Mortgage in arrears – Repossession?

S

ssb

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Hi,

Just looking for some advice??

My brother owns a house but was let go from his job a while ago now and while he was looking for a job his mortgage repayments went into arrears by a few thousand. The house is rented out now since November. When he was made redundant from his job and could not afford his mortgage repayments he explained all this to the bank and even tried to sell, but obviously the wrong time for selling so he rented instead.

He is after getting a call from his bank saying that when he bought the house it was for owner occupier and that it should not be rented out and that “under the circumstances” they will let it go. They also said that they are sending someone down to value the property and that they want him to send them in a copy of the Lease?

Has this happened to anyone or does anyone know why they want to value it and want copy of the Lease?

Advice much appreciated.

Thanks
 
How Long ago did he buy the house, and what kind of mortgage product is he on?
Mortgages for buy to let properties genrerally have a higher interest rate than owner occupier, so it may be that the bank are trying to up the interest he is paying.
Re the valuation, again it depends on what type of mortgage he has - eg if he is on a tracher rate with a LTV of 80%, the way property has fallen might mean that he no longer qualifies for theat tracker and the bank would try to put him on a higher rate.
As long as he can prove it was his own private residence for a number of years (and gets his arrears paid off asap!) i don`t think the bank can do anything.
 
Hybrid Boss said:
He sould tell them that he is living in the house & is just renting out the other rooms
Click to expand...

I don't think that telling a lie now, after telling the real story some time ago is going to help at all.

Why have you got "reposssession" in the title of this post?

Is the mortgage still in arrears?

Your brother may have the rate increased, but if the mortgage is no longer in arrears, there will be no attempt to repossess the house.

If the title is misleading, you might change it.

Brendan
 
It's best to be one step ahead of the banks. If he's in arrears still they may want him to sell it to repay them the mortgage particularly if the value is higher than the mortgage and if he has no job. They may also want to move him from a residential mortgage to a buy to let mortgage which is more profitable for the bank, they will base this probably on the amount of rent versus mortgage payments or they could let him stay as he is and see if the rent is enough to allow him to continue with them lending to him and not repossessing. A bank is probably more likely to repossess a buy to let than a residential propety in the current climate.
 
"Has this happened to anyone or does anyone know why they want to value it and want copy of the Lease?"

Mortgage accounts that go into arrears prompt a review by the bank - it is part of their internal policy. This involves reassesing their own security position and your brothers earnings. This means that most likely, they are looking for a valuation to try and ascertain the current LTV of the property (if it is in negative equity or not). The lease is probably to confirm the level of rental income your brother is receiving to determine his income presently. An outcome of this is that they will ask your brother to lodge any rental income in reduction of the arrears (if he is not already doing so. Although, if not - I would wonder why?). I would doubt they are looking to reposess although this would depend on the amount and length of time your brother is in arrears and also if he is being co-operative with them.
 
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