struggling

[janot]

We are really struggling to sell our house, we owe approx 215k in mortgage and secured loan on it, and a valuation came in at 195k.

If I handed the keys back to the mortgage company would they make us go B.R? Until the house has sold we cannot start IVA and we are starting to get worried that the creditors will start to send around bailiffs. I am really worried that we are running out of time

We also wondered if we spent a little on the house, i.e. new windows and doors would help the value. Trouble is this would take any deposit money we had for the rental property.

Advise would be very much appreciated.

[mikebdomain]

Hi Janot

If you hand the keys back to the lender they are unlikely to make you bankrupt in the short term. I would advise against spending any money on the property as you are unlikely to recoup this in a sale (throwing good money, after bad…).

- Have you spoken to your lender about your current situation?
- Are you currently in arrears with your mortgage payments?
- Have you already been through repossession proceedings?
- If you are on a repayment mortgage have you spoken to your lender to revert to interest only until the property is sold?
- Who carried out the valuation – estate agent / valuer?

I would suggest seeking a rented property ASAP and making the house as presentable as possible in an effort to sell it, and speak to your current lender about your situation to see how they may help.


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Mortgage Broker
Specialising in adverse credit.

Firm FSA No:313790
Personal FSA No:MJB01557

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[janot]

We are not under repossession proceedings, the mortgage provider have given us a 6 months holiday, we owe them aprox 106k, we also owe picture 106k on an secured loan, they would not give us a holiday, with the money from the mortgage holiday we are making token payments to the credit cards etc.

the valuation was by a mortgage company as at first we had been advised badly to remortgage to pay off the c/c and pay back interest only, however valuation came in to low.

on reflection this would have just made matters far worse for us as we are drowning already. the problem is we have robbed peter to pay paul for so long.

i wish we had found this site first, it has been a godsend.

do you think i shou;d speak to picture to see if they would allow us to hand the keys over, as this would also save us having to pay solicitors fees etc...

janot

[mikebdomain]

Picture are as usual being a tad short sighted here, they have no right to have the keys to the property, as they are a second charge lender, if you give them the keys, it is likely to over complicate everything.

If you are going to hand the keys back, it has to be to your first charge lender, the mortgage company.

To be honest I think you need some advice from one of the IVA experts on here, regarding payment priorities, and how to move forward. Especially if you are paying unsecured borrowing, using money you would usually use for secured borrowing.

As for your house, I would suggest contacting your first charge mortgage lender again, they have been good enough to give you a payment holiday, which would indicate they understand or at least sympathise with your situation and suggest to them, that you would prefer to walk away from the house and hand your keys back, it would also be advisable to make them aware of the fact that you have this second charge on the property with ‘Picture’.


FREE ADVICE IS THE BEST ADVICE

LEYBRIDGE LIMITED
Mortgage Broker
Specialising in adverse credit.

Firm FSA No:313790
Personal FSA No:MJB01557

see feedback and testimonials at:
http://www.leybridge.com/testimonial.php
Check out my blog at:
http://mikebdomain.blogs.iva.co.uk/
Please read our Initial Disclosure Document(IDD):
http://www.leybridge.com/Leybridge-IDD.pdf

[Andrew Graveson]

Hi janot,
If you're to hand over the keys it would normally be to the lender for your main mortgage. When the home is sold they will be paid first. It's likely that Picture will not be fully repaid as they are second in the priority order.
That debt will become an unsecured debt at that point; i.e. it would be treated the same as a credit card or overdraft for the purposes of any debt solution.
If you sell the home yourself it's possible that you'll realise a better price than your mortgage lender will. That would mean that your potential future debt to Picture would be smaller.
I don't like to be the bearer of bad news but I've recently handled a case (for a user of this site) where Picture have been remarkably unsympathetic to the debt concerns of my client. This extends to the point that they're quite prepared to force bankruptcy on someone who, if they were to remortgage, could enter an IVA (in which Picture would get a better return!). Not quite the cuddly fun family image they portray on TV.
I'd work closely with your main mortgage lender to bring the situation the best conclusion you can for you.

Andrew Graveson
Independent Mortgage Broker & Bright Oak Debt Management
andrew@brightoak.co.uk
www.brightoak.co.uk

[mikebdomain]

Janot

More out of interest - did the mortgage company who arranged the valuation, charge you up front for it?

FREE ADVICE IS THE BEST ADVICE

LEYBRIDGE LIMITED
Mortgage Broker
Specialising in adverse credit.

Firm FSA No:313790
Personal FSA No:MJB01557

see feedback and testimonials at:
http://www.leybridge.com/testimonial.php
Check out my blog at:
http://mikebdomain.blogs.iva.co.uk/
Please read our Initial Disclosure Document(IDD):
http://www.leybridge.com/Leybridge-IDD.pdf

[janot]

I think i understand, so if i handed back the keys and the morgage lender got back there 106k and then paid picture say 85k we would be liable for the outstanding balance of 21k.

this would be added to our other 85k depts and and IVA would be proposed.

If picture are likely to force BR should we just file for it first? we are at our wits end and just don't know what to do first.

