Mortgage Default & Pissing off to NZ

Shakakan

Hi

Couldn't find a similar thread on boards about this kinda thing (must have been talked about though!)

I'm worried about my sister. She has a mortgage about 2 years now and she thinks she can just stick the keys in the NIB's letter box and go to New Zealand. (mortgage is about 125k)

After maybe 7 years she reckons the bank will have forgotten about it (apparently she works with an English person who did something similar)

I'm blue in the face trying to tell her to talk to the bank about interest only / restructuring etc etc but she just wants to leave the house and this god forsaken country.

Surely it can't be that easy?? Anyone know what would happen if she just left?

I'm assuming of course that she hasn't used someone as a guarantor.

I'd appreciate any thoughts...

Thanks
A

chris85

Shakakan wrote: »

Hi

Couldn't find a similar thread on boards about this kinda thing (must have been talked about though!)

I'm worried about my sister. She has a mortgage about 2 years now and she thinks she can just stick the keys in the NIB's letter box and go to New Zealand. (mortgage is about 125k)

After maybe 7 years she reckons the bank will have forgotten about it (apparently she works with an English person who did something similar)

I'm blue in the face trying to tell her to talk to the bank about interest only / restructuring etc etc but she just wants to leave the house and this god forsaken country.

Surely it can't be that easy?? Anyone know what would happen if she just left?

I'm assuming of course that she hasn't used someone as a guarantor.

I'd appreciate any thoughts...

Thanks
A

Firstly if she gives the house back they will sell it and your sister will be liable for the shortfall on the account plus legal costs and so forth. So if your sister is in negative equity this will be a problem and i am going to assume she is in negative equity by the sounds of it (if she is in postive equity then she should try sell the property)

the banks arent stupid they use agents throughout the world and yes it may be hard to get her to pay from NZ but they will try get her to. Also how does she plan on staying in NZ for 7 years. she couldnt get a visa that long, maybe her english friend could due to commonwealth country and all that.

BnB

Take it from a well practiced, StickingYourHeadintheSand Merchant, it is not the way to go.

The first step is most certainly to talk to the bank.

How much is the house worth. If the mortgage is only €125k, then surely the house can't be worth too much less than that.

She might be right. After 7 years, the bank would have sold the house and her ICB report might even be cleared..... but 7 years is a long time. What'll she do if she meets someone in NZ, and after a year or two they want to come home together...?

chris85

BnB wrote: »

Take it from a well practiced, StickingYourHeadintheSand Merchant, it is not the way to go.

The first step is most certainly to talk to the bank.

How much is the house worth. If the mortgage is only €125k, then surely the house can't be worth too much less than that.

She might be right. After 7 years, the bank would have sold the house and her ICB report might even be cleared..... but 7 years is a long time. What'll she do if she meets someone in NZ, and after a year or two they want to come home together...?

Also its not just seven years and they cant chase you. if they seek a judgment which they will then the account can be chased for 12 years from date of judgment. After this it is statute barred. Any payment or written acknowledgment of the debt will reset the "clock" and start the 12 years again.

tbh the bank will chase her abroad. Its not a small loan or credit card here. its a mortgage they will not let it rest and that is from experience dealing with mortgages in the past.

She needs to talk to her bank and they will try help her as much as they can if they are a good bank. The sub prime lenders will not be great to deal with and will push on legal action.

[Jackass]

Having worked in mortgages, I always laugh at people's suggestion of "handing the keys back".

You didn't buy the house off the bank. A mortgage is a type of loan, such as a personal loan or business loan, the house is just security on that loan.

Say, for example, you got a secured (hire purchase) loan to buy a $30,000 car.

The car is security on that loan. Then say you crash the car and don't have insurance. You can't go to the bank and hand them the keys to your car, just because it's lost significant value and the loan now far exceeds what it is worth. You owe what you owe, the car was just security.

If you did give the car back, the bank may sell it for parts, and get $5,000, but you still owe $25,000 no matter where the keys are, and the bank will chase you and take you to court to get it.

I'm not sure about the legalities of what happens in court and if it can become a criminal issue, i'm interested myself to find out if and how finance problems can become criminal, but a mortgage? The bank will never ever ever stop chasing that money and will do everything in their power to get it. They are chasing bad debts of $500 right now, never mind thousands or hundreds of thousands.

How much is the house worth? The mortgage doesn't sound like an awful lot considering there's a house that could be sold.

chris85

[Jackass] wrote: »

Having worked in mortgages, I always laugh at people's suggestion of "handing the keys back".

You didn't buy the house off the bank. A mortgage is a type of loan, such as a personal loan or business loan, the house is just security on that loan.

