Mortgage written off by bank

SimonPRepublic

Did anyone see the article in the Sunday World yesterday regarding a couple who get their mortgage lender to write off over 50% of their mortgage?

The mortgage lender Stepstone (KBC are the bank) moved to repossess the house, but on the advice of their solicitor Anthony Joyce (disclosure he's a client of mine, but I genuinely think this will be of interest to a lot of people) they opposed the bank's repossession and put their house on the market. The house originally cost €300k and they sold it for only €140K but were able to get Stepstone to agree to take this sum and write-off the remaining €160k. So they're free of the mortgage and negative equity. Even if they'd handed the keys back they would still owe the bank the difference between what the bank sold it for and what their mortgage was.

For anyone who hasn't seen the article I will scan it in and post it.

S

dave1982

Do please.Banks have no issue upping our rate's.I hope this is a landmark case

SimonPRepublic

Will do. I think it's an important case. People need to be aware that they can take the banks on and win because the way these mortgages were sold left holes than be exploited by good solicitors. Plus, it makes sense for the banks to take the money from the sale rather repossess a property that they then have to sell themselves and incur legal fees chasing the remainder.

Incidentally the legal fees came off the money the homeowners received from the house.

BuffyBot

Please do not scan and post unless you have permission from the copyright holder to do so

dave1982

No newspaper scanning allowed?

ANXIOUS

It's not exactly a solution if they had to sell the house. They are back at square one.

DublinWriter

ANXIOUS wrote: »

It's not exactly a solution if they had to sell the house. They are back at square one.

At least they're not back at square minus one.

ANXIOUS

DublinWriter wrote: »

At least they're not back at square minus one.

They were never at that stage. No bank in ireland will reposess any house where people are making an honest attempt to pay it back. They basically rented an expensive house.

Monty Burnz

Bear in mind though that when one of the state owned banks (AIB, BOI, EBS, INBS) writes off a debt then it is the Irish taxpayer who picks up the loss. Thankfully in this case it was KBC (a private Belgian bank) who took a 160,000 euro hit, but if the taxpayer-owned banks start doing the same then the IMF nightmare hasn't even begun.

SimonPRepublic

They were in arrears, hence the repossession proceedings were started. But I'm sure banks would love us to keep paying our inflated mortgages. However, if they had just simply handed the keys back, and the lender had sold the property, then they would've still been liable for the remainder owed, so they would have lost their house and still had money owing. No they're free of the debt.

SimonPRepublic

BTW copyright is covered; I will post it on my site when I am back in the office.

SimonPRepublic

Here is a link to the article below on the case discussed above where the couple got the bank to write off over half their mortgage. In effect this amounts to the mortgage lender taking the hit on the negative equity as opposed to the couple being left to clear the balance.

http://www.republicpr.ie/2011/02/22/stopping-repossession-mortgage-written/

Rabidlamb

Monty Burnz wrote: »

Bear in mind though that when one of the state owned banks (AIB, BOI, EBS, INBS) writes off a debt then it is the Irish taxpayer who picks up the loss. Thankfully in this case it was KBC (a private Belgian bank) who took a 160,000 euro hit, but if the taxpayer-owned banks start doing the same then the IMF nightmare hasn't even begun.

So your saying if you were in their position & BOI offered you a write off you'd refuse it on moral grounds.
Would you fcuk.

JJJJNR

a landmark case if ever there was one.

amdublin

Yeah but how did they do it??

The article is a bit low on details tbh.

What i's weren't dotted and what t's weren't dotted

Seems like just one big ad for the solicitor if you ask me...

JJJJNR

Yeah I think your right, he's seeing a gap in the market, however the article is accurate if not KBC would be taking action. It might be worth investigation by mortgage holders who are in trouble with KBC and are under repossesion much like the people in the article.

Lets not forget the people in this case they must be counting their lucky stars, how many people would like to do this..? 44,000 mortgages in arrears in Ireland at the moment.

SimonPRepublic

amdublin wrote: »

Yeah but how did they do it??

The article is a bit low on details tbh.

What i's weren't dotted and what t's weren't dotted

Seems like just one big ad for the solicitor if you ask me...

I appreciate it doesn't give much detail, but that is the nature of tabloid journalism; they are more interested in the result than the details of the case.

From the little that was explained to me, it succeeded by a combination of challenging how the mortgage was granted and what steps were taken by the lender, plus a bit of common sense negotiation. By the latter point I mean that that most lenders would prefer to take back a cash sum rather than repossess a property that they that would then have to sell, which can be very uncertain for them and also lead to them paying fees on both the repossession and sale.

If you'd like more details Anthony is very approachable, I'm sure he would be happy to discuss it in more detail. However, each case will be different and therefore, alternative legal tactics or arguments may be used for other cases. He's made his name defending property investors, most notably those that bought overseas property, so he's pretty adept at finding holes to exploit.

amdublin

Finding holes is all very well but at some point people have to take responsibility for their own actions.

The bank did not hold a gun to my head to make me sign my mortgage contract.

Also, if I remember correctly it was I who sought a mortgage from them.

SimonPRepublic

That's true, but there was a lot of very expensive and clever propaganda around at the time to make you do exactly that (not from me I hasten to add). And if the lenders should've taken more care in considering the granting of your mortgage, and possibly should've refused you, or made mistakes in not confirming or checking all the information required, then then they may have erred and it may be possible to hold them accountable for their actions.

Let's face it, a lot of people were taken advantage of. The banks knew that holding the carrot of cheap money in people's faces would lead them to make rash decisions on their finances. They were just salesmen.

dudara

Republicpr.ie wrote: »

Let's face it, a lot of people were taken advantage of. The banks knew that holding the carrot of cheap money in people's faces would lead them to make rash decisions on their finances. They were just salesmen.

