Tricky Mortgage Situation

fairuse

Hi All,

First of all Im a semi regular boards poster, but this is a burner account for reasons that will become clear. So first of all, sorry for that.

Im 33, living in Greystones, married, one child. In 2005 my wife and I bought a house in an okay area (as lead to believe by agent) for 280k.

We moved in, and on day one we found hose was broken into the week before while empty. What followed was 4 years of hell until 2009 of broken windows, rocks thrown at my wife, car vandalized, fireworks thrown form a near by hill at our house/front door. This really stressed us out, as garda did nothing really, and we had two miscarriages during living there, and I'm convinced it was the stress. My health also suffered in that at every noise my heart raced for the years there and to be honest it changed me, and I'm only finding my way back now.

In late 2009 we moved out to a rented house near by in a great area. It took 18 months to get the house rented which involved work on the house to make it legally fit for renting and so many people came and went not wanting to rent it during the time. We paid every mortgage repayment when not living there and our rent elsewhere, which decimated our finances. During this time, my income halved due to the recession, but because I have my own limited company I have not ever claimed welfare (not allowed). We finally had a child after moving which is the only bright spot in years, she is wonderful.
My wife stays at home, as she has bad fibromyalgia, and working and coming home to a child would be too much for her. We have had no luck getting state benifit for my wife as its an abstract condition (not easy for them to quantify compared to others), that does not tick their stupid boxes (sorry).

We have been receiving some help from MABS in form of advice, but they offer limited help with mortgage advice, mainly other debt.
We received some financial help at various stages from some charities and the vicar in my church.

We ow about 250 on the mortgage, i guess its worth 160. I just want to give back the keys. We have been through enough and I want to take control back of our lives as a family. I dont see how the bank can not take som pain, we have taken too much.
We dont have money to give them, I dont see how they can get a judgement against us given our situation and though all this never missing a payment (to our own detriment).
(We have MABS documentation of our finances and proof of social issues with house from Garda)

Anyone here willing to reply or PM with ideas? Should I talk to a solicitor, Am I being silly?

Also, I know someone is going to say it , so I'll say it first. We should not have bough the house in the first place. We were told the area had improved, but it turned out that what was hidden from us was that the house was previously a drugs den when last owner rented it out, so when they did it up and sold it, we were seen as the people who took their hangout. Making us Scumbag enemy number 1. I know we should have done more research, but I think we have paid for that.

All the best,

Anon

djimi

First off I sympathize with your situation and hope that everything gets resolved for you.

But can you clarify why you ask the following?

fairuse wrote: »

We ow about 250 on the mortgage, i guess its worth 160. I just want to give back the keys. We have been through enough and I want to take control back of our lives as a family. I dont see how the bank can not take som pain, we have taken too much.
We dont have money to give them, I dont see how they can get a judgement against us given our situation and though all this never missing a payment (to our own detriment).

I understand your frustrations but why do you feel that the bank should take some pain as you put it? Why would they be happy to let you off the hook for all or part of the near €100k difference between what you owe and what the house is now worth?

D1stant

So you are talking about a strategic default, for which there is no sympathy from the Banks.

Really tough situation. Have you considered emmigrating?

juan.kerr

I'm not sure how paragraphs 3 and 4 are relevent?

How are you any different to any other mortgage holder with negative equity?

fairuse

Because what many people fail to realise, is that its both the lender and the person who takes out a loan who takes a risk when a loan is created. Going after us for money is pointless as we dont have it. Irish banks have collectively brainwashed so many people into thinking that they bear all the burden. Its not the case. I'm happy to negotiate, but dont know how we can given the situation (lack of money).

djimi wrote: »

First off I sympathize with your situation and hope that everything gets resolved for you.

But can you clarify why you ask the following?



I understand your frustrations but why do you feel that the bank should take some pain as you put it? Why would they be happy to let you off the hook for all or part of the near €100k difference between what you owe and what the house is now worth?

Gurgle

juan.kerr wrote: »

How are you any different to any other mortgage holder with negative equity?

They can't just live in the house, as per the usual 'put up and shut up' advice (which I'm usually first to dole out).

