Keys in the letterbox & liability

kieransulli

If you decide to post the keys of your house back to your mortgage provider, does anyone know where your liability ends?

Will the mortgage provider just add you to their black-list and you'll never again get credit in this country? Or do they pursue you through the courts 'til you end up in Mountjoy?

Any advice is appreciated.

Thanks.

Nody

You still have a loan even if you turn over the keys and you'd owe what ever difference between your loans and the money the bank gets for the house (when ever they can churn through the paper work to sell it).

Your best bet is to go in and have at alk with the bank; clearly outline your budget (and it better be stripped of pretty much everything from eating out to pub rounds to vacation trips etc. for the bank to listen to you that you are in dire straits or you'll need to cut those first) and show you can't handle the current mortage and take a discussion with them.

ashleey

kieransulli wrote: »

If you decide to post the keys of your house back to your mortgage provider, does anyone know where your liability ends?

Will the mortgage provider just add you to their black-list and you'll never again get credit in this country? Or do they pursue you through the courts 'til you end up in Mountjoy?

Any advice is appreciated.

Thanks.

for any shortfall between for what they sell the house and what you owe plus interest and costs. They can even add that debt to your estate too, which is a really nice outcome for your kids.

In all practicality you'll be blacklisted for a while and then it will all be written off in about 10 years.

What's nice is that your average developer borrowed via the vehicle of a limited company so he walks into the sunset minus any personal guarantee if given. Nice

murphaph

kieransulli wrote: »

If you decide to post the keys of your house back to your mortgage provider, does anyone know where your liability ends?

Will the mortgage provider just add you to their black-list and you'll never again get credit in this country? Or do they pursue you through the courts 'til you end up in Mountjoy?

Any advice is appreciated.

Thanks.

IF the bank sells the property at more than the mortgage outstanding (after the costs involved) you have no liablity.

IF (more likely) the bank sells at less than the cost of what's outstanding on your mortgage (after costs) you still owe the bank this money.

They will chase you for it but you'd likely never end up in prison unless you then defaulted on the court repayment plan as you would then be in contempt of court. You can't be jailed for a mere civil debt.

Anyway, putting the keys in the letterbox is the silliest thing. If you are going to owe the bank money, better to owe them as little as possible and this means selling the property yourself and redeeming what you can of the mortgage.

If you are in difficulty, the FIRST thing you should do is approach your bank and let them know. They'd rather not repossess if at all possible. Talk to MABS too. Go to citizens advice. Don't bury your head in the sand and best of luck!

dan_d

http://www.boards.ie/vbulletin/showthread.php?t=2055379757&highlight=jingle+mail
I think this will probably answer some of your questions.
It's been discussed in a good bit of detail.

kieransulli

Thanks for the advice.

We're not in too much difficulty, to be honest, but we're looking at all options.

Our circumstances are going to change in a few year's time and we hope to move house at that stage. It's unlikely that our current house will be sold/rented in the meantime and i wondered what might happen if we just walked away from our over-priced house and its 35-year mortgage.

Thanks again.

dvpower

There was an economist type on with Marian Finucane at the weekend saying that the collateral for the mortgage is usually the property itself. So, if you hand back the keys, its game over. I'm not sure if this is true?

You would never get a loan again; I think thats for sure.

Taxipete29

Posting back the keys is generally regarded as the worst of all the options a person has. As someone suggested above go and see MABS and talk to your bank. Never ignore the problem. It doesnt go away.

gurramok

kieransulli wrote: »

Thanks for the advice.

We're not in too much difficulty, to be honest, but we're looking at all options.

Our circumstances are going to change in a few year's time and we hope to move house at that stage. It's unlikely that our current house will be sold/rented in the meantime and i wondered what might happen if we just walked away from our over-priced house and its 35-year mortgage.

Thanks again.

You just have to wait until the prices go up to the level(minus the mortgage amount you paid off) you bought the house in that situation -break even.(many years away).

Just don't walk away, they'll chase you for it. Either that or emigrate to a non-1st world country

dvpower wrote: »

There was an economist type on with Marian Finucane at the weekend saying that the collateral for the mortgage is usually the property itself. So, if you hand back the keys, its game over. I'm not sure if this is true?

You would never get a loan again; I think thats for sure.

No. That happens in USA. You still owe the difference here. You could declare bankruptcy as a way out but that means 12yrs of hell.

kieransulli

Thanks again.

As i said, we're not really in any difficulty at the moment and are not going to walk away any time soon. Just considering all options, given the expected change in circumstances that may happen in 3-4 year's time.

Regarding renting: media reports claim that rents are coming down all the time. Anybody have any on-the-ground sample figures?

Gurgle

murphaph wrote: »

IF (more likely) the bank sells at less than the cost of what's outstanding on your mortgage (after costs) you still owe the bank this money.

You also owe them penalty fees, late payment fees and accelerated interest on all over-due payments.

If you are in difficulty, the FIRST thing you should do is approach your bank and let them know. They'd rather not repossess if at all possible. Talk to MABS too. Go to citizens advice. Don't bury your head in the sand and best of luck!

Yes, if you go in to re-negotiate you still hold some cards.
It does the bank no good to see any debt go bad. As long as you agree to cover the interest payments then they can service their debt and you still have the possibility of eventually getting out of it with your shirt.

kieransulli

Thanks.

Especially to those who told me not to do what i said i wasn't going to do in the first place!

Seriously though, all advice is much appreciated. I guess i just heard some stuff about handing back the keys and the mortgage provider taking some of the hit. I realise now that this is something else that happens "only in America".

Sponge Bob

kieransulli wrote: »

"only in America".

Only in parts of America where the law allows it. In most of america the law does not allow it in the sense that handing back the keys ends your liability for any outstanding amounts .

http://www.mortgagereliefformula.com/recourse/

These are all the mortgage walkaway trustee sale states, meaning they are non-judicial foreclosure states.

In those states, generally, when they foreclose on you, they cannot pursue you for their financial losses.


Many, such as California, do in theory allow a lender to choose judicial foreclosure but in those cases the lenders only do so if a borrower has significant other assets. This is the "one action" rule that lets the lender either pursue non-judicial foreclosure, at lower cost and less time, or judicial foreclosure that costs more money and takes more time but lets them go after you for their financial losses.


Alaska
Arizona
Arkansas
California
Colorado
District of Columbia (Washington DC)
Georgia
Hawaii
Idaho
Mississippi
Missouri
Montana (as long as non-judicial foreclosure is used)
Nevada - note that the lender CAN get a deficiency judgment (See below)
New Hampshire
Oregon
Tennessee
Texas (but even in a non-judicial foreclosure, the lender can pursue a deficiency judgment)
Virginia
Washington
West Virginia


These are states that also allow non-judicial foreclosure, and/or where non-judicial foreclosure is more common and deficiency judgments can be obtained more easily:



Michigan
Minnesota
North Carolina
Rhode Island
South Dakota
Utah
Wyoming

Better hide in one of them and not in New York

hiorta

Abandoning the property does not remove the burden of keeping it in good repair.