Defaulting on mortgage payments

[callywynne]

We'd like to cease making mortgage payments and hand our properties over to the bank.

How easy will this be to do?

Thanks, Cally

[Nigel Howarth]

Hi Cally,

Here's the reply that Louise emailed me:

This is a difficult one to answer on the information given. The fact you say ‘properties’ implies to me that you are an investor and do not live in the properties. The chances are, you also do not have title deeds. If this is your situation (subject to which bank you are with and exactly what your Loan Agreements and any Power of Attorney’s given to the bank state) the general position on what action the bank will take if you default in your mortgage payments is as follows,

I anticipate that the bank will have a Power of Attorney which allows them to withdraw your contracts of sale from the land registry if you default. Once they have done that, they can sell your property at ‘forced sale’. This means they can sell it for a very low price. They can then take a court judgment against you for the shortfall between the sale price and the amount you owe them. The bank can then try to get its money from you (called 'enforcing your judgment') in Cyprus and or in England in the same way as any court judgment, i.e by asking the court for any of the following:

• A warrant of execution – the court bailiff will seize goods at your address which can be sold at auction to raise money to pay the judgment

• An attachment of earnings order – this is a method by which money will be stopped from your wages to pay the debt and as such can only be used if you are in paid employment.

• A third party debt order - is usually made to stop you taking money out of your UK bank or building society accounts. The money you owe is paid from the account. A third party debt order can also be sent to anyone who owes you money, not just a bank or building society.

• A charging order - is an order of the court placing a 'charge' on your property, such as a house or a piece of land. The charge will be the amount owed on the judgment. The charging order will not normally mean you have to pay the money immediately, but it prevents you from selling the property without paying the debt. If you own stocks or shares or have a fund or money in court, the court can also put a charge on these in much the same way as on property.

• If the amount you owe the bank is more than £750, they can also apply to make you bankrupt.

I know this does not make pleasant reading but you need to be aware of the position you are in and the consequences it may have if you do not repay the bank

Regards,

[Nigel Howarth]

Hello kumeliya and welcome to the forum,

Hopefully your relative will have taken out insurance that will repay the mortgage in the event of their untimely death.

Regards,