Unsustainable Mortgage

betterdays

Hello,
I would really appreciate some advice from anyone in the know or who has been through this.

We cannot afford to pay our mortgage. Unlike may unfortunate people, we do have work but we are not earning near enough to pay for the mortgage and never will. No matter what arrangement the bank agrees with us we simply will never be able to pay the full mortgage amount. We have engaged with the bank and are currently on a reduced payment. We cannot extend the mortgage as it is a 40 year mortgage.

We are due back to the bank after Christmas. We do not see the point in delaying the inevitable any longer so we want to explore (1) voluntary surrender or (2) renegotiating mortgage terms etc.

Does anyone know of a solicitor (experienced in dealing with the banks) who could negotiate/deal with the bank on our behalf?/advise us?

Many thanks

unclebill98

What bank is it?

betterdays

Tks for your response. Its Ulster Bank.

scwazrh

betterdays wrote: »

we are not earning near enough to pay for the mortgage and never will.

Maybe I'm missing something but you must have been able to afford it when you got the mortgage and if so you may be able to afford it again.If you have a home that you like and want to stay in I would be very cautious about giving it up. While ever you pay something and make an effort it is unlikely that the bank would get a repossion against you and you don't know how strong your earnings will be in10 yrs time which may enable you to over pay monthly amounts and catch up on your current arrears / underpayments

cookie1977

It's good that you're talking to your bank. Have a look here for some advice:
http://keepingyourhome.ie/
Also look at speaking to MABS or FLAC but both are very swamped. If you are talking to your bank you might under certain conditions be entitled to go interwst only or as low as 66% interest payments and defer capital repayments for up to 5 years:
http://keepingyourhome.ie/mortgage_arrears_resolution.html.en
This as I said would depend on your financial situation and that you're openly communicating with your bank.

Best of luck.

unclebill98

Ub have a very fair process in this area, well as fair as can be.

Your current flex agreement can last as long as needs be and is reviewed every 3-6 months depending on the time granted.

Your not going to be able to hand the keys back or walk away. As for renegotiating the mortgage, your already at the max years so not much room there.

I'd have to ask if you've not lost your job then how is the current difficult happening? Is it a case of a reduction in wage?

If your not happy with the flex then you can take it to the ombudsman for review.

Other options is to wait till neg eq is not an issue and then sell up and move on. Is the house in neg eq?

derry

I would look at the www.tnsradio.ning.com they do many articles in their members forums from similar people with similar problems to you , who in some cases seemed to have found ways to solved these issues.

To my knowledge there is no limit to mortgage terms even 100 year mortgages exist and also interest only mortgages exist . Many house Mortgages in Germany in the past were often about 90 years terms and the grand children paid the last payments

Interest only mortgages were allowed before the crisis

Just cause the bank doesn't want to give interest only mortgages again doesn't mean without the right arm twisting it can not be got again

An example might be where you do a interest only mortgage for a few years and when finance allows you go back to do a term mortgage such as 30 years

Contract law which a mortgage is is straight forward . One party proposes a contract the other party excepts or offers a counter proposal.
The process continues until there is a suitable meeting of the minds and a contract is made .
Presently the bank looks like they are not informing you that you can make a counter proposals that might not suit the bank as much as they like, but they would have to accept your offers if done in the right way

Many solicitor´s ( verb noun solicit for trade like the ladies of the night ) work for their own agenda which might not be in the small guys interests (no pun intended )

