What happens when someone cannot pay the mortgage?

ricman

I,M curious ,what happens when someone loses there job and can no longer pay the mortgage.Theres thousands going on the dole every month.
So they go to welfare ,say mortgage is 150k.Say a married couple with 2 kids.Does the welfare pay the whole mortgage, or does the bank put em on interest only payments.
I hear people on rte talking about mortgage support from the welfare officer, but they do not go into detail.

bryaner

Mortgage allowance is €100 per week as far as I know

As for the lender that's their prerogative to say yea or nea.

ricman

I heard from someone who works in a bank if someone is in difficulty they ask em to switch to mortgage interest only payments as they are reluctant
to take a family to court and evict them and the banks do not want to end up with 1000s of houses which they may be unable to sell.

Zamboni

Interest Only Repayments = High rent + Increasing Negative Equity

Or

Gaining a breath whilst tightening the rope around your neck.

Riskymove

Zamboni wrote: »

Interest Only Repayments = High rent + Increasing Negative Equity

Or

Gaining a breath whilst tightening the rope around your neck.

first of all, not everyone with a mortgage that loses their job is in negative equity

the issue here is about repaying mortgage

OP the people involved should talk to Welfare but also an Organisation like MABS to dicsuss the options

pursuing an interest only mortgage or payment holiday etc is also a good idea in this situation to give you some space to get things together, get other work etc

unfortunately any family with a large mortgage who cannot get employment over a long period are going to struggle but can try to manage through difficult periods

Gurgle

Zamboni wrote: »

Interest Only Repayments = High rent + Increasing Negative Equity

Or

Gaining a breath whilst tightening the rope around your neck.

Or

Temporarily reducing monthly outgoings during a time when its hard to make ends meet.

But that won't set anybody off pontificating about the overpriced houses they didn't buy because they knew better all along.

SoupyNorman

ricman wrote: »

I hear people on rte talking about mortgage support from the welfare officer, but they do not go into detail.

In the majority, any support like that will be very tough to get. You'll be made jump through many hoops and must fit an exact criteria and then circumnavigate endless red tape to qualify.

In terms of not being able to repay, there's not really a whole lot that can happen at the moment. Interest only payments is probably the most popular restructuring option for people in trouble but it gives the lenders leave to smack penalty after penalty on the principal sum.The saving grace is lenders are reluctant to move for repossession as most property is currently unsellable.

The people in trouble MUST keep communication lines open with the lenders. Even if it's a letter to say you are unable to pay it shows you've not buried your head in the sand and should the case go to court you'll be viewed upon alot more favorably by a judge.

Having people close to me in severe financial trouble I can empathize with anyone in the same boat however I still dont believe that mortgage holders should be bailed out anymore then banks should have been but thats another discussion.

The mortgage arrears situation here is quickly approaching tsunami proportions, a solution needs to be thought of...fast.

Zamboni

Gurgle wrote: »

Or

Temporarily reducing monthly outgoings during a time when its hard to make ends meet.

The problem here is when people assum they are in a temporary spot of bother.
I feel for the guy who is out of work paying interest only, but his unemployment becoming a longer term than expected. All he has achieved is paying even more interest for an asset that has devalued at the same rate.

The_Morrigan

The best thing to do is talk frankly to your bank manager first before any arrears may arise. They ain't all bad and some of them are in the same situation (just cos they work with money doesn't mean they have it!!)
I was facing the possibility of redundancy last year and at the first sniff of it I rang my bank manager, there are options available depending on whether or not you have insurance to cover the mortgage, or if you're young enough to put the mortgage on hold for 6-12 months, and add it onto the end of your existing term. Some of the banks will allow you to restructure it so that your payments are reduced or interest only.

Victor

bryaner wrote: »

Mortgage allowance is €100 per week as far as I know

Its limited to the interest portion of the mortgage repayment, less €24 per week.

http://www.citizensinformation.ie/categories/social-welfare/social-welfare-payments/supplementary-welfare-schemes/mortgage_interest_supplement

Gurgle

Zamboni wrote: »

The problem here is when people assum they are in a temporary spot of bother.

