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The Colour

Reposession Questions

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If you are reposessed and the lender cannot raise the amount of your loan by selling your house, then can they go after you for the rest?

Additionally if they let you off (say a £35,000 shortfall), would this be counted as income, and therefore taxed?

Thanks in advance.

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When you borrow the money off your bank to buy your house you are commiting yourself to repaying it come what may. If you borrow 200,00 and have to sell your house for 160,000 you still owe the bank the missing 40,000- they don't give a to$$ about the "real" price of your house- all they want is their 200,000 repaid in full. You sell for 160,00.... so what, you borrowed 200,000.

This is why the bank has the deeds to your house- it's only their security on the money you borrow- nothing more nothing less. Banks aren't interested in playing property speculator- that's your job. If it all goes pear shaped they'll snatch your house and come after you for any shortfall- and they will try and make you sell EVERYTHING you own to get their money.

The good bit is that after snatching back your house your bank are under no obligation to get the best price they can when they bung it into the auctions- it might sell for even less than 160,000- guess who has to make up the difference?. Whatever happens you owe them the full whack end of story.

Nice situation isn't it- and who said being a mortgage provider was risky

(can't see any bank or building society "letting you off" 35,000- tax probably won't be an issue as you'll be bankrupt with nothing of worth left).

Edited by sun n sea

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For advice on repos see this site

Its advice is to get a couple of valuations before repo and then....

[/indent]'If the price the lender sells it for falls far short of these valuations and it chases you for the shortfall, you should not do anything except continually require the lender to explain its marketing techniques and how it arrived at the sale price.'

Trouble is though if and when the market starts spiralling downwards they'll have the perfect excuse for that shortfall

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When you borrow the money off your bank to buy your house you are commiting yourself to repaying it come what may. If you borrow 200,00 and have to sell your house for 160,000 you still owe the bank the missing 40,000- they don't give a to$$ about the "real" price of your house- all they want is their 200,000 repaid in full. You sell for 160,00.... so what, you borrowed 200,000.

This is why the bank has the deeds to your house- it's only their security on the money you borrow- nothing more nothing less. Banks aren't interested in playing property speculator- that's your job. If it all goes pear shaped they'll snatch your house and come after you for any shortfall- and they will try and make you sell EVERYTHING you own to get their money.

The good bit is that after snatching back your house your bank are under no obligation to get the best price they can when they bung it into the auctions- it might sell for even less than 160,000- guess who has to make up the difference?. Whatever happens you owe them the full whack end of story.

Nice situation isn't it- and who said being a mortgage provider was risky

(can't see any bank or building society "letting you off" 35,000- tax probably won't be an issue as you'll be bankrupt with nothing of worth left).

Cheers for the reply - I only ask because in the US there are mortgage states and trust-deed states. In a mortgage state the lender has to get a court order to reposess. In a trust-deed state the lender can evict the borrower and sell the house without a court order.

Additionally in some trust-deed states there are laws which state that the lender cannot pursue the borrower for any shortfall not covered by the sale of their home.

Do you know if the banks here require a court order to reposess here?

Thanks

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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