Minor sub note Mortgage from Latin means death grip

Derry

Ansuildunta

Hi , im 31 years old and i have a mortgage with ulster bank over 40 years @ 1,252.00 p. mth fixed @ 5,9% for 5 years (bad finanical advice from comission hungry muppets) i got the mortgage out nearly 3 years ago. My prediciment is that i rang up ulster bank today as i recieved a mortgage statment off them and basically it said that over a 3 year period i paid a couple of grand off the mortgage, the mortgage i got off them was @ the value of 270,000 and the mortgage statement said that the outstanding balance was 268,000 N.b there was 4 mths i had missed , giving me arrears on my account, i discussed this with a finanical advisor two years ago who told me that because i was in finanical difficulty the arrears would be boxed off until a time i was finanically able to pay them. He said that i would have to pay intetrest of 4,500e on the 4,800 euro owed ! i said ok , fair enough, i didnt worry about them as they would be dealt @ a later date. This man then came to see me every 6 mths for the last two years , where we would chat and he would assess me on how i was doing with my mortgage. Today i queried this guy on wtf was going on with my balance ? He said that i was paying mostly intetrest on the overall mortgage, i said listen if im paying over 1,000 euro a mth, how is my bill not coming down ? he proceeded to tell me that most people pay mainly interest for the first couple of years and what he said next totally knocked me, and he said oh yes and the arrears are still on your account ?????? i said what do you mean , they have nothing to do with this as they are seperate issue to be dealt with at a later date !!!!! He said oh but you are still getteng charged on the arrears even though an agreement was made on them ? i said what ? do you mean that im paying interest on the arrears anyhow ? he said yes ? i knew i would have to pay interest but it was never explained to me by this guy that all along ive been paying interest ??? if i had of known that i would have agreed to recapitolise the arrears bringing my mortgage up to over 1,300 euro a mth !! but i felt safe when he said the arrears could be dealt with later down the line??? i went absolutely mad with this guy on the phone and he was very flippant and ignornat ! So basically for 2.6 years @1,252 euro p.m ive paid nothing off my mortgage where i thought i was making good ground, i feel like walking away . what is the point in me pxxxing against the wind, im going to organise a meeting with the manager, but if hes as HELPFUL as this guy i see no alternative but to walk .....

TonyStark

Ansuildunta wrote: »

Hi , im 31 years old and i have a mortgage with ulster bank over 40 years @ 1,252.00 p. mth fixed @ 5,9% for 5 years (bad finanical advice from comission hungry muppets) i got the mortgage out nearly 3 years ago. My prediciment is that i rang up ulster bank today as i recieved a mortgage statment off them and basically it said that over a 3 year period i paid a couple of grand off the mortgage, the mortgage i got off them was @ the value of 270,000 and the mortgage statement said that the outstanding balance was 268,000 N.b there was 4 mths i had missed , giving me arrears on my account, i discussed this with a finanical advisor two years ago who told me that because i was in finanical difficulty the arrears would be boxed off until a time i was finanically able to pay them. He said that i would have to pay intetrest of 4,500e on the 4,800 euro owed ! i said ok , fair enough, i didnt worry about them as they would be dealt @ a later date. This man then came to see me every 6 mths for the last two years , where we would chat and he would assess me on how i was doing with my mortgage. Today i queried this guy on wtf was going on with my balance ? He said that i was paying mostly intetrest on the overall mortgage, i said listen if im paying over 1,000 euro a mth, how is my bill not coming down ? he proceeded to tell me that most people pay mainly interest for the first couple of years and what he said next totally knocked me, and he said oh yes and the arrears are still on your account ?????? i said what do you mean , they have nothing to do with this as they are seperate issue to be dealt with at a later date !!!!! He said oh but you are still getteng charged on the arrears even though an agreement was made on them ? i said what ? do you mean that im paying interest on the arrears anyhow ? he said yes ? i knew i would have to pay interest but it was never explained to me by this guy that all along ive been paying interest ??? if i had of known that i would have agreed to recapitolise the arrears bringing my mortgage up to over 1,300 euro a mth !! but i felt safe when he said the arrears could be dealt with later down the line??? i went absolutely mad with this guy on the phone and he was very flippant and ignornat ! So basically for 2.6 years @1,252 euro p.m ive paid nothing off my mortgage where i thought i was making good ground, i feel like walking away . what is the point in me pxxxing against the wind, im going to organise a meeting with the manager, but if hes as HELPFUL as this guy i see no alternative but to walk .....

You not getting any interest relief on this?

Ansuildunta

Im getting 187e trs , i still have to pay 1,252

Ansuildunta

TonyStark wrote: »

You not getting any interest relief on this?

Im getting 187e trs , i still have to pay 1,252

peteb2

Whats your question or are you just ranting? The first 15 years of mortgages pretty much go to repay the interes and barely scratch the capital. That how they work. Its Mortgages 101.

Why would you think you wouldnt be charged interest on your arrears? Did you think that they would just exclude that 4000? You still owe it.

As i said its completely unclear as to what you possibly want here.

betterdays

Many thanks to you all for your very informative replies. There is much food for thought in what you all said and thank you for the links.

Perhaps we are too speedy in our desire to surrender the house. It is a nice house but we have not as much as 50 cent after we pay most of the bills and I had to borrowed money to pay for heating oil and car tax. I could work 7 days a week to pay for it but no house is worth not rearing my own children and at least even seeing them occasionally.

