I want to hand my home back to the bank

LegacyUser

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?

Peewee_lane

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?

eth0_

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.

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.

Dob74

I think you would still owe the bank money. You should get professional advice.

kayos

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

andrewh5

eth0_ wrote: »

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.

egan007

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

Mr. Presentable

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?

kmick

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.

darragh o meara

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.

The_Conductor

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

Peachy123

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.

mikemac

Unregistered wrote: »

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

ted1

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.

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.

LegacyUser

what about extending the term of the mortgage so the monthly repayments are less? for example if the current mortgage is 25 years then get it extended to 35 years.... but i don't know if that involves a lost of legal costs or if the lender will entertain the idea.

Victor

Talk to your local community welfare office - you may be entitled to a mortgage supplement.

board om

ted1 wrote: »

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.

thank you, i am glad someone has said it. there is no €20k or €30k left over after paying back the bank. at the moment there is nothing because you have no offers. you are only in positive equity when you have someone willing to pay you more for the house than you currently owe. for example you cant say your house is worth €250k but there are no buyers, the house is only worth what someone is willing to pay you for it. so if nobody is willing to pay you €250k, then it isnt worth that amount. you have to drop the price to a figure that someone IS willing to pay for it, and then THAT is what your house is worth. so if nobody will pay €250k but they will pay €200k, then your house is worth €200k. the €250k doesnt exist, its just a number.

the problem is that people in this country have been making up there own property prices for so long that they dont seem to understand that just because someone was willing to pay X amount for their house a year ago doesnt mean that their house is still worth that amount. it is only worth what someone is willing to pay for it. the days of making up figures are over, its take what you can get time.

Lollipops23

if you desert your mortgage you will be blacklisted forever. why did you take on a mortgage that was more than your wages?

Keyzer

Shame on you for taking a mortgage you couldnt afford and shame on your bank for giving it to you...

Nevyn

Can we keep the post helpful or else.

Toots

Sorry to hear about your situation OP. I've never heard of someone simply handing the keys back to the bank, it's a bit more complicated than that.

Really you need to make an appointment to sit down with someone in the bank and explain that you simply don't have the money to pay the next mortgage payment. Don't beat about the bush, lay it out for them in black and white, you simply do not have the funds you need. Sit down and take note of all your outgoings; loans, bills and other essentials, then work out the max you can afford to pay and see if they're willing to negotiate a lower repayment amount for the next year (or more if you feel you need that time to get back on your feet). I think in the circumstances the bank will be happier to get something from you albeit a smaller amount, rather than no payments at all. The only thing to watch out for is that if you take a payment break or else reduce your payments for a time, your repayments may increase at the end of your reduced/non payment period, as extra interest will have built up on the loan and it will still have to be paid off on time, so your payments will be adjusted accordingly. If you don't get any joy from your bank, MABS may be able to intervene on your behalf. They should also be able to advise you of any benefits you might be entitled to in your situation. Are you claiming your tax relief on your mortgage? If not, then start claiming it. The Revenue Website has a form you can download and send in to start claiming.

Also, is there a third room in your house you could rent out to get a bit of extra cash? Any possibility of picking up some part time work for a short while? I'd view 'giving the property back' (if that's even possible) as a last resort. Also if you default on the mortgage, you'll be blacklisted as regards your credit rating goes. Feel free to PM me if you need any more info, and I'll do my best to find it out for you. I hope everything works out.

GigaByte

Unregistered wrote: »

Hey does anyone know what happens if you hand back the keys of your home to the bank?

Has it not crossed your mind to maybe ring the bank and ask them? you would have got your answer along time ago.

You've post your question this morning looking for info and haven't bothered to answer anyone’s questions or thank anyone for their help. I'm not surprised you’re in the situation you are now.

No doubt you'll say you haven't looked at this today. :rolleyes:

IanCurtis

Omeara_darragh wrote: »

Hold out hope and never give up.

I had to laugh at this. "Never give up" on a crippling debt they can't afford to pay back....the Irish attitude summed up...classic!

Agent J

Smccarrick pretty much has the nail on the head

1)You owe money, not property.

Handing in the keys will do nothing. You are still liable for the balance left on the mortagage and any costs incurred by the bank in selling that assest

2)Contact MABS asap.

Others have said it and i can only repeat it. Go talk to others. It isnt the end of the world and you arent not the only person stuck in this kinda situtiaion.

3)5 Years.

Is the time you end up on the Irish Credit bureaus register. In short for the next 5 years after being declared bankrupt you wont be able to get finance to buy a bag of chips. After that it resets and relative clean slate.

4) This is not the end of the world.

It might feel like that and you just feeling like staying in a deep dark hole but lets look at the situation. The worst that happens is you loose your home and you are declared bankrupt. Yep. Thats pretty bad alright but you can get over it and 5 years later it will be all water under the bridge. It isnt the end of the world. Also to be honest banks do not want to reposses if they can at all help it. It sounds as if you are taking steps to deal with the situation, Thats a good sign, many people are just burying their head in the sand and hoping it will all go away. Continue to take action and seek advice

5)When did you buy?

