Mortgagee blues

[offshore]

Had a very bad fall due the recession and to top things off our house is a very bad leaky home so any equity we did have is all gone now. Been having a stand off with Bank for nearly two years. stopped paying mortgage in 2009, rates and insurance. Now live offshore and sorted here. Have put numerous proposals to the bank but always silent. House originally valued at 2.8 mill.....after leak valued at 1.1 by bank valuer. Bank loaded old business debt and compounded interest so owing now 2.3 Mill. They will take a very cold shower as I cannot fix............But what i can do is get some offshore finance and did so..offering them 700k....they went silent......i know they will do no better at sale if they find anyone at all who wants such a big leaky home....becase they are not talking I basically locked the house, gates and told there Mortgagee real estate agent to take a hike. Bank intends to do a mortaggee tender after xmas.

At what point does the bank boot u out so they can get vacant possession?????

Anyone know???

[Ivan McIntosh]

Sorry to hear of your troubles...a damed shame to be caught up so terminally in leaky building trouble.

They often don't boot you out at all, but sell with you in place and copious disclaimers in the agreement with the purchaser.

In this case they might find themselves doing remedial work to get something saleable, at which point they will need to become mortgagee in possession.

[Xav]

Offshore, you are not doing yourself any favours from the sounds of it. The more that the bank gets for the house the better for you (you will still be liable for the shortfall).

Did you honestly expect the bank to accept your offer for $700k when it has a valuation saying the property is worth $1.1m?

If they want access to the property they can just get the locks changed under the access provisions in the memorandum of mortgage. They cannot deny you access to the property without going into possession, but since you are overseas it sounds like that's not going to be relevant anyway.

In this case they might find themselves doing remedial work to get something saleable, at which point they will need to become mortgagee in possession.

Actually I don't think they would HAVE to, as the work could be done under the provisions in the memorandum of mortgage relating to faciliating realisation of the security, but given the work would be extensive they may choose to go into possession in any event.

[Ivan McIntosh]

There would usually also be power of attorney provisions that would give scope to do all the work. I do think they would take the mortgagee in possession approach anyway, in part to keep offshore out, but you're quite right that they wouldn't have to do so.

[offshore]

How do they take possession and boot us out ...ie what process do they have to follow....obviously PLA's in place but do they have to get an order to be mortgage in possession and boot us out...and how much notice....the house still stores all our Nz possessions....Xav the purpose of the 700k offer was to start a negotiation which they ignored despite even showing the offshore bank offers......its owned by our trust....and I have nothing to lose as already inform them will go bankript over any shortfall as un manageable....i know ou offers will be the best as house too big and too stuffed...estimate for repair by leaky homes is 700k plus

[TheLiberalLeft]

I know what I'd do given the numbers you've quoted...

Orig value: 2.8m
Current val: 1.1m
You can access: 700k
Cost to fix: 700k (+, but we'll ignore that for now).

If you use the 700k to fix it up, then in theory it's worth 2.8m again. In reality it probably won't be worth quite that, but it'd be worth more than 1.8m if you make sure it's done right this time.

You'd need to involve the bank though if you took this route. You'd need to sweet talk them into forgetting the compounded interest. You don't say what portion of the amount owing is interest, what is mortgage, and what is old business debt and that may be the sticking point.

How out of pocket would you be if you spent the 700k, made the house right and then put it on the market and it sold for, say 2.2?

In what part of NZ is this house?

[Maccachic]

Are you aware that the Government and in some cases the council will contribute 25% each to repair? http://www.consumerbuild.org.nz/publ...resolution.php

[offshore]

Sorry forgot to mention the valuation by bank totally off.....all the real etste appraisals say land value at 650-700k due to only option demolishing house....the valuer being over optimistic

[TheLiberalLeft]

I'm kind of surprised the bank isn't negotiating up from your 700k offer. That plus the 700k for the land, and surely that's better than nothing if you go tits up. If you stay offshore, they can't touch you anyway, right?

However, in your shoes, I'd be a little concerned by all your stuff in the house. What's that worth to you? Personal effects like family photos or heirlooms / things of sentimental value?

[offshore]

Maccachic........not eligible. Dont get me started about who is and who is noy eligible for funding.....also most people i speak too cannot afford there 50% part......and as previous post says once repaired still not worth original value......main issue is houses with leak regsitered on lim despite repair not saleable.....i see in herald reports that even plaster houses with no issues people avoiding....

[TheLiberalLeft]

I avoid plaster homes, leaks or no leaks, as do many people who post here. Just not worth the risk. When I say plaster, I mean the cladding. Plaster over brick/block is fine obviously.

[offshore]

Tne liberalleft....thats our concern nothing too valuable but still whats left of our nz house lot.....plus of course photos etc.....we still come and go from house 3 or 4 times a year and have some children at university who go home often....so still our home but i and rest of family work in expat contract........i am ready to transfer our stuff to storage but no point as treating home as free storage.....i also find the whole scenario amazing....rates owed is like 20k, no insurance, no repayments since 2009.......bank just sitting doing nothing....every few months an email saying what are we doing to which i reply read your offers....

[offshore]

Myth that plaster over brick ok....ours is block home plaster vineer.....600sq metres very fancy home...water still getting in and causing issues

[Maccachic]

People are avoiding the typical leaky type homes whether they are leaky or not, and this is being reflected in rating values. Would def recomend reclading in a non leaky associated cladding.

Interesting to hear the repaired ones are not selling? I would have thought they would have been a safer option than existing or new builds (Caveat: only if done correctly) - however I am not a Building surveyor so just my opinion.


Its an unfortunate situation we deal with on a regular occasion (Prendos) Best to remediate first if $$ are avaliable and then claim actual costs.

Other option is legal depending on age of construction - the lawyers on here will be able to advise on that side of things.

[TheLiberalLeft]

Then it's not the block that's leaking - it's somewhere else. Internal gutters, crap eaves, poor joinery.

If you hadn't plastered the block and left them raw, it would have leaked. How can the block be at fault?