Hiya

I have just joined this forum, for the purpose of gaining some advice to my problem,

Cutting a very long story short, i have a mortgage (interest only) and a secured loan on my property. In sept 07, the discount ended on my mortgage, so i found myself a new deal, and was in the process of a remortgage. When i applied for a 2nd charge from the secured loan company, they refused, so i was unable to continue with the remortgage. I then became unable to pay the mortgage payment as it had increased by 250.00 per month, so i fell into arrears. I put my house on the market asap, and gained some advice from CAB, who basically said, move out before they kick you out, so thats what i am doing. I move into a rented apartment on the 1st Feb, and will be handing the keys back to the mortgage company. This is where i need the advice. Whats happens next, what will they do with the house, what will happen to the secured loan as they will have nothing to secured the debt too.

Any advice welcome x

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Laney x

The mortgage lender will probably auction the house, the mortgage will be paid off, the secured loan paid, if anything is left it should come your way (unlikely) BB

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Circumstances alters cases!!

thanks bb

however i dont feel the sale of the house will cover both debts, so if the mortgage company takes their's first, and what ever is left goes to the loan, but it doesnt completely pay it off, then what happens?

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Laney x

OK, you hand the keys back, the mortgage company registers that you are in default and you credit references are screwed for around 5 to 6 years. Anything on the secured loan will also go into the same file. The house will be placed on the opne market and all proceeds will go to settling the debts. Anyone with a secured interest in the property will also probably be serviced by any profits. Any outstanding debts NOT covered by the sale will go against you.

Whilst I believe that the CAB will have advised you to sell the house, I cannot believe that anyone would have told you simply to hand the keys back as this 'loophole' was sealed a long time ago.

Basically, this is the most irresponsible course of action I have heard of in a number of years. Yes, you may be desperate and yes, there are always mitigating circumstances, but simply walking away from your responsibilities and debts merely means that the rest of us end up paying more as a result.

I hope that you reflect on what you have just done to yourself and those of us who try to maintain good accounts.

SHARK!

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For every positive action, there's an equal and opposite government plan.

i will firstly say that i have done all possible before considering handing the keys back, i have spoke to both debtors to see what i could do to keep my home, but unforntunatly the secured loan was the most adamant that they wanted their monthly payment plus the arrears.

Shark..... i can see how my situation would make you feel that 'others' suffer as a result, however i joined this forum for advice as i felt i was at the end of a long line that i have followed for several months. I have considered my options carefully, as i really did not want to lose my home, however as i only earn 1000.00 per month and the mortgage had risen to 750.00 and the loan is 250.00, it didnt leave me with much option, so i resent your comment as this whole sitaion has been extremelly upsetting and stressful for me.

if i'd have known i was going to be a subject for personal attack i certainly would have not asked for advice, althought i would say thanks to the geniune people who gave me advice x

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Laney x

Hi Laney - i have just read your post and then i read the arrogant post of 'shark' (by name and nature). I sympathise completely about your situation, we are in exactly the same position. My story is, in a nut shell, we got in debt, we were gready and we spent too much. We struggled for years to pay it back, in the end it got too much so we instructed a debt management company who helped. We then decided that, as there were arrears on both the mortgage and a secured loan that the responsible thing to do was to put our house up for sale. Which we did, it sold quickly and we began to see a light at the end of a horrible, dark tunnel. The problems started when we needed to get the second charge on the house released - you might know the company, not naming names, Carol whatsit from Countdown. They are absolute 'sharks'. Not prepared to negotiate due to their being a shortfall. We literally bent over backwards to get this sorted, to no avail, they dragged their pathetic little feet for so long we are now left with no other options. There is a repossession order on the house for this wednesday coming, catch 22 situation - solicitor cannot do anything without the mortgage company's agreement, mortgage company cannot do anything without the solicitor doing something and neither of them can do anything without the robdogs off the TV doing something. I am thinking that (and yes shark, you may think irresponsible - if i cared what you thought i might be bothered) handing the keys back to them is our best option, we could wait till wednesday and give them to a bailiff, but who wants that? Only time will tell whether we are making the right decision - we'll see.

