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Distressed (non) purchase

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  • 26-08-2013 2:44pm
    #1
    RonnieL
    Registered Users Posts: 782 ✭✭✭


    Hi Guys.

    I struggled to think of a descriptive title for this thread, so you'll have to read on to understand the topic!

    My wife and I viewed a house recently, which we liked. During the course of the viewing the agent explained that the owner was having to sell the house as she can't pay the mortgage. He went on to explain that any offers made had to be approved by the bank she has the mortgage with. Anyway, we made an offer and about a month later the agent contacted us to say the offer was accepted by the bank, but the owner has decided to refuse to leave the house, and as such the house if off the market.

    We know which bank the owner has the mortgage with (the estate agent told us), and it happens to be the same bank we got our mortgage approval from.

    We obviously feel bad that the lady in question can't afford her mortgage etc, but at the same time we still like the house. Considering we were offered a mortgage by the bank, and the same bank accepted an offer from us, we're wondering if there is anything we could/should do to make the bank aware of the situation - so that if the house ends up being repossessed they could contact us or something? We mentioned this to the lady who we were dealing with during the mortgage application, but she didn't seem interested.

    That aside, assuming the owner isn't paying the mortgage, what is likely to happen, and in what timeframe? I have read some threads on here about repossessions and stuff, but I'm still not clear on what the process is.

    Thanks,

    Ronan


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    #2
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    Ok- so the borrower put the house on the market to keep the bank happy (not realising that it would actually receive an acceptable offer). Your offer has been accepted. That your bank and her bank are the one and the same, is neither here nor there. Part 2 of the equation- is the current owner coming to an agreement with the bank over how to treat that portion of the loan, not offset by the purchase price. This is a discussion between them (and one they should have had before they put the property on the market!!!). As they are now refusing to vacate the property and give the bank vacant possession- you are incapable of buying (no bank will give you a residential mortage for a property you intend to live in, unless you have vacant possession of the property).

    Next step is for the bank to start repossession proceedings against the owner. Unfortunately- even with the revised arrangements- this is a long and arduous process. If- and its a big if- some manner of dealing with negative equity becomes widespread among owner occupiers- its possible that more of them (including your owner) may be inclined to hand back property to their lenders. Until then- it doesn't matter how much you love the property- or what time, money or effort you've put into your property search- its in vain.

    All you can do is ensure the next property you look at- is not a reluctant sale being forced by a bank (or if you're willing to wait it out- and it could be a long wait- its possible the house may become available, eventually.........)


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    #3
    RonnieL
    Registered Users Posts: 782 ✭✭✭RonnieL


    The_Conductor wrote: »
    Ok- so the borrower put the house on the market to keep the bank happy (not realising that it would actually receive an acceptable offer). Your offer has been accepted. That your bank and her bank are the one and the same, is neither here nor there. Part 2 of the equation- is the current owner coming to an agreement with the bank over how to treat that portion of the loan, not offset by the purchase price. This is a discussion between them (and one they should have had before they put the property on the market!!!). As they are now refusing to vacate the property and give the bank vacant possession- you are incapable of buying (no bank will give you a residential mortage for a property you intend to live in, unless you have vacant possession of the property).

    Next step is for the bank to start repossession proceedings against the owner. Unfortunately- even with the revised arrangements- this is a long and arduous process. If- and its a big if- some manner of dealing with negative equity becomes widespread among owner occupiers- its possible that more of them (including your owner) may be inclined to hand back property to their lenders. Until then- it doesn't matter how much you love the property- or what time, money or effort you've put into your property search- its in vain.

    All you can do is ensure the next property you look at- is not a reluctant sale being forced by a bank (or if you're willing to wait it out- and it could be a long wait- its possible the house may become available, eventually.........)

    Thanks a million for the reply conductor - it pretty much confirms what I suspected. We're not desperate to buy, but just a little tight on room in our current place. I think we'll just continue to keep an eye out, and you never know, the place might come on the market again once the bank and current owner sort things out. My main concern at the moment is the possibility of prices rising, as the area we're looking in seems to have a shortage of supply. On the other hand, maybe if the rate of respossessions increases in general, the market might stay at the level it's at. Who knows?!


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