Banks knocking down the door

LegacyUser

I have defaulted on my mortgage. I am in debt to the bank, the credit union, and various other bills and sundry amounts.

I lost my job during the year. I tried to get another job, but I couldn't. I have tried everything, and there are no jobs, in any category, because there are so many other people looking for the same jobs.

I was called into the bank. They are putting pressure on me to pay my mortgage. They will not negotiate. I have a credit rating.

If I could get a job, this problem would work itself out, but the bank will not wait for some future day that I might or might not get a job. They want paid, NOW.

I went to the auctioneers and enquired about selling my home. There are already a good few similar homes on the market in the same area, that have been available all year with no takers.

I would sell my home in the morning, if I could, and move home to my parents. It would solve everything. But I can't sell it. I owe so much now, that to rent my home out is no use, I still need a massive lump to pay off the debtors.

I have been to MABS, I have cut out all unnecessary expenditure, I am not even eating properly, so little money do I have.

Where do the bank think I can get the money from?

If I could get a buyer at an enormous loss, sell my Dublin home for say, €180,000, a MASSIVE 40% loss, just to get everyone off my back, how much extra would the bank look for to clear my mortgage early? They are totally unreasonable about things. I am in a complete bind. No way out.

hungryhippo

Few questions-

When did you buy your home and how much of a deposit/mortgage repayments have you put in thus far? Do you have a partner? How old are you?

There is little point in fretting about this. The banks,etc know that you cannot get blood from a stone. There is a way out, that being to move home and hand back the keys to the bank.

JuliusCaesar

The banks here don't work like in America. If you hand the keys back, they'll sell the house at any price and you'll still be liable for the mortgage.

go to askaboutmoney and MoneyMakeovers or Debts and ask the accountants and moneywise people there.


However, in my experience, banks are willing to negotiate the amount of the instalments you pay back, and the length of time over which they expect to be paid. They want their money back, and it's a case of negotiating with them.

But - look after yourself. Eat properly and get exercise as well as taking on any job whether parttime or menial just to have some income.

Can you rent out the house or even a couple of rooms?

Craft25

When I look to rent a room for college with rent supplement i find it almost impossible... perhaps you would consider taking a lodger.. guaranteed 400+ (in dublin).. are you single? move to the box room & rent the doubles...

if you start to give the banks sometheing they might negotiate... pay off credit cards asap...

you may be able to work a couple of days in a pub/offlicense/shop and still get dole on the casual/part time basis(sundays dont count, so working then wont affect payment)...

go to mabs straight away... also go to citizens advice and as many people as you think can help

lastly.. is this the right forum?

pseudonym1

What about making an arrangement with parents/family member and if they are in the position prehaps they could help?


Majority of sucessful people in americia have been bankrupt!

Craft25

http://www.askaboutmoney.com

hungryhippo

JuliusCaesar wrote: »

The banks here don't work like in America. If you hand the keys back, they'll sell the house at any price and you'll still be liable for the mortgage.

This is correct, however the liability won't mean very much at the moment as he doesn't have any net assets.

He has been to MABS and isn't even eating properly. It has gone past the stage of taking a lodger or looking for some cash work i'd say.

MagicMarker

Tbh, I'd say not to worry.

If the bank calls again, just say ''listen, I don't have the money to give you, I'm looking for a job and until I get one you're just going to have to wait, there's absolutely nothing I can do right now''.

Really, there's nothing you can do but keep searching for a job. So just keep the head up in the mean time and look after your own health.

boredatwork82

can you declare bankruptcy?
not sure how it works, but at least it'll get everyone off your back, and your credit rating is probably screwed anyway, but you can't be a company director for 5 yrs i think.

I can imagine that the effort required to sort this would be massive and sustained, and the chances of finding permanent employment are poor enough now. so you could find yourself in the same situation in a few months time again.

JuliusCaesar

are you in receipt of Social Welfare? Don't they pay the interest on your mortgage while you're out of work?

LegacyUser

when you default on your mortgage and you want to less at a major loss..as far as i am aware you need the consent of your mortgage lender to do so as it is also their security.

i work in a solicitors office and i have seen a massive increase with people in your situation who have defaulted on their mortgage repayments for 6 months plus. I find that it depends on the mortgage lender you went with as some of the lesser well established banks such as GE Money, Start Mortgages etc. are more inclined to issue court proceedings much quicker than the major banks we have here.

