Full & Final - In Shared equity - where do i get valuations from?

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hope17
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by hope17 » Thu Mar 16, 2017 12:35 pm
Hello there,

I hope you can help me.

I'm in the position where redundancy looks likely. I've had the figures through today. I've made my IP know that this could be a possibility and they've said that depending on figures, a full and final settlement could be appropriate.

I have ordered the redemption statement from my main mortgage provider.

However I have a shared equity mortgage and have to also obtain a redemption figure from the people i have the shared equity with. They have requested 2 valuations, my IVA practitioner only required one.

The company have said 'We don’t ask for full RICS valuations because these can be expensive but we do want to see a valuation from someone who has visited the property and who is reasonably qualified to give a fairly accurate view of how much it is worth.
Please can you submit two such valuations?'

This is my first home, I've never put a house on the market or anything before so i don't know if I call estate agents and ask them to come whether they provide a written valuation before you commit to putting the house on the market or not.

I don't have spare money to be able to pay for valuations just like that, and my family are unaware I'm in an IVA so asking to borrow this money isn't an option either. Does anyone have any advice or suggestions as to whether estate agents will provide this valuation in writing or whether I would need to pay for a valuation or is there another option I've not considered.

I'm sorry if this is a daft question. Just a bit lost and a bit stressed too as I have no one to talk to or bounce ideas off about all this. Thank you.
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Foggy
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by Foggy » Thu Mar 16, 2017 1:16 pm
Is there easily likely to be more than £5k equity on your share ? If so ask the IP to add on another 12 months payments, to be considered in the F&F.

If you do have to go through the hoops to prove less than £5k I don't see why the other equity owners need be involved. You get a valuation, along with a redemption figure for your mortgage. The title deeds will specify the shares -- i.e., say, if you own 50% of the property.

So ... let's say you own 50% share and the valuation comes in at £120,000 .... your share will then be £60,000, take off your mortgage redemtion will leave you with your equity.

Unless I am missing something ... hopefully an Industty expert will comment shortly.
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Michael Peoples
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by Michael Peoples » Thu Mar 16, 2017 2:48 pm
I agree with Foggy. The shared equity is a percentage and not an amount unless you are paying them off so no need to involve them at all. Ask your IP if you can pay for a valuation as a cost of the IVA which we allow. It normally costs about £100 and if the IP agrees you can then reduce your next payment by the cost and send in the receipt.

That is the simplest and fairest way to get a valuation.
hope17
Posts: 16
by hope17 » Thu Mar 16, 2017 8:59 pm
Thank you Foggy and Michael very much. I'll see if that's possible when I contact them tomorrow. I'm just rather nervous about all this. I had been thinking I was in either negative or equal equity as my house was originally valued at £117,996 and houses around my area that are like mine are going for less but not sure how it all works.

And I'm just so nervous, because of the whole redundancy situation and that there may be a possibility of ending the IVA with the settlement but then that may not be possible. Anyway, i can't know anything until I ask all these questions so thank you both once more. Will try tomorrow and see where I end up.
hope17
Posts: 16
by hope17 » Wed Mar 22, 2017 11:54 am
Hello,

I posted last week and Foggy and Michael were very helpful so thank you.

I’ve arranged for 2 estate agents to come out to visit my house tomorrow for a free valuation. I just wondered if I could pick your brains a bit more as I just want to have an idea of chances re full and final. It’s just me (and my dog) but I also have some carer responsibilities for my parents and though I’ve managed to continue in work, I suffer from depression and I almost wish I’d declared myself bankrupt and whatever will be re the house. (just providing this as background) as I’m struggling and have no life at all, no one in my family knows about the IVA and I know creditors don’t and shouldn’t care but I just find it hard.

The redemption figure from Halifax was £68500 approx though £7 interest added each day. The shared equity and second charge is 25% of the valuation of my home. Having carried out research, I’ve been informed that the approx. figure of the sale of my home would be between £99k to £110k max. My house was originally valued at £117,995. (it’s a new build though almost 7 years old now).

