Debt on a second mortgage

[hollyjack77]

Hi
It's a bit of a long story but I had a second mortage with my wife but we have been separated for nearly 3 and 1/2 years now, it was with Welcome finance and the interest was a very high rate and they ceased trading for new business a few years ago but still managed old business. I stopped paying my half in April 2015 as I received a £15000 csa bill that had to paid so could not afford both. I informed my wife and also the loan company but they would not look into the amount of interest they were charging as I was paying an unsecured loan over their secured loan. I had previously tried to arrange with welcome finance to pay my half of the loan but they could not split the loan between me and her as they were no longer trading for new business. I have also tired to sort it out with her 2. Last September I was looking on right move and noticed that she had put the house on the market without my knowledge as she thought that she could sell it and take all the equity as I am on both mortgages but not on the deeds. I completed a matronial rights form and sent it to the land registry so she was unable to sell the house without my consent but because I found out and she didn't want to give me any money she removed it from the market even though she had a buyer for the property. The debt was sold on my welcome finance and a new company prime credit contacted me in September informing they now run the mortgage and that there was an outstanding arrears amount that needed to be paid. I received another letter on Monday stating that they would be sending a field agent out to speak to me about the £3000 outstanding arrears which they did on Tuesday and I informed him I was not in a position to pay and that if they needed to start repossession action then to do so. My wife has still been paying half of second mortage so I was wondering what would happen if it did go to court for repossession.
Many thanks in advance for any replies.

[Diana M]

Re: Debt on a second mortgage

Without seeing the papers it's difficult to comment, but consider taking a pragmatic view.

You say your wife found a buyer for the property. The sale would clear off both the first mortgage (in your name only?) and the second charge (in joint names) when the sale completes. You imply that there will still be equity/capital after that.

If you frustrate a sale that won't release you from your legal obligations to both lenders. A joint loan/mortgage makes both parties jointly and severally liable for the debt. They can chase you for 100% of the outstanding balance if they want. This will be why the lender wasn't willing to accept a 50% repayment from you.

If the lender issues possession proceedings and seizes the property they will sell it at auction for a lot less than the market value and you (as well as your wife) will both be the losers.

What was the purpose of the second charge loan? Was it home improvements which may factor into any division of finances when the property is sold?

Is there no way you can come to some amicable legally binding arrangement with your wife over all financial matters even if you have no plans to divorce after three and a half years' separation? This can be achieved by Mediation.

Di

[hollyjack77]

Re: Debt on a second mortgage

Hi Di

Thank you for the reply.
I moved out of the property in August 2013 and she has been paying the mortgage amount for the first charge and I was paying the whole amount of the second charge for a good year and a half until she agreed to start paying half. The sale was stopped by her in September 2015 as I found out she was selling and she was not willing to give me any of equity left over after both the loans were paid up and will not speak to me with regards to anything. I would just like to know if it does goes to court for repossession would the judge grant repossession even though she has been paying half the second loan or would he change it so that the arrears is just shown in my name. The second mortgage was used for home improvements. What happens if I was not to attend the court hearing?

Many thanks

[Diana M]

Re: Debt on a second mortgage

I would just like to know if it does goes to court for repossession would the judge grant repossession even though she has been paying half the second loan or would he change it so that the arrears is just shown in my name.

. . . . What happens if I was not to attend the court hearing?

I can't predict what a DJ would do at the possession hearing. The decision would be based on the facts in front of him.

If there are substantial arrears then a Possession Order is a possibility. However he would usually have the discretion to make a Suspended Possession Order if there was evidence to show that the full monthly payment would be met from then on plus an amount towards the arrears which would clear them within a reasonable period of time (typically before the loan expirey date).

As explained a joint loan makes both parties equally liable for all of the debt. That includes any arrears. I don't believe the court has the authority to change the original mortgage terms.

If you don't attend the court hearing the DJ will make up his mind based on available evidence. If there is a summons for possession both you and your wife will be named on the papers. She may go to the hearing in your absence.

You say your wife has been paying all of the first mortgage so presumably you have an informal arrangement in place for financial matters. It may be wise to get that formalised.

Di