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Can one take over someone's unwanted mortgage?


RepublicOfLuas

Well-known member
Joined
Jun 18, 2011
Messages
9,354
My _____ is currently in arrears on a mortgage. The house is currently being rented out and my _____ is living in other rental accommodation. My _____ and the family have been offered jobs abroad and are thinking of either a) just giving the keys to the house back to the creditors, or b) letting the people in the house continue to rent, but there'll be no landlord or representative in place to take care of landlord duties.
Is there anything that the tenants can do to officially "take over" the mortgage, i.e, get the name of the debtor changed and free the landlord of their debt?
Thank you in advance.
 


mickterry

Well-known member
Joined
May 8, 2009
Messages
1,307
My _____ is currently in arrears on a mortgage. The house is currently being rented out and my _____ is living in other rental accommodation. My _____ and the family have been offered jobs abroad and are thinking of either a) just giving the keys to the house back to the creditors, or b) letting the people in the house continue to rent, but there'll be no landlord or representative in place to take care of landlord duties. Now bearing in mind, I already know that subletting while paying mortgage arrears, is there anything that the tenants can do to officially "take over" the mortgage, i.e, get the name of the debtor changed and free the landlord of their debt?
Thank you in advance.
Talk to citizens advice or a solicitor.
 

Tea Party Patriot

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Joined
Oct 31, 2010
Messages
11,557
My _____ is currently in arrears on a mortgage. The house is currently being rented out and my _____ is living in other rental accommodation. My _____ and the family have been offered jobs abroad and are thinking of either a) just giving the keys to the house back to the creditors, or b) letting the people in the house continue to rent, but there'll be no landlord or representative in place to take care of landlord duties.
Is there anything that the tenants can do to officially "take over" the mortgage, i.e, get the name of the debtor changed and free the landlord of their debt?
Thank you in advance.
Providing the bank is happy that you are in a better financial position than they are I don't see a problem so long as you know you can make the repayments. Please do not construe this as financial advice.
 
R

Ramps

My _____ is currently in arrears on a mortgage. The house is currently being rented out and my _____ is living in other rental accommodation. My _____ and the family have been offered jobs abroad and are thinking of either a) just giving the keys to the house back to the creditors, or b) letting the people in the house continue to rent, but there'll be no landlord or representative in place to take care of landlord duties.
Is there anything that the tenants can do to officially "take over" the mortgage, i.e, get the name of the debtor changed and free the landlord of their debt?
Thank you in advance.
No. Sorry to be the bearer of bad news, but the banks won't allow that. Been there; done that; wore the t.... :(
 

Hitch 22

Well-known member
Joined
Dec 26, 2011
Messages
5,220
Female pro-life activists are volunteering to be impregnated with unwanted frozen embryos so I'm sure they will take care of your unwanted mortgage too.
 

myrak

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Joined
Jul 18, 2010
Messages
442
No. Sorry to be the bearer of bad news, but the banks won't allow that. Been there; done that; wore the t.... :(
Next question- why wont the banks allow that?
Why can't a mortgage be transferrable?

The weakest answer would be 'its not the done thing'
 

dizillusioned

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Joined
Jan 19, 2011
Messages
14,869
Well Banks can sell a chunk of mortgages to investors at massive discounts.... surprising that they can afford to loose on this but not give relief to the home owner on a slightly lesser scale...?
 

sparkey321

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Joined
May 4, 2007
Messages
1,385
Next question- why wont the banks allow that?
Why can't a mortgage be transferrable?

The weakest answer would be 'its not the done thing'

Beacuse a mortage is a legal contract between one party and another. That contract can be terminated and a new contract started.

In otehr words there is nothing to stop the current tennants purchacing the house from the curent owner allowing them to clear their mortage and then taking out a mortgage of their own ending the previous contract and starting a new one. Which is essentially what they want to do.


The only reason I can see why they wouldnt just go down that route is that they (the tenant) would not be eligable for a mortgage.
 

