There is an interesting case reported from the local County Court; a house was taken back and the lender put it on the market at a level just sufficient to cover the outstanding mortgage and fees rather than the market value- it is being challenged by a law centre solicitor on the grounds that such action is unfair to the debtor - no judgement yet - has this happened before does anyone know?
Yes,this happened to us about 13 years ago.Although we couldn't prove it,not only was it sold under market value it never actually was put onto the open market,it was sold to a property developer who made a tidy sum!!
I cannot recall one off the top of my head, but the problem with this one, in my opinion, is simply how do you prove what the market value is? The market value is simply what someone is willing to pay, and if the vendor is keen for a quick sale then the laws of supply and demand must surely come into play? Anybody's house is only worth what someone is willing to pay, and if the seller cannot sell in the current market then he can must make a decision as to whether to accept a lower price or keep hold of the asset until he can get a better price for it.
It will be interesting to see what the outcome of this case is.
Regards.
Cert DR
23+ years in debt advice
I do not post for anyone other than myself
I never take any notice of how much my house is worth, as like Size5 says it's only worth what someone is prepared to pay. When we moved we took a £10k drop from what the estate agent said it was worth.
Also, the house a few doors along from us (identical to ours) is on the land register for £20k more than we paid for ours, despite being sold at an almost identical time. Someone was obviously prepared to pay that, but I certainly wouldn't have!
Interesting Skippy - the Judge who is hearing the case has a reputation for taking a tough line against secondary charge holders who try to force a sale.
We have two identical houses for sale by me - one is up for £190k and the other one for £200k. They are same as our house.
Neither of them are selling.
When we entered the IVA, our house was valued at £215k - no way is it worth that now.
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The lender who is in possession of the property has an obligation to secure the best possible price but they leave that to the discretion of the agent handling the sale. If it is not sold quickly the property will be auctioned and it is difficult to argue that the best price was not obtained.
The mortgagee in possession is responsible for the maintenance, insurance and security of the property once it has been repossessed so the quicker they can sell it the lower the costs and fees are. It also lessens the dangers of damage to the property and the possibility of squatters which can cause a lender even greater costs.
If the client whose property was repossessed believed the property to be worth more than the outstanding mortgage they had the option of applying for a suspended possession order to allow them to market the property themselves and keep any monies left after the mortgage was redeemed. It seems to me a bit late to take legal advice and cannot see how a judge could find against the lender.
Waggers situation is different as I have heard of repossessed properties never making it on to the open market because the agent does a sweetheart deal with a friendly developer and is not the fault of the mortgagee in possession.
