I own a house and a flat, both on mortgages.

Since I bought the flat in 1992 the landlord has disappeared, no maintenance is being done, place is falling apart. Others in block all let to noisy antisocial yobs. I would dearly like to sell it but no-one will buy. Therefore I let it to cover the mortgage but have had to accept lower and lower quality tenants as the whole building has gone downhill.

Now, my tenants have ceased paying rent (for no reason) so I cannot pay the mortgage. The tenants have done this before and intend to sit form and make me evict them, which takes 6 months. In the meantime, I cannot pay the mgge. I am on the Dole (JSA).

The mgge is 2 months overdue and the lender, obviously, wants contact. They do not know my new address nor that the flat is let to tenants. They think I live there. This clearly breaches their rules since it is a residential not a commercial mortgage and I get MIRAS.

For my house I have another mortgage with another lender (since 1999). This is paid for by my lodgers. I live here. I do not claim MIRAS on this second mortgage but I did not declare the first mortgage when I applied for the second.

My main concern is that the repossessing lender will put a second charge on my current residence, presuming that their debt collecting agency find out I own it. I have about B#24,000 equity in this house and desperately do not want to lose it. I expect the shortfall to be about B#15,000.

Should I sell this house and move into rented accommodation? Would that put then off the scent?

The only ways I can think of that the debt collectors could find out that I live here and own this house are (1) the tenants they will have to evict might tell them I live here (2) via my bank, as I have paid my mortgage by cheque from my bank account (3) via Council Tax records?

There may be other ways I can't think of.

Should I hand the keys in voluntarily to the repossessing lender and tell them the tenants won't pay, that I am in rented accommodation and am on the dole, and have no savings or assets? Would that put them off the scent and prevent them searching for assets? Can they sue me for having tenants in the flat without permission?

I would be very grateful for advice in this matter.

Helena

-- helen bailey (happy.girlie@zoom.co.uk), November 07, 2000

Answers

I would honestly see an accountant and a solicitor.

Who is (are) the lender(s) involved?

Your problems are somewhat different to those of many people who come to this site. At least you stiill have the potential to take charge of the sale of your tenanted flat, and make sure that all repairs are carried out and all insurances claimed, and that the lender markets and sells the flat properly.

(How has the landlord disappeared, by the way? Can't any of the other leaseholders locate him? Who pays the buildings insurance? Isn't the local council aware? Surely other mortgagees are?)

Anyway, you are suggesting that people responding to your post encourage you continue with a sequence of events which quite possibly are, shall we say, unwise . I'm really not comfortable about this. Please do yourself a favour, get your life sorted out, and see a professional advisor.

-- Eleanor Scott (eleanor.scott@btinternet.com), November 07, 2000.

Hi Helena,

I'm afraid we can't really help you with your situation because this site is not really about how to hide your assets or how to deal with situations where you've got two mortgages, one of them by not telling the lender that you alrady had a mortgage.

The underlying principle of this site is that both lenders and customers should be open and honest. Pretty much the whole of the site is about how customers should deal with lenders that are refusing to be open or are showing signs of not being honest.

The policies promoted by this site generally do not work unless the customer can show that their own actions have been squeaky clean.

Lee

-- Lee (repossession@bigfoot.com), November 11, 2000.