Forced sale of property info please

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14 years 7 months ago #20411 by ronnie
A friend of ours happens to be in the very unenviable position of about to have their property mortgagee sold out from under them.

Does anyone here have any experience of what to expect?? As you can imagine, our friend is extremely distraught at the prospect and doesn't know what the best course of action from here is.

Any info would be appreciated. If you would prefer, please pm me rather than post in a public forum.

Lawyers are involved, but don't seem to be of much use at present with offering any advice.

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14 years 7 months ago #300608 by wino
How far along the process are they?

If it is early enough the best thing they can do is list it themselves at a competitive price and hopefully beat the bank to selling it. That will save them some of the costs that get added on when a property goes to mortgagee auction and their credit rating. Though if they end up being offered less than they owe on the mortgage they won't be able to sell it without coming to an arrangement with the bank.

If the process is underway and the property is listed for sale as a mortgagee auction the best thing they can do is be as helpful as possible - keep the place tidy and allow viewing within reason. Also assure the RE salespeople that they will leave when the property is sold and have no intention of damaging it (that doesn't count for much but will help). They need to talk over with the bank what the options are if the property sells for less than they owe (it is usually left as an unsecured debt - bankruptcy is an option but in my opinion not necessarily a good one)

One of the issues with mortgagee auction is buyers are limited in tougher times as a mortgagee auction does not guarantee vacant possession or that the property will be in the same condition as it was at hammer fall (also insurance is the buyers problem from hammer fall and it can be very difficult to get if bought at mortgagee auction) Therefore buyers are wary and willing to pay less which is detrimental in the end to the old owner.

Budget Advice is probably one place to go if they haven't been there already. If there is any way out they may be able to negotiate it for them. It is not unheard of (but not usual I admit) for people to refinance leading up to a mortgagee auction because another bank is more willing to extend loan periods or whatever. Westpac in particular get very tough on mortgage defaulters that other banks may look at in a more friendly manner.

Never have a hangover - stay drunk

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14 years 7 months ago #300681 by Castle Peak
I guess lawyers will just run up another bill and it all depends how far down the repossion road they are. :( I'm sure the CAB or debt counselling bureau would be better people to get help from. Is there one near them?

The best advice I can offer is to keep talking to the bank, put it all in writing, turn up at the bank, anything that shows the bank they are trying to keep the comminication avenues open. Let the bank see they are willing to co~operate and try and impress them enough to let your friends handle the sale. If it's taken out of their hands they could still end up owing, after the bank has taken their chunk, and be homeless too. Not nice at all.

I do hope they can sort it out.

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14 years 7 months ago #300838 by ronnie
Thanks for the info - shall be visiting them over the weekend and offering loads of moral support. Not a nice time for anyone.

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14 years 7 months ago #300843 by Jack
Replied by Jack on topic Forced sale of property info please
Gidday

Jan, you just could not get better advice than already offered by Wino.

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14 years 7 months ago #300848 by Jen - Featherston
a few other tips

if they have land they should sell all their stock if they can - this will save having to do it if and when a hammer falls, and if they can approach neighbours or local farmers if they want to lease the land - an income stream at least.

If they have vehicles, get rid of one, if they have the option of down sizing vehicles do it tough times call for tough measures and its those that wont let go of the comforts they are used to that sink.

Same with things in the house, trade me is your friend, when you have money again you can buy new things but for now they need to cash up as much as they can

Try to find extra work, telephone surveys, supermarket shop stacking anything that will bring in extra money - ask friends if they want a house cleaner $15ph you would be amazed at how soon you can get 10 people each wanting 2 hours a week!!! School newsletters for cleaning jobs or after school child care is another one.

Fully agree with Wino and Dunard, keep talking to the bank tell them your ideas for helping and definitly list it first if they can.

Sometimes its not only what you say, its the way you say it that counts.

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14 years 7 months ago #301407 by leesha
My Parents are going through this at the moment, for 30 years they've been paying off the interest rather than the farm, they've come to a brick wall. The bank has given them a month to sort something out. I went with dad around the farm and we took pics of Machinary he's horded over the years, netting he bought in the hope of running deer, the stock truck he hasnt used in nearly six months, the horse float that was used back in the day of pony club, Pine trees that are about 50 years old that his grandfather planted and other stuff he inherited when my grandfather retired and passed on. I listed the whole lot on trademe for him. And it sold. We were blown away with how much it all went for. Its not enough to save them from having to sell. But its enough to by them some time to place it on the market themselves rather than the bank. Over the years they went from one bank to another, each bank buying the other out. He was relying heavily on this years bull sale with his Hereford stud. But I guess the genius's that McDonalds are with their lastest sales stint no one was wanting Hereford this year. Sales were down nearly $400 a bull on last year. Yet the neighbours Angus were up a great deal. (sorry anti Mcd's at the moment)

Since all this has happened my father has been a different person. He was someone I only saw cry on my wedding day, but going around the farm with him I just wanted to cry with him. His dream is coming to an end :'(

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14 years 7 months ago #301426 by jeannielea
All this sounds like good advice. I've never had much to do with the process but know someone whose property is now listed as a mortgagee sale. We saw it in a rural paper and the description plays down all the renovations including a new roof and the fact that most of the house is now really lovely. The agents obviously want anyone and everyone to look and put in offer. So the advice about trying to get to a position where they can sell it themselves would obviously bring a much better outcome.

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14 years 7 months ago #301470 by Birman Babe
My friends in the South Island have just gone through the same thing.
They tried to sell it themselves to no avail and in the end the mortagee auction took place and they came out with nothing. Bank got enough to cover what they were owed & thats was pretty much it really :-) Must say though, my friends did have a HUGE mortgage, it was a large property with packaging sheds, lots of machinery, etc.
One of my neighbours called in last night & they have had to put their house on the market as well; said they are hanging in by their finger nails only. They have 2 children as well....its all so sad !!!

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