Mortgage Arrears

mortgagemess

Hi,
i have 7 months arrears on my mortgage. bought house with brother and he has left country. mortgage approx 1300 per month and i can afford to pay about 200. mortgage is 252k and value is 70k. i will never be able to pay it back and dont want to spend the rest of my life paying the banks back money and have nothing to show for it. i am willing to hand house back but am afraid of what happens next. i got legal advice and was advised to sit still until the bank comes knocking on my door. can anyone please advise what to do?

namloc1980

You borrowed the money, but you don't want to pay it back! What kind of advice are you looking for?

mortgagemess

well my circumstances have changed. im on alot less money now and my brother has left the country. i didnt buy the house to be tied into it for life and never get anything back from it.

namloc1980

But you did buy the house and that investment didn't work out so you have to deal with the consequences. If we could all just walk away from things that didn't work out wouldn't that be a wonderful world?? You are jointly and severally liable for the debt as is your brother. The Bank won't forget about your loan and will come looking for it's money sooner or later. Is the house rented or are you living in it?

mortgagemess

i'm living in it. i understand i sign a loan offer agreeing to pay back the loan but never in a million years thought id be tied to it for life. my big issue is that alot of people cannot afford capital and interest payments and so any payment made is not coming off the capital. i can never see myself being able to meet full payments so therefore will spend every penny i have and it will go no where.

namloc1980

Have you talked to your Bank at all? You are entitled to protection under the MARP (Mortgage Arrears Resolution Process) and should fill out an SFS form asap and get your case assessed.

By the way what kind of legal advisor told you just to sit still and ignore the Bank until they come after you??? That's mad stuff.

votecounts

I bet you would have no problem paying it back if property prices had continued to rise, typical let the taxpayer pick up the tab on this.
Btw, great brother fleeing and leaving you in the lurch.

mortgagemess

from a solicitor in Dublin that charged 200 quid to give me the advice. i'm in the process of filling in the forms this week just know how its going to go. i'll pay a reduced payment every month for the forseeable future and the capital i owe which stands at 250k will stay at that too. by the time house prices rise to what i owe i'll have paid the bank back tens of thousands and i will have nothing to show for it.

@ votecounts. i am too a taxpayer. We bought the house as brother and sister to live in for a few years and then sell it on. not to be stuck with it for life. he always wanted to move abroad and when he lost his job thats what he did. hes working in another country and trying to make a life for himself as he couldnt here.what do you propose he do? stay here and go on benefits and ask the government and taxpayer for help to live and assist with the mortgage?

namloc1980

mortgagemess wrote: »

from a solicitor in Dublin that charged 200 quid to give me the advice. i'm in the process of filling in the forms this week just know how its going to go. i'll pay a reduced payment every month for the forseeable future and the capital i owe which stands at 250k will stay at that too. by the time house prices rise to what i owe i'll have paid the bank back tens of thousands and i will have nothing to show for it.

@ votecounts. i am too a taxpayer. We bought the house as brother and sister to live in for a few years and then sell it on. not to be stuck with it for life. he always wanted to move abroad and when he lost his job thats what he did. hes working in another country and trying to make a life for himself as he couldnt here.what do you propose he do? stay here and go on benefits and ask the government and taxpayer for help to live and assist with the mortgage?

Did you think buying the house was some sort of get rich quick scheme....you know buy it, sell it on and make a few bob??

You made a bad investment and you now must deal with the consequences of that investment. The best advice is to work with your Bank and see what happens, but don't expect someone else to pay your debts for you.

NIMAN

mortgagemess wrote: »

We bought the house as brother and sister to live in for a few years and then sell it on. not to be stuck with it for life. he always wanted to move abroad and when he lost his job thats what he did. hes working in another country and trying to make a life for himself as he couldnt here.what do you propose he do? stay here and go on benefits and ask the government and taxpayer for help to live and assist with the mortgage?

Many others did this too, buying a house at the height of the madness and thinking they were going to make a killing on it.

But nothing was guaranteed, so unfortunately its not so simple as to walk away completely. You may get some debt relief but the full amount won't be written off.

Declaring yourself bankrupt might be your only way out, but that is the last resort.

mortgagemess

no i bought the house because the bank made it easy for me to buy by offering 100% mortgage and telling everyone rent was dead money. we didnt care if we made a profit. i wasnt the only one who made a wrong decision here. the banks did alot wrong, councils builders etc. i've already taken a big hit having paid back almost 50k in mortgage payments to the bank do you not think ??? Now i feel like im entitled to have my life to live.

mortgagemess

do you know how bankruptcy works? can anyone declare bankruptcy?