Say, for example, you got a secured (hire purchase) loan to buy a $30,000 car.

The car is security on that loan. Then say you crash the car and don't have insurance. You can't go to the bank and hand them the keys to your car, just because it's lost significant value and the loan now far exceeds what it is worth. You owe what you owe, the car was just security.

If you did give the car back, the bank may sell it for parts, and get $5,000, but you still owe $25,000 no matter where the keys are, and the bank will chase you and take you to court to get it.

I'm not sure about the legalities of what happens in court and if it can become a criminal issue, i'm interested myself to find out if and how finance problems can become criminal, but a mortgage? The bank will never ever ever stop chasing that money and will do everything in their power to get it. They are chasing bad debts of $500 right now, never mind thousands or hundreds of thousands.

How much is the house worth? The mortgage doesn't sound like an awful lot considering there's a house that could be sold.

A default can beome criminal if a court order is granted by the courts (a judgment would have been obtained previously) and it is not kept to. It becomes criminal and the bank can then seek a committal which contrary to popular belief due to news in the media is still allowed here and its the credit unions who have been the ones who would have sought the majority of committals in the past.

A committal order can be granted if the person is refusing to pay (ie. has some means to make payments but wont). A committal order will not be granted if someone does not have the means to pay.

[Jackass]

But what about, in this case, the person just disapears and the bank have no way of even contacting the person or knowing if they have means to pay and their irish accounts cease activity, can it become criminal then?

chris85

[Jackass] wrote: »

But what about, in this case, the person just disapears and the bank have no way of even contacting the person or knowing if they have means to pay and their irish accounts cease activity, can it become criminal then?

The banks have very good outside agents they use to track people overseas. its a lot of effort to go completely off the radar from the bank and these agents.

Toots

What your sister is planning is actually a form of fraud. It could be classified as 'bust-out' fraud, although this type of fraud does not usually involve mortgages. I know a guy who has worked in both bad debts department, and the fraud department of a bank, and he said to me that it's basically easier to kill someone and disappear than it is to owe a bank a large sum of money and disappear. They have ways and means of tracking you down.

In fairness, she's going to NZ, not some remote unpopulated island. She'll have to apply for a visa, a very small amount of digging by the bank will uncover that info, then they'll know where she's gone, and it wouldn't take a genius to realise that she planned to renege on the debt. We're talking about a mortgage here, not some couple of thousand euro credit card debt, it's serious money and the bank will use every resource they have to get it back. Your sister may well find that she could be prosecuted for this, because she is intentionally defaulting on the debt, and that is fraud. I'm not sure of the legalities behind this, however.

Sure if it was just a matter of popping the keys in a letter box and departing for sunnier climates for a few years, we'd all be at it! If she bought the house 2 years ago, chances are she's in negative equity, so even if she sold it there could be a shortfall which she is liable for. If she really feels that she must go, then at least get her to look at selling the house, or even get in touch with an estate agent to see what the house is actually worth. If it's only negative equity of €10k or so, if she saves hard for a few months, she could nearly pay that off, then she could head off to NZ debt free and have the option of coming home whenever she wanted without a sword of damocles waiting to fall when she gets back.

financialmess

Hi,

Im no expert (as you will see from my post about my Bf) but I can say one thing that you may consider and look into for your sis
- a few months ago I saw Pat Kenny's Frontline show where he had a very nice lady on (who was some kind of financial advisor) and she said she knows of people who are handing back their keys to the bank, declaring themselves as bankrupt, changing their 'former' names by deed pole then off they go to a new life elsewhere. She said it CAN be done.
Of course you have to start from scratch again but what did ANY of us care about the future when we were 18?
Anyone seen the show and researched the ladies statements?

Seen a post on Boards aswell where a guy who went to the US had no way of getting a credit card (which without, you cant even RENT a place in America) so he found out there was a card, that you put YOUR OWN saving onto and use AS a credit card, in order to build up that all-essential credit rating.
He started small (couple hundered dollars) then eventually bulit up to REAL credit.
So that could maybe also work in a case of self-bankruptcy.

Mezcita

financialmess wrote: »

Hi,

Im no expert (as you will see from my post about my Bf) but I can say one thing that you may consider and look into for your sis
- a few months ago I saw Pat Kenny's Frontline show where he had a very nice lady on (who was some kind of financial advisor) and she said she knows of people who are handing back their keys to the bank, declaring themselves as bankrupt, changing their 'former' names by deed pole then off they go to a new life elsewhere. She said it CAN be done.
Of course you have to start from scratch again but what did ANY of us care about the future when we were 18?
Anyone seen the show and researched the ladies statements?