@OP, have you tried to rent out the house at knock-down rates? Even if it doesn't cover the mortgage, it will reduce the monthly burden.

fairuse

Because the bank guidelines that the banks operate under now are supposed to be sympathetic to the situation of the person who took out the loan..

juan.kerr wrote: »

I'm not sure how paragraphs 3 and 4 are relevent?

How are you any different to any other mortgage holder with negative equity?

daltonmd

First of all you need to take a massive step back and take a deep breath. You have done everything possible to avoid/repair the situation you are in and it has cost both you and your wife a lot - and not in monetary terms.

You are not alone, there are thousands of people in similiar situation for a variety of reasons. You bought a house, the economy tanked, you have no way out.

You will never, ever be in the same position you were in in 2005 and this means that you will never be able to repay this mortgage. You must accept and reconcile yourself with this fact and work with this fact.

I would strongly urge you to document this to your bank exactly as you have done here. Sit down and work out financial plan that gives you and your wife breathing room, if at the end of it you can afford to repay 250pm - then that is what you TELL the bank you are doing.

If they don't agree and drag you to the courts there is no judge in the world you will not see that you have tried everything.

Cancel your DD, pay cash into the account each month. Tell them that you are considering bankruptcy (when the new laws come into action) - this is a serious consideration for you.

Offer to put the house on the market and tell them you will negotiate some kind of settlement on the O/S amount - a settlement that again, will not cripple you.

You are a young man with a young family and you made a mistake - you should not be punished for the rest of your life for this.

Screw anyone who tellls you otherwise. When you took out the mortgage your situation was different - this has changed.

In this country there are those who simply refuse to see that making a financial mistake should not destroy your life - in the UK and the US they realise this - and they have bankruptcy laws to facilitate these mistakes.
Indeed in the US - bankruptcy is not seen as failure but rather a stepping stone on the way to success.

I would urge ou to put your health and the health of your family first - whatever you think the banks can do to you, they can not hurt you anymore than you have already been through.

Good luck.

fairuse

We do finally have it rented, at the knock down rates you mention, but they are moving out soon (october).....
As for emigrating, yes I have considered it, but I dont want to be in a situation where I can never come home..
I'm not trying to get a free ride (if I was I'd have closed my lut company and started collecting dole a long time ago), I just feel its just that the burden of this situation is spread to the bank, for their part of the risk.

Gurgle wrote: »

They can't just live in the house, as per the usual 'put up and shut up' advice (which I'm usually first to dole out).

@OP, have you tried to rent out the house at knock-down rates? Even if it doesn't cover the mortgage, it will reduce the monthly burden.

cookie1977

Have you considered speaking to FLAC or New Beginning about the very complicated situation?

fairuse

Thank you Daltonmd, I broke down reading your message. I'd write a bigger reply, but not up to it at the moment, but I do feel your right, I think we need to be frank with the bank , like I have been here... and see where it goes...

daltonmd wrote: »

First of all you need to take a massive step back and take a deep breath. You have done everything possible to avoid/repair the situation you are in and it has cost both you and your wife a lot - and not in monetary terms.

You are not alone, there are thousands of people in similiar situation for a variety of reasons. You bought a house, the economy tanked, you have no way out.

You will never, ever be in the same position you were in in 2005 and this means that you will never be able to repay this mortgage. You must accept and reconcile yourself with this fact and work with this fact.

I would strongly urge you to document this to your bank exactly as you have done here. Sit down and work out financial plan that gives you and your wife breathing room, if at the end of it you can afford to repay 250pm - then that is what you TELL the bank you are doing.

If they don't agree and drag you to the courts there is no judge in the world you will not see that you have tried everything.

Cancel your DD, pay cash into the account each month. Tell them that you are considering bankruptcy (when the new laws come into action) - this is a serious consideration for you.

Offer to put the house on the market and tell them you will negotiate some kind of settlement on the O/S amount - a settlement that again, will not cripple you.

You are a young man with a young family and you made a mistake - you should not be punished for the rest of your life for this.

Screw anyone who tellls you otherwise. When you took out the mortgage your situation was different - this has changed.

