Mortgage arrears - dealing with mortgagee to get payments down...

Have a friend who is some difficulty. He is in arrears of about €30k in a mortgage of about €600k. His house was valued about €800k to get the mortgage, but of course it is now worth less than half of that - its been on the market 2 years. He is self employed.

The financial institution has already allowed him reduced payments (he was paying about €3k a month) but built up massive penalties and interest on that. He wants to meet them to see what can they do, but he has little leverage other than that if they repossess the property and sell it, he will still owe them a few hundred thousand, and he will simply go on the dole and they can get their instalment order for a couple of hundred euros a month. So in a nutshell his position is that if they do their worst he will have to give up his house, but they will only recover maybe half of what they are owed. Is there any other angle anyone can think of? Has anyone else gone through this process and anything else to note?

monkeypants

I doubt that the bank wants his house. I'm currently out of work and we're paying interest only on the mortgage. The bank were quite happy to work with us, however, we weren't in arrears. When I went in to talk with them, they presented several options, one of which was a complete payment holiday for six months.

chris85

monkeypants wrote: »

I doubt that the bank wants his house. I'm currently out of work and we're paying interest only on the mortgage. The bank were quite happy to work with us, however, we weren't in arrears. When I went in to talk with them, they presented several options, one of which was a complete payment holiday for six months.

i am happy they sorted you out but most will only grant a payment break or moratorium if there are no arrears on the account.

OP, the last thing the bank want is the house. generally it will take ages to even get a repossession order (this can go on several years if there are kids and so forth involved) so they will want for your friend to get back on track.

His best angle should be to promote his future earning if he has good prospective employment when the economy gets back on track.

Thanks for that. He was given a further 6 months to see how things go. So worth going to the meeting.

His mortgage broker had advised him to hand in the keys, stop making any payments, tell them take a hike and stay 'under the radar' for a few years and work for cash!! I thought that was just about the worst piece of advice I ever heard. He'd lose his house and end up owing hundred of thousands to a financial institution that could easily hire a private investigator or simply make a few calls to see if he was working or not. Nuts.

chris85

Deleted User wrote: »

Thanks for that. He was given a further 6 months to see how things go. So worth going to the meeting.

His mortgage broker had advised him to hand in the keys, stop making any payments, tell them take a hike and stay 'under the radar' for a few years and work for cash!! I thought that was just about the worst piece of advice I ever heard. He'd lose his house and end up owing hundred of thousands to a financial institution that could easily hire a private investigator or simply make a few calls to see if he was working or not. Nuts.

Thats the worst advice i have ever heard. The banks can track down anyone anywhere using there sources. I have seen it happen and it will continue to happen.

I am glad your mate got it sorted. Hopefully in six months things will look better.

Toots

Deleted User wrote: »

Thanks for that. He was given a further 6 months to see how things go. So worth going to the meeting.

His mortgage broker had advised him to hand in the keys, stop making any payments, tell them take a hike and stay 'under the radar' for a few years and work for cash!! I thought that was just about the worst piece of advice I ever heard. He'd lose his house and end up owing hundred of thousands to a financial institution that could easily hire a private investigator or simply make a few calls to see if he was working or not. Nuts.

That's shocking! :eek: I can't believe a broker told him to do that! If anyone was asking me what course of action not to take if their mortgage was in arrears, it'd be this one!

Christine45

I don't really have anything positive to add to this thread but wanted to say I'm going through a similar situation.

I was told also by a broker to stop paying. As crazy as it sounds I done just that. I missed one months mortgage and when the letters started flying in the door I panicked and handed out the last of what money I had left.

In the meantime I had made the bank aware of my circumstances and finally they reduced payments. Even though the payments are reduced I still can't afford to pay so I asked again would it be possible to get a payment break or interest only payments and was told that both were against bank policy.

If this is the attitude; then OP your friend was lucky to have been assisted in his request for a payment break.

My next option is to rent and go to the UK for whatever work I can find. That's the only way I see that I will be able to keep up mortgage payments. There's just no hope of a sale at the moment.

stepbar

Deleted User wrote: »

Thanks for that. He was given a further 6 months to see how things go. So worth going to the meeting.

His mortgage broker had advised him to hand in the keys, stop making any payments, tell them take a hike and stay 'under the radar' for a few years and work for cash!! I thought that was just about the worst piece of advice I ever heard. He'd lose his house and end up owing hundred of thousands to a financial institution that could easily hire a private investigator or simply make a few calls to see if he was working or not. Nuts.

The mortgage broker is encouraging him to "effectively" evade tax. For that alone, he should be brought to the attention of the financial regulator.

monkeypants

I think that the options presented are what the underwriters will allow. I know that when I spoke with the chap at the bank (BOI) a few months ago, all he could do was build a case with me and present it to them.