Rights of mortgagee in possession

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    Rights of mortgagee in possession

    Hello

    Couple questions:

    Can a mortgagee in possession stop marketing a property for sale?

    And can they instead rip everything out the property and do a complete refurb? And decide to try rent instead?
    ​​​​​​
    It's a leasehold property.

    Interest is still accruing on the mortgage.

    The lender has had opportunity to sell. There are valid buyers but they are refusing to now sell. They could have sold last year. But didn't.

    Would be grateful for advice?
    Not sure if mortgagor needs a lawyer to stop them?

    #2
    The mortgagee in possession has a duty to the mortgagor to maximise the sales proceeds, which is why they normally put properties to auction. Very odd. Yes speak to a lawyer. not the average idiot doing routine conveyancer but preferably someone who has a deep knowledge of property insolvency

    Comment


      #3
      Thanks for the reply

      The mortgagee gave a high valuation originally. They slashed the price for quick sale. As is their want to get a return quick

      Despite advising mortgagor of offers within 2 months of first marketing, instead mortgagee hasn't accepted and has wasted 18 months whilst accruing interest and adding costs.

      Mortgagee also held a bids thing with agents after 1y on market. The potential buyer who won, was one of the buyers who had originally offered. Lawyers were instructed. Yet the property still hasn't sold. The mortgagee has given no further details to mortgagor - despite constant requests

      Now mortgagor has discovered builders are instead gutting it. And has received notification of legal process for insolvency.
      it seems mortgagee intends to keep the property, are renovating it before an insolvency hearing and will rent it instead.
      We all know the market has been poor and Covid hasn't helped - but mortgagee's actions seem to have a blatant disregard for any duty to maximise sales proceeds for the mortgagor.

      If successful in the insolvency process the mortgagee will have gained a very valuable rental asset whilst leaving the mortgagor - a family - with nothing.



      ​​​​​

      Comment


        #4
        Can anyone offer clarity on this?
        Does the mortgagee have the legal right to gut a property?

        Comment


          #5
          Perhaps I am in the wrong forum? Maybe this topic should be moved into Planning? May I get more replies there? This is quite important

          Comment


            #6
            It's impossible to give any advice on the scant details you have given.

            Comment


              #7
              Oh. sorry. I thought I was being clear.
              To elaborate - can a mortgagee in possession gut a house they are supposed to be selling? I mean, rip out bathrooms and kitchen and CH, making it an empty shell? And take the property off the market?
              By gutting it they are surely devaluing it?
              They had low offers - because the market has been so slow. But they did confirm in writing they had offers 18 months ago. One of these potential buyers clearly remained interested to buy because the agents did a bidding option this summer and the same buyer won the bidding. Lawyers were instructed. But now the property has been taken off the market and is being gutted by the lender who instead is attempting to retain it for themselves via insolvency process. By all accounts the mortgagee has had opportunity to sell, yet has delayed the sales process whilst interest still accrues and has worsened the mortgagor's position, to the point of maybe being made insolvent....
              So what can the mortgagor do?

              Comment


                #8
                Was it a buy to let or was it your residence?
                Has an IP been appointed?
                Have you or any joint owner made a bankruptcy application?
                Are you insolvent?
                How do you know the property has not been sold?

                Comment


                  #9
                  HP MUM You had something called equity pf redemption, ie the ability to get rid of the mortgagee by paying off the amount owed. so long has gone by though that this may not now apply.

                  Comment


                    #10
                    Most irregular! Can I ask who the lender is ?

                    Comment


                      #11
                      Op doesn't want to clarify by answering questions.

                      The policy on this site is not to identify the individual companies, banks etc.

                      Comment

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