Shark - have you never in your life had a problem, had to go through anything that is really hard. Suppose you spent your sad little life looking at the postings of vulnerable, upset and stressed people to turn around and say 'i've paid my bills for 30 years and never had a day off sick', well all i can say is bully for you. Try thinking outside of the box, people get into trouble, it's a fact of life. At this precise moment in time, and i am sure that Lacey will agree, i dont care if my actions have consequences to your little life, i just want my life, my children's lives, my husbands life and my mom's life back to being enjoyable and fun. If achieving this means telling the mortgage company and the 'sharks' off the TV to stick their house where the sun doesn't shine, then this is what i will do.

Think about what you say before you open your small minded little mouth next time!

Hey Jenny, not so much of the 'little mouth'! We must retain our objectivity. Its in the nature of sharks to have small minds and big mouths and to cruise around looking for things to bite chunks out of. You can't really blame them it's in their nature to prey on the less perfect as defined by their own scheme of things.

It's not just the rare ones that frequent discussions either, there are plenty in the financial services 'industries' too.

I sincerely hope things work out for you Jenny and Laney and that life becomes enjoyable and fun again. The best advice I can give is to just try to smile and do your best and don't let them get to you if you can help it. I'm sure the less judgemental, less 'perfect' little fish around here will send their thoughts to cheer you, Good Luck!

I'm deeply sorry if the truth offends.

The bottom line here is that thousands of people read these forums every day. I cannot believe that the CAB would advise anyone to simply hand the keys back to their home as 'general' advice. That is the irresponsibility that I can neither believe nor should have been posted as a 'correct' course of action.

As thousands of people end their cheap two year mortgage deals now, there is little comfort for anyone who had negotiated a 4.49% mortgage in 2006 and is now facing a 5.9% or higher deal. With the SVR at around 7.25% this is effectively doubling the mortgage monthly payments. The warnings have been sounded for months in the press and the media in general, but it is the essence of every 'introductory' rate that people take out to get on the property ladder. The planning that must be done for when the rates change is rarely adhered to in the light of moving into the new home with the inevitable results that this poor person has had to face.

The attitude of the original poster's title for the thread is also irresponsible. "Your home may be repossessed blah, blah, blah" is not a message to give to anyone. It shows a complete lack of respect for the commitment that you undertake between you and the mortgage provider and anyone else could be forgiven for thinking that terms and conditions are merely window dressing. They are a legally binding contract that you are now unable to fulfil. So what do you do?

The course of action was to hand back the keys and then what? I told it like it is. Your credit rating is screwed for at least 6 years. The issue will go to court (it has to) and the costs added to the debt. The secured loans and the mortgage are added together and the mortgage gets paid off first followed by anything else. If the sale of the house does not cover the debts, then the remaining debt is lodged against the debtor and placed on record where they usually then pass it off to a debt collection agency.

Now, do you really think that the CAB will not have said this as well?

Arrogant, yes - I can live with that. Unsympathetic - possibly (the original poster admitted to greed). A 'personal attack' - I don't deal with these unless it is to posters whom I know. I give free - and I hope - good advice and I try to make people aware of the much greater issue that these things produce. As this so-called credit crunch bites, the CAB and forums like this will get more and more stories like this where people seek advice from those in similar situations. Northern Rock is a really good example of what happens to all of us when ONE debtor gets it wrong. Every tax payer now pays around £3,200 for this government's mishandling of the bank's debt. On a much smaller scale - every time someone goes into an IVA or debt management or bankruptcy, those of us left "in the system" end up paying more for being good citizens. Now - arrogant and wrong ...

SHARK!

