mortgage and negative equity

[neilm]

I recently viewed a bmv potential property but the price i had in mind would effectively mean that the mortgage lender would be approx. 25k out of pocket. Even though the seller just wants to cut his losses, i assume the mortgage lender (commercial first) would not sell. The seller will shortly be defaulting on his mortgage. Would the mentality of the mortgage lender let the house be repossessed and hope that they can get a better offer at auction etc. any ideas.

[Poppy]

Of course the seller/borrower wants to cut his losses. He thinks he can get away without paying the £25,000! The mortgage lender would find it difficult/impossible to recover the money because the borrower can no longer offer any security (ie the property) if he sells. It's a no brainer for the mortgage lender. They will not allow him to sell without the full proceeds.

Walk away. Stop wasting your time.

[jeffrey]

Of course the seller/borrower wants to cut his losses. He thinks he can get away without paying the £25,000! The mortgage lender would find it difficult/impossible to recover the money because the borrower can no longer offer any security (ie the property) if he sells. It's a no brainer for the mortgage lender. They will not allow him to sell without the full proceeds.

Walk away. Stop wasting your time.

Since mortgagee is already partly unsecured, it might agree to repossess and sell at full market value. It's got nothing to lose!

[Poppy]

Of course the mortgagee is going to repossess - there is no other option.

The seller/borrower will owe the mortgagee big time!

[jeffrey]

Of course the mortgagee is going to repossess - there is no other option.

Well, only other option is to hang on and hope that property rises in value [eventually!] sufficient to cover mortgage debt.