Shared ownership repossession

[Cookalina]

My OH purchased a 40% share in a flat in 2008 the flat was valued at 175k.

 

 

Soon after due to the crash of the Icelandic banks the company he worked for made his position redundant. The company lost money.

 

He was out of work for around 4 months.

It was a struggle to keep up with the mortgage payments and the rent (60%) rent (40%mortgage).

My partner was self employed.

A one bed flat was costing us £1800 a month inc rent/bills and mortgage.

 

. He had remortgaged 3 times by now and my other half has been in and out off work ever since.

We just kept on playing catch up and getting nowhere.

 

 

With years off struggle, depression we finally decided in dec2012 that enough was enough.

We handed the keys back to our mortgage lenders in March 2013.

Wrote to both the HA and building society with forwarding addresses and told them both that he has no longer interest in the property.

 

Today (October 11th) we received a letter from the HA to say that the property sold at 155k.

They (HA) were expecting to receive 93k as they owned 60% and in respect to stair casing

but because we handed the keys back to the mortgage provider.

The lender reposed the flat.

 

 

This led to them selling the flat and exercise their rights under the mortgage protection clause in the shared ownership lease.

The lender recovered all the outstanding mortgage to them , 12months unpaid interest, legal and estate agent fees,

together with arrears paid on our behalf.

 

 

The HA received £59.8k in respect of the stair casing.

 

They are now chasing my OH on an outstanding 33.1k.

 

 

The reason we handed back our keys was because we could not afford our flat.

 

 

My OH or I do not have 33.1k

Any advise us much appreciated.

 

We handed our keys back to the mortgage provider not the HA. This meant the Mortgage provider sold the flat. Took the money they lent us plus added legal selling fees etc. our shortfall is with theHA now. I've posted to get advise on what my options can be on my own thread.

 

Please can some some help or give advise

[Lea_HTH]

You need to read your lease and your rental agreement to find out whether you are liable for the shortfall to the HA. Some shared ownership 'deals' are more complicated than others as to what is expected in the case of a sale.

 

Common sense would indicate that the mortgagee could only take what share was theirs of what the flat sold for - so 40%, if the sale price did not yield sufficient to pay them what they wanted, that is for them to chase you for the shortfall. Not the HA. So you really do need to check under what clause of any agreement with you the HA have the right to chase their shortfall...it is highly likely there isn't one, but until you check, you can't be sure.

 

You can request that the mortgagee account to you for the sale and any other monies they charged from the sale, to find out why they sold at the price they did, and why there was such a large shortfall.

 

Seems to me the HA and mortgagee should be talking to each other at this stage.

 

Put them to proof as to why you owe them money and ask them to point to the clause in the lease or the tenancy agreement which says they can chase you for a shortfall. The fact is, they haven't actually lost anything - they still own 60% of the flat - unless by staircasing you mean the flat was staircased to 100% without you paying any more money and then sold to the new owner as 100% share? If the latter, then they may have a case against you for the staircasing share - but again you'd need to look to the agreement you made for this (and if you were not party to the agreement because it occurred between HA and mortgagee, you still need to know the liabilities to you uunder that contract).

 

It all sounds terribly messy, but will come down to the contracts involved, so start there.

[ThomL2]

Cookalina - your situation is so similar to mine. Did you not receive any correspondence from either the mortgage company or HA between handing the keys back and receiving the shortfall notice?

 

I've double checked with my HA and they've confirmed that staircasing to 100% during the purchase process isn't allowed. They mentioned I could staircase to 100% myself and then sell - except even that isn't permissible because the flat is in negative equity!

 

So the only options are either try and sell my percentage (which isn't working), or allow the mortgage lender to sell 100% under the Mortgage Protection Clause. Are there really no other options??

[Cookalina]

'We' could not even staircase to 100% even if we HA allowed it. We got into so much debt after OH was redundant that that we fell behind on rent to HA as well as mortgage. It was costing us £1800 a month inc bills. for a one bed flat. We ended up with the mortgage provider taking the HA rent we fell behind on, and adding it to the mortgage and the mortgage we borrowed when we first moved in went up instead of going down. This happened at least twice in 5years. For us to remortgage or add me on to the mortgage to borrow and buy more percentage it would have meant we had to get back into positive payments with the mortgage provider. This would gave taken at least 6 years with paying mortgage plus extra. Having the bear minimum to spend on food. Not go out, walk to work and have no life.

It was getting so bad that it would have ended our relationship. My OH just wanted rid off the flat we ended up hating it so much. The only option was to post the keys back to the mortgage provider. The shared ownership scheme is the worst thing ever. To us it was a disease eating us up and we can't do anything about it.

Hope you get urs sorted. Xx

[Lea_HTH]

Staircasing during the sale process does not involve borrowing more money.

 

I agree shared ownership is one of the stupidest ideas any government has ever come up with. It doesn't assist people to get on the property ladder, it traps them into staying where they are as they find they either can't afford to buy the remaining shares or can't sell the shares they've got. Worse, they can't increase the length of their lease in many cases either, so they are trapped in a cycle of nonsense.

 

I think anyone left in either of your positions should challenge as much as you can with the HA and the mortgagee.

[NoGood]

The shared ownership scheme is the worse thing I have ever gotten into.

 

 

You are well and truly trapped if considering this option.

Beware of all the fee's that you need to pay.

 

 

Not only did I have to pay out for legal side of the sale but also had to pay for HA solicitors fee's plus a further third party's solicitors fee's....

 

 

.My financial circumstances changed and I am not able to pay the increasing part rent and mortgage..

..I am very much in arrears with both of these..

 

 

..I have been in constant contact with my mortgage lender asking for a repossession, also the HA did serve a Notice of seeking possession last year.

 

 

My mortgage company decided to pay my rent arrears....this has made matters worse.

I am still battling with both sides to take action against me, as I cannot afford to remain in the property...

..my mortgage lender is refusing to act and are adding a large amount of interest each month to the outstanding mortgage...

 

 

the HA have also now applied to the small claims court for the large rental arrears....

 

 

.There isn't enough equity in my share for me to sell...

 

 

...This scheme is nothing but a trap!!!

 

 

If anyone is considering this option I would advice that you save as much as you are able to, use as a deposit to buy outright.

 

 

...My rental and mortgage payments are almost double to what it would cost to have a complete ownership.....

[dx100uk]

theads a bit old and you probably wont get seen here if you want help

 

 

might be an idea to

start a new thread

of your own

 

 

dx