Hypothethical: How to "buy out" when in negative equity?

[Sesed]

Not a homeowner, but I've read a lot of forum posts about people separating and wanting to take over the mortgage themselves, or add another party on to it. There seems to be a lot of different opinions and expectations and still talk of "buying out".
For example: A & B buy a house in 2006. In 2010 they are in negative equity to the tune of 100k. A & B split up. C moves in with A and wants to buy out B.

If C has to buy out B, deposit plus what was paid so far on mortgage, B is in a great position. Similarly, if B can just walk away he is in a better position than most. Or, does B OWE the 50k to A/C?
If they sold the house, they would both owe 50k each, but the A/C couple would owe 100k between them if B was allowed walk away, so as a unit be worse off, so I would deduce that B does owe them 50k.

I read you can remortgage together to do this, but why would the bank allow C to be party to a mortgage where the mortgage is twice the value of the house?

Sorry if these are stupid questions! I genuinely am confused as to how this works...

 

[ClubMan]

If I was B then I'd be looking for at least half the market value of the property. End of.

The negative equity and tight lending practices these days make some of the options above very difficult to achieve.

 

[Sesed]

Ok, but say the market value of the property is 200k, and mortgage is 300k, B is still left with 50 k to cover?

 

[ClubMan]

Yes. So?

 

[huskerdu]

I read you can remortgage together to do this, but why would the bank allow C to be party to a mortgage where the mortgage is twice the value of the house?

Sorry if these are stupid questions! I genuinely am confused as to how this works...

It doesn't work.

What evidence do you have that mortgage companies are allowing the transfer of ownership of houses with negative equity without the mortgage being paid off ?

 

[Sesed]

Yes. So?

That was what I wanted to know. There appear to appears to be a lot of conflicting advice regarding this issue.
It seemed logical to me that B would take his / her share of the negative equity but I saw thread on askaboutmoney where the first reply suggested that when buying out one person owed the other person half the mortgage price + the deposit to the other party, which seems unfair since the property is in negative equity. Although that advice may be specific to that case because one party didn't want to sell.

What evidence do you have that mortgage companies are allowing the transfer of ownership of houses with negative equity without the mortgage being paid off ?

I don't have evidence, that's why I'm asking. I saw this another thread here where the person who wanted to buy out his girlfriends sisters half of their house was told:
"Essentially, you buy out the sisters share and either take over her responsibility for the mortgage ( with the consent of the lender) or you buy out her share and you and your g/f take out a new mortgage to pay off the old mortgage"
but I presume if the house is in negative equity, he can't "buy out" the sisters share as the sister still owes something? I don't see here why the bank would allow him and his girlfriend to get a new mortgage to pay off the old one if property they are effectively "buying" is worth less than the mortgage.

(Sorry I can't post the links to the thread as I am new)

 

[huskerdu]

"Essentially, you buy out the sisters share and either take over her responsibility for the mortgage ( with the consent of the lender) or you buy out her share and you and your g/f take out a new mortgage to pay off the old mortgage"
but I presume if the house is in negative equity, he can't "buy out" the sisters share as the sister still owes something? I don't see here why the bank would allow him and his girlfriend to get a new mortgage to pay off the old one if property they are effectively "buying" is worth less than the mortgage.

Exactly. You are right.

Regardless of whatever advice someone gave here, in the present climate, there is no chance of a mortgage lender allowing a new borrower to take over responsibility for a mortage in negative equity.