Messy Joint mortgage issue - joint holder not co-operating

[Bearcub]

Hi,

I would be grateful for any advice provided.
My wife entered into joint mortgage with her brother in 2001. Brother has always lived in property and wife entered into mortgage contract to facilitate brother to buy property.
Brother married and property was used as family home, however, brother is now going through unamicable separation with spouse. The brother is living alone in property now.

Original mortgage 120k
arrears 21k
current balance exc arrears 105k
Lender Bank of Scotland
Current month payment 857
current market value 200K

The brother has been unemployed past year and he got into major financial difficulty in 2006 which my wife was unaware of (all letters going to mortgage address and were not brought to attention of my wife until the bank contacted directly at our own family home)


Due to previous problems we agreed to pay the mortgage payments for past year to allow him to get back on his feet. So basically we have been paying mortgage on two properties, we have childcare costs etc.
Our savings have been exhausted and we are now at the end of our tether with her brother.
Her brother has not found work and has not been looking (despite many interviews arranged through our own contacts and other channels to get him a job).
We asked that at least 2 rooms be rented out to help with the mortgage payments - this has been refused.
We have requested that the house be put up with sale to clear the mortgage - he has refused to do this.
We had offered to approach the bank to buy him out (this was earlier when we still had some savings to our name) - he refused this also.
I understand that we are strictly and severely liable and as he does not have a penny to his name, the bank will in all likelihood come after us.

Basically, What I am asking is can we ask the bank to force the sale of the property. We understand if there is a shortfall we will have to accept this but has there been any situation where a bank forced sale of property on the request of a joint mortgage holder? We are trying to save our own credit ratings as we desperately need to trade up to a house of our own. We cannot swap properties.

Please be aware we cannot afford to keep paying for her brothers property, and, only have enough savings left for another 2 payments. We are budgeted to the bone and cannot make any more savings on our own costs of living.

Many thanks in advance for your assistance.

 

[Lucuma]

Hi bearcub, you should stop paying his mortgage immediately. you have decided that you want the house to be sold, which considering it's in positive equity and your brother-in-law no longer needs it as a family home, seems like by far the sensible option to get your wife out of this joint mortgage. There are 2 ways to go about getting it sold but before I get into it, can I just say I think ye are tying yourselves up in knots over the jointly and severally liable thing. Yes your wife is jointly and severally liable but this does NOT mean that she has to pay the full or even half the mortgage every month. In fact she doesn't have to pay the mortgage at all. She will not get into trouble with e.g. the guards or the law over not paying a joint mortgage. All that being severally and jointly liable means is that if the house is repossessed by the bank and sold, and there is a shortfall, the bank can get a judgement in court against her for the outstanding amount. However this house is not in negative equity so it really doesn't sound like that's an issue. Even taking into account the fees that there will be for selling the house it sounds like the equity in the house will more than cover those. So you need to get this idea that being jointly and severally liable means you have to pay the mortgage out of your head first.
Stop paying that mortgage immediately and use the little bit of savings you have left to pay for an appointment with a good solicitor (preferably one with experience in property). I paid around 200 euro for an hour to an hour and a half with a solicitor in D4, best money ever spent. He/She will spell things out for you.
Anyway in order to get the house sold 2 options:
1. Your wife can take her brother to court to force the sale of the house (no this cannot be done through the bank as you said, it has to be done through the courts). My solicitor quoted me a figure of about 15-20k that this would cost me to take this court case
2. Stop paying the mortgage completely (this accelerates the process) and they will repossess the house and force the sale. This seems like your best option. If you spend time meeting the bank, filling in SFSs, agreeing interest only and all this it only postpones the sale of the house, the fastest way to get them to sell it is to stop paying completely. if there is a shortfall your wife will be liable but seems unlikely that there will be. I asked this question on the mortgage arrears forum and was advised that if the bank threaten repossession the best thing to do is to write to them outlining that your wife will happily agree to voluntary surrender of the house. You have no control over whether her brother does the same but hopefully to avoid having the bank's court costs awarded against him he will.
Good luck

 

[so-crates]

As you say you are concerned about keeping yours and your wife's credit record clean with a view to being able to trade up yourselves lucuma's nuclear option is obviously going to impinge on that long term plan. While it isn't a criminal matter that doesn't mean there are no consequences.

However, your brother-in-law may not take consideration of that so perhaps threatening him with that option may result in him taking some action. Are there any other family members that may be able to bring some pressure to bear on him?

If not, you may have little choice but to go down the route of forcing the issue. It would be worthwhile discussing the option of your wife taking her brother to court with a solicitor just so you have an outline cost and approach in mind if you decide to do that.

 

[Brendan Burgess]

Joint mortgages get people into almost insoluble difficulties.

We are trying to save our own credit ratings as we desperately need to trade up to a house of our own. We cannot swap properties.

Forget it, you won't be able to maintain your credit record. Check it out with the ICB - I would guess that it's already shot.

I don't really see any point in going to court to force your brother to sell the house. It will take a long time and cost a lot of money. He will probably start paying the mortgage towards the end of it, and the judge will leave him where he is.

Stop paying the mortgage
This will damage your credit rating but it can't be helped.
Explain the situation to Bank of Scotland and tell them that you will support their efforts to repossess the house.

Write to your brother
Set out your proposed course of action.
Set out the costs involved in a forced repossession and sale of the property.
Show him that he will do better by agreeing to the voluntary sale now.
As it is probably a cheap tracker, show him the benefit of making the payments himself to keep the house and tracker.

This may well end up in court, so you will need a trail of correspondence to show the judge.

What is your sister's stake in the house?
Did she do an agreement when she jointly bought the house?
Has she paid anything at all on the mortgage before paying the last year's money?
Does she "own" half the equity in the property or will she just get back the payments she made over the past year?

 

[Bearcub]

Thank you for all your replies. There was no previous agreements when my wife entered into the contract. We now intend to put in writing all previous option to her brother and confirm that we are willing to voluntary sale. If he still doesn't cooperate we will contact bank directly and advise payments are stopping and give copy of letter to bank to show we have tried to compromise with her brother. All her family has been involved and tried to put pressure on him but it's not helped. We applied for credit report and awaiting result. We are going to use this against him in family talks. Thanks again .