My IVA started in October/November 2014 – I have agreed with the IP to have 2 payments missed due to requirement for funds elsewhere and so have added that onto the end estimate of how much is left to pay. My payments are £448.57 per month. Without the extra 12 months, there would be approximately £14000 left to pay.

I don’t fully understand how the extra year’s equity works. My redundancy has been estimated at £17.5k. Based on the figures above how much equity would I have to pay into arrangement or the full & final. It was agreed by my IP that I could put forward an amount to offer, I’m just a bit lost on whether I’d have to pay and consider the extra year of payments and an offer based on including this or not.

I'm sorry for the question and appreciate I could just wait a day but I have this in my head all day every day with no outlet and just need to know if anything i'm thinking of is viable.
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Foggy
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by Foggy » Wed Mar 22, 2017 12:28 pm
First equity:

The usual method (detailed in your proposal) would be --- -Valuation ( taking the max) £110,000 -- maximum Loan To Value would be 85% of this, so £93,500. Take off 25% shared market value (£27500) leaves 66,000. Less redemption leaves negative equity --- NOT enough to trip equity clauses.

A few do it this way ----Valuation ( taking the max) £110,000 less 25% shared leaves 82,500. Less redemption leaves £14,000 --- enough to trip equity clauses

So a lot will depend upon the method your IP uses.

If the equity clause is tripped you are looking at a further 42 payments and around 30 if not. So ..... 42 payments of £450 = £18,900 ( 30 would be £13,500 ).

An offer would be based around these figures. Yes it would swallow the redundancy money, but would leave you debt free. If no offer is agreed they will take the redundancy money anyway ( leaving you 6 months salary equivalent to live on and continue paying the IVA until you find more work) and you will still have the IVA to finish off.

Without detailed knowledge of your full circumstances this is only guesswork. With support from your IP a lower figure might be accepted. And, of course, all of the above depends on the level of original debt --- if you hit 100% debt repayment, plus fees and possible statutory interest the IVA will end ... so if you are anywhere near that figure, you might be able to offer less.
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Michael Peoples
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by Michael Peoples » Wed Mar 22, 2017 12:28 pm
First of all you have very little equity and no need for an extension to the IVA. The mortgage and second charge alone are in excess of 90% of the value of the property so you have nothing to worry about on that side.

In redundancy you normally keep six month's living costs and continue on as normal. The rest is deemed a windfall and paid into the arrangement but what happens afterwards depends on whether you find work and at what salary level. If you think you can easily find another job ongoing payments could be made depending on whether your wages have gone down or not and the IVA run its course as normal. If you think you will struggle to find work or will suffer a serious pay reduction then creditors may allow the IVA to close after the six months is up.

I suggest that a full and final may be an option based on the above. Do you think you will find work and will the wages be the same or less?
hope17
Posts: 16
by hope17 » Wed Mar 22, 2017 12:32 pm
Thank you for the quick reply Foggy. I'm with McCambridge Duffy. I think i must drive the poor person i contact mad so I'm trying to leave them alone a bit now, but it's just hard cos I'm a born worrier.

I'll see where tomorrow takes me, and then how it's calculated from there. Thank you again x
hope17
Posts: 16
by hope17 » Wed Mar 22, 2017 12:35 pm
Michael Peoples wrote:
First of all you have very little equity and no need for an extension to the IVA. The mortgage and second charge alone are in excess of 90% of the value of the property so you have nothing to worry about on that side.

In redundancy you normally keep six month's living costs and continue on as normal. The rest is deemed a windfall and paid into the arrangement but what happens afterwards depends on whether you find work and at what salary level. If you think you can easily find another job ongoing payments could be made depending on whether your wages have gone down or not and the IVA run its course as normal. If you think you will struggle to find work or will suffer a serious pay reduction then creditors may allow the IVA to close after the six months is up.

I suggest that a full and final may be an option based on the above. Do you think you will find work and will the wages be the same or less?


Thank you Michael. Oh my god really re the little equity? Would that be the case if it was even the top figure? I mean I'm assuming that's what it'll be based on other houses round here, and i've had a few things go wrong with the house but don't want to assume too much.

