Bell & Company regularly hear individuals in Negative Equity declare themselves as “Mortgage Prisoners”. This opinion is often developed from listening to poor knowledge of their circumstances and not seeking professional independent advice.
The answer to the question is, YES but it depends.
Some lenders will allow borrowers who are in Negative Equity to sell their property – but of course this must be done with prior consent from the lender otherwise they will not release their charge on the deed so there would then not be clear title to complete the sale.
The lenders who do allow an open market sale will require a full financial review often in their own format. Bell & Company know which lenders do allow borrowers to sell on the open market and we also know the processes, timeframes and negotiations involved. Our Resolution team achieve on market sales agreed with lenders on a daily basis.
Some lenders however will not allow an open market sale. This does not seem like a commercially minded decision given that an open market sale if beneficial for all parties by achieving the true price for the property which will ensure the lender receives the maximum sales proceeds possible and the borrowers shortfall debt is reduced. Nonetheless, this is their stance and must be respected.
Even if you are with a lender who will not allow an open market sale it is still possible to offload the negative asset but it comes with greater issues. This involves repossession (through court) or voluntary surrender of the property – this will typically mean a sale in possession by the lender which typically achieves only 70% of open market value. There could also be consequences for your credit rating.
It is essential you do not deem yourself a “mortgage prisoner” and understand that options do exist and that many people in a similar situation have extricated themselves from Negative Equity by appointing Bell & Company. Our expert team will ensure the advice is tailored to your situation. We do not tell you what you want to hear but instead what you need to know to move forward. All our initial consultations are free and to arrange yours please call us today on 02895 217373.