Not looking for how much but knowing when would give an idea of how much you stand to loose on it. As others have said positive equity only exists if someone pays for it. As the Japanese learned the hard way a fixed assest is only worth was someone will buy it for. If you bought pre 2003 then i reckon you should be able to get away with it without loss. If later then get ready to take a hit. Be honest with yourself and price it at below what places are currently selling for in your area. Thats the only way it will move. (This is just a personal opinion though.

IanCurtis

Good post.

Too many amateurs out there with massive loans they refer to as "property"

This will be the first of many of these posts. Sound advice above.

jhegarty

Agent J wrote: »

3)5 Years.

Is the time you end up on the Irish Credit bureaus register. In short for the next 5 years after being declared bankrupt you wont be able to get finance to buy a bag of chips. After that it resets and relative clean slate.

The clock on the 5 years doesn't start while you are still behind, so it could be far longer

Agent J

jhegarty wrote: »

The clock on the 5 years doesn't start while you are still behind, so it could be far longer

True, hence when i say after you have been declared bankrupt which can be a long process in itself i accept but forgive the pun if the situation was that bad then a person could go for broke and go for bankruptcy.

[Jackass]

OP just had a read of your post and a skim through the replies, but if you can't sell I would suggest:

1/ Go on interest only if you are not already on it.
2/ Failing that extend the term of your mortgage to the maximum allowable term (usually until you're 65 / 70, but on interest only term makes no difference.)
3/ Rent the property if at all possible and move in with family or friends if possible and come to an arrangement later if needs be.
4/ Do not hand in your keys, you still owe the bank money and they will only try and sell it same as you, but you might as well try and get the best price, but don't be afraid to drop it to even the mortgage value just to get it cleared.
5/ Don't panic and don't stress. I work in mortgages and this is happening at an amazingly regualr rate. Banks understand it and have people a lot further down the arrears line than you to deal with first. Don't let it take over your life, it's only property and you're not alone, speak to you financial adviser and bank and see if there is any other sort of arrangement you can come to. (not many banks will give a payment break unless there is a realistic chance that you will be able to pay without defuault there after - losing your job and being on a payment break will only let the interest add up like it would anyway.)

Best of luck and don't worry too much.

LegacyUser

GigaByte wrote: »

Has it not crossed your mind to maybe ring the bank and ask them? you would have got your answer along time ago.

You've post your question this morning looking for info and haven't bothered to answer anyone’s questions or thank anyone for their help. I'm not surprised you’re in the situation you are now.

No doubt you'll say you haven't looked at this today. :rolleyes:

Has it not crossed your mind to read my post before making smart comments? I went INTO the bank, suit and tie, figures, everything. Yes, I got my answer. I was told NO deferment, NO interest only, NO mortgage extension. Not an inch.

With regards to your next comments, has it not crossed your mind that perhaps I am out working fourteen hours a day, only eight of which I am getting paid for, the other six of which are spent driving from job to job, and that I don't have the luxury of spending my day sitting on the internet, posting idle smart comments for people who come on looking for a bit of genuine advice?

Go to hell, and for all the other posters who sent helpful advice, thank you, I'll pull through somehow, I am just annoyed at how the bank slams the door in my face as they did.

[Jackass]

Every bank will give you a term extension out to 65+. It's not in their favour if you don't pay your mortgage, it is in their favour if you pay interest for an extra 10 years or whatever extension you get.

Unless it's already out to the max

GigaByte

Unregistered wrote: »

Has it not crossed your mind to read my post before making smart comments? I went INTO the bank, suit and tie, figures, everything. Yes, I got my answer. I was told NO deferment, NO interest only, NO mortgage extension. Not an inch.

I did read you post and I told you the best advice imo is to ring the bank and ask them what happens if you hand the keys back.

I do hope things work out for you and I apologise for the rudeness of my last post

milod

Topical piece from breakingnews...

http://www.breakingnews.ie/ireland/mhidsnkfojmh/

The banks are going to have to wake up sooner or later OP. I suggest you get everything in writing from them so that if they do try to repossess or hold you liable for debt, you can prove you tried every available channel. This counts for a lot when faced with bankruptcy court etc.

LegacyUser

GigaByte wrote: »

I did read you post and I told you the best advice imo is to ring the bank and ask them what happens if you hand the keys back.

I do hope things work out for you and I apologise for the rudeness of my last post

* Group Hug *

Sorry for being shirty, this being in debt business sure gets to you...

All I need is a bit of leeway, the same as lots of people right now. Please God the banks will recognise the human face behind the statistics.

LegacyUser

Sorry to hear your news, but I'm in exactly the same scenario. Had a fab job etc., etc., but now been made redundant twice in the past 6 months. Can't make my payments either and no help from anywhere. I have contacted a solicitor (who told me to ask parents for money!!)