The alternative is to give up, assume that he'll never get back on his feet, leave the family home and apply for a council house.

Zamboni wrote: »

I feel for the guy who is out of work paying interest only, but his unemployment becoming a longer term than expected.

Or it might not.

Zamboni wrote:

All he has achieved is paying even more interest for an asset that has devalued at the same rate.

The vast majority of house owners did not invest in an asset, they bought a home. 'Devalued' only means something if you're selling.

Treehouse72

Gurgle wrote: »

The alternative is to give up, assume that he'll never get back on his feet, leave the family home and apply for a council house.

No it's not. That is disingenuous, inflammatory and downright offensive claptrap and you should be more careful when peddling such casual ignorance.

The other alternative is that the family rent a home instead. Here's what should happen:

The bank should repossess their house. The family moves out of the property - which they can no longer afford - and rent instead. In most cases this would immediately slash shelter costs for the family - 50% drops in such circumstances from, say, a €2k mortgage to €1k rent would be very possible. This would be like a dead weight lifted from the family and would give them some portion of their life back. And the rental property they move in to, in all likelihood, would be a direct replacement for their house given there is hardly a house in the country you can't find a direct rental equivalent for at a fraction of the cost. Same property for less money and with the pressure of repayments eased...win/win/win.

In this regard, I find your use the term "family home" highly loaded and very offensive - as if you can't have a "family home" if you rent. In your schema, the only people with the right to call their shelter a "family home" are people with mortgages. What kind of sick snobbery are you peddling here? You're trying to sound concerned about people, but in an instant dismiss renters as somehow second class citizens. Offensive, ignorant crap.

The vast majority of house owners did not invest in an asset, they bought a home. 'Devalued' only means something if you're selling.

Emotive nonsense that is of no practical use in a serious debate.

Besides, the vast majority of people who cannot afford to buy are in that situation because this family were part of the problem: they helped bid up prices during the bubble. Where is your sympathy for those people who were priced out? Don't those people just want a "family home" too? Why do you retain all your sympathy for those who took on too much debt? In your vision the reckless get to keep their "family home" and the prudent get to rent forever because the reckless are not being made pay for it. Sorry, not acceptable.

A small number of people need to have their houses repossessed now so that a majority of others can afford to buy, so that future generations can also do so and - crucially - so that our national competitiveness can improve. I have no idea why you want a minority of people - and distressed mortgage holders are a significant minority - to effectively hold the rest of the country to ransom. This is not compassionate. It is ignorant, impractical, morally offensive and generally stupid.

ricman

This is not the us, if you leave your home, you,ll owe 150k plus interest, maybe the economy will recover in 4 years time.
And most of these people will get back to work.No one knows what will happen, the falling euro is helping our export sector .
i consider it a good thing that prices are falling to realistic prices.

Gurgle

Treehouse72 wrote: »

In most cases this would immediately slash shelter costs for the family - 50% drops in such circumstances from, say, a €2k mortgage to €1k rent would be very possible.

You're making the assumption that most people bought a home they couldn't afford at the peak of the boom. Most people did not.

You're assuming that most people who have lost their job didn't see it coming and plan accordingly.

Treehouse72 wrote:

In your vision the reckless get to keep their "family home" and the prudent get to rent forever because the reckless are not being made pay for it.

Didn't you read my posts?

dan_d

NiMhaoldearg wrote: »

The best thing to do is talk frankly to your bank manager first before any arrears may arise. They ain't all bad and some of them are in the same situation (just cos they work with money doesn't mean they have it!!)
I was facing the possibility of redundancy last year and at the first sniff of it I rang my bank manager, there are options available depending on whether or not you have insurance to cover the mortgage, or if you're young enough to put the mortgage on hold for 6-12 months, and add it onto the end of your existing term. Some of the banks will allow you to restructure it so that your payments are reduced or interest only.

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