Aindriu

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Joined
Jun 28, 2007
Messages
8,702
Beacuse a mortage is a legal contract between one party and another. That contract can be terminated and a new contract started.

In otehr words there is nothing to stop the current tennants purchacing the house from the curent owner allowing them to clear their mortage and then taking out a mortgage of their own ending the previous contract and starting a new one. Which is essentially what they want to do.


The only reason I can see why they wouldnt just go down that route is that they (the tenant) would not be eligable for a mortgage.
Agreed. Plus it is a transfer of ownership as well. Not as straight forward as the OP hoped.
 
R

Ramps

Next question- why wont the banks allow that?
Why can't a mortgage be transferrable?

The weakest answer would be 'its not the done thing'
Why they won't allow it, I know not!

I know, from my experience and that of several members of my family and friends, is that the mortgage is a very exclusive agreement between the bank and those who take out the loan. No on can just "take it over". The first mortgage has to be fully settled to the bank's satisfaction, disposed off, before the banks will consider its business with the borrowers finished.

Anyone who wants to buy the property would have to go in and apply for a brand new mortgage, agreeing to all the terms and conditions that the bank feels are necessary for that particular mortgage.

That's not to say that the bank definitely wouldn't come to an arrangement with the owners regarding the settling of their mortgage (although it's unlikely); but a mortgage can't be "taken over" by anyone else.
 

Trainwreck

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Joined
Sep 6, 2012
Messages
26,788
In a nutshell, you want to sell your house to your tenants. I will assume it is negative equity, which leads me to conclude that:


A bank might be will to refinance to the new owners if they were a better credit risk than you - meaning likely t repay where you won't. BUT, why would the tenants pay ou more than the house is worth.

If they aren't a better prospect to repay, why would the bank evre conider lending the anything, let alone lend more than the house is worth.



A definite non-starter.
 
Last edited:

pinemartin

Well-known member
Joined
Jun 7, 2006
Messages
6,728
Beacuse a mortage is a legal contract between one party and another. That contract can be terminated and a new contract started.

In otehr words there is nothing to stop the current tennants purchacing the house from the curent owner allowing them to clear their mortage and then taking out a mortgage of their own ending the previous contract and starting a new one. Which is essentially what they want to do.


The only reason I can see why they wouldnt just go down that route is that they (the tenant) would not be eligable for a mortgage.
The banks will block the sale if they think that the price being offered is not to their liking.
 
Joined
Oct 8, 2011
Messages
40,632
Next question- why wont the banks allow that?
Why can't a mortgage be transferrable?

The weakest answer would be 'its not the done thing'
If the house is currently in negative equity then the bank is in effect deliberately granting a loan, a portion of which is unsecured.

If, in a couple of years, there is a mortgage foreclosure, then the current value of the property might be the total of what they could recover.
 
Joined
Oct 8, 2011
Messages
40,632
Why they won't allow it, I know not!

I know, from my experience and that of several members of my family and friends, is that the mortgage is a very exclusive agreement between the bank and those who take out the loan. No on can just "take it over". The first mortgage has to be fully settled to the bank's satisfaction, disposed off, before the banks will consider its business with the borrowers finished.

Anyone who wants to buy the property would have to go in and apply for a brand new mortgage, agreeing to all the terms and conditions that the bank feels are necessary for that particular mortgage.

That's not to say that the bank definitely wouldn't come to an arrangement with the owners regarding the settling of their mortgage (although it's unlikely); but a mortgage can't be "taken over" by anyone else.
Yup. That's what I was trying to say.

The new mortgage will require a survey and evaluation. They're not going to lend ovr their evaluation.

WHat might transpire is this:

Mortgage of 400k obtained in 2008 on house valued at 400k;
Currently 360k due, but house worth 200k;
Tenant can afford the mortgage but not a deposit and may not qualify for a mortgage;
If they *can* qualify for a mortgage, the bank will offer a mortgage of c. 180k;
Original owners will have sold the house at market and will still owe 160k.

The days of banks throwing money at people are over.
 

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