Can i hand my house back to the mortgage company????

[almajane]

I am moving back to australia in august for good with my husband and kids..... we have a mortgage and a secure loan which leave no equity in our property we have tried to sell with no joy:(

to rent the property out while in oz will leave us with a shortfall of nearly £200 a month.

Can we give the property back???

Does your credit rating follow you to oz???

How do we do this

thanks in advance

alice

[Lea_HTH]

Put the property up for sale, sell it at a realistic price and negotiate final settlements with the mortgagee and the 2nd charge.

 

Given that you are intending to leave the country, it is in their interests to try to resolve the issue prior to you leaving - if only because it is more costly for them to chase you whilst you are in Australia. But they WILL chase you if you simply hand back the keys and try to do a runner - frankly, if you are wanting to start a new life there, it would be preferable for you to resolve issues here first so that you can go with a clear head and not worry that 10 years down the line they finally catch up with you and everything you've built up will be in jeopardy. The longer they have to chase you for any shortfall, the higher the costs will be.

 

If you sell and negotiate, they are far more likely to be willing to entertain taking less than they claim they are owed.

 

The world is incredibly small now, thanks to all the technology we have, so chasing someone for money in another country really isn't difficult, it just costs more, and those costs will be passed on to you when they catch up with you.

[almajane]

HI thanks for the advice.

We have had the house up for sale for almost 2 years we have dropped it from 105 to 84... we are now at a point of selling where it wouldnt cover the mortgaga eand charge and i have been told that the loan company (with the secured loan) would stop any sale unless we had the difference.... i would like this to be setlled before we leave but i feel im running out of options....do you think i should ring them again telling them i amthinking of handing it back and ask if i can reduce again?

[Lea_HTH]

HI thanks for the advice.

We have had the house up for sale for almost 2 years we have dropped it from 105 to 84... we are now at a point of selling where it wouldnt cover the mortgaga eand charge and i have been told that the loan company (with the secured loan) would stop any sale unless we had the difference.... i would like this to be setlled before we leave but i feel im running out of options....do you think i should ring them again telling them i amthinking of handing it back and ask if i can reduce again?

 

Generally speaking, when a house doesn't sell when it's been on the market for so long, it's because it is over-priced for the area it is in (no offence intended, but that pretty much is the only reason a house doesn't sell wherever it is placed). So dropping the price was a good idea. What are similar houses going for in the area? Is the price reasonable for the area it is in? If so, the next offer you get, accept it.

 

The 2nd charge may not get all their money, but they cannot prevent you moving on with your life, and if the house is repossessed it will sell for far less than it will sell for if it is occupied (another fact of house-selling), as a result, the 2nd charge is not likely to recover all of their loan from a sale instigated by you, or one instigated by repossession - in fact, they are less likely to get anything from a repossessed property. But, that doesn't mean you do not owe them the money, and they WILL chase you for it, regardless of where you go in the world and they have 12 years in which to do it too.

 

How much are the loans on the property? How much will be left over if you sell for 84k? Are you prepared to make an arrangement with them for the remainder?

[almajane]

no offence taken im grateful of any advice....the mortgage is 69000 the loan is 18 so we are already at a loss i was just hoping that they would accept it if we got an offer.... in 2 years we have had three people round ...no offers houses are just not selling...the estate agent said that the few he had sold had been at this price, but it is a two up two down terrace and in our area there are so many repossessions that you can buy a house at auction for around 70...this here lies the propblem why would anyone buy mine if they could get one that just needs decorating and a bit of tlc for 15 grand less..... i am happy to drop it to sell but when i spoke to the loan company they said they wouldnt agree to the sale unless it covered the charge...can they do this?? i just presummed it would go onto a personal loan i didnt realise that it could stop the sale??.... can they pursue me in australia ...im happy to make a repayment plan buti thought they couldnt go throught the courts there.

[Lea_HTH]

You're not much below the amount needed to discharge both mortgages.

 

They can kick up a fuss about the sale if it won't discharge the loans, but frankly, I cannot see any reasonable judge who looks at the case entertaining them for very long for a sum that will probably not exceed 5k! They seem to me to be being unreasonable, so contact them again, state that you would like to go ahead with a sale for 84K if you get another offer and that you realise this will leave you with a bit of a shortfall, but that you are happy to make an agreement with them to pay this off at X per month. Point out to them that if they are not in agreement of this, you will do the following:

 

Apply to the court for an order for sale - the court has the discretion to order such even if the sale of the property would leave an unsecured debt. In doing so the court has to have regard to the interests of all parties and what is just and equitable to all.

 

S91(2)a of the LPA1925 applies. Application needs to be made to the High Court (if the debt exceeds 30k), not the local county court (unless the debt is below 30k - which thinking about it, this may be the case as it's the 2nd charge and not the first). You'll probably need a solicitor if it has to be in the high court though.

 

They can definitely pursue you in Australia - and in the vast majority of countries in the world - it's far harder to escape debt than it used to be! But realistically, if you make an agreement to pay, and ensure that you pay it, there will be no need for them to take you to court, either here or in Aus.

[almajane]

thank you so much for taking the time to advise me, you have been a real help i will ring the mortgage and loan company in the new year and hope for a good outcome x

[Leo1]

Hello, how did you get on with this? I am in a similar position - my house is up for sale and there will not be enough equity to clear my secured loan. The loan company have informed me that to release the charge on the property it has to have authorisation from the Regional Manager or whatever....!!

[hannahhelp]

oohh whats happened? me too in similar position, bought home for 110k now not sold for 72k 100% mortgage on it too still owe 107k ;-(

[Happyhippy1959]

A little pessimistic me thinks, to pursue a debt on the other side of the globe would be just too expensive !!!! my personal opinion but to be on the safe side you could always go bankrupt simples, !!!!!!!!!!!!!!!!!!! I am in the same position now, left with a massive 1st mortgage and second secured loan, house not worth the two amounts. I will put up for sale but hey,,,, what ever.