Another Jeremy Kyle article from the indo

J.pilkington

As I see it, parent topped up their mortgage by €50k in 2001, didn't pay it back and now a child is complaining because their inheritance is impacted, I fail to have sympathy here. No talk of what was done with the €50k back in 2001 which would have been a large sum of money. Does this lady want the government to step in and write off this loan?

http://m.independent.ie/business/personal-finance/mum-didnt-understand-how-much-money-was-owed-woman-forced-to-sell-family-home-to-clear-controversial-life-loan-35881545.html

Olivia has spent three years dealing with Bank of Ireland on behalf of her deceased parents.

No you have spent three years looking after yourself trying to maximise the amount you would receive from the estate of your deceased parents

"To discover this was devastating, you like to think your parents are secure, that they own their own home, and then to find out otherwise – I was devastated by it all," Olivia says.

You mean to discover that your inheritance wasn't as large as you expected was devastating.

I don't know which is worse, the standards the indo will lower themselves to or the sense of entitlement from the woman

Donald Trump

J.pilkington wrote: »

As I see it, parent topped up their mortgage by €50k in 2001, didn't pay it back and now a child is complaining because their inheritance is impacted, I fail to have sympathy here. No talk of what was done with the €50k back in 2001 which would have been a large sum of money. Does this lady want the government to step in and write off this loan?

http://m.independent.ie/business/personal-finance/mum-didnt-understand-how-much-money-was-owed-woman-forced-to-sell-family-home-to-clear-controversial-life-loan-35881545.html



No you have spent three years looking after yourself trying to maximise the amount you would receive from the estate of your deceased parents



You mean to discover that your inheritance wasn't as large as you expected was devastating.

I don't know which is worse, the standards the indo will lower themselves to or the sense of entitlement from the woman

A rough estimate is that a 9% interest rate will double the amount in 8 years. So in 16 years it will quadruple the original sum. If people don't understand compound interest then that's just an expensive lesson for them to learn.

The kids should have given more of a shite about their parents while they were alive. Maybe helped them out so that they didn't need to get a loan from the bank in the first place.

Bit of a coincidence that they care now that the expected windfall inheritance isn't coming in

Canis Lupus

You slate the newspaper but then create a thread about it and provide everyone with a link to click through to. If you don't like it wouldn't it be best to not bring attention to it?

McDermotX

Was all over Duffy there last week.
The sense of inheritance entitlement stunk the airwaves out of it.

Hilarious stuff.

Senna

I bet this daughter wasn't told for a very good reason, it does say that one if the kids knew about. The parents were probably delighted with the €50k and might have made their life very comfortable. Somewhere the parents are looking on and laughing at this silly mare.

Fr_Dougal

Article writes like she's on a crusade to help her parents. Reality is she's out for herself to see if she can increase her inheritance.

Samaris

Actually, I have some sympathy. She and her siblings just inherited a 200k debt to the bank which is still increasing its interest (and given the loan itself was 50k, the debt is now 200k - that is a hell of a jump). That's a fun position for anyone to suddenly find themselves in. And it's probably not surprising that she's sorry to have to sell her childhood home to try and clear the debt either. Necessary, sure, but that doesn't mean that it wouldn't upset someone.

And what do you think happens if elderly people in this position get ill enough that they need constant care? That is when the assets are often used to balance against the healthcare.

Meh, given the age of the people being targeted with these offers and the sheer scale of the cumulative interest on it, I find the whole thing pretty fishsome.

Winterlong

Isn't the whole point of these loans that they are redeemable up to the maximum value of the house on the death of the person taking out the loan?
So it is assumed that when taking the loan out the mother knew the house would need to be sold on her death?

Yourself isit

Samaris wrote: »

Actually, I have some sympathy. She and her siblings just inherited a 200k debt to the bank which is still increasing its interest (and given the loan itself was 50k, the debt is now 200k - that is a hell of a jump). That's a fun position for anyone to suddenly find themselves in. And it's probably not surprising that she's sorry to have to sell her childhood home to try and clear the debt either. Necessary, sure, but that doesn't mean that it wouldn't upset someone.

And what do you think happens if elderly people in this position get ill enough that they need constant care? That is when the assets are often used to balance against the healthcare.

Meh, given the age of the people being targeted with these offers and the sheer scale of the cumulative interest on it, I find the whole thing pretty fishsome.

Personally I love the idea. Get equity out of the house and live on that. A better scheme is the reverse mortgage where the banks pay you monthly payments and get the house when you die. The trick is to die as late as possible.

Yourself isit

Winterlong wrote: »

Isn't the whole point of these loans that they are redeemable up to the maximum value of the house on the death of the person taking out the loan?
So it is assumed that when taking the loan out the mother knew the house would need to be sold on her death?

