To be repossessed or not to be.........

[barloo69]

Oh dear, things just taken a turn for the ............

We are therefore after some concrete advice please.

We currently have a mortgage for £160k with Northern Rock and a 2nd mortgage with Picture for £50k. (I hate acknowledging that fact, what was we thinking !!).

Our house in todays market is worth approx £185k so very much in a negative equity situation.

Ive just been told that my job is coming to an end very soon and therefore will no longer be in paid employment.

Whilst we are still in the driving seat and in control of our finances, what are rules concerning and is it possible for us to effectively sell our home at the maximum amount we can therefore repaying NR completely and only part repaying the 2nd mortgage with the difference.

Is this possible or will Picture 1) try and block the sale or 2) Try to enforce the remainder of the debt as being owed, which obviously I dont have a problem with coz I owe the debt but I can then manage this small amount at more favorable terms.

[enaid]

Re: To be repossessed or not to be.........

Have you no PPI or any insurance covering your loans incase of redundancy etc?

[Jester]

Re: To be repossessed or not to be.........

I've faced this situation myself. You will have to inform Picture of your intention to sell the house (just the same as you will have to tell Northern Rock), but in your circumstance I don't think Picture would be able to object.

As I understand it, you will still be liable to Picture for any outstanding sum left after the sale of the house - but it the balance then becomes an unsecured loan. Picture only have SECOND dibs on money raised by selling your house as they are not the principle secured creditor.

Besides, if you are going to be in hardship meeting the payments, then they will much rather get some of the money back rather than face losing the whole lot.

The first port of call is to contact both Northern Rock and Picture and warn them of the impending change in circumstances. They may agree to come to an arrangement with you until your situation improves. Certainly that is what the Government have told all secured lenders to do (though I know from personal painful experience that not all of them heed that).

Also, as Di has suggested, check that you have PPI cover as it should cover this type of circumstance.

The other thing that may be in your favour is that the time before the DWP start paying the 'interest-only' payments on your mortgage have vastly reduced and now comes in after (I think) 60 days rather than the previous 6 months (that I had to wait).

Up to you how you play it, but definitely get in touch with both creditors as soon as possible and warn them of what is to come. If you are lucky then they may come to an arrangement.

Hope this helps

[barloo69]

Re: To be repossessed or not to be.........

Brilliant, great advice. thanks peeps. Alas no Insurance that would cover.