In this country there are those who simply refuse to see that making a financial mistake should not destroy your life - in the UK and the US they realise this - and they have bankruptcy laws to facilitate these mistakes.
Indeed in the US - bankruptcy is not seen as failure but rather a stepping stone on the way to success.

I would urge ou to put your health and the health of your family first - whatever you think the banks can do to you, they can not hurt you anymore than you have already been through.

Good luck.

ionapaul

Is bankruptcy an option? Specifically in the UK? It is nothing to feel ashamed about, people have and do choose bankruptcy all the time (I've written about a former landlord who went down this route, it was the clever move and I was just surprised he didn't make the choice earlier!) and the process is there for a reason. Or maybe wait to see what the personal insolvency legislation brings? If you don't have the money to pay it back, you just don't, and you owe it to your family to take whatever legal steps necessary to build a decent life for yourselves.

Edited to say I've just seen daltonmd's post above - I obviously agree with him 100%. Do not feel embarrassed about dealing with your situation through bankruptcy / personal insolvency or whatever, your situation is what those processes are there for!

cookie1977

Before considering bankruptcy and speaking to your bank I really think you need some good legal advice

fairuse

As in declare bankruptcy in another country??? I did not even realise that was possible?
Thank you..

ionapaul wrote: »

Is bankruptcy an option? Specifically in the UK? It is nothing to feel ashamed about, people have and do choose bankruptcy all the time (I've written about a former landlord who went down this route, it was the clever move and I was just surprised he didn't make the choice earlier!) and the process is there for a reason. Or maybe wait to see what the personal insolvency legislation brings? If you don't have the money to pay it back, you just don't, and you owe it to your family to take whatever legal steps necessary to build a decent life for yourselves.

cookie1977

fairuse wrote: »

As in declare bankruptcy in another country??? I did not even realise that was possible?
Thank you..

It's not as easy as it sounds. You need to show you've been living and paying tax there for a period. Just ask Feely:
http://www.independent.ie/national-news/mcfeelys-uk-bankruptcy-order-cancelled-as-irish-bid-not-revealed-3140022.html

ionapaul

fairuse wrote: »

As in declare bankruptcy in another country??? I did not even realise that was possible?
Thank you..

You should definitely get legal advice before making any decisions but yes, you can declare bankruptcy in the UK where the process is much less onerous (so you would be engaging in 'bankruptcy tourism', as my old landlord did), so long as the UK qualifies as your centre of main interest for six months prior to the bankruptcy - basically people are moving over for six months, renting there and basing their business (if any there) before going to the courts.

Interesting article: http://www.guardian.co.uk/world/2012/may/27/irish-dodge-debts-uk-bankruptcy-tourism

engineermike

Hi OP,
I fully sympathize with your situation. On the ground its more difficult to broach what you would like to happen and what the bank will concede.

- The first thing on my agenda would be the continued rental of the property. Not sure knock down rates would apply unless its particularly un rentable due to the location issues mentioned.

- The overall financial burden. I would seek advice from free legal aid, or counsel
while also looking for further advice from any other quater. With your figures in hand I'd approach the bank intermediary to put the situation and negotiated settlement to your lender.

Once all avenues are run down, you can then make a family decision on what is palatable or feasible going forward.

Another option is the letting agent, let them worry about the management of it for you, and you maintain the property and the payments ( or a level of the payments) - giving you breathing space and time to look after your family and health.
Kind regards,
Mike F

fairuse

Thanks for the info and ideas all, it really is appreciated...

daltonmd

fairuse wrote: »

Thank you Daltonmd, I broke down reading your message. I'd write a bigger reply, but not up to it at the moment, but I do feel your right, I think we need to be frank with the bank , like I have been here... and see where it goes...

No problem, it really upsets me to see people in this situation, I am lucky enough that I rent and am in secure employment, but I would absolutely rather my taxes helped out those, like you, who need it.

If this was the states you be out of bankruptcy, back on your feet creating employment and paying taxes - this is what many people don't realise - we are trying to attract investors, entrepeneurs - who the hell would come here to start up a business, when they know if it goes belly up they are screwed?