To answer some of the questions you asked: My husband is in employment. They have had a pay freeze for 5 years, there are minimal promotional opportunities. He works very long hours but at least his has a job and hopefully it is secure (who knows). I was the higher earner - self employed - business was doing very well - hence we could afford the mortgage - but nothing else really. Business has reduced by 60% as has the rate I can charge for a days work. In addition we have children now and the cost of childcare was something we never budgeted for. In fairness, we did not think - if we did we would never have gotten ourselves into such debt. Anyway, while it is true we were paying the mortgage in full since 2005 - we were doing so at the cost of no holidays, no clothes, no eating out - all to pay for a house that if we had any cop on we should have known was unsustainable if anything changed in our circumstances.

betterdays

Sorry forgot to say that we are in negative equity. We have paid €125k off the mortgage over the last 5 years. Total mortgage was €540 - it is currently €507k. We have trs of €333 and are on a fixed mortgage 4.9% - as we cannot pay the mortgage now, what will happen when our trs is gone and we move to a standard variable rate in 2013 - thats why we were thinking we should surrender now instead of pumping more money into a house we will never get to keep. thanks for your replies. I will look at the links.

unclebill98

Keep engaged with your bank. The previous post of 100+ year mortgages is not something done in this country at the moment, so I'd not be looking at that as an option as the variables are endless.

Long term interest only seems to be the only option however the long term implications are obvious. 6 month deals is the best you'll get, the more honest you are the more likely you'll get what you can. Banks are getting better at identify those you can't pay rather than those who won't.

Mabs would be a good road to go down as mentioned already.

cookie1977

Handing back the keys will do nothing really. You'll still owe debt and you'll have lost control of your only asset:
http://www.rte.ie/news/money/questions/i-am-in-negative-equity-can-i-hand-back-the-keys.html

tenchi-fan

Ansuildunta wrote: »

Hi , im 31 years old and i have a mortgage with ulster bank over 40 years @ 1,252.00 p. mth fixed @ 5,9% for 5 years ... @ the value of 270,000 and the mortgage statement said that the outstanding balance was 268,000 .....

This is exactly how mortgages work!

€270,000 * 5.9% = €15,930 interest per year, or €1,327.50 per month. Obviously, you are currently paying less because of TRS. The small additional amount goes off the capital. Any arrears obviously continue to accrue interest.

If interest rates and TRS remain the same for the entire 40 years of your mortgage your mortgage would be completely paid off after the 40 years. The early years see most of your payments going towards interest with only a sliver repaying the actual capital.

As peteb2 said, mortgages 101.

Have a look at http://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator . Assuming your interest rate remained the same and you had not missed any payments, your outstanding mortgage would be as follows:

Years Remaining debt
0 270,000
1 268,282
2 266,461
3 264,529
4 262,480
5 260,306
6 258,001
7 255,556
8 252,963
9 250,212
10 247,295
11 244,201
12 240,920
13 237,439
14 233,748
15 229,833
16 225,680
17 221,276
18 216,605
19 211,650
20 206,395
21 200,822
22 194,911
23 188,641
24 181,992
25 174,939
26 167,458
27 159,525
28 151,110
29 142,185
30 132,719
31 122,679
32 112,031
33 100,737
34 88,759
35 76,054
36 62,579
37 48,287
38 33,129
39 17,052
40 0

As you can see, despite payments of over €150k in the first ten years, only €20k has been knocked off your debt.

unclebill98

Some of the new variable rates are not far off the rates your paying. Did you get a tracker? Cause you may revert back to that and find your actually paying less or when the trs runs out it may balance off.

Look at your original offer letter to see what would happen when you come off the fixed rate.

unclebill98

Handing back your keys or jingle mail will not help.

cookie1977

And I dont mean to scare you either with this story but it's just advice:
http://www.rte.ie/news/money/mortgages/we-handed-back-keys-and-still-owe-eur100-000.html

You should go talk to:
Mabs: http://www.mabs.ie/
FLAC: http://www.flac.ie/

And then also continue to talk the bank. There are options out there which may help you. Best of luck

Ansuildunta

tenchi-fan wrote: »

This is exactly how mortgages work!

€270,000 * 5.9% = €15,930 interest per year, or €1,327.50 per month. Obviously, you are currently paying less because of TRS. The small additional amount goes off the capital. Any arrears obviously continue to accrue interest.

If interest rates and TRS remain the same for the entire 40 years of your mortgage your mortgage would be completely paid off after the 40 years. The early years see most of your payments going towards interest with only a sliver repaying the actual capital.