Munstermissy

Where is your brother in all this? Abroad, yes but is he sending you any moola home towards the mortgage?

I don't get your point about banks throwing money at you. They threw it at everyone that would take it, myself included so that doesn't make you a special case.

djk1000

mortgagemess wrote: »

no i bought the house because the bank made it easy for me to buy by offering 100% mortgage and telling everyone rent was dead money. we didnt care if we made a profit. i wasnt the only one who made a wrong decision here. the banks did alot wrong, councils builders etc. i've already taken a big hit having paid back almost 50k in mortgage payments to the bank do you not think ??? Now i feel like im entitled to have my life to live.

Don't ignore your bank, deal with them in writing only and save all the letters. Go to the MABS website and do up a personal budget following their advice, send it in to the bank and show them your situation. At some point you'll probably end up in court, have a solicitor for that. You'll probably lose the property and have to pay back as much as you can afford each week.

If the worst comes to the worst, you might in future be able to benefit from the new insolvency legislation.

Wils110

The bank will bring up your brother....legally he should be contributing and they will ask for him to sign papers worst thing you did was pay a solicitor you wasted 200 quid...I'm going through something similar so I am speaking from experience

NIMAN

mortgagemess wrote: »

do you know how bankruptcy works? can anyone declare bankruptcy?

I don't know anything about it, but do a search and see.

I know its not a decision you take lightly.

djk1000

mortgagemess wrote: »

do you know how bankruptcy works? can anyone declare bankruptcy?

Bankruptcy is not a realistic option with current laws, unless you move to the UK and declare bankruptcy there.

Cushie Butterfield

Your brother is in this mess with you so he should be paying half of the repayments from his earnings wherever he has set up his new life. Not much of a brother if he's prepared to leave you high & dry, but you already know that.

So, why don't you rent out the house or rooms in the house? That could well cover the majority of the repayments if put with what you & your brother can afford.

At least the bank would see that you're making an effort rather than what you're doing at present.

mortgagemess

Munstermissy wrote: »

Where is your brother in all this? Abroad, yes but is he sending you any moola home towards the mortgage?

I don't get your point about banks throwing money at you. They threw it at everyone that would take it, myself included so that doesn't make you a special case.

yes i know but my point is they made it too easy for people to get money. they are supposed the be the experts here. 100% mortgages should never have been given out.

NIMAN

100% mortgages were wrong but there has to be an element of personsl responsibility in all this. They made it easy to get money, doesn't mean everyone took it. Legally I'm afraid you both signed on the dotted line, and trying to blame the bank for giving you easy money will get you nowhere I'm afraid.

Cushie Butterfield

mortgagemess wrote: »

100% mortgages should never have been given out.

From what you say you can only afford to repay, even if you had only got a 50% mortgage you'd still be in trouble, so best to face reality & rent it out or rent out rooms, especially considering your brother has done a runner.

Dubh Geannain

mortgagemess wrote: »

yes i know but my point is they made it too easy for people to get money. they are supposed the be the experts here. 100% mortgages should never have been given out.

Yes we can blame the banks for their hand in effing up the country. That said, on an individual basis the borrower is as much to blame as the bank. You weren't held at gunpoint and forced to take out a mortgage.

On the bankruptcy front. The new personal insolvency legislation is due to be passed into law next March I believe. This will allow people alot more flexibility than they have now in terms of defaulting on their debt, but make no mistake there won't be debt forgiveness. I'd sit tight until the legislation becomes clear but do as others have pointed out. Stay on contact with the bank.

The way things are at the moment if you are showing enough commitment to working with the bank then you won't be homeless.

Here's an insight into how much the banks' hands are tied when it comes to repossessions. From the code of conduct on mortgage arrears:

48. Where a borrower is in mortgage arrears, a lender may commence legal action for repossession of the property without the 12 month period applying, only in the following circumstances:

a) where the borrower does not co-operate with the lender;
b) in the case of a fraud perpetrated on the lender by the borrower; or
c) in the case of breach of contract by the borrower other than the existence of arrears.

http://www.centralbank.ie/regulation/processes/consumer-protection-code/documents/code%20of%20conduct%20on%20mortgage%20arrears%20%201%20january%202011.pdf

phormium

You may as well keep paying the 200 p.m, you get to live in the house, rent elsewhere would cost you as much and maybe more. I would keep doing that as long as you can and until there is some more clarity on the upcoming insolvency bill.