In the cases we have here....nobody has been issued with an eviction notice and when it goes back to court the Judge is issuing a further 6 month extension and so on. The Judges seem to be punishing the lenders more so than the homeowners. But i suppose every situation needs to be look at differenlty.

I have heard it is suggested to people in your situation not to pay any unsecured loans i.e. credit cards, credit union, car loan etc. and just to pump all your money in to your mortgage.

MsFifers

I have recently advertised a job where I work, and there are tons of applications coming in, but I am amazed at how badly people are at selling themselves and their skills. A huge number of people are sending out a general CV that isn't targeted at the job being advertised.

In case you aren't already doing this, I'd really advise you to get some advice on your applications to jobs. There are jobs clubs in lots of places, and they can give you some advice on putting your best foot forward.

Regarding your bank, it sounds like you are just going to have to take a deep breath everytime they call. They probably have their staff on a target of a certain number of phone calls per day, and it isn't that they are being personal. If you know in your heart that you are doing everything you can to get a new job and improve your finances, then all you can do is hang in there.

Don't give up, you'll get yourself out of this mess.

LegacyUser

It is not in the Banks interest to take the keys of the property and attempt to sell it in a market that currently will not allow for it and if it does sell, will be for less then the Banks debt.

The calls you are receiving from them are standard, they will threaten and bluster because that is their job, they have to be seen to be chasing people up. Its just as frustrating for them as it is for you. They will not act until the situation becomes untenable, ie the amount of arrears becomes so great that even selling the property for maximum value during a good market would not give the Bank its return. At this stage they will take the hit and demand the keys and sell for any price, but you are not at that stage yet.

Your best bet at this stage is to get a letter from your accountant / solicitor / auctioneer stating that you are endeavouring to sell your house. Banks love formal letters, particularly because the manager in charge of your case can wave said letter in hiss bosses face and say 'look hes trying!'. That will buy you time. This is a lot better then the manager saying 'oh well he said on the phone that hes trying!'.

Remember aswell you are not the first person in this position and you most certainly will not be the last, while the Bank is entitled to its money back, they are over a barrel aswell and will work with you if you show evidence that you are working with them, ie letters!

kittenkiller

Have you considered getting a few more menial than you would usually be interested in jobs?
There's a lot of competition for most skilled positions out there at the moment and if you're finding it touch getting anywhere that you want to go, try a different route.

I know it'll probably feel like a step back for you career wise, but at least you'll be out there earning some money for yourself and feeling useful.

With regular money coming in, you can pay the bank as much as you can each month to show that you're intent on getting them their money back.

When I was working in credit control (albeit in a much less formal envirnoment than most banking establishments I would imagine), we would always give more consideration to people who would call us up and make payment plans or explain their situation rather than waiting for us to chase them. It puts a human perspective onto things from the employees point of view and the calls were usually much more pleasant all round.

Try renting out a room or the whole house if you move home, any money coming in will at least ensure that you can eat properly.

Once your circumstances begin to change, whether to work or rental income, go back to your MABS advisor to let them know about the changes and reassess your payment agreements and if they're acting on your behalf with anywhere you owe money to, it's best to get an update.

Best of luck.

Firetrap

If I was in your shoes, first thing I'd do would be to try and earn some money from the house. Look into renting out rooms in the house or even the full thing in one go - you said you could move back in with your parents. It probably won't cover the mortgage but it may take the sting out of the repayments.

On the jobs front, keep plugging away at getting a new job. In the meantime, try to get any sort of a job, even if it's cleaning toilets or flipping burgers. They may not be jobs that you thought you'd ever do again but it's income and surely better than the dole.

I wouldn't normally be one for suggesting you look for money off your parents but perhaps they might be able to help you out short term.

On dealing with the banks, perhaps get back in touch with MABS and ask for advice on this. Perhaps if you're seen to be making an effort to repay your mortgage it will stand for something.

herya

Rent the house out, it won't help that much but it's important for you to get your hands on any money and show the bank that you're doing something even if you can only pay a fraction of the mortgage now keep paying it.

Also keep searching for work, there are jobs cuts all right but with so many foreigners returning to their home countries you may get lucky. If you could use a free CV formatting/advice please feel free to PM me I'll be happy to lend a hand.

The last thing you need now is getting depressed and passive, keep yourself occupied.

bren2002

What bank are you with?

The banks who've signed up to the recapitalisation scheme have agreed not to start legal proceedings for at least 6 months.

