I want to hand my home back to the bank - boards.ie
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03-12-2008, 09:19   #1
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I want to hand my home back to the bank

Hey does anyone know what happens if you hand back the keys of your home to the bank? I've missed my last mortgage payment. I missed a few payments a couple of years ago, got a credit rating, but pulled it together and got back on track. Not this time though, as my job is just not paying enough, and I cannot get a job that pays enough. I have no hope of paying the next three mortgages, I asked the bank for a mortgage deferment, and they refused flatly. I don't know where they think I can get the money. I asked for a deferment because the money's not there. Deferment or no deferment, they are getting no mortgage payment. I can't make it appear by magic, and I'm sure there's even less likelihood of a better job after Christmas.

I share with another, who faces losing their job after Christmas too, so there'll be even less money. I put my property on the market to see if there would be an offer, but there is none. Nobody is buying round here at all. I'd sell tomorrow if there was a buyer, but there isn't. The bank couldn't care less about my situation. I went in, suit and tie and all, and it was a waste of time. So my only option seems to be to hand it back.

My question is very specific, IF I go into the bank and put my keys on the counter, what happens next? What do they do, are my debts cleared, or will they continue to screw me? What about tax, etc? I'm not in negative equity, there should be €20,000 or €30,000 left over IF I could get a buyer. I can't, so I suppose the bank takes everything?
 
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03-12-2008, 09:36   #2
Peewee_lane
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Hey, give Mabs a call and speak to a professional about this.

Theres loads of great heads you can talk to without having to go near the banks for advice.

I know you're under pressure and this seems like a great way out but think about how bloody long it will take, you just dont give the bank keys and walk out of the bank... am I right or wrong?
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03-12-2008, 09:38   #3
eth0_
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It's not up to YOU to find a buyer once you hand over the keys, and I don't think you CAN just jack in your house like that.

The bank will sell at auction, and lately houses are going for way less than their value in these cases.
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03-12-2008, 09:40   #4
Black Briar
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It's probably a bit more complicated than that.
I would call in to see your manager if I were you and explain that you are going to clear the debt with the sale of the house.
They will offer you all and sundry in terms of mortgage holidays etc ,it depends on what you want to do then.

You'd be better off formally deciding to sell and getting the bank to park the debt pending the sale.That way you can probably avoid getting a bad credit report again.
I'd imagine if you have the income to get a house again in the future,that would be easier to explain than a foreclosure.
You might also get to stay in the house a while longer giving you leeway to find somewhere to rent.
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03-12-2008, 09:40   #5
Dob74
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I think you would still owe the bank money. You should get professional advice.
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03-12-2008, 09:41   #6
kayos
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http://www.mabs.ie would be a good crowd to get in touch with.

Its not in the banks interest to take your home as it not like they will sell it any easier than you will. In saying that they are not exactly being helpful in refusing a deferment. MABS should be able to help you sort something with them
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03-12-2008, 09:41   #7
andrewh5
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Quote:
Originally Posted by eth0_ View Post
It's not up to YOU to find a buyer once you hand over the keys, and I don't think you CAN just jack in your house like that.

The bank will sell at auction, and lately houses are going for way less than their value in these cases.
I agree. They will sell it for whatever it gets and pursue you for the shortfall. You will be screwed for the next 12 years and will find it extremely difficult to get a private letting. You will also not be eligible for social housing as you will be deemed to have made yourself homeless by your actions.

Get professional help fast.
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03-12-2008, 09:43   #8
egan007
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If you don't mind.
As you are in as a guest if you answer these questions you might get some more help here.

What's your monthly repayment?
The mortgage total remaining?
How much do you bring in after tax per month?
Do you have any other loans?
Monthly repayments on them?
What type of property - bedrooms?
Are you a first time buyer?
Have you any dependents?

Thanks
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03-12-2008, 09:44   #9
Mr. Presentable
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Consider any other options. Rent out a room, give the bank something - half the payment, whatever, do you have a car or two? Could you work evenings for Tesco or delivering pizza?
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03-12-2008, 09:50   #10
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Do you have anyone who could act as an advocate for you and approach the bank. Its easier for someone who is outside to be objective. Then approach the bank and get them to make the following points (*also put it in writing to them and keep a copy).
1) You cant afford your repayments and want to re mortgage for a lower repayment.
2) You want a break from repayments for 3 months so you can talk to MABS and get you finances on order.
3) You will keep your house on the market and sell if possible for at least the value of your mortgage.

Instruct you advocate not to take no for an answer and dont leave until you have bullied them enough to make them say yes - they are in no position to say no as if they do you tell them you are walking away and will be bringing evidence (your copy in writing above*) to court to say you made every effort to broker a deal.

Above all dont throw away your house. Its equally as hard to pay rent when you dont have a job, you will damage your credit record and also the bank can 'recover' any difference they have when they sell the house from <you>. So you hand back a house with a mortgage worth 300k and they sell it for 200k you still owe them 100k.
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03-12-2008, 09:57   #11
darragh o meara
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in fairness speaking to a manager in the bank is the only way to go. Explain your situation well to him/her and tell them what you can afford to repay every month they're more likely to help you out as your not the only one in this situation. If your not successful contact mabs, they know their stuff and help hundreds of people out every day in similar situations. In any case dont hand back the keys to the bank.