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For every positive action, there's an equal and opposite government plan.

well as jenny said 'if i care what you said,i might be bothered'

jenny - how did you get on with your situation. i have been in my rented place for a few months now and the house has gone back to the mortgage company, who have it on the market for the same amount as the outstanding mortgage, meaning the secured loan wont be paid, so i still have that pressure hanging over me.

i hope everything goes well for you in the furture, you still deserve to be happy and not punished for the next 5/6 years

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Laney x

While I have huge sympathy for the personal plight of the original poster, I hope you don’t mind me calling out to others that this should serve as a warning of what happens if financial planning goes wrong. You lose all you have worked for and it has a tremendous effect on all the important people around your - namely your family.

The blasé attitude some of my friends and family have over their debt always astonishes me. Wonderful Plaza TVs’ and new cars on the outside but trying desperately to keep head’s above water on the inside. One has already lost their home, others are on the brink. I only wish these people would read the original posters account and change their ways while they still have time.

I know personally how hugely frustrating it is for me to have warned people time and time again (even offering to work through their finances) only to see them still living beyond their means and ending up in a mess. Although I stop short of SHARKS opinion’s I certainly understand where he is coming from in a general sense.

Best of luck to the original poster in the future.

Smala01

To the two women who posted I really hope your situation has improved.... please let me know, as I am in a real bad way right now. and to Shark - you are a very sad person preying on people who are in absoloute distress. You don't know everything - what makes you some kind of authority on the subject? You clearly have no idea what you are talking about. No one gets into this situation because they want to and most haven't got plasma screens or flash cars. Come back to us once you have experienced a bit of real life. Until then go away little man.

My personal issue is less about money believe it or not (although I am skint and struggle to eat and live on £200 a month) but my problem is that I have a neighbour from hell. I have suffered 2 years of terrible harrassment - up all night with the music, cant watch tv as his noise drowns it out, dog *** thrown in my garden along with beer cans, *** butts you name it, he urinates on my front garden - i did the whole police/council route and got no where - the intimidation got worse. I attempted suicide and clearly it didnt work and i realised i can no longer cope. no one is buying the place so i have no option but to walk away.

shark - i am terrified of the consequences. all i asked for was to work, pay my bills and live my life. this isnt my fault - as it isnt for most people. think about what you are saying before you put your oar in - and whilst we are at it get a life and stop surfing for people with problems to attack you total loser.

What happens is you're going to have to get used to a different kind of living for the next six years or more. Credit is going to be thing of the past for you, unless it's expensive credit of the 'no credit check required' variety.

Any outstanding debt from the secured loan will be passed from collection agency to collection agency, and you'l learn a lot about explaining your budget to courts, collection agencies and the like. You'll find that soem cllection agencies are nnicer and more professional than others. You'll probably hate getting letters from addresses you don't recognise.

Some people will see this as being a moral issue, and will judge you as if you're somehow morally defective for having been overtaken by circumstances. You'll have days when you feel like other people's decisions about the risk involved in lending to you in the future is some kind of punishment. It's not.

Thank you for your honest and non judgemental reply. I don't know what the hell I did to deserve what has happened to me but i do know that I have to move and fast. I wish I could do the right thing and pay my mortgage but i am now in survival mode and simply have to have a roof over my head and feed myself. I have never wanted for much; all i ever wanted was a quiet and honest life - I have been driven to do what I am doing and believe me I did all I could to appease my neighbour - until recently if he had asked me to cut off my arm and this would stop I would have done it. it isn't an option now - it is this decision or my life. I cant cope anymore

I can't promise you that you can cope, only that I have known others cope in similar circumstances, and flourish.

This is the last place to get preachy or political, but I'll say this. For the last generation we've been promised that if we pursue individual solutions, buy our own homes, take responsibility for ourselves, we'll flourish. In fact it's a gamble, and you're on the wrong end of this individualistic bet. I could say I'm sorry that it's you, and that would be true, but actually I'm sorry that it's anyone.

But, gentleb, if it weren't for the ridiculous behaviour of greedy idiots who are rightly judged and lectured to you would be free to move. The market would not be messed up by infantilised graspers who refuse to unclasp the cookies and trap you. You are incorrect in suggesting your pathological situation is typical - the vast majority of people who the 'crunch' is affecting are not sober or sensible or ungreedy. Almost no-one can not afford their renewed mortgages.