Fall In House Prices.

[holeinpocket]

Fall In House Prices.
With the current fall in house prices, where do we stand if the market falls to a level at which our current mortgage is at, so there is no or little equity in the property.
As with most IVAs we have to have the property valued in the 4th year clause that the equity has to be realised. It also states that the term may be extended for aperiod of 12 months to allow and equivalent sum to be paid.
My question is how do we find out what this sum is? Or will the creditors expect us to extend our term past the 5th year.
Do you think that with the current market we would be better to try to offer a full and final? We are just entering our 3rd year and about to complete our annual review.
Any advice or thoughts much appreciated.

[jpj]

I think a lot of IVAs state the remortgage clause is at the end of the 4th year, so you have almost got 2 years to go!! I would sit tight for another year then see how the property market is and worry then!
If you remortgage now to do a full and final,and prices do drop quite a bit you could end up in negative equity.
You could sell now,but as you have the 6th year clause it would have to be a good F+F offer to make up for the next 3 years of payments!!

[Sensible77]

My IVA is with PayPlan and the Chairman's report reads:

"An open market valuation of the property must be provided to the supervisor in the 4th year of the Arrangement together with a mortgage redemption figure. The debtor must remortgage realise the maximum amount of his share of the equity in the property from a re-mortgage, up to a maximum of 85% loan to value based on affordability. The debtor must forward details of the
re-mortgage offer to the supervisor and written confirmation from the mortgage broker of the best offer available.
Should the debtor be unable to realise his share of the equity in the property by way of a remortgage, 12 additional monthly contributions shall be made, providing that the supervisor has first written to creditors to ensure that there are no objections."

I understand this to mean that I can raise the remortgage from month 37 onwards or if there is insufficient equity to do so, I will make a further 12 payments at the amount in force at 60 months.

[Adam Davies]

Hi
If you have no equity at in the final year of your IVA,or are unable to release any due to the fact you can't get a remortgage,and no clause to extend for a year then your IVA will complete and conclude at month 60
Regards

[holeinpocket]

Thanks for the advice. Sorry for the delay in posting back been on nights.
I have noticed that the fourth year cluase is quite common and having spoken with one of our IP staff they informed me that 100% of the equity has to be released. Yet there is no mention of the 100% in our modification. It simply states that,"after the fourth year anniversary the debtors equitable intrest is to be realised and paid to the supervisor before completion of the arrangements. If necessary the ongoing contributions can be extended to allow an equivelentsum to be paid by way of contributions for a period of twelve months.
Am i missing something or does this mean we will have to get a 100% mortgage in the fourth year?
Can anyone tell me if this is correct, as i cannot see us getting a 100% mortgage. I can never get through to the IP, its always a different member of his team. To make matters worse we are waiting on our review and they cant find the wage slips etc we sent in as proof of income etc.

[MelanieGiles]

It's a badly worded clause, because taken literally it does require you to offer up all of your equity.

Insist on speaking to the IP next time - and not members of his/her staff.