And yeah I thought re the windfall but when I discussed it with them they said a full and final could well be an option depending on figures. I work for public sector and well paid as a result, I definitely think wages wouldn't be any greater or I'd be amazed and I'm looking at jobs a minimum of £5k less to be realistic as the market in my area isn't that strong or even otherwise there's not much. Thank you both so much, your message Michael, leaves me wanting to cry almost because I'd resigned myself to needing to add the equity in.
Last edited by hope17 on Wed Mar 22, 2017 12:38 pm, edited 1 time in total.
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Foggy
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by Foggy » Wed Mar 22, 2017 12:37 pm
hope17 wrote:
Thank you for the quick reply Foggy. I'm with McCambridge Duffy. I think i must drive the poor person i contact mad so I'm trying to leave them alone a bit now, but it's just hard cos I'm a born worrier.

I'll see where tomorrow takes me, and then how it's calculated from there. Thank you again x



Ah, that is good news -- they calculate the equity in what I consider to be the "fair" way --- so you will not have the equity clause tripped as they would consider the equity you have to be insufficient.
hope17
Posts: 16
by hope17 » Wed Mar 22, 2017 12:42 pm
Foggy wrote:
hope17 wrote:
Thank you for the quick reply Foggy. I'm with McCambridge Duffy. I think i must drive the poor person i contact mad so I'm trying to leave them alone a bit now, but it's just hard cos I'm a born worrier.

I'll see where tomorrow takes me, and then how it's calculated from there. Thank you again x



Ah, that is good news -- they calculate the equity in what I consider to be the "fair" way --- so you will not have the equity clause tripped as they would consider the equity you have to be insufficient.


Thank you Foggy, so very much.
hope17
Posts: 16
by hope17 » Wed Mar 22, 2017 1:32 pm
Just wanted to add that the way its worded is as 'discretionary compensation' but where I work is facing largescale cuts, our department alone has to make savings and we have already lost 2 people and that's not enough, I'm the newest member of the team and the circumstances are that someone else has to go , however the council has no policy for compulsory redundancy at this time and instead they class it as DC though they've said that at some point this could be reviewed and also that the redundancy scheme could change at any point.
hope17
Posts: 16
by hope17 » Thu Mar 23, 2017 3:36 pm
Hello.

Didn't want to start a new thread but thought I'd update the title.

Had 2 estate agents out. Very different figures.

1 said to start at £119,950 which having carried out research and borne out by the second agent i think is too high.

The second agent said I could start at £110k but he'd expect based on either houses in mine and the accompanying estates to achieve between £95k to £105k.

So not sure what to do next. When I broached the subject of just saying well I only need 1 valuation with my contact at my IP they still said I needed a settlement figure but said they only needed 1 valuation themselves.

My shared equity company need 2 to give me the figure as to what their 25% would be.

Just not sure where this leaves me. The higher valuation is so high compared with other properties here that are end terrace 3 beds like mine.

I guess what it boils down to is where do I stand re having to consider equity for the iva full and final based on the above and my previous posts .

Once I know that I can then take a step forward or otherwise and start considering figures (or not, and probably ask for more guidance then too)

Thank you and sorry for being a pain.
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Foggy
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by Foggy » Thu Mar 23, 2017 3:55 pm
I still do not see why you need involve the shared equity company at all. It has nothing to do with them.

If you accept the market value at £110,000, they own 25% --- so their share is £27,500
hope17
Posts: 16
by hope17 » Thu Mar 23, 2017 4:26 pm
Foggy wrote:
I still do not see why you need involve the shared equity company at all. It has nothing to do with them.

If you accept the market value at £110,000, they own 25% --- so their share is £27,500


Thanks Foggy, I totally agree but when I asked the person I email at McCambride Duffy, they said I'd have to obtain a figure from the Shared equity company tho the last email didn't say that explicitly just repeated earlier information, It may just be me being stupid and I think i'm trying to wade through treacle in my head lately.

If there's a way around it then great, and I'll use that valuation along with the redemption figure from Halifax (though still waiting for the statement) and the share to show there's no equity in the property and then make a full and final or work out what to offer based just on what's remaining with the IVA but I was just concerned re the higher valuation.
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