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  • Mortgages & Finance

    Repo process

    Hi

    I have a friend who has a problem with his mortgage with Santander

    He is 6000 in arrears which they let him carry over ,however now he is a couple of months on top of that, so if he doesn't pay 2000 or so by 23 Dec he will have legal proceedings started

    Does anyone know the process and if he gets leeway or will they go for repo straight away

    The mortgage is 96 with 7 in arrears, only 8 years left, the props in Cambridge, worth about 350

    He is a builder but jobs don't start till the New year or Feb, could he get customers to sign a contract for jobs in advance to show the court

    I cannot help him as I am doing a conversion gone over budget and will need to borrow more money myself!

    Any advise greatly appreciated, I'm worried that they will be strict, he's juggling tax owed as well

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    Has he spoken with the lender? Repossessen is the last point of action for lenders.

    If there is equity in the property (more than 75%) they can role it up in the mortgage as it sounds like they have already done, however it needs to be affordable.

    Citizen advice are also a good call for debt advice.

    Hope all goes well for your friend

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    Hi Graa

    ltv probably 30% but maybe they have already rolled it up.

    I told him repo was the banks worst option

    Thanks for your reply

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    Hi Rodney,

    My advice would be to speak to the lender and arrange a payment plan.  As Graa said, repossession is a last resort.

    Your friend should ask for the lender to send a field worker to see him to work out his income and expenditure and then propose a repayment plan.

    ​I wish your friend luck.

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    Thanks Vanessa

    I think because he already has an agreement of a floating 6k they are threatening court action.

    I hope if it does go to court the judge will give him time.


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    If he could even pay £500.00 off that arrears, I think it would ease the situation for him.

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    As someone who has much experience of being repo'd - although it was a long time ago when lenders were strict, communication is the key. He has to not hide and not run away from the problem - he needs to talk to the bank regularly and just make the smallest of payments even if swallowing pride to ask for help from friends and family. He has a lot of equity which he might lose. Would he be willing to downsize? he could put the property on the market to sell so its market price not forced repo sale price, he might find he could make money from moving - buying somewhere cheaper and doing it up (he's a builder) - smaller in value so smaller mortgage paying off arrears and having a lump sum or no mortgage at all and money left to refurb new place. He could make money from buying cheap and doing up new place (his job) and then buy back better place after that.

    He also needs to be very careful - there's plenty of sharks out there who'd want to take advantage of this situation, the 'we help people with mortgage arrears' type they'll want a good sized fee, share of the equity, buy the property off him cheap etc.

    Maybe he can promise family / friends (who can afford to help) that he will sell if he can't pay them back within X time, and he then uses the min poss money needed for bank to roll up the rest of the arrears, maybe he can extend the mortgage time frame too if possible (although this could be difficult with him having arrears).

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    regards Andrew Peers - property investor / sourcer - 07912674181

    andrewpeers@hotmail.co.uk


    I agree. A quick sale would be his best bet. At the lowest he can afford to get out of this mess and through an estate agent. I would get it on the market now. I have been through my share of money worries and I know how quickly things can escalate if you don't act fast. I also know how easy it is to get overwhelmed and the temptation to do an ostrich impression is very real. There are many vultures out there who will be quick to leap in to offer to save the day in a way that leaves him nowhere to turn and very often is probably against his mortgage conditions. He needs to get to the estate agents rapidly with a motivated sale price.  And stay in touch with his lenders.

    An EA by me (Oldham) charged a price that included legal fees of £500 with their legal firm and she was the best conveyancing solicitor I have ever used. Maybe he could find a similar deal so he has zero outlay.

    Action is his best bet. Maybe he should get anything of value out of there now too just in case.

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    Has he room for lodgers?

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