Seen a post on Boards aswell where a guy who went to the US had no way of getting a credit card (which without, you cant even RENT a place in America) so he found out there was a card, that you put YOUR OWN saving onto and use AS a credit card, in order to build up that all-essential credit rating.
He started small (couple hundered dollars) then eventually bulit up to REAL credit.
So that could maybe also work in a case of self-bankruptcy.

Awful advice. Can I suggest that you learn from your boyfriend's financial mess and stop encouraging people to actively default on debt which they are legally required to pay.

I love it. Nobody forced the OP's sister to buy a house. The market has turned and she wants an easy way out. Fact is that there is no easy way out for anyone in this country who has a mortgage.

Mezcita

I'll repeat that nobody forced this person to buy a house. If, for example, the market had not imploded and the value had increased significantly would she be looking to leg it to New Zealand without paying the debt? Not a chance.

People can bitch and whine about the banking bail out all they like. Without a functioning banking system no economy can survive.

As someone else said, it's a loan, plain and simple. You can ignore it all you like but it won't go away.

Toots

danbohan, encouraging posters to renege on debts is against the charter of this forum. I have deleted both your posts on this thread. Please read the charter and abide by it when posting in future.

danbohan

Toots* wrote: »

danbohan, encouraging posters to renege on debts is against the charter of this forum. I have deleted both your posts on this thread. Please read the charter and abide by it when posting in future.

nobody was encouraging anybody to renege on debts , i said because the banks are reneging on their debts , others such as mortgage holders in difficulty may feel that they do not have to pay , so i think you should reread my original posts

stepbar

danbohan wrote: »

nobody was encouraging anybody to renege on debts , i said because the banks are reneging on their debts , others such as mortgage holders in difficulty may feel that they do not have to pay , so i think you should reread my original posts

Sorry?

Blackjack

danbohan wrote: »

the banks are reneging on their debts

Old news for you - the Bank's aren't reneging on their debts.

danbohan

Blackjack wrote: »

Old news for you - the Bank's aren't reneging on their debts.

really , that's excellent , so you mean we are going get back all the billions poured in Anglo nationwide aib boi etc , when ?,

a debt is a debt no matter what spin is put on it

chris85

danbohan wrote: »

really , that's excellent , so you mean we are going get back all the billions poured in Anglo nationwide aib boi etc , when ?,

a debt is a debt no matter what spin is put on it

thats stupid. The NAMA debts are ones the builders reneged on, not the banks.

The money given to the banks is to buy these debts (some not toxic) and pursue the builders for it all.

And the plan is for NAMA to get the money back but wont happen straightaway.

The banks havent reneged on debts.

MortgageBroker

it is actually as simple as walking away from the mortgage and heading to NZ, however, there are repercussions. The actual process will be as follows:

The bank will attempt to get in touch, this won't work as she's gone, then they will get a repossession via the circuit court but in the mean time they will be piling up costs (albeit circuit court costs rather than high court) and then they'll be awarded possession with a judgement against her. If she is in negative equity it could turn out to be a fairly large sum.

The '7 years' thing is a myth, that is perhaps the British system but it isn't the Irish one. Here you can be chased for that debt for the next 12 years, lets just say she is 27 years old, that means that if she makes a penny in this country or comes back before she is aged 39 that they have recourse to her. Naturally, they have to find out but an ICB check or any other detail out there could tip them off and then they'll be on to her.

The judgement doesn't go away for a very very long time and posting back the keys is the worst option because if you surrender voluntarily at least the costs are lower. In the UK they made it a civil offence to hand back the keys, Ireland may follow suit some day.

In a nutshell her plan is ridiculous, the only thing it satisfies is her urge to get up an get out of Ireland, which, well founded or not, doesn't solve the problem and it could affect her future in a way that it doesn't have to if she does it correctly (namely to deal with the bank and then go).

Strategic Default is what they call this and it works in some countries but I think it would be a bad idea in Ireland.

karl

seamus

Ultimately if a judgement is made against her by a court and she fails to abide by that judgement, a warrant will be issued for her arrest, which could theoretically include extradition from NZ to Ireland.

Unless she plans to go abroad, completely change her identity, cut off all contact from her family and friends and never return to Ireland, the bank will find her. There's nothing to stop them from hiring a private detective, who'll knock on her door in NZ some day and hand her extradition papers.

MortgageBroker

seamus wrote: »

Ultimately if a judgement is made against her by a court and she fails to abide by that judgement, a warrant will be issued for her arrest, which could theoretically include extradition from NZ to Ireland.