As peteb2 said, mortgages 101.

Have a look at http://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator . Assuming your interest rate remained the same and you had not missed any payments, your outstanding mortgage would be as follows:



As you can see, despite payments of over €150k in the first ten years, only €20k has been knocked off your debt.

It wasnt explained to me at all like that, i was just very disheartened with the way the guy was speaking and not explaining anything to me properly but i wasnt having a rant as tat guy peter presumed, i knew i had to pay interest on the arrears but the guy from the bank said it would be 4.5 grand interest and today he tells me oh yes it is that amount but you have also been paying interest as well on it as it stands , where as when we talked two years ago about the arrears he put it in away that it would be 4.5 grand end of story, i didnt know all the two years ive been paying it regardless ..... thank you for your help though, i have arranged a meeting with the bank manager nxt week .

Ansuildunta

unclebill98 wrote: »

Some of the new variable rates are not far off the rates your paying. Did you get a tracker? Cause you may revert back to that and find your actually paying less or when the trs runs out it may balance off.

Look at your original offer letter to see what would happen when you come off the fixed rate.

The guy said once the 5 years was up id be on a tracker after that ?

Ansuildunta

Ansuildunta wrote: »

The guy said once the 5 years was up id be on a tracker after that ?

would there be much of a difference, ythe reason i ask is because all my wages is going into the house , i tried getting pple to rent but it some dont stay long and some arent suitable.....

unclebill98

So that would and should mean a decrease in payments.....hopefully.

Ask to come off the tracker now? There would be fees however customers have had these waived. What would be your tracker rate?

Ansuildunta

unclebill98 wrote: »

So that would and should mean a decrease in payments.....hopefully.

Ask to come off the tracker now? There would be fees however customers have had these waived. What would be your tracker rate?

i still have another 2.5 years on the fixed 5.9% rate, then ill be on the tracker. i thought to come off a fixed rate you would have to pay a massive sum of money,

tenchi-fan

Ansuildunta wrote: »

i still have another 2.5 years on the fixed 5.9% rate, then ill be on the tracker. i thought to come off a fixed rate you would have to pay a massive sum of money,

It's likely to be quite a bit.

Current ECB interest rates are relatively low. There is also an expectation that they will be cut by another .25% - .5%.

As you are obliged to pay the bank 5.9% they will look for compensation to allow you to change to a variable rate. You should request a quote from the bank, although it could work out cheaper to remain on the fixed rate.

On the other hand, PTSB made a blunder a few years ago due to a computer glitch that allowed dozens if not hundreds of people to switch from fixed to variable for a small fee. (They made up for it since by hiking variable rates to over 6%)

So no harm to get a quote.

timhoward

in order for a mortgage contract to be valid and legal it must have what is termed "consideration" this simply explained means that you must put up something ie your house and they must put up something ie the money. europe just like the americans use what is called the fractionalist banking system which can be intentionally complicated to explain but in laymans terms they can produce money from nothing see on you tube zeistgeist adendum they explain this process very clearly and simply. the fact that this money does not actually exist except digitally in some computer means that your morgage lender did not actually put up anything and your mortgage contract is actually not legal.
in the 60s a case was taken to court in america and the guy won his case against the bank, see
First National Bank of Montgomery vs Jerome Daly - Wikipedia, the free encyclopedia

how does this apply here you ask, well contract law is practically the same the world over this is how contracts can be drawn up between multinational companies in various countries and they are still legal. the precedent was set in the states in the 60s but it was not widely publisised (i wonder why) because there were not many tvs at the time or internet. the legal arguement used can also be applied here but no one has thought of doing it. i expect you think im crazy at this stage but remember someone has to be the first. i do not have a mortgage thank god so i will not be taking the case but a visit to a good solicitor who fully understands the fractionalist banking system may well be your answer and first consultation is free so basically it would cost you nothing furthermore if you get a good solicitor he may well take the case free of charge for the notoriety that would come with the case so ,, up to you am i mad or just first to bring it to public attention

Ansuildunta

tenchi-fan wrote: »

It's likely to be quite a bit.

Current ECB interest rates are relatively low. There is also an expectation that they will be cut by another .25% - .5%.

As you are obliged to pay the bank 5.9% they will look for compensation to allow you to change to a variable rate. You should request a quote from the bank, although it could work out cheaper to remain on the fixed rate.

