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People Leaving and handing keys back to the bank

People Leaving and handing keys back to the bank

Old Jan 22nd 2009, 9:04 am
  #16  
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Default Re: People Leaving and handing keys back to the bank

Originally Posted by Katya View Post
If you were given a 130% mortgage a few years back - say 130K and now your propery is worth 60-70K - what happens to the deficiet of money? Ive been told it is just written off - but surely the owner of the property has a liability for this?
Yes, exactly. The person who took out the loan is still liable for repaying it. If
someone signs a house over to the bank, the bank will sell it off as quickly as
they can - for whatever price they can get immediately. if that only
covers a tiny fraction of the loan, then the borrower still has to stump up the
rest. Since the bank has no interest in achieving the best price for the
sell-off, this is a particularly desperate way to approach things. You'll almost
certainly be worse off that if you persued any other option - including
bankruptcy. What the bank will then do is sell on your debt to a collection
agency. if you thought the bank was giving you a hard time over unpaid
obligations expect 10 times worse from the "professionals".
(BTW, I'm not a financial expert - so don't take any of this as advice)
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Old Jan 22nd 2009, 3:10 pm
  #17  
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Default Re: People Leaving and handing keys back to the bank

Originally Posted by Mitzyboy View Post
Are you sure they have the power to take assets in the UK? That will be a shock to some people
As you know I have worked in conveyancing in the UK and they can come after you for the balance due
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Old Jan 22nd 2009, 3:48 pm
  #18  
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Default Re: People Leaving and handing keys back to the bank

Ah, but what happens if you file for bankruptcy? I always assumed that did remove all your debts.
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Old Jan 22nd 2009, 4:38 pm
  #19  
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Default Re: People Leaving and handing keys back to the bank

Originally Posted by bil View Post
Ah, but what happens if you file for bankruptcy? I always assumed that did remove all your debts.
Nope, not at all......



Some debts are bankrupt proof, Inland Revenue is one example.
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Old Jan 22nd 2009, 5:53 pm
  #20  
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Default Re: People Leaving and handing keys back to the bank

Things just as bad in the UK.
Every 10 minutes another house is repossessed according to a report today.
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Old Jan 22nd 2009, 8:24 pm
  #21  
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Default Re: People Leaving and handing keys back to the bank

Originally Posted by rugbymatt View Post
Nope, not at all......



Some debts are bankrupt proof, Inland Revenue is one example.
Wel, that I can understand, but what about mortgage arrears? Does bankruptcy erase those?
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Old Jan 23rd 2009, 12:06 am
  #22  
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Default Re: People Leaving and handing keys back to the bank

They interviewed one of the UK victims on TV tonight.
The bank had just sent him a bill for the outstanding balance of 160,000 pound after already having taken his house and pocketed the proceeds.
There are so many others in the same boat.

Such people are simply victims of the recklessness,stupidity and greed of the banks that caused the mess.

Despite Browns promises, little is being done to help these people who have had their lives ruined, whilst the greedy, corrupt bankers can no doubt retire in luxury without a single care.

The numbers now losing their homes is increasing at an alarming rate!
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Old Jan 23rd 2009, 7:26 am
  #23  
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Default Re: People Leaving and handing keys back to the bank

Originally Posted by Dick Dasterdly View Post
They interviewed one of the UK victims on TV tonight.
The bank had just sent him a bill for the outstanding balance of 160,000 pound after already having taken his house and pocketed the proceeds.
There are so many others in the same boat.

Such people are simply victims of the recklessness,stupidity and greed of the banks that caused the mess.

Despite Browns promises, little is being done to help these people who have had their lives ruined, whilst the greedy, corrupt bankers can no doubt retire in luxury without a single care.

