So in short ...

[Road Pest]

To the wise PH (and the not so),

If I was to sell a house in negative equity, what would happen to the money that was owed to the mortgage lender upon such a sale?

Thanks in advance

[ewenm]

You'd owe them the shortfall. Presumably you'd carry on paying the mortgage payments until the debt was paid off.

[Monkey boy 1]

you would still owe the difference

[Road Pest]

Thanks, what would the typical conditions of such a debt be?

What a st time to be faced with this...

[scotal]

I dont think they'll release you from the mortgage, i.e you couldn't sell the house.

I've checked. You wont be able to sell the house unless you completely redeem the mortgage.

Edited by scotal on Wednesday 22 April 09:54

[ewenm]

I'd guess you can negotiate the terms with your lender or it may be set out in your mortgage contract.

[Road Pest]

scotal said:

I dont think they'll release you from the mortgage, i.e you couldn't sell the house.

Thanks Scotal, that's what I thought. However I have been told if the sale was forced it would go to court and end in a reposession order, is that correct? If so has anyone had any experience with such a scenario.

[scotal]

Road Pest said:

scotal said:

I dont think they'll release you from the mortgage, i.e you couldn't sell the house.

Thanks Scotal, that's what I thought. However I have been told if the sale was forced it would go to court and end in a reposession order, is that correct? If so has anyone had any experience with such a scenario.

Who's forcing the sale? Is it down to a matrimonial split?
If so why would you force a neg equity sale?

I'm guessing here, but the lender is going to tell the vendors to fk off, the lender after all has first charge on the house.

The only way the sale would be forced is by the lender, who would have to have a good reason to force the slae.... which would have to be non payment of the mortgage...... advising someone not to pay their mortgage so the house was repo'd would be a good one. Get the cause for concern register out.

[NDA]

I note your profile says 'Manager (Finance)'.

Why are you having to sell?

[Road Pest]

Yep, it's matrimonial. I'm pretty sure that what I know already is correct, just needed to put the feelers out there to see if anyone had practical knowledge.

[scotal]

Road Pest said:

Yep, it's matrimonial. I'm pretty sure that what I know already is correct, just needed to put the feelers out there to see if anyone had practical knowledge.

If its you, I'm sorry to hear that.


Forcing a sale at the moment can only be through spite if the house is in neg equity.
Better that if one of the parties is in a postion to take on the whole mortgage blaance, they do.
ETA assuming of course the house is in joint names. If its in sole name then one party can just walk and the other is saddled with the debt.

Edited by scotal on Wednesday 22 April 10:13

[Road Pest]

scotal said:

Road Pest said:

Yep, it's matrimonial. I'm pretty sure that what I know already is correct, just needed to put the feelers out there to see if anyone had practical knowledge.

If its you, I'm sorry to hear that.


Forcing a sale at the moment can only be through spite if the house is in neg equity.
Better that if one of the parties is in a postion to take on the whole mortgage blaance, they do.

She's ignorant to anything financial and of course won't take my word for it at the moment. Unfortunately due to the state of the economy neither one of us can take the mortgage on on our own. I'm hopping it is ignorance more than spite and her solicitor doesn't do a job on her.

ETA she wants to move abroad which is why the sale would be her ideal move

Edited by Road Pest on Wednesday 22 April 10:20

[Road Pest]

NDA said:

I note your profile says 'Manager (Finance)'.

Why are you having to sell?

Unfortunately even "we" have problems sometimes.

[NDA]

Road Pest said:

NDA said:

I note your profile says 'Manager (Finance)'.

Why are you having to sell?

Unfortunately even "we" have problems sometimes.

I wasn't having a go, just curious if your financial background could assist.

If you're in negative equity you're stuck, unless you walk out and continue paying your share of the mortgage. If she walks out and defaults then you're up the creek.

Awful situation.

[Grey Ghost]

If the house is in joint names then surely she is responsible for 50% of the negative equity? Still not an ideal situation but if you could raise your 50% share of the negative equity and pay this off if you could sell it then would she be left with a financial problem to be solved on her own and your credit rating undamaged?

If she does not understand the finance implications of selling a house with negative equity perhaps a simple explanation of her "share" of the problem will ensure she understands she just cannot walk away.

Sorry to hear of your troubles but don't let personal feelings come into this financial arguement.

[Road Pest]

NDA said:

Road Pest said:

NDA said:

I note your profile says 'Manager (Finance)'.

Why are you having to sell?

Unfortunately even "we" have problems sometimes.

I wasn't having a go, just curious if your financial background could assist.

