and we have run up arrears of £16K on this mortgage. We have been trying for months to get Kensington to agree to a reduced or accept a lower monthly figure until we sell some land that is attached to the property and is on the market for £115K which will more than cover all of this mortgage and leave us a small amount to sort out some other debts. It goes without saying that Kensington have done nothing but drag their feet through this process and they have finally pushed it to the courts and issued a "Claim form for Possession of Property".

 

I have made arrangement with the help of my Mother and with cashing in a policy I had forgotten about that will allow me to pay off all the arrears before the court date (13th Dec).

 

We cant afford to meet the full second mortgage payment with what we both earn at the moment along with the 1st mortgage payment. Doing a I&E we have offered them £350.00 a month.

 

I have never been in this situation before and need any help that I can get please...

 

The last thing we want to do is lose our home... with both mortgages we only owe £225K and the house and land is worth £400K at least...

 

Thanks in advance...

 

The response you have so far received was no doubt well-intentioned, but it isn't accurate. Kensington do not need NR's permission to repossess...NR will simply get their payout before Kensington do, which isn't a problem as there is plenty of equity in the property to cover both loans.

 

Your biggest issue if this comes before a judge is that you cannot afford the current instalment - so even if you have cleared the arrears, if you make reference to that fact in court, the judge will have to take it into consideration. It is not within the judge's power to alter the contractual instalment, no matter how much he or she sympathises with you - and as a result you may find that the claimant pushes for repossession on the basis that there is no other way that they can recover their money (if you can meet the instalment once the arrears are completely cleared, they have no claim).

 

The only other thing that the judge can do realistically, is adjourn the hearing for a period of time for you to sell this land you refer to. Is it a realistic prospect that it will sell? Is it being aggressively marketed? Have there been any offers or interest? Do you have proof it is being marketed? Is it realistically priced?

 

My suggestion would be the following: the 16k that you are planning to raise to pay the arrears off would almost certainly be better used in part to reduce the arrears and then in part to assist you with paying the CMI for a period of up to six months whilst you sell the land (if you think it will sell in that period). So if you can afford to pay 350 per month towards this loan, whatever the remainder of the actual payment is, multiply that by 6 months and keep that amount back, then calculate how much you want to pay towards the arrears each month - deduct both sums from the 16k and pay the remainder off the arrears.

 

That way you would go into court with a firm plan, having a) reduced the arrears somewhat, b) made arrangements to meet the CMI plus something extra towards the arrears for 6 months whilst you c) sell the land.

 

Go to the main repossessions page and access the sticky thread at the top started by Ell-enn. Attached you will find an income and expenditure sheet - use that (it calculates automatically), and see if you can reduce some of your other outgoings in order to meet the CMI on the second loan.

[Mr Exasperated]

The response you have so far received was no doubt well-intentioned, but it isn't accurate. Kensington do not need NR's permission to repossess...NR will simply get their payout before Kensington do, which isn't a problem as there is plenty of equity in the property to cover both loans.

 

Your biggest issue if this comes before a judge is that you cannot afford the current instalment - so even if you have cleared the arrears, if you make reference to that fact in court, the judge will have to take it into consideration. It is not within the judge's power to alter the contractual instalment, no matter how much he or she sympathises with you - and as a result you may find that the claimant pushes for repossession on the basis that there is no other way that they can recover their money (if you can meet the instalment once the arrears are completely cleared, they have no claim).

 

The only other thing that the judge can do realistically, is adjourn the hearing for a period of time for you to sell this land you refer to. Is it a realistic prospect that it will sell? Is it being aggressively marketed? Have there been any offers or interest? Do you have proof it is being marketed? Is it realistically priced?

 

My suggestion would be the following: the 16k that you are planning to raise to pay the arrears off would almost certainly be better used in part to reduce the arrears and then in part to assist you with paying the CMI for a period of up to six months whilst you sell the land (if you think it will sell in that period). So if you can afford to pay 350 per month towards this loan, whatever the remainder of the actual payment is, multiply that by 6 months and keep that amount back, then calculate how much you want to pay towards the arrears each month - deduct both sums from the 16k and pay the remainder off the arrears.

 

That way you would go into court with a firm plan, having a) reduced the arrears somewhat, b) made arrangements to meet the CMI plus something extra towards the arrears for 6 months whilst you c) sell the land.