On the other hand, PTSB made a blunder a few years ago due to a computer glitch that allowed dozens if not hundreds of people to switch from fixed to variable for a small fee. (They made up for it since by hiking variable rates to over 6%)

So no harm to get a quote.

I dont think there is any point in getting a quote because i couldnt stump up a lump sum of money, im really sick that i was jargoned into the fixed rate of 5.9 % by the two guys who worked in the mortgage brokers, i didnt know that much about rates or mortgages and god am i paying the price now. I am meeting the repayments of 1,252. but to do this ive made a hell of alot of sacraficies, please note im not complaining and i know the whole of the emerald isle is suffering too. Every time i hear of a percent decrease im sick but on the other hand im happy because my 2 sisters have mortgages too, so @ least its good for them. If i recapitolised the arrears the guy said my monthly repayments would go from 1252.00 to 1300.30 , so this is something i am considering because of the way you explained it , i really was going to throw in the towel but im glad i put up my original post

Ansuildunta

timhoward wrote: »

in order for a mortgage contract to be valid and legal it must have what is termed "consideration" this simply explained means that you must put up something ie your house and they must put up something ie the money. europe just like the americans use what is called the fractionalist banking system which can be intentionally complicated to explain but in laymans terms they can produce money from nothing see on you tube zeistgeist adendum they explain this process very clearly and simply. the fact that this money does not actually exist except digitally in some computer means that your morgage lender did not actually put up anything and your mortgage contract is actually not legal.
in the 60s a case was taken to court in america and the guy won his case against the bank, see
First National Bank of Montgomery vs Jerome Daly - Wikipedia, the free encyclopedia

how does this apply here you ask, well contract law is practically the same the world over this is how contracts can be drawn up between multinational companies in various countries and they are still legal. the precedent was set in the states in the 60s but it was not widely publisised (i wonder why) because there were not many tvs at the time or internet. the legal arguement used can also be applied here but no one has thought of doing it. i expect you think im crazy at this stage but remember someone has to be the first. i do not have a mortgage thank god so i will not be taking the case but a visit to a good solicitor who fully understands the fractionalist banking system may well be your answer and first consultation is free so basically it would cost you nothing furthermore if you get a good solicitor he may well take the case free of charge for the notoriety that would come with the case so ,, up to you am i mad or just first to bring it to public attention

Extremley interesting read but to be honest i dnt think your mad @ all, but i do believe that they would just choose another angle of attack, if they didnt the whole country would fall to pieces ... more pieces than its already in .....i will talk to a friend of mine out of curiosity doe

-Chris-

timhoward wrote: »

the fact that this money does not actually exist except digitally in some computer means that your morgage lender did not actually put up anything...

In terms of the person who sold the property, what did they receive in return for their property?

Was it an email that says "you now have €X00,000", did they get a piece of paper with loads of 1s and 0s written on it, or do you think they would have expected to be paid actual money (into their bank account obviously)?

chris85

timhoward wrote: »

in order for a mortgage contract to be valid and legal it must have what is termed "consideration" this simply explained means that you must put up something ie your house and they must put up something ie the money. europe just like the americans use what is called the fractionalist banking system which can be intentionally complicated to explain but in laymans terms they can produce money from nothing see on you tube zeistgeist adendum they explain this process very clearly and simply. the fact that this money does not actually exist except digitally in some computer means that your morgage lender did not actually put up anything and your mortgage contract is actually not legal.
in the 60s a case was taken to court in america and the guy won his case against the bank, see
First National Bank of Montgomery vs Jerome Daly - Wikipedia, the free encyclopedia

how does this apply here you ask, well contract law is practically the same the world over this is how contracts can be drawn up between multinational companies in various countries and they are still legal. the precedent was set in the states in the 60s but it was not widely publisised (i wonder why) because there were not many tvs at the time or internet. the legal arguement used can also be applied here but no one has thought of doing it. i expect you think im crazy at this stage but remember someone has to be the first. i do not have a mortgage thank god so i will not be taking the case but a visit to a good solicitor who fully understands the fractionalist banking system may well be your answer and first consultation is free so basically it would cost you nothing furthermore if you get a good solicitor he may well take the case free of charge for the notoriety that would come with the case so ,, up to you am i mad or just first to bring it to public attention

Contract law is not the same all across the world. There is contract law in Ireland. Show a case in Ireland where this has happened, not some US case.

Also you didnt mentioned that case you linked to was overturned the next day on appeal.