I would be really grateful for some advice in regard to a buy to let mortgage I have with the West Bromwich Building Society, which was inculded in my bankruptcy in 2010, but was deemed to be in negative equity, so the trustee had no interest.
Prior to my bankruptcy, I owned 2 properties, one which I rented out. However, the tenant did a runner and the property was damaged and needed work if I was to get a new tenant. At the time, I was ill, unable to work so my mother helped out by, paying for the refurb, new radiator and new carpets.
This was in 2008 at the start of the recession, so in their endeavour to relieve themselves of their higher risk loans, they kept their interest rates around 5.6%, when the base rate was only .5%. Rents had fallen drastically in our area due to turbulent market conditions, so obtaining a tenant at previous rental yields, was proving very difficult. I took advice from a number of agents, who all told me I would have to reduce the rent if I were to find a tenant.
I found a tenant ready to move in, but she had a budget below the advertised rent, but in line with current market prices. So I explained the situation and tried to request some form of help from the West Brom, ie reduce the interest rate on my account so the monthly repayments could be covered by the rental income. They point blank refused, as they were hoping this would encourage borrowers to move their buy to let facility to another lender. Being ill and unable to work meant this wasn't possible for me.
So despite having refurbished the house, having a tenant ready to move in, they put the house into receivership and it would stand empty for almost a year, accruing monthly charges. They eventually placed a tenant, for £275 per month according to my statements, yet I had asked them to reduce the mortgage such that I could have placed a tenant at £375 per month before they instructed a receiver.
Sorry for the ramble, but I suppose I'm trying to demonstrate just how unreasonable they have been, despite my request for help and fully disclosing my situation.
On the morning I was due in court for my bankruptcy hearing in 2010, I received a county court summons from West Brom's solicitor for the full mortgage amount, plus their accrued fees, amounting to £83,000! I emailed the solicitor the same afternoon with my bankruptcy reference.
The house has been left empty more than it's been occupied. In the times it has been tenanted, occupiers have all been more than unsavoury, causing nothing but problems with the neighbours. However, due to the house being unoccupied for so long, the charges and arrears have stacked up so the outstanding amount is now in the region of £112,000, but property values have dropped substantially and the receiver has just advised me that the house is to be placed on the market for £59,950.
This leaves a massive shortfall and this is where I am panicking now, as I seem to be receiving conflicting advice / information.
The trustee handling the account told me in 2010, that as far as he was concerned any shortfall should go into the bankruptcy, yet the West Brom recently responded to my complaint in regard to the handling of the matter, refusing to correspond with the trustee, informing me that I was liable for the mortgage, so would only correspond with me.
I am still not in a position to work and have no income other than DLA, so am really worried that I will end up going through the whole bankruptcy nightmare again.
Apologies for the protracted explanation of the situation, but I'd br really grateful to know where I stand on this. Was the trustee correct in his assumption that the shortfall would go into the bankruptcy even though it was back in 2010, or am I going to be personally liable for the shortfall following a sale?
Thanks for reading and I apologize if its sent the proverbial glass eye to sleep!
Here’s hoping with fingers and toes crossed!