Cancel my mortgage! Any chances?

Auriux1234

Hello.

I have a problem:

I buyed house for 290.000 E. Payed 30.000 deposit.
My mortgage is on 260.000 E.
Home value is only 190.000 at the moment on the market.

IS there any chance to cancel the mortgage and give back to bank for the 260.000E and wont be in depth of (260-190) 70k E ?

Thanks
Mr. A

danbohan

Auriux1234 wrote: »

Hello.

I have a problem:

I buyed house for 290.000 E. Payed 30.000 deposit.
My mortgage is on 260.000 E.
Home value is only 190.000 at the moment on the market.

IS there any chance to cancel the mortgage and give back to bank for the 260.000E and wont be in depth of (260-190) 70k E ?

Thanks
Mr. A

in a word , no you will still owe the bank 70k .

Mr. Presentable

If you give the house to the bank they will sell it for what they can get. This may not be 190,000. It may be 100,000! You will owe the difference between what they sell for (less their costs) and what you owe. In this example you would owe 160,000 and have nothing to show for it.

danbohan

Mr. Presentable wrote: »

If you give the house to the bank they will sell it for what they can get. This may not be 190,000. It may be 100,000! You will owe the difference between what they sell for (less their costs) and what you owe. In this example you would owe 160,000 and have nothing to show for it.

true , i know situation 760k owed , sold by bank for 270k balance still outstanding 590k , couple gone walkabout , taxpayer picking up tab no doubt

daigo75

danbohan wrote: »

true , i know situation 760k owed , sold by bank for 270k balance still outstanding 590k , couple gone walkabout , taxpayer picking up tab no doubt

Sorry for the off topic, but I'd like to understand the above: do you mean that somebody had a mortgage for 760000 Euro, "gave back the keys" (sentence that I read quite often), and just "disappeared"? It sounds way too easy to me...

Jet Black

daigo75 wrote: »

Sorry for the off topic, but I'd like to understand the above: do you mean that somebody had a mortgage for 760000 Euro, "gave back the keys" (sentence that I read quite often), and just "disappeared"? It sounds way too easy to me...

The bank would still try and collect the money, it would be passed to collections who would contact the customer by ringing and sending letters. If they can contact the customer and they refused to pay the would go the legal route. If they cant find them it would either be kept by the bank with the amount still owing for the customer or sold to a collection agency.

Giving back the keys does not really work as you still owe the balance.

You could dissapper, grow a mustache and change you name to José. The bank/collection agency probably would not find you. BUT you would still owe the money and they will try and find you.

Markdini

Going walkabouts may not work either. Many banks have dedicated 'Trace' departments. If debts owed are over a certain amount (alot smaller than most would think) these trace departments may outsource to a Trace company.
I've seen plently of cases where consumers have been found living abroad, one was found in Tailand.
If you 'hand back the keys' the bank no longer holds security over the remaining debt owed, make some kind of repayments every month and you're golden.

Markdini

There are a few variables to be considered in which course of action to be taken.
Depending on amount owing and the country the debtor is residing in.
For example, a civil summons can be sent by registered post to an address in Thailand, 21 days before the date of proceedings.
If the debtor fails show at proceedings warrants can be issued for arrest.
If the debtor doesn't wish to return home, i guess there's not much can be done. However, if the debtor does return they may be arrested.
This can happen. Will it happen is another story.

JJJJNR

You can go to the uk and declare yourself bankrupt, the whole process takes 12-18 months, there are companies who specialise in bankruptcy over there. you wont have any assets while you are going through it but its better than the 12 years or so you would have to do if you were to stay in this hole.


http://news.sky.com/skynews/Home/UK-News/Bankruptcy-Tourism-Insolvenz-Agentur-Helps-Insolvent-Europeans-Travel-To-UK-To-Wipe-Away-Debts/Article/200909415390024?f=rss

Bozacke

In the US, you can hand back the keys and owe nothing, because ultimately it's the bank that owns the property. I've heard of countless cases of where homeowners in negative equity have handed back the keys to the bank. I'm not sure if the defaulter also needs to file bankruptcy, but that's also a lot easier to do in the US, a bit too easy. Their only downside is their credit will be ruined and they wouldn't be able to buy a house for a few years. The beauty of this, is if this was the case here, the banks would of had an incentive to properly vet the properties before handing out mortgages. This in turn would have resulted in the banks turning down many applicants, and in turn this would have held down house prices to more realistic levels and maybe we wouldn't be in such a bad state as we are now. Ironically, in the US the banks still got in trouble, despite this system, but there problems were more related to the sub-prime and other issues.

AstonMartin

American banks were giving out mortgages to broke unemployed people so that system does not give the bank incentive to properly vet. so long as executive bonuses are related to earnings without restrictions the current executive will try to make as much as they can while they can.

Toots

Aston Martin, advising posters to renege on debts is not permitted on this forum. Please read the charter, which contains the rules for the forum, and abide by them when posting.

Bozacke

AstonMartin wrote: »

American banks were giving out mortgages to broke unemployed people so that system does not give the bank incentive to properly vet. so long as executive bonuses are related to earnings without restrictions the current executive will try to make as much as they can while they can.

That's not completely true. First not all banks in the US gave out subprime loans. The whole thing is a lot more complicated, but yes, many US banks got burnt because they didn't properly vet the situations. Here on the other hand, the banks didn't have to vet home mortgages and if a home owner defaults it's them not the bank that's responsible. Unfortunately the Irish banks didn't vet the developers and that's what has caused all the problems. My point is, if the banks did vet the loans to individuals and developers, it would have two effects, it would have held down prices by only giving realistic loans, hence reducing the number of loans during the boom and when the bubble did finally burst, the banks wouldn't have had so many toxic loans.