I need some advice on my situation, which I feel is fairly uncommon.(posted 8089 days ago)A number of years ago, my family outgrew our 1 bedroom flat so we tried to sell it for a bigger property.
Because of market conditions, however, we were in a serious negative equity situation, and our building society was... unsympathetic, to say the least.
We then found our current lender, who was happy to give us a mortgage for a second, larger property (ironicly for less than our existing flat!) on the understanding that we could afford the total of both mortgages using their usual criteria, which at the time we could.
Unfortunately, circumstances have changed and we can no longer bear the financial burden of both properties. We have tried letting the former, but this has proved to be an ongoing nightmare of bad tenants and large repair bills, to the point where we can no longer cope. We have decided to hand the property back to the building society, before it becomes so rundown that it is no longer worth anything.
I then fully intend to repay at least some of the shortfall which will remain when our lender sells the property, hopefully in full and final settlement.
Our problem is this - while our current lender is fully aware of our situation, and was quite happy to lend to us in addition to our existing mortgage, our original lender has no knowledge of any of this.
Can anyone tell me what action, if any, our original lender could take should they become aware of the above? I assume we were not under any legal obligation at the time of the second mortgage to inform our existing lender, as I would have thought that our new lender would have instructed us to do that (which they did not).
To reiterate.. we are not trying to run away from this. We simply wish to relieve ourselves of this burden.
Can anyone help?