Buying Off A Mortgagee

[babnye]

We put an offer in on a house which was accepted.

Two agents were involved.

The other agent (quite unscrupulously as he has a client wanting to buy too) rang today and told us that the vendor owes more money to the building society than he will get from the sale and that he has to ask permission to sell. He says 'they have been to court about it'.

The estate agent we are dealing with has confirmed the vendors have to get authority and that they need to confirm that the lenders will pay their solicitors fees.

This sounds like a possession order has been asked for and that this may be a mortgagee sale. Perhaps, as he alreday had the property on the market and has a buyer, they have let him proceed

This is an old couple. The property has been on the market for a while and then suddenly dropped massively in price. The husband is very ill and hasn't worked.

What are the difficulties with buying from someone in this situation?

[peter_2008]

The risk being that the lender may decide not to sell at a loss at a later time, after you paid your surveyor and solicitor.

The UK government and the banks are desparate to pretend that property (asset) price are still at their 2007 peak level. They have to pretend this to avoid facing write down or write off, as it will affect the balance sheet and make it clear that their (the banks) are bankrupt.

So, say the old couple has a short fall of £50,000 after selling the deal, if the lender allow it to be sold to you, it will effective admit that it has made a £50,000 loss, because they can't get more money from that old couple - it's a write off. Now, imagine that one bank has 20,000 cases like that. The bank will have a loss of £1 billion. Now imagine, EVERY BANK is in the same shxt multiple 10 times. Ok, I have been too simplisitic, but you see the picture.

My advice is that if you are REALLY serious about this, then pay some money to a proper solisitor to advise the risk. It not that expensive if you ask them not to produce any reports or documents, just advice. I once paid £120 for a bit service - moeny well spent. Saved me from a financial disaster.

[babnye]

Thanks for this. It's really helpful.