End in sight but need to come clean !!!

[darlo70]

I have highlighted some of the basics of mine and my wife's joint IVA in other posts.
To summarise: Approx £37K debt paying back 52p in the pound. Payments started @ £296/month and went up to £466/month last year when car finance was paid off. We missed two of the £296 payments which were sanctioned by our IP to cover getting a new boiler so still need to pay that back. We also have a year 4 75% equity release clause which at time was estimated to be £10,500K.
IVA started March 2004 so we are nearly at 5th anniversary and the worst should be well and truly behind us.
Yesterday we had an Estate Agent come round to do a valuation and they will be sending me a written valuation for £99.5K , we got house for £75K so in theory that means £15K to add to pot.
However we would prefer to sell and buy another house under a joint equity scheme and there could be investors keen on our place for a price we would be willing to accept (£90 - £95K. We have an 8yr old boy and 4yr old girl sharing a bedroom right now and although they get on brilliantly, it's getting awkward. We would also want to extend the family. Staying in this house is becoming less and less feasible.
Here's the major catch. One thing you might need to appreciate is that although IP's do a lot of the work to help get you out of this mess, I regarded them a bit as the enemy also. Having read a lot of threads on here and seen all the support and advice from the likes of Melanie and David, I know this is not the case. Quite by accident some years ago, I found out that my IP had not been receiving copies of our payslips. I thought it was strange they had not chased us for them as it is their responsibility to review this on a quarterly basis. I got lazy and stopped sending them altogether. They only asked for them and our I & E each year but were never beligerent about it. My car needed major repairs (new gearbox and clutch) and I ended up owing my father £1500. Our pay structure at work changed and rather than nice payrises, we got performance related bonuses on top of our salaries every 6 months. Needless to say the 50% portion which should have gone into the IVA has gone to my Dad and also my mum who helped with getting us a new boiler.
We are more than happy to come clean to our IP and propose an additional £1500 when finalising. We are a little worried they could fail us for this but at this stage it seems ludicrous and to be honest, I think it works both ways. Ironically, in my job I "account manage" some of my creditors as well as some of the IP firms and lets just say, I am not so backward in coming forward about their contractual obligations sometimes.
Melanie/David/anyone. I know I've been a bit of an idiot.....but I haven't walked away neither. I'd really appreciate some guidance as to how to approach this with my IP. We would prefer to put our home on the market and make an F & F should the right offer come by rather than re-mortgage. The F & F need not necessarily be less than what was expected in the IVA although that may depend on what size mortgage we can get.

[Adam Davies]

Hi
They won't fail your IVA if you can make a provision to repay the full amount.
If you can sell and release the required equity and the £1500 shortfall then a full and final should be acceptable.
Don't be concerned about contacting your IP, they will want your IVA to succeed
Regards

[MelanieGiles]

This is not necessarily about history, but about the future. What is done is done, and the IP himself/herself has not exactly been proactive about chasing you. At this stage of the game, you just need to get the case closed and any sensible suggestion ought to be seriously considered.

I am a little curious about your interpretation of the equity release clause. Please confirm your current valuation and the amount require to discharge your existing mortgage.

[darlo70]

Thanks Andy

[darlo70]

This is not necessarily about history, but about the future. What is done is done, and the IP himself/herself has not exactly been proactive about chasing you. At this stage of the game, you just need to get the case closed and any sensible suggestion ought to be seriously considered.

I am a little curious about your interpretation of the equity release clause. Please confirm your current valuation and the amount require to discharge your existing mortgage.

Cheers Melanie. I do think you have hit the nail on the head. If my IP had been a bit more forceful, I wouldn't have hidden away. Guess it made things easier for me not having to go cap in hand to them as it were. I am not going to be overcritical of them, though. They proposed a solution which we were happy for them to do and it was accepted. That is what they are there to do.