I know where you're coming from, but I still disagree with some of it. People willingly signed their names on mortgage agreements for many multiples of their incomes. There has to a significant proportion of responsibility born by people.

If a bank deliberately missold a mortgage, or knowingly lied, then I would say fair enough, but in most cases, the banks played on peoples greed, nothing illegal there.

amdublin

Republicpr.ie wrote: »

That's true, but there was a lot of very expensive and clever propaganda around at the time to make you do exactly that (not from me I hasten to add).

And sounds like you are now trying to generate a big load of propaganda for this Anthony fella.

Also, please don't patronise me saying I was taken advantage of because of a few fancy ads. I like to think I'm a little bit more intelligent than that thanks.

SimonPRepublic

dudara wrote: »

@republicpr.ie Can you please provide some more detail on the legal aspects of this case i.e. how the couple were able to deal with the bank and have the negative equity cleared.

Right now, this seems like a massive PR exercise for your client and it's not providing any real benefit to the readers here.

@Dudura, I'm not qualified to comment or know how it was done. I only know the outcome, which I thought was important to inform people. I have tried to be transparent in my relationship to legal firm. I'll get them to provide more details here.

SimonPRepublic

amdublin wrote: »

And sounds like you are now trying to generate a big load of propaganda for this Anthony fella.

Also, please don't patronise me saying I was taken advantage of because of a few fancy ads. I like to think I'm a little bit more intelligent than that thanks.

@amdublin, I wasn't being patronising and I'm sorry if it came across that way. I used the term propaganda purposely because it was much more than a 'few fancy ads' or simple PR.

JJJJNR

amdublin wrote: »

Finding holes is all very well but at some point people have to take responsibility for their own actions.

The bank did not hold a gun to my head to make me sign my mortgage contract.

Also, if I remember correctly it was I who sought a mortgage from them.

Who is your mortgage provider ? is it KBC ?

amdublin

JJJJNR wrote: »

Who is your mortgage provider ? is it KBC ?

No, not KBC. But the article seems veery general and in his first post republic.CPR has said he thinks a lot of people would be interested - implying not just KBC.

amdublin

Republicpr.ie wrote: »

@amdublin, I wasn't being patronising and I'm sorry if it came across that way. I used the term propaganda purposely because it was much more than a 'few fancy ads' or simple PR.

Apology accepted but I think you are spreading a fair bit of propaganda now yourself.

JimiTime

Appreciate the post OP. Don't mind the nay sayers, they love getting their knickers in a twist about guns to heads and how all of us in severe mortgage trouble were just greedy. nothing to do with simply buying a home or anything. Love some info on this. If something is not done about rising rates etc, I'll be looking at facing defaulting in about 2 - 3 years I'd say, so info like what you've given is very valuable. thanks for sharing.

amdublin

JimiTime wrote: »

Appreciate the post OP. Don't mind the nay sayers, they love getting their knickers in a twist about guns to heads and how all of us in severe mortgage trouble were just greedy. nothing to do with simply buying a home or anything. Love some info on this. If something is not done about rising rates etc, I'll be looking at facing defaulting in about 2 - 3 years I'd say, so info like what you've given is very valuable. thanks for sharing.

I'm not saying I was greedy

I'm saying I wanted a thirty year mtg, I sought a thirty year mtg, I got a thirty year mtg. I take responsibility for this.

JimiTime

amdublin wrote: »

I'm not saying I was greedy

I'm saying I wanted a thirty year mtg, I sought a thirty year mtg, I got a thirty year mtg. I take responsibility for this.

Fair play to ye. I take responsibility myself. People like yourself however seem to relieve the bank and government of responsibility in all of this. I'm all for personal responsibility, but I'm afraid that however noble you find your stand, its quite simply untrue that the responsibility lies solely on the mortgage holder. Also, who's fault, responsibility it is etc is pretty unimportant in the scheme of the reality of the major issue facing the nation in relation to mortgage defaults. So whoever you want to blame, the reality is that there is a social catastrophe on its way. The whole blame game is a bit of a red herring tbh.

seamus

JJJJNR wrote: »

a landmark case if ever there was one.

Not really unfortunately. The agreement was made privately outside of the courtroom, so it's not an indication of any kind of precedent or trend.

It was a subprime mortgage. These lenders are not in it for the long haul. The intention is to lend to high-risk customers who typically pay their mortgage (or most of it) for a couple of years and then sell their property for a profit and move on. Stepstone (or whoever is backing them up) don't really want to know about long-term payments. They would be more interested in getting their money now and cutting their losses.

Normal banks, you are typically in it for the long haul would have a tendency to take the cash and then arrange a long-term payment plan for the balance of the mortgage. They are far less likely to cut and run unless you owe them insane amounts (like millions).

However it does paint a good picture for people who are completely screwed financially and/or borrowed way over what they could afford.

The Rooster wrote: »

But it'll depend on what the documentation says. I'm pretty sure I have heard of people who came off fixed and they did revert to tracker (on this forum I think), so don't give up on it.

Indeed, we took out our mortgage in 2008 with two years fixed. After the two years we reverted to a tracker rate, even though our bank had stopped offering trackers 12 months before that.
But in our case, this was the agreement beforehand. I imagine if we went for a new fixed period now we'd have to sign an agreement to switch to a SVR after the fixed period is up.

Monty Burnz

JimiTime wrote: »

So whoever you want to blame, the reality is that there is a social catastrophe on its way. The whole blame game is a bit of a red herring tbh.

The question is this - who do you want to make the losers in this social catastrophe? The people who borrowed or the people who didn't? I'd say natural justice suggests it should be the borrowers who bear the brunt of the consequences.