We are losing a generation to suicide, emigration and lifelong debt I wonder do people realise that the "growth" we are looking for is in the likes of people like this?

We want to suck the life out of the very people we should be supporting.

Sad situation.

As I said, it's just a house, it's the bank that you owe money to, yes the taxpayer is in the firing line - but if you are released from this nightmare sooner rather than later then you can repay that debt by building up your business.

fairuse

Thank you. Its horrible that tax payers are on the firing line with these situations, thats the bit I find hard to handle. But I dont see how we can pay this money. I've paid a lot of taxes in the past, and hope to again in the future. Hopefully we can get the bank to see some sense and move forward with something possible.

daltonmd wrote: »

No problem, it really upsets me to see people in this situation, I am lucky enough that I rent and am in secure employment, but I would absolutely rather my taxes helped out those, like you, who need it.

If this was the states you be out of bankruptcy, back on your feet creating employment and paying taxes - this is what many people don't realise - we are trying to attract investors, entrepeneurs - who the hell would come here to start up a business, when they know if it goes belly up they are screwed?

We are losing a generation to suicide, emigration and lifelong debt I wonder do people realise that the "growth" we are looking for is in the likes of people like this?

We want to suck the life out of the very people we should be supporting.

Sad situation.

As I said, it's just a house, it's the bank that you owe money to, yes the taxpayer is in the firing line - but if you are released from this nightmare sooner rather than later then you can repay that debt by building up your business.

StillWaters

Are you in the MARP process with the bank, as you really should be whilst sorting out what to do?

It will give you breathing space, paying reduced payments or interest only for a while.

the groutch

you need to be straight with the bank, present them with figures showing exactly what you can afford each month.

I would avoid bankrupty at any cost, because after you come out the other side, no financial institution will lend you two halpennies, and you'll have to live on a cash basis.

Zamboni

daltonmd wrote: »

Screw anyone who tellls you otherwise. When you took out the mortgage your situation was different - this has changed.

It is easy to have sympathy for an individual case but what about the poor family guy on the breadline who will pay for this sh1t with higher taxation?
Screw him too?
Just remember by helping any case (that the person willingly entered into) you are screwing another guy (who had no participation).

I feel for the OP's personal circumstances but his mistakes will place hardship upon others. Remember that when you're up on that high horse.

fairuse

Hi zamboni,

I take you point, but our only mistake (in my view) was trusting the agent and the one other local we asked about the street. We took out a mortgage 4 times our combined income at the time, not silly compared to many that happened at the time. I would not change our decision of moving out, I had to get my wife out of there, and myself.

Again I agree with your principle in a lot of situations, but if there is no grace whatsoever how will this country ever recover. If I were to add up the value of all the taxes I have paid between 1997 and 2009 It would be more than the shortfall if the bank take it and sell it...

Ray Palmer

An I the only one who wonders how things were for your tenants? Surely if was as bad as said the tenants would have got the same. Blaming the estate agent when you were just as likely to drop tenants into the same situation seems a little hypocritical.
Not sure why any judge would actually side with you. Basically you bought a house didn't get on with neighbours. You then paid rent with a reduced income. Sell the house and carry the debt is the most likely outcome.
It may sound harsh but I think other things said are pretty unlikely. Uk bankrupt rules maybe possible but that is not any easy choice. I reject the notion the bank are responsible in any way the loan was to you. The risk was to you and trusting the estate agent was your choice.

fairuse

Hi Ray, you have taken some big leaps to conclusions there..


1. Tenants are local to the area and connected enough to not receive the treatment we did.

2. I laughed for the first time today when you said not getting on with the neighbours, I wish it was that simple. You obviously did not digest what I said. This was not about getting on, it started before we moved in because we had bought what was previously a base for the troublesome elements in the area and those who travel from other towns near by. In fact we got on with all the neighbours, the problem came from young adults who were not even from the area and obviously some who were troubled off spring of local families.