The numbers now losing their homes is increasing at an alarming rate!
Yes I saw that .... exactly what we described ... they sold it for less than it was worth just to offload it and then went after him for the balance ..... even if a house is reposessed they seem to be able to do that
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Old Jan 23rd 2009, 7:30 am
  #24  
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Default Re: People Leaving and handing keys back to the bank

Originally Posted by Mitzyboy View Post
Yes I saw that .... exactly what we described ... they sold it for less than it was worth just to offload it and then went after him for the balance ..... even if a house is reposessed they seem to be able to do that
They will do, from what I understand you are liable for the whole equity of the property mate.
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Old Jan 23rd 2009, 8:55 am
  #25  
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Default Re: People Leaving and handing keys back to the bank

Originally Posted by Dick Dasterdly View Post
Such people are simply victims of the recklessness,stupidity and greed of the banks that caused the mess.
The banks forced them to buy and forced them to borrow?
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Old Jan 23rd 2009, 8:59 am
  #26  
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Default Re: People Leaving and handing keys back to the bank

Originally Posted by Hillybilly View Post
The banks forced them to buy and forced them to borrow?
Sometimes the situation forces people to borrow, and I think the issue of buying and borrowing have to be kept completely separate.
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Old Jan 23rd 2009, 9:07 am
  #27  
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Default Re: People Leaving and handing keys back to the bank

Originally Posted by Hillybilly View Post
The banks forced them to buy and forced them to borrow?
Karma sent for this post. People overstretched themselves, borrowed against the increasing values of their homes to buy things like cars, holidays in exotic places, second homes in places like Spain to rent to tourists and buy to lets to bring in extra income. Property values only go up, right?

You can't blame the banks for everything, bad that they were in allowing people to borrow too much.
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Old Jan 23rd 2009, 9:09 am
  #28  
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Default Re: People Leaving and handing keys back to the bank

Going back to what the OP said, handing the keys back to the bank is called a dacion en pago. I have just done this myself a few weeks ago (we were 4 months behind ). The bank do not make a habit of offering this to you, you have to ask for it. The bank then do a valuation on the property and if you have equity in the property then yes, you go to the notary, hand the keys over and any debt (including credit card that is associated with your account) is written off and they do not come after you for it. The document you sign in the notary says that the bank in question are now responsible for any debts relating to the property (including suma etc) however, if the valuation comes back that you are in negative equity then the dacion en pago is not an option and then, yes you have to go down the reposession route where the difference between the outstanding loan amount and the sale of the property is liable to the borrower. If you believe you may have equity in the property it is worth speaking to your bank about it, believe me, with everything else we had going on, it was one less thing to worry about. We signed our house back over to the bank in the last week of December and i had initially asked the bank about a dacion en pago in the last week of November so it didn't take very long either. Not a very nice thing to happen whatever way you look at it, but tried to look at it as the best outcome of a horrible situation.
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Old Jan 23rd 2009, 9:18 am
  #29  
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Default Re: People Leaving and handing keys back to the bank

Thanks Dessiree that sums it up perfectly. No need now for others to speculate what is and what is not possible.
Sorry I didn't work out for you ..good luck
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Old Jan 23rd 2009, 9:20 am
  #30  
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Default Re: People Leaving and handing keys back to the bank

Originally Posted by rugbymatt View Post
Sometimes the situation forces people to borrow, and I think the issue of buying and borrowing have to be kept completely separate.
Well, not really. Last time I looked there was still the option of renting property. We come from a culture where the majority aspire to own their own home but it isn't compulsory, nor is it compulsory to own the biggest and best house in town.
We all have aspirations but shouldn't borrow recklessly to acquire them. I aspire to own a big flashy new sports car and a racehorse but I know I can't afford 'em!
Yes, the vast majority have to borrow at some point in their lives but it's their responsibility (not the bank's) to ensure that they will be able to meet those repayment obligations for the term of the loan i.e. not borrow (whether a mortgage, credit card, car loan etc) beyond their means, surely?
When I had a mortgage in the UK and was working for an employer that had a long history of, ahem, financial "dodginess", I took out a mortgage payment protection policy that kicked in when the inevitable happened.
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