Yes. The parents didn't suffer here. They got 50K and put their house as collateral. That's tough on the inheritors but nobody has a right to inheritance.

Samaris

Yeees, but living off your own money and assets is one thing, but most parents wouldn't deliberately drop a 200k debt on their kids (unexpectedly in at least all but one case) when they die. I agree that no-one has a right to an inheritance, but 200k debt is harsh.

I'm also dubious about the mention of Alzheimer's in the article. It suggests she wasn't aware of the issues as the whole matter progressed, although she -may- have been aware of them at the original decision (that's not really made clear). And given how the banks acted with pushing loans and the like on people during the boom, I'm again dubious on how careful banks would be to not push loans like that on elderly people who were vulnerable - like people with Alzheimer's (although again, that probably did not happen in this case, although their ability to deal with the problem as it was progressing was limited.) This is partly why all adult children are supposed to be aware of said loan, which does not appear to have been made the case here - one knew about it and it's not stated how much they knew about it.

It sounds rather predatory as a scheme to me. It doesn't have to be, but given how the banks were acting during that period, I doubt it was all done according to Cocker in all cases. Including this one from the sounds of it.

micar

Samaris wrote: »

Actually, I have some sympathy. She and her siblings just inherited a 200k debt to the bank which is still increasing its interest (and given the loan itself was 50k, the debt is now 200k - that is a hell of a jump). That's a fun position for anyone to suddenly find themselves in.

Totally agree.

I wasn't aware of this type of product.

The central bank raised some serious concerns about it.

This type of product is no longer available.

You'd have to wonder how it was sold to their parents and what sort of illustrations were given to them in how much could be needed to pay off in 10-20 years.

Surely it would be better for the parents to discuss this with all children and perhaps for them to each take out a loan totalling the amount needed or take out 5k loan for 5 years then another at the end that and another at the end of that.

MilesMorales1

I thought you meant an actual Jeremy Kyle article, am disappointed.

J.pilkington

Samaris wrote: »

Actually, I have some sympathy. She and her siblings just inherited a 200k debt to the bank which is still increasing its interest (and given the loan itself was 50k, the debt is now 200k - that is a hell of a jump). That's a fun position for anyone to suddenly find themselves in.

As far as I know if the estate / asset is negative it doesn't get passed in the will (debt is linked to asset).

Yourself isit

J.pilkington wrote: »

As far as I know if the estate is negative it doesn't get passed in the will.

It sounds like you are saying otherwise

The house has to be sold off. They aren't inheriting debt. They are not inheriting the full price of a house.

Samaris

Ah, okay, I see. Well, as long as the cost of the house -does- actually cover the cost of the huge interest hikes. 50k -> 200k is still a hell of a jump. What happens if the house is not sufficient to cover the interest accrued?

Pawwed Rig

You are not obliged to take an inheritance. If you don't want it or cannot afford to take it then it can be disclaimed and you walk away.

Yourself isit

Samaris wrote: »

Ah, okay, I see. Well, as long as the cost of the house -does- actually cover the cost of the huge interest hikes. 50k -> 200k is still a hell of a jump. What happens if the house is not sufficient to cover the interest accrued?

The bank just gets the house sale price as far as I know. After all the parents put that up as collateral.

Samaris

Yeah, okay, that's more reasonable then.

The interest rates still appear to be predatory, and I'm dubious about how well it was all regulated, but at least it doesn't just drop a 200k debt on someone unexpectedly.

soups05

I remember that back then the papers were full of stories about parents taking out loans to help their children buy a house. The fact that one sibling was aware of the loan makes me think that is what the 50k was for and the woman in the article is simply jealous that her inheritance is less because of the parent helping the sibling.

I seen a major fall out between friends and their children when they did something similar for one of the kids but could not do it for the other.

Fr_Dougal

Samaris wrote: »

Yeah, okay, that's more reasonable then.

The interest rates still appear to be predatory, and I'm dubious about how well it was all regulated, but at least it doesn't just drop a 200k debt on someone unexpectedly.

When you die, your debt lies with your estate; it cannot be passed onto other individuals.

In most cases, these debts are secured on property but life insurance policies are put in place or are already in place to pay the debt.

Would be interesting to understand if any life policies were in place in this instance.

Pawwed Rig

Samaris wrote: »

The interest rates still appear to be predatory, and I'm dubious about how well it was all regulated, but at least it doesn't just drop a 200k debt on someone unexpectedly.

As a mortgage product the rates seem high however as a general loan they are not that onerous.

I did compound interest in primary school as part of my state education. I would assume most people have done the same. This constant assumption that people are thick and cannot understand primary school theory grates on me. Maybe the parents knew exactly what they were doing when they took out the loan.