Problem is if i went BR i would loose job. and my income is 24k so makes a big difference to our family.

janot

[Andrew Graveson]

Hello janot,
Your understanding is correct. Main mortgage lender gets paid in full, second mortgage lender gets what is left. The remainder becomes an unsecured debt.
Once it got to that point I'm sure Picture would rather get a return from an IVA as opposed to nothing via bankruptcy.
I think you need to speak to an Insolvency Practitioner quickly to get some good advice; protecting your employment is clearly extremely important.
The IP's on this site would give you good advice.

Andrew Graveson
Independent Mortgage Broker & Bright Oak Debt Management
andrew@brightoak.co.uk
www.brightoak.co.uk

[mikebdomain]

You would be liable for the outstanding balance,
if you start IVA preparations I am not sure if Picture would be able to make you bankrupt – this is where one of the IVA experts could advise much better.

FREE ADVICE IS THE BEST ADVICE

LEYBRIDGE LIMITED
Mortgage Broker
Specialising in adverse credit.

Firm FSA No:313790
Personal FSA No:MJB01557

see feedback and testimonials at:
http://www.leybridge.com/testimonial.php
Check out my blog at:
http://mikebdomain.blogs.iva.co.uk/
Please read our Initial Disclosure Document(IDD):
http://www.leybridge.com/Leybridge-IDD.pdf

[jane.l]

I was in this same situation. We explained to Picture it was either IVA, if they allowed a sale or we go bankrupt. I was told by a horrid woman from Picture that they do not acknowledge bankruptcy and they would not agree to a sale so we could not put our shortfall into an IVA

We are now bankrupt, if Picture would have let us sell, they would have received £16,000 immediately and then if the IVA would have been successful, whatever dividend we could raise from that, but they would not agree to let us sell, so we just left the property to be repossessed by the mortgage company

[mikebdomain]

If the first charge mortgage company knows about Picture they may accept the property without a repossession hearing or they may instigate a repossession hearing. If they do, Picture would be taken out of the decision as to whether the property could be sold or not. The balance of Pictures charge would then become unsecured.

FREE ADVICE IS THE BEST ADVICE

LEYBRIDGE LIMITED
Mortgage Broker
Specialising in adverse credit.

Firm FSA No:313790
Personal FSA No:MJB01557

see feedback and testimonials at:
http://www.leybridge.com/testimonial.php
Check out my blog at:
http://mikebdomain.blogs.iva.co.uk/
Please read our Initial Disclosure Document(IDD):
http://www.leybridge.com/Leybridge-IDD.pdf

[Andrew Graveson]

Hello Jane,

A remarkable likeness in ethos to the case I've been working on. Picture, for some unknown reason, seem prepared to take a low return under bankruptcy rather than allowing my client to remortgage and continue to pay the Picture loan in full every month!

It's hard to explain from a commercial point of view. From a reputational point of view their name is mud with a number of mortgage brokers I know and it seems it could be a widespread perception (see Mike's 'short-sighted as usual' comment at the start of the thread as well).

Andrew Graveson
Independent Mortgage Broker & Bright Oak Debt Management
andrew@brightoak.co.uk
www.brightoak.co.uk

[mikebdomain]

Andrew

I agree they certainly have a black mark with us, we have had a number of cases where our processors find them very hard work. We have had a bit of success on a few cases over the years, but it’s very hit and miss, they do not seem to adhere to the principle of TCF at all.


FREE ADVICE IS THE BEST ADVICE

LEYBRIDGE LIMITED
Mortgage Broker
Specialising in adverse credit.

Firm FSA No:313790
Personal FSA No:MJB01557

see feedback and testimonials at:
http://www.leybridge.com/testimonial.php
Check out my blog at:
http://mikebdomain.blogs.iva.co.uk/
Please read our Initial Disclosure Document(IDD):
http://www.leybridge.com/Leybridge-IDD.pdf

[mikebdomain]

Directly from the Picture website FAQs

What happens if I fall behind with my repayments?
If you have difficulty making repayments, or think that you may encounter some difficulty in the near future, get in touch and we'll do all we can to help. There are a number of ways we can assist, but only if you tell us. In the worse case, because these are secured loans, we could repossess your home, but this is certainly not something we'd ever want to do.

Perhaps they should consider rewording that statement

FREE ADVICE IS THE BEST ADVICE

LEYBRIDGE LIMITED
Mortgage Broker
Specialising in adverse credit.

Firm FSA No:313790
Personal FSA No:MJB01557

see feedback and testimonials at:
http://www.leybridge.com/testimonial.php
Check out my blog at:
http://mikebdomain.blogs.iva.co.uk/
Please read our Initial Disclosure Document(IDD):
http://www.leybridge.com/Leybridge-IDD.pdf

[Andrew Graveson]

In my recent case their definition of help was to offer to lend more money; secured on the house of course.

They will not allow a remortgage because, due to new unsecured borrowings, the existing secured loan would no longer meet their underwriting criteria.

But they'll lend more!!!!

Andrew Graveson
Independent Mortgage Broker & Bright Oak Debt Management
andrew@brightoak.co.uk
www.brightoak.co.uk