Unless she plans to go abroad, completely change her identity, cut off all contact from her family and friends and never return to Ireland, the bank will find her. There's nothing to stop them from hiring a private detective, who'll knock on her door in NZ some day and hand her extradition papers.

mortgages fall outside of the judgements on contract that you can go do jail for. otherwise people would get repossessed and then go to jail. family homes don't count. the judgement would be real, and would last for c. 12yrs though.

rugbyman

Here is a kind of a ramble.

to the moderator who refers to a charter, I suggest the charter is changed,(i have not read it). In the present,awful ,scenario in which we now exist, defaulting or reneging on a loan is now often good advice.
We have not been told how much the house of the OPs sister is now worth. We dont know the balance that would be owed in the event of a fire sale.

I wonder what advice any of the holy joes on here would give to a borrower who owed over 150,000 more than the current value of their home and who lost their job/split with partner.
This person would never be able to pay off the "monies that they had borrowed".
there has to be a doomsday situation where having had the situation looked at by a debt advisor, the advice is to give up. i know of one person who was advised that to go bankrupt would perhaps be the best choice.

Depending on the loss incurred and the history of how the lady dealt with the situation, and considering the costs of legal fees,and taking into account the "feathers off a frog" aspect, I am not certain/do not believe that the bank will start/continue a world wide trawl for this lady.

She would be best seeking advice, getting an advisor/solicitor/public rep to negociate with the lender to make the flight to NZ,the end of the story, thus saving the bank time and money. Her best friend in this case may be a judge,whowill take all into account.

By the way, I often stuck my head in the sand and sometimes it worked,mostly did not.

Regards, Rugbyman

baaaa

chris85 wrote: »

The banks havent reneged on debts.

I think it's important to realise that the banks lent everybody money to buy the biggest asset purchase of their lives and then manipulated that same asset market into a bubble with cheap credit .
This is why they should be blanked ,there is serious moral hazard, in my opinion, in letting the banks enslave people to debt like this for their lives.

seamus

MortgageBroker wrote: »

mortgages fall outside of the judgements on contract that you can go do jail for. otherwise people would get repossessed and then go to jail. family homes don't count. the judgement would be real, and would last for c. 12yrs though.

Surely though a failure to adhere to a judgement counts as contempt and a warrant can be issued on the foot of that?

rugbyman

seamus, if a judge gives a judgement it is just that.
if he/she orders the debtor to pay x amount per week and the debtor fails to do so,the debtor can be jailed. this ,jailing will not happen many times, especially where the debtor clearly has no assets.
rugbyman

chris85

baaaa wrote: »

I think it's important to realise that the banks lent everybody money to buy the biggest asset purchase of their lives and then manipulated that same asset market into a bubble with cheap credit .
This is why they should be blanked ,there is serious moral hazard, in my opinion, in letting the banks enslave people to debt like this for their lives.

you go first.

Its a legal document that is signed for these debts enfoceable in the courts. End of.

Noone forced people to get mortgage and loans. We applied for the credit for these facilities.

The whole of ireland contributed to creating the bubble. We all want to own our own home and wanted to get on the ladders because our friend got one and blah blah blah.... this is due to a historical need to own our property instead of the brits having it... i understand it but.

The banks twisted the rules/regulations a little in order to satisfy the demand. They should not have done this i completely agree.

I do not agree with the questionable practices that went on in the bank but we all need to take responsibility of this. The public reneging on their debts doesnt help anything. The bank will just require more input from goverment and the markets will see the economy as unstable which we do not need anymore.

We got the credit, we have to pay it back.

chris85

MortgageBroker wrote: »

mortgages fall outside of the judgements on contract that you can go do jail for. otherwise people would get repossessed and then go to jail. family homes don't count. the judgement would be real, and would last for c. 12yrs though.

The judge would view this as different. I am assuming the OP's sister is single as will b e fleeing country, so it will be viewed as a primary dwelling rather than family home as only person residing there.

The courts are not being lenient on cases were the debtors are not working with the lender to try help.

Toots

As I have already said, advising posters to renege on debts is against the charter of the forum (those of you who have not read it, I suggest you do so). Regardless of whether people feel posters would be justified in doing so, encouraging them or advising them how to do so is not permitted. The next person to do this will receive a 1 week ban from the forum.

Blackjack

danbohan wrote: »

really , that's excellent , so you mean we are going get back all the billions poured in Anglo nationwide aib boi etc , when ?,

a debt is a debt no matter what spin is put on it

When you can point out when any one of the Banks in Ireland have reneged on their debts in the last 10 years, I'll accept you point.

Otherewise, I'm sorry, but you're just talking Bollox.