If you're in negative equity you're stuck, unless you walk out and continue paying your share of the mortgage. If she walks out and defaults then you're up the creek.

Awful situation.

Sorry, didn't mean to imply you were. She has these ideas that the lender will just right it off and let he walk away with a nominal payment, I think. I've told her that it will be at least two years until we are in a position to sell.

[Road Pest]

Grey Ghost said:

If the house is in joint names then surely she is responsible for 50% of the negative equity? Still not an ideal situation but if you could raise your 50% share of the negative equity and pay this off if you could sell it then would she be left with a financial problem to be solved on her own and your credit rating undamaged?

If she does not understand the finance implications of selling a house with negative equity perhaps a simple explanation of her "share" of the problem will ensure she understands she just cannot walk away.

Sorry to hear of your troubles but don't let personal feelings come into this financial arguement.

Thanks, we've already gone through this, but she sees that a solicitor is better placed to tell her what is what rather than me, which is fair enough. I hope I am not coming across over emotional, these things happen.

[Grey Ghost]

Road Pest said:

Grey Ghost said:

If the house is in joint names then surely she is responsible for 50% of the negative equity? Still not an ideal situation but if you could raise your 50% share of the negative equity and pay this off if you could sell it then would she be left with a financial problem to be solved on her own and your credit rating undamaged?

If she does not understand the finance implications of selling a house with negative equity perhaps a simple explanation of her "share" of the problem will ensure she understands she just cannot walk away.

Sorry to hear of your troubles but don't let personal feelings come into this financial arguement.

Thanks, we've already gone through this, but she sees that a solicitor is better placed to tell her what is what rather than me, which is fair enough. I hope I am not coming across over emotional, these things happen.

You aren't showing emotion on here at all, just asking for advice....which is brave to be honest. Had the same sort of issue a few years ago and had what turned into a quite short, sharp exchange followed by a written example of what would happen if a house in joint names need to be sold with negative equity. Neither my mate or his former wife had ever seen me lose my temper before but it got the message into her amazingly thick head.

"Yes you fkwit bimbo, of course the lender is going to write off £40,000 just because you have decided to shag some bloke from the gym and now want your freedom back to shag all his mates as well, probably at the same time. You have responsibilities and debts to service that you cannot walk away from what is so fking difficult for you to understand?".... was about the jist of it

[Road Pest]

Grey Ghost said:

Road Pest said:

Grey Ghost said:

If the house is in joint names then surely she is responsible for 50% of the negative equity? Still not an ideal situation but if you could raise your 50% share of the negative equity and pay this off if you could sell it then would she be left with a financial problem to be solved on her own and your credit rating undamaged?

If she does not understand the finance implications of selling a house with negative equity perhaps a simple explanation of her "share" of the problem will ensure she understands she just cannot walk away.

Sorry to hear of your troubles but don't let personal feelings come into this financial arguement.

Thanks, we've already gone through this, but she sees that a solicitor is better placed to tell her what is what rather than me, which is fair enough. I hope I am not coming across over emotional, these things happen.

You aren't showing emotion on here at all, just asking for advice....which is brave to be honest. Had the same sort of issue a few years ago and had what turned into a quite short, sharp exchange followed by a written example of what would happen if a house in joint names need to be sold with negative equity. Neither my mate or his former wife had ever seen me lose my temper before but it got the message into her amazingly thick head.

"Yes you fkwit bimbo, of course the lender is going to write off £40,000 just because you have decided to shag some bloke from the gym and now want your freedom back to shag all his mates as well, probably at the same time. You have responsibilities and debts to service that you cannot walk away from what is so fking difficult for you to understand?".... was about the jist of it

Yeah, It went like this for me, "what exactly do you think will happen with the 50k shortfall?" her words were "I dunno."

[scotal]

Road Pest said:

Grey Ghost said:

If the house is in joint names then surely she is responsible for 50% of the negative equity? Still not an ideal situation but if you could raise your 50% share of the negative equity and pay this off if you could sell it then would she be left with a financial problem to be solved on her own and your credit rating undamaged?

If she does not understand the finance implications of selling a house with negative equity perhaps a simple explanation of her "share" of the problem will ensure she understands she just cannot walk away.

Sorry to hear of your troubles but don't let personal feelings come into this financial arguement.

Thanks, we've already gone through this, but she sees that a solicitor is better placed to tell her what is what rather than me, which is fair enough. I hope I am not coming across over emotional, these things happen.

She could always speak directly to your lender (not maybe the brightest of ideas) or a broker. I'll happily run through things with her, but seeing as it would be you giving her my contact detaisl I'm assuming she wouldn't believe me.