Ray Palmer wrote: »

An I the only one who wonders how things were for your tenants? Surely if was as bad as said the tenants would have got the same. Blaming the estate agent when you were just as likely to drop tenants into the same situation seems a little hypocritical.
Not sure why any judge would actually side with you. Basically you bought a house didn't get on with neighbours. You then paid rent with a reduced income. Sell the house and carry the debt is the most likely outcome.
It may sound harsh but I think other things said are pretty unlikely. Uk bankrupt rules maybe possible but that is not any easy choice. I reject the notion the bank are responsible in any way the loan was to you. The risk was to you and trusting the estate agent was your choice.

Zamboni

fairuse wrote: »

If I were to add up the value of all the taxes I have paid between 1997 and 2009 It would be more than the shortfall if the bank take it and sell it...

Tell me, in this new equitable system you have just devised, do I get a cheque back for the taxes I paid between 1997 and 2009 too?

strandroad

fairuse wrote: »

I take you point, but our only mistake (in my view) was trusting the agent and the one other local we asked about the street. We took out a mortgage 4 times our combined income at the time, not silly compared to many that happened at the time. I would not change our decision of moving out, I had to get my wife out of there, and myself.

But then I don't see you how you can have issue with the banks, say that the banks should share the burden etc. There are many scenarios in which the banks are partially to blame (for example pushing large loans onto people who came in for small ones) but in this case the loan was reasonable and your only problem is that the house is in a toxic environment, and you bought it based on the advice from an estate agent and one local. The bank has nothing to do with it. If you bought a different house with the money they gave you you'd have no issues whatsoever.

I hope that things work out for you but lay the blame where it belongs, you are in no way the victim of the banks.

daltonmd

Zamboni wrote: »

It is easy to have sympathy for an individual case but what about the poor family guy on the breadline who will pay for this sh1t with higher taxation?
Screw him too?
Just remember by helping any case (that the person willingly entered into) you are screwing another guy (who had no participation).

I feel for the OP's personal circumstances but his mistakes will place hardship upon others. Remember that when you're up on that high horse.

Oh I'm sorry - will leaving him and thousands of others wallowing in debt mean that we'll pay less tax?

Leaving people drowning in debt to repay money to banks is really going to help us?


"Tell me, in this new equitable system"

Equitable? Are you serious?

As ror getting down off my high horse - tell you what, when you get down from your pulpit - I'll get off my horse.

BTW - whether I agree or disagree with mortgage debt write offs or det restructing is irrelevant - because it is going to happen whether I like it or not. The trick is to target and help those who are in completely unsustainable situations.

If you you think there can be recovery without this then you are wrong.

fairuse

Some clarity:
I don't blame the banks, I'm saying in situations like this the bank cannot expect to get all money back, this was not negligence on my part but a screwed up economy compounded by societal issues. I'm saying the bank and myself took risks, fall out should be in some way negotiated / shared.

To reply to previos post, my point of stating the taxes I have paid was making the point that I am not a freeloader.

mhge wrote: »

But then I don't see you how you can have issue with the banks, say that the banks should share the burden etc. There are many scenarios in which the banks are partially to blame (for example pushing large loans onto people who came in for small ones) but in this case the loan was reasonable and your only problem is that the house is in a toxic environment, and you bought it based on the advice from an estate agent and one local. The bank has nothing to do with it. If you bought a different house with the money they gave you you'd have no issues whatsoever.

I hope that things work out for you but lay the blame where it belongs, you are in no way the victim of the banks.

strandroad

fairuse wrote: »

Some clarity:
I don't blame the banks, I'm saying in situations like this the bank cannot expect to get all money back, this was not negligence on my part but a screwed up economy compounded by societal issues. I'm saying the bank and myself took risks, fall out should be in some way negotiated / shared.

I don't think this is right because there are no issues with the house itself, only with "societal issues", which are outside of the bank's expertise. I understand that should the environment suit you, you'd have no major problems with paying it off while living in the house, so not sure what you mean by economy related issues. It's a bit like wanting to rescind the mortgage because someone's abusive ex-partner lives next door.

I think that your case is not a typical unsustainable mortgage, because your issues are external to the contract you have with the bank and your finances. Legal aid should be sought and the whole thing may turn out to be quite complicated.