Awful situation, with no light at the end of the tunnel. I hope someone comes online to advise us, but wish you well and a lot of good luck for 2009!

Unregistered wrote: »

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?

madmik

Unregistered wrote: »

Sorry to hear your news, but I'm in exactly the same scenario. Had a fab job etc., etc., but now been made redundant twice in the past 6 months. Can't make my payments either and no help from anywhere. I have contacted a solicitor (who told me to ask parents for money!!)

Awful situation, with no light at the end of the tunnel. I hope someone comes online to advise us, but wish you well and a lot of good luck for 2009!

three pages of good advice and u "hope some comes online to advise us"

what do u want ,magic?

Agent J

Unfortunatly there really isnt much to advise on the orignal post.

You cant simply hand back the keys in this country because they can and probably will chase you for the rest of the balance of the house.

It sucks but the laws are pretty victorian when it comes to debt.

There isnt going to be a white knight im afraid.

Longerview

Hey Guys.....you have been given the ONLY advise you need.

(1)...go to MABS....go to MABS....go to MABS.These people will help you.They'll make a payment plan that you can afford and will deal with the bank.They know how to approach the bank,experience counts in dealing with the banks !

(2)The second bit of advise was SELL IT YOURSELF...go to an estate agent ,sell it cheap.Take a loss if necessary,you can live with a small loss now compared with a much bigger one when housing prices are even lower.

mountainyman

You should look at all options including emigration combined with bankruptcy. The bank will pin you to the wall for years if they can. You should explore the implications of emigrating to avoid the consequences of bankruptcy.

MM

gurramok

You cannot emigrate to a first world country as the bank will chase you for the debt. You're better off disappearing to South America/Africa if you want to escape the debt without paying.(not advising this!)

LegacyUser

im in a similar situation, i was also turned away by the bank. couldnt believe they wouldnt lift a finger to help me out. Only "advice" they gave me was "go 3 months into arrears and credit dept will contact you to work out a payment plan" now my logical argument was that i was there to work out some kind of payment plan BEFORE i got into arrears. They still said no. point blank, no compromise, NO. I plan to contact mabs tomorrow (didnt even know they existed, thanks folks!)

Slutmonkey57b

If a bank manager told me that, I'd ask him to put it in writing and then forward it on to a newspaper. It's not in the bank's interest to have people defaulting on their mortgages and increasing the numbers on the "bad debt" figures they have to report to the government.

For those suggesting he "hand back" the keys - they're the bank's keys. It's the bank's house. Leaving them on the counter does nothing. If they want to sell the house because you can't pay, guess what - they can already do that, because it's not your house.

John Mason

Unregistered wrote: »

im in a similar situation, i was also turned away by the bank. couldnt believe they wouldnt lift a finger to help me out. Only "advice" they gave me was "go 3 months into arrears and credit dept will contact you to work out a payment plan" now my logical argument was that i was there to work out some kind of payment plan BEFORE i got into arrears. They still said no. point blank, compromise, NO.e I plan to contaclt mabs tomorrow (didnt ebven know they existed, thaanks folks!)[d/QUOTE]

drublin city council shared ownership/affordable housing have the same policy but you have to be 6 months in arrears before they will speak you.

complete and utter madness

Willm5499

Hi, i was just wondering if anyone knew of a way out of the shared ownership scheme with Dublin City Council. My fiancee and i bought an apartment through the shared ownership with d.c.c for €265,000 and lived in it for the past two years. The problem is the property is only worth €175,000 and we want to start a family now so we spotted a beautiful house in the same area for €288,000 :eek:... I would be greatful if somebody had a soloution that would not put us in bad credit rating, Thanks Will

The_Conductor

Willm5499 wrote: »

Hi, i was just wondering if anyone knew of a way out of the shared ownership scheme with Dublin City Council. My fiancee and i bought an apartment through the shared ownership with d.c.c for €265,000 and lived in it for the past two years. The problem is the property is only worth €175,000 and we want to start a family now so we spotted a beautiful house in the same area for €288,000 :eek:... I would be greatful if somebody had a soloution that would not put us in bad credit rating, Thanks Will

I'd hang on in there- saving as much as possible, and generally paying down as much debt as possible. Make sure you have no credit card debt, overdrafts or other debt.

There are proposals being hurried through the Oireachtas to bring our personal bankruptcy laws into the modern world- however even with this- your credit rating would be ruined for 5 years.......

Unfortunately there is no simple solution. In the states those who handed their keys back to the bank (something that we can't do here) will have their credit ruined for 6 years- however there is no stigma attached to renting there.

If you can pay your debts- the best solution is simply to continue to do so. There is no magic reset button

There are several threads over in Accommodation and Property from folk in an identical situation to you- if you have a browse over there you can see how they're faring.

Zaph

As this is dragging up an old thread I'm locking it. Willm5499, as smccarrick said, you may want to have a look at the Accommodation & Property forum.