Hi everyone,

I am asking for advice concerning a vendor who contacted me last week about his debt problems. Frankly I don’t quite know how or if I can help him.

Here is the situation:

·         “A couple of months” behind in mortgage repayments

·         Outstanding mortgage - £252,000

·         Market value of his property - £280,000 (according to the vendor)

·         Current monthly repayment - £1,600

·         Has NO secured loans

·         But has unsecured debts (don’t know the outstanding amount)

·         Total monthly debt repayment £2,300 (i.e. mortgage = £1,600 & unsecured = £700)

·         He is concerned his property will be repossessed, therefore would like to sell and rent back with buy-back option

·         He would sell 80% BMV and rent back

·         He has tried in the last 6 months to negotiate with the unsecured creditors, but to no avail

·         He believes he will be able to get back to his feet in 6-12 months

·         Court hearing in early August

Looking at the situation, a straight BMV purchase does not seem to work (e.g. 80% of £280k = £224k). So my questions are:

·         If the sale was to go ahead (presumably my mortgage of £224k and his of £28k (£252k - £224k)), can there be 2 mortgages against 1 property?

·         Seeing that he is already in arrears, are there lenders out there who will lend him the £28k required to pay back the mortgage outstanding (so there will only be 1 mortgage)?

·         Can we help this person in any case?

 

Please let me know if you can help this person.  I’ll be happy to pass the details.

Thanks for your help in advance.

Regards,

Chiu