As to the bank giving you 100%, yes it was a bad business move but people were borrowing 100% long before the banks started, they would borrow 90% from bank and the balance from credit union while lying that it was a gift from parents, no icb trail with credit union to contradict it.

I was a mortgage adviser during the boom and I was sick and tired of discouraging people to buy over inflated houses or spend 5k on curtains or buy second properties because of bar talk telling them they would get rich, they didn't want to hear. I didn't buy a second property myself despite being well able to afford it at the time. Anyway my point is the pressure to borrow more was coming from the customers in my opinion, yes they were carried along on the wave of get on the ladder hype, there was wrong on both sides, banks did a damn bad job of underwriting loans as well and staff who disagreed were basically told what they could do.

donalg1

mortgagemess wrote: »

no i bought the house because the bank made it easy for me to buy by offering 100% mortgage and telling everyone rent was dead money. we didnt care if we made a profit. i wasnt the only one who made a wrong decision here. the banks did alot wrong, councils builders etc. i've already taken a big hit having paid back almost 50k in mortgage payments to the bank do you not think ??? Now i feel like im entitled to have my life to live.

You bought the house because you and your brother wanted to make a quick profit on it, yes the banks made it easy to get one, but you are the one that signed the papers for it and you are the one that initiated the whole procedure in the first place. The banks, council, builders never dragged you in off the street and forced you to take out the mortgage.

Would you be giving out about them if your house price had increased instead of decreased?

You took out a mortgage which means you signed a contract with the bank stating you would pay this back in full over a set period of time. Now that things havent worked out for you and no easy profit is to be made from it you want out of this contract. Unfortunately that is not how things work. You are still contracted to the bank and they arent going to care if you intended on being out of the mortgage by now, as far as they are concerned you signed up for 30years or whatever and that is what you are in for.

So waiting for the banks to come knocking wont be any good for you, you would be better getting in touch with them to see if there is anything they can do for you to help you.

Equality

If you are unemployed, you are expected to pay about €30 per week towards accommodation. You are paying only slightly more than that, so you have accommodation at a reasonable cost for now. Keep doing this and save as much money as you can, in case you need to go to the UK for bankruptcy there. If you decide to go to the UK, you might as well stop paying the 200/month and save that also, from about 6-10 months before you are planning to go to the UK.

If you have a public service job you should consider a career break once you have saved some money, and use this to manage bankruptcy in the UK. This is even more essential if you are near to retirement, as the retirement lump sum will be pounced upon by the bank, to reduce the debt on the house. If you go to the UK for bankruptcy (on career break) before retirement, you should be able to save both your occupational pension and your retirement lump sum. I know two small time developers with wives in the public service who have gone down this route, successfully. Their main aim is to clear the slate and protect the retirement income the wife has an entitlement to. The wife's lump sum will be enough to purchase a modest house, and her pension will give a reasonable standard of living in retirement, but only if they can remove the debt through UK bankruptcy proceedings.

whatcanido

My husband is in financial difficulty. To help him, I'm thinking of buying a house he has which will clear the mortgage on the house. However, he has other loans and I am wondering will the other Banks look badly on a wife buying a house from a husband to clear some of his debts.

I want to help him but I don't want the bank then coming after me and taking a house that I have bought with my money.

Just wondering if anyone has an understanding for this kind of a situation?

Henry Ford III

mortgagemess wrote: »

yes i know but my point is they made it too easy for people to get money. they are supposed the be the experts here. 100% mortgages should never have been given out.

Fair points, but in your circumstances whether it was 85%, or 90%, or 95% wouldn't have made much difference. Sure the banks were chucking out money, but you still borrowed it, and agreed to pay it back too.

You are in a bad financial position and will possibly never be able pay off this debt.

You are probably insolvent, so the new personal insolvency legislation and/or bankruptcy will be options.

Best of luck.

p.s. How did your brother manage to just walk away from his side of the debt?

mozattack

I wonder how they will tackle the issue of having a second car.

I know a guy who needs a car for work and his wife has three jobs (part-time) in three different locations. They also have two kids, 1 starting school and 1 infant.

They have old cars so no repayments but there obviously still is a cost in having them.

However, how the hell can the main earner (the man) not have a car when it is needed for work and if so how can the woman get to and from work on buses/taxis without a car. It makes no sense really.