dads mortgage to be redeemed by 2017 - major shortfall and now retired - what will happen?

[sortingthings]

Hello all,

 

1st time poster but long time lurker. Having read some amazing advice over the last couple of years its finally time for me to seek some assistance if you guys would be kind enough to help.

 

my dad bought a property in northern ireland in 2006. Its an apartment and if any of you know the ni property market, apartments are hugely over subscribed in and as such the values are more like those from mid-late 90s.

 

Dad was self employed at the time and stretched himself on a self cert mortgage to get his own home. Having split from my mum many years before he was desperate to get his life back on track. As a result, hs bought at tge top of the market and (foolishly) took out a further advance to improve the property and consolodate sone other debts.

 

The market crashed and overnight the property fell in value to nearly 50% of what he paid. He took ill, as he bought the property with the intention of future capital growth, and to be able to offer him a nestegg for his retirement. At the age of 58, he had suffered a mental health breakdown and felt suicidal. my wife and i stepped in and took over contact with the mortgage company, birmingham midshires.

 

Unable to keep up his mortgage payments which were repayment and interest, he changed them to interest only. But 4k of arrears were added.

 

credit due to bm, they made no rash decisions and allowed us to handle things for dad.

 

short term we paid the mortgage. We arent wealthy so this was a struggle.

 

After a nunber of months they allowed dad to capitalise the arrears which was a gift as it just hung over his head every day.

 

But now we face a new problem. With no likelyhood of capital growth, dads mortgage is due to finish in 2017. Bm have already sent letters asking what his plans are to redeem the mortgage at that time. The truth is that with no value in the property and now relying on state benefits to help cover the mortgage (along with us still toppinv his payments up), he wont even be able to sell on and come close to clearing what he owes.

 

so the questions I guess are these:

 

Come the end of his mortgage in 2017, what will birmingham midshires expect?

 

Will they expect the mortgage account to end and for him to make full settlement of what he owes?

 

If he cant do this due to a major shortfall, would they allow him to continue making payments either on an interest only or repayment basis so that he can have his days in his home.

 

If they insist on a shortfall sale, will they accept the true value of the property in the marketplace and allow him to sell to a buyer himself ? (and try to minimise the loss rather than see it go to auction for pennys)

 

Or if he cant settle in full would they begin repossession proceedings and sell at any cost leaving him homeless but with a massive debt to repay?

 

its not likely the property will recover its 2006 value for at least the next ten years. Long beyond the mortgage end. We just want to know what options will be available to dad and being honest we are quite scared to ask the mortgage company incase they prempt things and cause problems.

 

thanks for all your thoughs and I hope someone can assist us.

 

Marky

[dx100uk]

birmingham midshires rings alarm bells with me here

 

i'd do some serious research into their history & their passed conduct.

 

cant help on the other issues sorry

 

dx

[f16]

Hi Sortingthings, Welcome to Cag. There will be a lot of charges on the account that are "Reclaimable", Late payments, admin, etc.

Was there PPI ?

I'm not "up" on the legal bit .... But other Caggers are and will assist

Good luck

F16

[citizenB]

There is some good information in the pdf attachment and the guardian also reported on what you steps you could take. Is it possible that extra money.. even a few £'s each month would help to reduce the final damage.

 

http://www.theguardian.com/money/2013/may/02/interest-only-mortgages-shortfall

 

The pdf below is from the Money advice service. I think National Debtline might also be able to offer advice.

 

[ATTACH=CONFIG]49879[/ATTACH]

[theoldrouge]

Contact BM and request mortgage extension to age 75 on an int only basis to give time for market to recover they may well agree to this

[sortingthings]

Thanks for your advice everyone.

 

The extension possibility looks very interesting. Is this something they normally agree to?

 

We can help dad keep up the payments as we have been doing and one would sincerely hope the market should have gone a long way towards a recovery.

[citizenB]

You never know until you ask And yes, one would sincerely hope the market does pick up in the next 18 months or so.

[theoldrouge]

Thanks for your advice everyone.

 

The extension possibility looks very interesting. Is this something they normally agree to?

 

We can help dad keep up the payments as we have been doing and one would sincerely hope the market should have gone a long way towards a recovery.

yes I know from personal experience that they do, its in no ones interest to repossess in those circumstances and they do offer mortgages to 75