 

Go to the main repossessions page and access the sticky thread at the top started by Ell-enn. Attached you will find an income and expenditure sheet - use that (it calculates automatically), and see if you can reduce some of your other outgoings in order to meet the CMI on the second loan.

 

Thanks for the reply...

 

I am hoping to raise £22k from what I have cashed in and the money coming from my Mother, so could clear the arrears and still have some money left to help meet the CMI. But your suggestion of keeping some back does make sense - but if I go to court and say that I have savings that can be used to meet the CMI wouldn't Kensington just ask for all that money to handed over to clear the arrears?

 

Yes the Land has been up for sale for a number of months and we have had a number of viewers but no firm offers. It's price was set by the estate agent's valuer BUT I have taken the matter into hand this week and reduced the price by £15K to try and find a buyer. It has outlined planning permission which I renewed this year, so hopefully it will sell but when is another question, I may have to look at moving it to another estate agent.

 

Should I seek Legal advise about this situation? Or is it a matter that can be dealt with by myself? We dont have lots of money to throw at this as you can understand but I don't want to have our home reprocessed as we can survive the downturn if we just didn't have the monthly payments of the second mortgage, which is why we are trying to sell the land to get rid of this debt.

[Lea_HTH]

Thanks for the reply...

 

I am hoping to raise £22k from what I have cashed in and the money coming from my Mother, so could clear the arrears and still have some money left to help meet the CMI. But your suggestion of keeping some back does make sense - but if I go to court and say that I have savings that can be used to meet the CMI wouldn't Kensington just ask for all that money to handed over to clear the arrears?

 

Yes the Land has been up for sale for a number of months and we have had a number of viewers but no firm offers. It's price was set by the estate agent's valuer BUT I have taken the matter into hand this week and reduced the price by £15K to try and find a buyer. It has outlined planning permission which I renewed this year, so hopefully it will sell but when is another question, I may have to look at moving it to another estate agent.

 

Should I seek Legal advise about this situation? Or is it a matter that can be dealt with by myself? We dont have lots of money to throw at this as you can understand but I don't want to have our home reprocessed as we can survive the downturn if we just didn't have the monthly payments of the second mortgage, which is why we are trying to sell the land to get rid of this debt.

 

You'll have to be a bit 'creative' about where the extra money has come from to meet the CMI - perhaps, as you indicated that some of it was coming from your mother, you could say the portion being held back to help meet the CMI was from her, which is perfectly reasonable - and in fact, you could simply state that she has agreed to give you X amount to help towards the CMI whilst the land is in the process of being sold.

 

It is a matter which is reasonably easy to handle by yourself - the difficulties arise when you haven't mentioned something that might be relevant when seeking advice on a board such as this.

 

Fill in the I&E as suggested - do your workings out on an average basis, see what, if anything, you can reduce, and ensure you can meet the CMI. If you can do this AND clear the arrears before the court hearing, the judge will not make an order and the case will be dismissed. If you cannot meet the CMI, then there'll be a problem. If you feel confident in handling the case yourself, by all means go ahead, you may find there are duty advisers at the court on the day of your hearing who will be able to help. Alternatively, you could seek an appointment with CAB or Shelter, or a local law centre - all will be able to offer some support, if not attendance at court on the day. You will need to file a defence, so see the sticky thread I referred to in my earlier post.

[Mr Exasperated]

You'll have to be a bit 'creative' about where the extra money has come from to meet the CMI - perhaps, as you indicated that some of it was coming from your mother, you could say the portion being held back to help meet the CMI was from her, which is perfectly reasonable - and in fact, you could simply state that she has agreed to give you X amount to help towards the CMI whilst the land is in the process of being sold.

 

It is a matter which is reasonably easy to handle by yourself - the difficulties arise when you haven't mentioned something that might be relevant when seeking advice on a board such as this.

 

Fill in the I&E as suggested - do your workings out on an average basis, see what, if anything, you can reduce, and ensure you can meet the CMI. If you can do this AND clear the arrears before the court hearing, the judge will not make an order and the case will be dismissed. If you cannot meet the CMI, then there'll be a problem. If you feel confident in handling the case yourself, by all means go ahead, you may find there are duty advisers at the court on the day of your hearing who will be able to help. Alternatively, you could seek an appointment with CAB or Shelter, or a local law centre - all will be able to offer some support, if not attendance at court on the day. You will need to file a defence, so see the sticky thread I referred to in my earlier post.

