Short-Sale / Negative Equity

He said if a property is valued at €200,000 and the outstanding mortgage is €240,000 then this homeowner is facing negative equity of €40,000.
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I don't understand. If the customer was "in good standing" with their bank, why would the bank have to issue foreclosure proceedings.

It seems a ridiculous idea​
to suggest a bank write off part of a debt that was freely entered into and is being repaid as agreed between the two parties.​

 
It seems a ridiculous idea to suggest a bank write off part of a debt that was freely entered into and is being repaid as agreed between the two parties.​

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And yet they write off debts for greedy developers !!!
 
I'm in negative equity. If the banks were to intoduce this would I

A)Have to stop paying my mortgage.
B)Have to sell

In order to avail of this write off or if I wanted to stay where I was could I just apply for a write off?

Seems a pretty difficult scheme to introduce.
 
Ouch, the interest rates on the Nationwide offer are high (by today's standards). Interesting idea, but it seems only pretty desperate people will use it.
 
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