I know how hard it is, i recently lost my job and i had just bought a house and have a baby coming in a few weeks. Another thing i just thought of... Do you have payment protection on your mortgage? This should cover you.

Hold out hope and never give up.
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03-12-2008, 10:08   #12
The_Conductor
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We've discussed exactly this scenario in the Property and Accommodation forum. In the US there is a practice known as "Jingle Mail"- whereby someone simply hands back the keys to their property to the bank and walks away from their obligations.

Irish law, and in particular Irish bankruptcy law, is still fashioned on Victorian laws, and favours the creditor in all cases. If you try to hand back your keys- you are returning the asset to the bank- but you are still culpable for any interest, charges or difference between the eventual sale price of the property and the amount outstanding on the mortgage. You are restricted from holding a credit card or procuring credit from any official source- and your salary and/or pension may be purloined until such time as the outstanding balance is satisfied.

There are proposals to revisit Irish personal bankruptcy law every few years- the most recent proposals were put forward by Accountancy Ireland in 2006. Unfortunately they have, as yet, not been updated.

I would also be highly dubious about an assumption that there would be a balance over after the sale of the property- its perfectly normal to accept 30-40k below the asking price (or even more) these days. In some areas of Dublin- property is already back at late 2001 prices (and even at these levels its still considered likely that it has further to fall).

Totally aside from the banks refusal to give you a mortgage payment holiday (which is entirely normal), you need to sit down with your partner and work out your total monthly income, and your total monthly expenditure. Which items are necessities (food, electricity, heating) and which items can be foregone (everything else). You need to precisely document your income and expenditure. In conjunction with MABS- once you have precise details of your income and expenditure- you should approach your creditors with an offer to pay them "x" amount on a monthly basis- being the maximum you can afford without driving yourself into destitution. Do not expect any creditor (the bank or anyone else) to accept a payment holiday, or to write off the debt- but also do not offer to pay more than you can afford. Make sure your offer is conditional on your income remaining at a similar level- and conditional on neither of you loosing your jobs etc.

What assets do you have that you could possibly divest yourself of? Cars are incredibly expensive to run- can you do without? Do you have memberships of sports clubs, gyms, sky tv etc- that could be cancelled? Do you have any means of raising additional income (e.g. would you be willing to rent a room in your house, or provide student accommodation?) You need to recognise that this is a retrenchment- it will be painful- but you will be able to see light at the end of the tunnel.

There is a social welfare payment designed to assist people who are having difficulty in making mortgage interest payments. It may be worth your while exploring this option. To qualify- you have to be able to prove that when you originally took out the mortgage that it took below a certain amount (think its 30%) of your net after tax income to satisfy the interest component of the mortgage. Ask about this payment IMMEDIATELY.

I'm not trying to drive you into a panic- but it is imperative that you address this immediately- not wait until you've missed a few mortgage payments- at which stage your creditors will be far less likely to take a sympathetic line with you.

MABS will advise you of the best course of action- but don't put off seeking an appointment- they are incredibly busy these days......

You need to deal with this now- not after you've missed a few mortgage payments and have arrears on top of everything else to contend with. Take as proactive an approach as possible- ask questions, make an appointment with MABS, find out exactly what your options are- and do it now- not in January, when you'll have dug yourself into a deeper hole.

Regards,

SMcCarrick

Last edited by The_Conductor; 03-12-2008 at 10:11.
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03-12-2008, 20:12   #13
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Handing the keys to the bank isn't the answer.

You owe the bank money not a house/apartment - thats your legal obligation since you signed the mortgage agreement. The bank just want to get their money back & have the law on their side to do so (as you agreed). If they end up selling your house they won't care what they get for it - they'll take the first offer & you will likely find you then do have negative equity. You'll still owe the bank the difference under the terms of the mortgage you signed & you will be obliged to pay them.

Talk to MABS as others have advised. I don't know the solution but I do know it's not giving the bank your house - you'll end up much worse off by doing that.
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03-12-2008, 20:20   #14
mikemac
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I put my property on the market to see if there would be an offer, but there is none. Nobody is buying round here at all. I'd sell tomorrow if there was a buyer, but there isn't.
I see you are not in negative equity.
There are tens of thousands of potential buyers but they aren't buying at the prices being quoted.
You could sell your house very quickly if you wanted to but you'll have to put a realistic price on it and if you're not in negative equity now, you might be with the price you actually get

I wouldn't say selling is the answer at all.
But don't say there are no buyers, there are many potential buyers out there but they demand value and don't care what price you payed a few years back.

You've gotten fantastic advice from other posters, I can't realy add anything to it
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03-12-2008, 20:46   #15
ted1
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Quote:
What do they do, are my debts cleared, or will they continue to screw me?
How are they screwing you. your the one screwing them... you know what your repayments where before you got the mortgage. (there actually less know than when you took the mortgage.)

how easy do you think it is to give keys back? not easy or legal at all.

Quote:
I'm not in negative equity
if your not then sell the home and pocket the extra. if you can't sell the home then you are in negative equaity. houses are only worth what people are willing to pay for them. you'll find by lowering the price the house will eventually sell.
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