 

Thanks for the reply, we have been trying to cut back on all our outgoing's for the last couple of years, but both of our incomes vary every month - My wife takes as many extra hours as possible at the local supermarket where she now works & I have started a new business that is starting to pay reasonable money (but I only take out what is needed as it's still growing & I need x amount of spare to buy stock etc). I will do the I&E as you suggest with my wife tomorrow.

 

Kensington have said in writing that they would accept £350.00 a month upon us supplying all our bank statements for the last 3 months, which we are going to do next week - but they have now moved on to doing the repo and I wonder if this might just be a rouse to get more ammunition to fire at us in court. Kensington have been VERY lax in their communications and I am considering reporting them to the FSA etc for the way they have handled our case.

 

I am not trying to avoid paying them we just need some help and understanding from them & we will get it sorted - but they just don't seem to want to help...

 

What do you think a Judge would say if we paid off £10K and paid the CMI plus say £100.00 extra a month, with the understanding that when the land is sold that all of the loan would be repaid in full - would that be enough for it to be dismissed??

 

I know it's the "million dollar" question but looking at what options we might have!

[Lea_HTH]

Thanks for the reply, we have been trying to cut back on all our outgoing's for the last couple of years, but both of our incomes vary every month - My wife takes as many extra hours as possible at the local supermarket where she now works & I have started a new business that is starting to pay reasonable money (but I only take out what is needed as it's still growing & I need x amount of spare to buy stock etc). I will do the I&E as you suggest with my wife tomorrow.

 

Kensington have said in writing that they would accept £350.00 a month upon us supplying all our bank statements for the last 3 months, which we are going to do next week - but they have now moved on to doing the repo and I wonder if this might just be a rouse to get more ammunition to fire at us in court. Kensington have been VERY lax in their communications and I am considering reporting them to the FSA etc for the way they have handled our case.

 

I am not trying to avoid paying them we just need some help and understanding from them & we will get it sorted - but they just don't seem to want to help...

 

What do you think a Judge would say if we paid off £10K and paid the CMI plus say £100.00 extra a month, with the understanding that when the land is sold that all of the loan would be repaid in full - would that be enough for it to be dismissed??

 

I know it's the "million dollar" question but looking at what options we might have!

 

No offence, but Kensington have all the ammunition they need already: you are in substantial arrears and cannot afford the CMI. Do not send them your bank statements - you are not obliged to do so. Complete the I&E provided on the site and use that when you compile your defence and file and serve it, but ensure that you have cut back on absolutely everything and show that you have sufficient to meet the CMI. It is the only thing the judge will be interested in. If you have cleared the arrears before the hearing, and before you file your defence, you should actually be asking for the claim to be struck out.

 

If you have offered, and they have accepted in writing, the 350 per month then make sure you pay this even if they are now saying they will only accept with bank statements - just make sure you make the payments as you can show the judge the letter agreeing to this, which will support your claim to be trying to sort this all out.

 

As for your other proposal above - how many years/months left (exactly) on the loan? How much is the CMI? Whether an amount is sufficient will depend entirely on whether it fits in with relevant case law - as whilst the sale of the land is persuasive to the court, it's not definitive until there is an offer and a date for exchange of contracts in writing before the judge.

 

An offer of CMI plus something towards the arrears will almost certainly result in a suspended possession order, rather than a dismissal of the claim in its entirety, this is because the claim would be found to be valid and have substance. If there are no arrears and the CMI will be met in future, that is sufficient for a strike out (I am sorry if I did not make this clear in earlier posts). An adjournment is the best you can hope for if you are making an offer of CMI plus something towards arrears on the basis that you are selling the land...but this will be down to the skill of the adviser you have representing you on the day (either in negotiating that outside of court with the claimant or persuading the judge that there is a real prospect of the sale going through soon), or the failure of the claimant to properly state their case to the judge.

 

There are lots of ifs and buts...the outcomes likely are:

 

1. Reduce the arrears substantially (e.g 10k) and offer CMI plus something towards the arrears = suspended possession order.

2. Do same as above + sale of the land = SPO...OR...an adjournment.

3. Do nothing = possession order.

4. Pay all arrears off and pay CMI ongoing = case struck out (probably with liberty to restore).