Cape Blue

Then she's F*%#ed

CelticRover

Yes, but what about the poor bloody piper?

Chrissywissy100

Yes, you want to watch out for that one.. our house "completed" the sale one month after being in the US, and we were taxed by the US Gov't on the money we "earned" in the sale.

CelticRover

How would anyone know?

Chrissywissy100

Figured that if they managed to put Al Capone away for tax evasion then I wouldnt stand much of a chance!

CelticRover

Hmmm!

Cape Blue

Interestingly, I know a Brit couple that are moving back to the UK (from the US) as one of them has a better job to go to - its a voluntary move (also partly driven by desire for kids to be closer to family).

They bought their house 2+ years ago at the peak with a 100% mortgage at $260K, it is now worth around $180K (if they can sell it) so there is a $80K shortfall - they spoke to the bank, said they had to go back to the UK as their US jobs were about to disappear (& they are on H1B) and the bank has agreed they can go on a "short sale" - this appears to be the bank selling the property and swallowing the $80K shortfall, the only downside for them being a poor credit history if they ever moved back to the US, but otherwise the bank (apparently) will not be chasing them for the $80K.

Seems pretty whacked to me for the bank just to swallow the $80K and not at least try and set up a debt repayment program - looks like the investors and account holders in that bank are paying the piper.

dunroving

I read an article in the Times recently that pointed out that difference in the law between the UK and US. In the US you can just hand over the keys and are not responsible for the shortfall if it sells for less than the mortgage. In the UK, if you default and the house is repossessed and sold, the bank can then chase you, i.e., you're responsible for the shortfall. A couple of examples were given where the bank sold the repossessed house for a ridiculously low price - obviously, they could care less because they were legally entitled to go after the former owner/mortgage holder.

avanutria

Yup, some of the houses that DH and I looked at in the states recently are short sales. The bank decides to take the hit because the alternative is not getting ANYTHING out of the house - it's usually a last resort thing, the previous owners will get nothing but the shirts on their backs, and it makes it really hard to sell on even to GET the short sale, because the bank has to have the final say on any offer that a buyer might make. The normal house-buying process takes about 30 days in the US but for a short sale it's not unheard of to be 3 or 4 months or even longer.

CelticRover

Right! Yesterday I spent a couple of hours giving my daughter's brand new model home a thorough shakedown, just in case. The builder is now liquidating this never occupied, super upgraded model home, after gradually dropping his original asking price of $300,000 to $ 175,000.

The situation is indeed global.

Cape Blue

I had assumed that they would be responsible for the shortfall - in the land of personal responsibility and all, I guessed they would have a harder time than in the UK. Looks like their loss is shared out amongst all the customers and shareholders of the bank without any attempt to get them to pay for their debts - sounds a bit like socialism to me!

Meryl

lol, thanks for that I feel sooooo much better now!!!

....maybe I should sell a kidney to tide me over in the meantime?

Cape Blue

well at least it raised a smile

I'd look into the letting situation if I were you, you may have no choice but to give it a go, I can't remember if your partner is moving out with you or not, but she could hang around and make sure it rents before joining you.

Meryl

that might be an idea, although my parents have said to give them power of attorney if it's not sold before I go, if it's still not sold in 4 weeks then I'll have another look at my options.

If I had a couple of months wages in the bank then I wouldn't be so worried, because once I'm working in the US, I can make payments into my UK account to cover the mortgage etc....fingers crossed it doesn't come to that.

I'm just impatient to get there and start work really.

Jerseygirl

If you're that short for cash I would think very seriously about moving to the US unless your employer is giving you a very generous relocation allowance and good healthcare insurance. If there's a change in exchange rates...not in your favour you could be in a bit of a pickle if you're sending money back to the UK.