# Mortgage Arrears Nightmare... help!



## goober (4 Sep 2011)

My wife and I purchased a house 4 years ago which has a small shop attached to it. Our broker could only secure a business mortgage at the time due to the commercial aspect of the property. I am in full time employment and my wife runs her small business from the shop. About a year and a half ago I was unemployed for several months as as I pay the mortgage, was unable to make the full payments for a few months. Although we communicated with the banks they began the procedure to reposess the home. My wife's business has been struggling in this climate and so she was unable to help financially. Fortunately I have been in full time employment for the past 12 months, have managed to make the monthly mortgage payments as well as pay a little extra to chip away at the arrears (£150, as agreed). The bank are now putting pressure on us to clear the arrears (£6000). I can't increase the additional payments any further, I can't get a loan because no lender will touch us due to the arrears. I have asked to bank to consider capitalising the arrears but they have refused. They said they even if they were to consider they would want to see business books to see if the business is profitable, which is probably isn't. My wife and I have worked hard to maintain steady payments for the past year AND make additional payments to the sum agreed as we want to keep  our house. All the bank seem to be saying is how considerate they have been - time to pay up. Can anybody advise me?


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## oldnick (4 Sep 2011)

You'll probably find all sorts of advice in many posts in previous threads, except in your case  there is one odd difference that probably needs expert legal advice......

You (or was it  aseperate legal entity - limited company?) have actually got a commercial loan/business mortgage to purchase your home on the basis there is a small shop attached.

Perhaps you could clarify a couple of points in case an AAM poster could advise(though you should still get proper legal advice)..

1. Has the bank actually began procedures to repossess the home ? Or are you just referring to nasty letters ?

2. Is the bank fully aware that this is your primary residence-and that you own no other residence?

3. Maybe you could advise a rough breakdown on the figures?  

It seems unbelievable that for a small arears of 6.ooo - which is gradually diminishing - any lender would take proceedings,. most especially if a home is involved.  It seems more unbelievable that they'd get away with it.


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## goober (4 Sep 2011)

Hello. Thanks for your reply.

The business wasn't a limited company when it took out the mortgage, but the mortgage was taken out in the name of my wife's business. It's effectively a house, but the front two reception rooms have been converted into a shop.

1. The bank have "issued proceedings seeking possession of the property". Although it appears that they are not _about to_ take possession of the property. I am no longer in contact with the bank directly and must contact them via their solicitor. I have been to court on several occasions. The last time was six months ago to agree to an increase in the amount I could afford to pay in addition the the monthly mortgage payment. The next review will be this month. 
2. Good point. As far as I am aware the bank are aware of this, although I will check and confirm this.
3. The property has reduced in value a little due to the slow market, but is worth over £300,000. The mortgage balance is roughly £178,000. The arrears are roughly £6,000.


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## oldnick (4 Sep 2011)

O.K. goober nothing i can add.,except to emphaise to all concerned,especially the court that this is your one and only home. I hope some expert here can advise. 

I'm still shaking my head at the attitude of the bank if you are up-to-date with payments bar the 6k that  you are showing you're also paying.

The sad thing is you're probably paying a higher interest than on any home loan,and if your wife's business is not making much money then the interest relief is of little value.


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## hastalavista (4 Sep 2011)

the problem here is in part the bank sees a business loan on a business premises and does not see a house.
The loan is to a business, essentially a sole trader.

OP says he can't borrow because of the arrears but how are they his arrears, the are the wife's business arrears.

Has the OP g./teed the debt?

Is the 300k valuation based on it being a house or a business premises?

Are you paying business rates or is it nod and wink with the Local Co Co?

What term is left on the 178k and what ages are u and you wife?

Is it possible to make the case in court to have the loan extended.

The other question is what % of the loan is the business servicing and what % is the OP's wages?

To have any hope of saving this the house aspect has to come to the fore so this should be the focus as it ginves some protection

I suspect the bank knows this and wants to frog march/bounce the OP into  an exit strategy that will be done on business as opposed to PPR terms

It would be nice to see some hard numbers on the monthly repayment etc


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## goober (4 Sep 2011)

I see the arrears essentially as my own because I am the one paying the mortgage! I don't think my wife's business has ever been in a position to pay the mortgage consistently as takings vary from month to month - it just helps out with general household bills etc. and occasionally contributes to the mortgage if it's been a difficult month for me.

We paid paid around 350,000 for the property about 4 years ago. It was sold as a house but the vendors were trying to include their own business (which they were running in the shop) in the sale (which we declined).

My wife's business is paying business rates and I am paying household rates (council tax).

It was a 25 year loan taken out 4 years ago. Monthly repayment is £1090. Interest accrues at rate of 2.25% per annum at a daily rate of £11.00. We are both in our late 30s.


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## hastalavista (4 Sep 2011)

u may see the arrears as yours but this may not be the legal position
 re  am paying household rates (council tax)

In 26 Counties of ireland?


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## oldnick (4 Sep 2011)

I didn't pay attention to the sterling sign in your first post. Evidently you are in U.K.  This is an Irish site and most posters here would know more about how to deal with Irish banks- who ,in any event, would not act as your bank has.

 I admit I was puzzled by certain aspects of how your bank was dealing with you - it seemed strange  because nowadays banks here don't take things so quickly and nastily as your bank has - especially when a home is involved, you owe so little and you are paying off regularly.

In any event ,good luck.


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## hastalavista (4 Sep 2011)

oldnick said:


> I didn't pay attention to the sterling sign in your first post. Evidently you are in U.K.  ..
> 
> In any event ,good luck.




+1 by 2


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## goober (4 Sep 2011)

Yes, sorry, I am in UK. All your help has been incredibly helpful and I agree, Irish banks would not have acted in such a manner. 
Thanks again.


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