I assume you've sold any cars you own?

http://www.rte.ie/news/2008/1221/banks.html?TB_iframe=true&height=650&width=850

bren2002

Also, if things are as bad as you really say they are. You should consider stopping paying all other debts. It's unsecured debt, that's why the interest rates are higher. Visa can't take your house away.

Supercell

I agree, if you can rent it out and have to move back with the parents so be it. At least you'll be able to keep it until such time as your back on your feet. You'll also keep your good credit rating.
Best of luck however it works out for you.

daveirl

This post has been deleted.

LittleRose

"This too will pass" I was taught these words by my grandmother as a phrase that is to be used at all times in your life. When things are spectacularly dreadful; when things are absolutely appalling; when everything is superb and wonderful and marvellous and happy - say these four words to yourself. They will give you a sense of perspective" Claire Rayner...

I know I'm not offering any financial advice which you need but the above served me and continues to serve me very well after something that happened me recently - the thing that I always feared the most and the worst thing (IMO) that can happen to anyone. I detected a note of despair and desperation from your post so I just wanted to send you some positive thoughts and implore you to mind yourself and keep the chin up. And even if it seems overwhelming at times, remember that it only comes one moment at a time and there are hundreds, thousands going through the same.

dar83

Unregistered wrote: »

The calls you are receiving from them are standard, they will threaten and bluster because that is their job, they have to be seen to be chasing people up. Its just as frustrating for them as it is for you. They will not act until the situation becomes untenable, ie the amount of arrears becomes so great that even selling the property for maximum value during a good market would not give the Bank its return. At this stage they will take the hit and demand the keys and sell for any price, but you are not at that stage yet.

They wont reach that stage for a long time because it's not worth it. He has already defaulted on it though, so all he can do is try and agree some sort of repayment plan with the bank.

Unregistered wrote: »

Your best bet at this stage is to get a letter from your accountant / solicitor / auctioneer stating that you are endeavouring to sell your house. Banks love formal letters, particularly because the manager in charge of your case can wave said letter in hiss bosses face and say 'look hes trying!'. That will buy you time. This is a lot better then the manager saying 'oh well he said on the phone that hes trying!'.

No point in that whatsoever, it wont help in any way. It's already in the recovery department, all they;ll do is try to organise some sort of repayment scheme to tide things over until he finds work again. His best plan is unfortunately to either find a new job, try to gain income by renting rooms and/or putting any part of his unemployment benefits towards the mortgage, however small. That'll have a positive impact on the banks view. Once it's a temporary alternative to them receiving nothing they'll be open to the idea instead of it going further to legal.

To the OP, your best bet is what I've said above. The bank will appreciate any sort of contribution from you for whatever short term period it is until you manage to gain employment again and return to a normal repayment schedule. Speak to the FA in your bank again and see if you can get any sort of moratorium on it (unlikely at this stage) or see if they are prepared to allow you pay interest only until a time you can afford to pay back more. Thats your best bet. Good luck with it anyway, horrible situation that a lot of people are beginning to be in.

LegacyUser

* Sends LittleRose a big hug *

Thank you everyone for your support. One final question, IF I could get a buyer for my home, where would I stand to pay back a €170,000 mortgage? I mean, how much would the bank look for in order to cancel the whole agreement? Probably more?

dar83

Losteverything wrote: »

Thank you everyone for your support. One final question, IF I could get a buyer for my home, where would I stand to pay back a €170,000 mortgage? I mean, how much would the bank look for in order to cancel the whole agreement? Probably more?

Unfortunately that depends on the institution you're with and the contracts you signed. Fixed/Variable rate etc...
Your best bet is to just ask them. It'll change every day due to interest rates and what not anyway, so just give them a call or meet with them and find out.
Sorry I cant really say any more, but there's too many variables no one here knows to do with your contracts etc...

Slydice

Losteverything wrote: »

If I could get a buyer at an enormous loss, sell my Dublin home for say, €180,000, a MASSIVE 40% loss, just to get everyone off my back, how much extra would the bank look for to clear my mortgage early? They are totally unreasonable about things. I am in a complete bind. No way out.

40% loss isn't unusual anymore. A lot of houses are dropping about 30% already.

Expensive houses (1million+) have been seen to have dropped almost 60% in price.

I recommend undercutting anyone in your neighbourhood by at least 25%. With Dell letting go 1900 jobs there during the week, people are starting to realise that we ain't even close to halfway through the recession yet. If you undercut now, I think you might just sell your house.

Good luck with this. I hope you get sorted.