Ref. Equity release - I take it you are also referring to some discussion we had which was tagged on another contributor's thread. In the end Melanie, I accepted your explanation and accept that they can request 75% available equity. I'm not saying I like it though as itt was never properly explained to us at the time, just tagged onto paperwork. To be honest, I can't find any reference to it in the Chairman's original report.
To answer your query though, the O/S balance on our mortgage is approx £61K. We paid £75K for our house comprising £7.5K deposit and £67.5K mortgage. Current valuation is a shade under £100K so under 75% equity release. I assume that would be just over £18K (I said £15K before didn't I?).
If I put my house up for sale however, it is not realistic in the current climate to receive an offer at valuation price is it? I would prefer to ask my IP if I can put my house on the market and continue to pay into IVA. If I receive an offer (say £90K), I would like to approach with a F & F which at least leaves wife and I with enough to put what will surely be the required 15% deposit on a new mortgage so we can enter into a joint equity scheme.
Am I being unrealistic here or am I missing something?

[MelanieGiles]

Sorry - I don't rememeber your earlier post with regard to the equity.

I would get a forced sale valuation - which is a term recognised by estate agents and values on the basis of a quick sale within 3 months. In today's climate this could affect the valuation quite considerably. If the property were actually worth £90k on this basis, then you could only borrow £67,500 - leaving £6,500 to raise, or £3,250 if there is a co-owner who is not also subject to an IVA.

[darlo70]

I see but I thought I would still be able to remortgage on an 85% LTV basis? That would raise £15,500, 75% of which is £11,625.
What if I were subsequently offered more by a buyer/investor as well?
If I put house on market rather than remortgage though, a £90,000 offer (which is lower than feasible) would yield £15000. Add to that the deposit and you are looking at £22,500. We are thinking around £70000 for a new mortgage which at 85% LTV means a deposit in the range of £12,500 approx. Offer £10000 as a Full & Final. If we are offered £95,000 then I think an offer of £12,000 is totally reasonable.
Must admit I always find mortgages confusing. I have manged to procure the services of an Independent Advisor however FOC

[MelanieGiles]

You have no chance of getting an 85% LTV mortgage in today's economic climate if you are in an IVA I am afraid. I think you ought to consult a mortgage broker to look at this further - and Tony Parsons who posts on the forum as an expert is a good port of call.

[darlo70]

You have no chance of getting an 85% LTV mortgage in today's economic climate if you are in an IVA I am afraid. I think you ought to consult a mortgage broker to look at this further - and Tony Parsons who posts on the forum as an expert is a good port of call.

Of course how silly of me. Which means by selling anyway I could potentially offer more into IVA pot

[MelanieGiles]

If you sell, you could probably fund a deposit on a new property and honour the equity release provision - so it is a good idea to at least look into this.

[darlo70]

Well my mortgage advisor buddy has mentioned one lender that may be able to offer us 85%in a Joint Equity despite the IVA but she was at pains to point out that it would still all depend on the final credit scoring. I think there was a default on the car while in the IVA so that wouldn't help. Our budget has been tight and of course had I been a little more pro-active with my IP then maybe there would have been just a few extra pounds each month. Still you don't go into an IVA to have loads of spare cash and by God have we learned from it.

Anyway I digress - the situation is getting more eventful and it looks as if a house move is becoming the only option. For reasons I won't bore you with, it looks like my old man who is registered disabled (he lives in the US by the way not here)is going to be left jobless and homeless with no more recourse to healthcare etc. For him the "American Dream" is well and truly over and it looks like he is coming back to Blighty. He will not last 5 minutes on his own so my wife and I both agree it would be best if he were with us. He really has nowhere else to go.

Melanie - if I were to email you a draft proposal to my IP along the lines of wishing to put my house on the market instead, would you be happy to review or make any suggestions? Apologies if I'm asking a bit too much

[MelanieGiles]

Of course - I would be delighted to help you with this. Pop it onto my website e-mail, but it might not be until Sunday when I get a change to look at it. Hope this is OK.

[darlo70]

That's fine Melanie thank you very much. Lord knows you spend plenty useful time on here

[darlo70]

Of course - I would be delighted to help you with this. Pop it onto my website e-mail, but it might not be until Sunday when I get a change to look at it. Hope this is OK.

Just sent it to you now Melanie albeit with revised figures. FYI, we are viewing a house tomorrow which we should be able to afford under Joint Equity and which I know ticks all the boxes. Just want this all over and done with now

[darlo70]

Mailed it to you again as didn't work last time. Many thanks to your staff for phoning me this morning to let me know.