can I get a charging order on a repossessed house?

[Pochantas]

Hello All,

I am not sure if i have posted this in the right forum....... I would welcome some urgent advice please. I foolishly remortgaged my own house to lend an ex partner £70k. We had a written agreement if he defaulted on the loan he would sell his house and pay off the loan from the proceeds of the house sale. He has since defaulted and although he put his house on the market he says he does not plan to pay the loan off from the house proceeds. The land registry have looked at the loan agreement and say I have a beneficial interest in his house and that he is holding the house on trust for myself and him. Thus they have granted me a restriction against his property. I also sued him and have secured an interim charging order. The hearing for the final charging order is imminent.

However I have learnt that a repossession notice for his house came into force, coincidentally the same date the interim charging order was granted. My question is how does the repossession affect me? Can a final charging order be obtained when there is a mortgagee in possession of the relevant property?

If I do suceed in getting a final charging order how powerful is my position in negotiating with the bank that has repossessed the house given they are in possession of a house with a charging order against it? I am assuming the house will be less attractive to potential buyers because of the charging order. Ideally I would like to ensure the bank only sells the house at a price to cover the money they are owed plus what I am owed. How realistic am I being?

Any advice would be really welcomed! Thank you so much.

[FlamingParrot]

Re: can I get a charging order on a repossessed house?

Hi and welcome

Hello All,

I am not sure if i have posted this in the right forum....... I would welcome some urgent advice please. I foolishly remortgaged my own house to lend an ex partner £70k. We had a written agreement if he defaulted on the loan he would sell his house and pay off the loan from the proceeds of the house sale. He has since defaulted and although he put his house on the market he says he does not plan to pay the loan off from the house proceeds. The land registry have looked at the loan agreement and say I have a beneficial interest in his house and that he is holding the house on trust for myself and him. Thus they have granted me a restriction against his property. I also sued him and have secured an interim charging order. The hearing for the final charging order is imminent.

However I have learnt that a repossession notice for his house came into force, coincidentally the same date the interim charging order was granted. My question is how does the repossession affect me? Can a final charging order be obtained when there is a mortgagee in possession of the relevant property?

If I do suceed in getting a final charging order how powerful is my position in negotiating with the bank that has repossessed the house given they are in possession of a house with a charging order against it? I am assuming the house will be less attractive to potential buyers because of the charging order.

The first mortgagee has preference over any second charges on the property. If a property is sold, the mortgage and any charges are paid off from the proceeds of the sale. The property won't be sold with the charge, if there isn't enough equity to cover the mortgage and second charge in full, the mortgage is paid off first and any amount outstanding on the second charge would revert back to an unsecured debt. The buyer wouldn't be buying the charge with the house.

Ideally I would like to ensure the bank only sells the house at a price to cover the money they are owed plus what I am owed. How realistic am I being?

Any advice would be really welcomed! Thank you so much.

Such is the nature of the beast that the bank will only care about getting back THEIR OWN money, not yours. Repossessed properties are often auctioned off at well below market rates, and the mortgagees in possession add all sorts of fees and charges to the mortgage. :mad2: :mad2: :mad2:

There are certain guidelines concerning the sale of repossessed properties with regards to selling at a fair price, etc., but they are not intended to protect the interests of creditors holding second charges.

Based on recent valuations, how much equity is there in this property? Is there likely to be enough to cover both the mortgage (and fees, etc.) as well as the second charge?

[Pochantas]

Re: can I get a charging order on a repossessed house?

Thank you. Unfortunately I have no idea how much equity he has. He refuses to communicate with me and I don't know what his outstanding mortgage is.

[Pochantas]

Re: can I get a charging order on a repossessed house?

When you say the property won't be sold with the charge please can you clarify what you mean?

Also can I still get a full charging order even if the house has been repossessed?

[wales01man]

Re: can I get a charging order on a repossessed house?

If the house is sold and there is no money after first charge and costs to the mortgage company you get nothing the charge dies a Charge for obvious reasons is on the house whilst its owned by the person owing you money.
Did you expect the new owner to be liable for this debt?

[Pochantas]

Re: can I get a charging order on a repossessed house?

Thank you so much for responding. I didn't expect the new owner to be liable for the debt. I thought the charge would stay against the property if it was not paid off. I read somewhere the charge stays registered against the property if it is sold. This I thought the bank would find it difficult to find a buyer willing to purchase a property with a charge against it.