Repossession (Voluntary or not) - process?

[Pot Bellied Pig]

House is in joint names (me and ex-wife), neither of us are now living there as both are renting property. We've reached the point where neither of us now want to take responsibility for paying mortgage payments (bitter divorce ongoing). Mortgage outstanding is approx £60k; market value around £200k but hasn't sold in a year. No chance of selling now as cannot agree on price, estate agent, etc.

 

I am happy to voluntarily surrender property to mortgage company and take the financial hit; ex-wife is however not willing (nor is she willing to pay the mortgage!). I gather that if only one person is willing to voluntary repossess, then normal repossession proceedings after non-payment need to ensue.

 

(1) How many months of non-payment will it take before repossession begins?

 

(2) Will I need to go to court, even though I am happy for repossession to happen?

 

(3) Presumably matters don't finish until the mortgage company actually then sell the house, how long is that likely to take?

 

Given the low debt-to-market value (or even repossession auction value) I am still expecting a surplus after the mortgage company has taken their arrears and fees. I understand that the surplus may be small.

 

(4) That surplus is joint property between me and the un-divorced ex-wife. How will the morgage company pay it out? Will it go into a joint account that requires both signatures to withdraw (pending appropriate division by the divorce court); or will they divide the funds 50:50 and send half to each of us (which would obviously suit me better)?

 

Many thanks for any help. I know that most of you on here are trying to stop repossession and I hope you are not too offended by my attitude to this in being quite happy for repossession to happen

[Lea_HTH]

No offence, but this is a really stupid thing to do given that there is equity in the property. I realise that your circumstances are relatively difficult, but if you and the wife cannot agree on a sale price, then you should seek to have some mediation to resolve the issue. It may be a simple matter of each of you choosing two or three estate agents to value the property and then between the two of you choosing two out of those to sell the property - or one if you can agree. That way you'll both have agreed on the estate agent and the price.

 

If repossessed, depending on who the mortgagee is, the costs could swallow up a massive portion of the equity - it is ALWAYS better to sell the property - and if you really can't agree to sell it, then rent it out and ensure you get enough rental to pay the mortgage and some surplus for repairs etc. An occupied property always gets a better price than an empty one.

 

There is an alternative - sell to a professional who will buy it at a fixed rate, either to rent out or to redevelop (there are lots of companies out there that will buy property in this manner) - not, in my view, the best option, but it's better than repossession.

 

1. 3 months with some mortgage companies, but usually around 6 months of arrears.

2. No, you don't need to go to court.

3. It could take them months to sell, or they could sell the following day at a major loss. They are supposed to sell at the best market price they can get, but this is rarely the case for repossessed properties and they always go for much less than market rate.

4. The remaining money would remain with the solicitors involved in the sale - the discussion as to how the money was paid out would need to take place before the sale. If there are no other assets and the divorce settlement has been agreed, then there would be no reason not to split it equally (that would be the starting point).

[Pot Bellied Pig]

Yes, I am aware that it is a stupid thing to do. However, all avenues of mediation, sale and renting have been attempted. ("Bitter" is an understatement when it comes to the divorce.) Neither of us even live in the same area of the country as the once-marital home. I have no means of communicating with my ex-wife, she is returning all correspondence to sender, and so we are not in a position to go to one of the "buy-it-quick-but-at-a-discount" companies. I am viewing repossession as the final and only remaining option to remove what is now an obstacle - if I force the divorce through whilst the house is still our joint possession, she can continue to object to and obstruct the sale for years, leading to repeated court appearances for which I have neither the time nor money. If the house is gone and all that remains is a small pot of money (if any), the court proceedings will be short and decisive.

 

Thank you for clarifying the timescales & procedure involved in repossession, which is what I was seeking.

[Lea_HTH]

Your choice.

 

Good luck.

[TimeToStandUp]

Does seem bizarre to just give up !! Have you spoken to the mortgage company, who I am sure can advise ?

[Happyhippy1959]

Dear Pot Bellied,

 

I can understand where your coming from, now I am in the same situation as you and will be renting from end of May. I have struggled for three years with ex not contributing nothing. The only difference is mine is in slight neg equity with a secured loan on it.

 

My understanding is it's usually three months unless and I think in this case the mortgage company will probably grab at it as there is equity in property some will take six months. Now as u are aware there will be a heap of charges for non-payment, repossession etc so if after that there is still a surplus they will split it between you and your ex unless you go to court to stop it. But will it be worth it, I doubt it mate. After this, pick yourself up, dust yourself down and get on with living mate.

[Webranger]

Very odd this. There is an alternative course of action, but it would still involve consent from your ex. I suggest that your best approach from here is to ask: "what does she want?" Apparently not her share of cash - which is diminishing all the time of you are not paying the mortgage. Apparently not income either. Maybe it is just to spite you whatever the cost to herself - but that doesn't really seem all that likely unless she is very well off anyway.

 

If we knew what she wants it would be easier to advise.

[queensclose]

you really need to speak to your solicitor as you are now separated and know lives in the house the solicitor can force the sale. quite a big equity in the house if you offered it at the right price you would get a buyer

if its repossessed it will have a big impact on your credit file. it most likely be sent to auction. mortgage company only want to claw back £60.000 plus costs so if they dont get a buyer on the open market in 12 weeks off to auction it will go

 

see your solicitor and dont miss the mortgage payments this will be taken into account on the final settlement who paid the mortgage while no one lived there

[Happyhippy1959]

Best of luck PB

Edited May 30, 2012 by Happyhippy1959