Author Topic: Negative Equity  (Read 5463 times)

James Falla

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Re: Negative Equity
« Reply #15 on: Jan 31, 2012, 04:07:42 PM »
Please let us know how this turns out help needed. If you feel that the service offered is good, then it might also be useful for lots of others.
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Frances Long

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Re: Negative Equity
« Reply #16 on: Jan 31, 2012, 04:36:55 PM »
Hi Help Needed,

Let me know what your solicitor thinks.



help needed 68

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Re: Negative Equity
« Reply #17 on: Feb 09, 2012, 04:34:17 PM »
James,

Just thought I would post what my solicitor thought of the documentation and surprisingly to me he said that it was all above board just not what he is used to doing but if it solves my problems would not advise against it :)

I am currently doing some paperwork with Frances and talking to one of the specialist legal firms she recommended to me who do these sort of things all the time so fingers crossed it's all going through and I can finally move on with my life.

I have to say I am already sleeping better at night, I couldn't see a way out of my situation and this seems to be the answer to my prayers.

I'll let you know again once the process has finished

Thanks for all your advice

James Falla

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Re: Negative Equity
« Reply #18 on: Feb 13, 2012, 04:21:58 PM »
Hi there help needed 68
 
That sounds good. Can you let us know a little bit how the deal works. I sure it will be very interesting for other readers in a similar position.
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help needed 68

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Re: Negative Equity
« Reply #19 on: Mar 06, 2012, 12:52:42 PM »
James,

All sorted now and I move in to my new place next month. It's good to have a debt forum with people who do more than just offer IVA or Bankruptcy so thanks to everyone.

Frances was very helpful and has allowed me to walk from the property with no debts to pay and with my credit rating intact, I would recommend her services.

Thanks again

Simon Wyllie

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Re: Negative Equity
« Reply #20 on: Mar 06, 2012, 02:20:51 PM »
Hello help needed 68.
It's always good to hear from people that have found a solution that meets their needs.
I think you have been very wise to include a solicitor in the process as property transactions can be very complicated.
I'm curious in terms of how this works with your existing mortgage lender and hoped that Frances or yourself could advise.
Some mortgage lenders would want to change the commercial terms of a mortgage if it effectively becamce a buy-to-let scenario rather than a mortgagee living in the mortgaged property. Is the mortgage lender advised about the change in the situation?

help needed 68

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Re: Negative Equity
« Reply #21 on: Mar 06, 2012, 03:11:19 PM »
Because I didn't really know what to say to the bank Frances dealt with all of this for me but my solicitor tells me she got permission to let the place and has completed a direct debit with the bank to make payments.

If you want any technicalities please contact Frances as that is the limit of my knowledge - that's why I employ a solicitor !!!

Simon Wyllie

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Re: Negative Equity
« Reply #22 on: Mar 08, 2012, 11:12:02 AM »
No problem help needed 68.
Maybe Frances will tell us is she visits the forum again as it's always interesting to learn about the intracacies of these types of measures.
 

Frances Long

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Re: Negative Equity
« Reply #23 on: Mar 08, 2012, 05:02:37 PM »
Hi Simon,

In reply to your question, yes I do tell the lender that the situation has changed and get consent to let the property out. At the end of the day the lender would rather have the mortgage paid than have to start repossession.

In Help needed 68's case I have agreed a purchase price with him, which will not change until I am ready to payout what is owed on the mortgage. Help needed can now forget about the headache property and move on with his life. I will manage the property for him, I might rent it, sell it or develop it.

If this would help others on this forum, please let me know how I can put a link on here so it is easy for anyone who needs this service to find.

I also have other ways to help, depending on an individuals circumstances but I can't help in every scenario, but I can try. :)

Simon Wyllie

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Re: Negative Equity
« Reply #24 on: Mar 09, 2012, 11:12:39 AM »
Hi Frances.
I'm not sure who you'd approach to put that link on I'm afraid.
Out of curiosity (and I do hope this will not turn out to be the case for the sake of all involved) who would be responsible for the mortgage payment in the event that something happened to you or your company?
 
 

James Falla

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Re: Negative Equity
« Reply #25 on: Mar 29, 2012, 07:54:44 PM »
I am pleased to hear that this has all worked out well for helpneeded68.
 
As Simon points out, I guess the only risk for helpneeded68 is ultimately he is still the property owner and is named on the mortgage so still has ultimate responsibility for its payment. As such if for what ever reason Frances' company is not in a position to make sure the mortgage is paid, then the mortgage company can still repossess and helpneeded68 will still be liable for any shortfall. However I guess helpneeded68 has done their due diligence and this is a risk they are prepared to live with.
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simonmisiewicz

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Re: Negative Equity
« Reply #26 on: Apr 23, 2012, 03:35:31 PM »
Well done to Help Need and Frances Long.


I concur that this arrangement is perfectly legal and all above board. I too help individuals from this position.


If people have negative equity in their property and do not have sufficient funds in the accounts then there is often a problem if that person wishes to leave the property.


Taking Frances' methodology of agreeing a price at the start and then paying off the property in the future known as a deferred completion or option deal.


There are always risks with anything we do and nothing is ever 100% safeguarded or we can do is manage risk. What Frances is doing is providing a solution now. If the company that Frances runs is liquidated itself the contract would go back to the initial owner. People like myself would be right in line to provide the support they need.


Well done to you both


Simon


 

James Falla

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Re: Negative Equity
« Reply #27 on: Apr 25, 2012, 05:16:35 PM »
Hi Simon
 
I agree with you when you say that there are always risks. Of course if a deferred completion deal is agreed then this could well resolve the problem of a homeowner who cannot move because of negative equity. Ultimately however the liability for the repayment of the mortgage on the property remains with the origional owner until this is paid in full. It will only be paid if the property can be rented and the rent is sufficient to cover the mortgage payments, or indeed a company like yours agrees to continue paying the mortgage payments. I am just nervous about these types of deals in the current economic environment where the possibility of tennants falling behind with their rent becomes increasingly likely.
 
Simon may I ask, if you do this kind of deal do you always fund the mortgage by putting a tennant into it? If there is no tennant or the tennant defaults, are you then responsible for paying the mortgage thus minimising the risk of your client?
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simonmisiewicz

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Re: Negative Equity
« Reply #28 on: Apr 30, 2012, 02:06:31 PM »
James


I am sorry for the delay in getting back to your very good question.


Once a deferred completion is signed the responsibility of the mortgage becomes that of mine (as the investor). I never allow my cash balance to be less that than of the all property mortgages for a period of three months. This provides us with a significant buffer and would not let ourselves be in that position. As a chartered accountant I know the risks and rewards of property management.


The question does highlight the issues that other investors have. The fact that they grow their business too quickly provides a significant problem to them and their clients if they do not have the fund set aside.


In these instances the investor (bad one at that) would have to default on the contract and have to give up the property. The house owner would then have to pay the mortgage and find tenants, if the property is empty.


Even if that was to happen and there are many investors out there that could face these issues. That said, addressing the problem now and taking action rather than being re-possessed is always better.


Warm regards


Simon

James Falla

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Re: Negative Equity
« Reply #29 on: Apr 30, 2012, 02:58:23 PM »
Interesting Simon
 
So the bottom line is that the origional owner does remain on the mortgage and would ultimately be reposonsible if an investment company like yours could not fund the payments and therefore as you say then have to break the deferred purchase contract.
 
As such the seller will always need to understand this potential risk and must therefore weigh up how confident they are that a company like yours will maintain the mortgage payments on their behalf.
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