Refusing a split mortgage?

flix1 · 07-11-2013 12:42pm #1

Hi there,
I'm curious has anyone been offered a split mortgage and refused it on the grounds that the solution offered by the bank does not represent a real solution, it merely puts off a problem till you are 80. If you did...what happened? especially with KBC customers.

Id love to hear your experience
Thanks y'all

D3PO · 07-11-2013 1:06pm

I don't think anybody in the position of being in arrears and having no way of getting out of it on their own has any rights to refuse a split mortgage.

if you don't want a split mortgage pay what you owe or apply for bankruptcy.

flix1 · 07-11-2013 1:11pm

Hi D3PO...very helpful advice there for someone. Unfortunately it appears that you have misread the question posted.

D3PO · 07-11-2013 1:18pm

it wasn't advise it was an opinion.

somebody that cant pay their mortgage isn't in a position to dictate how their issue should be handled. If you want to control things the way to do it is to stick to your ogirginal agreement with the bank.

so if you or whoever refuses the split mortgage on no other basis than you don't like the idea of it (not a real solution) then what exactly is your counter proposal ? Let me guess debt writeoff so you get to keep your nice house and don't take any pain at all whilst the rest of the taxpayers in the country subsidise your lifestyle ?

Genuine question.

flix1 · 07-11-2013 1:31pm

if you don't want a split mortgage pay what you owe or apply for bankruptcy.

Your "advice" above is very helpful and insightful with a clear amount of dedicated reflection by you prior to your response.

It does appear from your last reply that you are having difficulty interpreting the question posted. Thank you so much for your effort...your attempt to understand the question is appreciated.

D3PO · 07-11-2013 1:36pm

so again what would your counterproposal be to the split mortgage ? Or do you just think it should be refused and the mortgagee continue to fall further into arrears ?

If you genuinely believe its not a viable solution surely you have one to propose.

D3PO · 07-11-2013 1:37pm

flix1 wrote: »

It does appear from your last reply that you are having difficulty interpreting the question posted. Thank you so much for your effort...your attempt to understand the question is appreciated.

it also appears your having difficulty interpreting the difference between opinion and advise despite it being clearly stated my post was the former rather than the latter.

Thanks so much for your effort ... your attempt to understand the response is appreciated.

whippet · 07-11-2013 1:39pm

flix1 wrote: »

Hi there,
I'm curious has anyone been offered a split mortgage and refused it on the grounds that the solution offered by the bank does not represent a real solution, it merely puts off a problem till you are 80. If you did...what happened? especially with KBC customers.

Id love to hear your experience
Thanks y'all

Only KBC can answer your questions with any accuracy.

However, I would imagine should you choose to reject the offer they have made they could consider repossession as it would show an unwillingness on your part to pay the mortgage.

flix1 · 07-11-2013 1:47pm

I guess they could could, but I'd rather consideration be given to more realistic options rather than just kicking the issue down the road. Bankruptcy is most likely the solution and one that is currently being prepared for, however just wondering if anyone has had any experience of the middle ground between these 2 solutions.

J.P.M · 07-11-2013 1:51pm

D3PO wrote: »

it wasn't advise it was an opinion.

somebody that cant pay their mortgage isn't in a position to dictate how their issue should be handled. If you want to control things the way to do it is to stick to your ogirginal agreement with the bank.

so if you or whoever refuses the split mortgage on no other basis than you don't like the idea of it (not a real solution) then what exactly is your counter proposal ? Let me guess debt writeoff so you get to keep your nice house and don't take any pain at all whilst the rest of the taxpayers in the country subsidise your lifestyle ?

Genuine question.

Really? ITG

D3PO · 07-11-2013 2:10pm

flix1 wrote: »

I guess they could could, but I'd rather consideration be given to more realistic options rather than just kicking the issue down the road. Bankruptcy is most likely the solution and one that is currently being prepared for, however just wondering if anyone has had any experience of the middle ground between these 2 solutions.

what middle ground are you referring to ?

JimiTime · 07-11-2013 2:14pm

flix1 wrote: »

Hi there,
I'm curious has anyone been offered a split mortgage and refused it on the grounds that the solution offered by the bank does not represent a real solution, it merely puts off a problem till you are 80. If you did...what happened? especially with KBC customers.

Id love to hear your experience
Thanks y'all

Unfortunately I can't offer any experience, but is this not what the personal insolvency thing was supposed to sort out? I hope you get something sorted for yourself.

Eldarion · 07-11-2013 2:18pm

flix1 wrote: »

I guess they could could, but I'd rather consideration be given to more realistic options rather than just kicking the issue down the road. Bankruptcy is most likely the solution and one that is currently being prepared for, however just wondering if anyone has had any experience of the middle ground between these 2 solutions.

The split mortgage IS the middle ground you're looking for between those 2...

I think the bank has gone above and beyond what they need to do in such instances, no one forced anyone into such arrangements. What kind of solution are you looking for? Debt write off?

Can I borrow 100k from you to buy an Audi A8? Then in a few years can we forget half the debt since it's not worth the same as what I paid for it? I think we should be able to find a middle ground here somewhere...

djimi · 07-11-2013 2:26pm

My understanding of a split mortgage is that they cut the amount owed in two; you continue to pay one half for the agreed term and the other half if then owed in full at the end - is this correct?

I can see where you are coming from with your concerns, but to honest it doesnt sound like a bad compromise. I would assume the aim of such an agreement is that at some point in the not too distant future you would hopefully be in a position to start paying more off the mortgage, so you can be in a position to sort out the remainder before it has to be repaid in full?

Its a fairer solution than suggesting reductions or anything like that.

D3PO · 07-11-2013 2:34pm

djimi wrote: »

My understanding of a split mortgage is that they cut the amount owed in two; you continue to pay one half for the agreed term and the other half if then owed in full at the end - is this correct?

I can see where you are coming from with your concerns, but to honest it doesnt sound like a bad compromise. I would assume the aim of such an agreement is that at some point in the not too distant future you would hopefully be in a position to start paying more off the mortgage, so you can be in a position to sort out the remainder before it has to be repaid in full?

Its a fairer solution than suggesting reductions or anything like that.

that's exactly the concept Djimi.

The idea being that hopefully the borrower will be in an improved position in future to tackle the second half of the mortgage, or with the reducing capital on the first portion plus what would be hoped appreciate of the asset over the medium term even just inflationary that the second half can be tackled in the future.

Clearly the figures and detail would determine if its viable as it wont be 100% of the time but I find it hard to belive the bank would offer it in a scenario where its completely unrealistic as a restructuring alternative.

and even if it is borderline its sure as hell a better option than letting an arrears buildup continue.

Id question if the OP is right in their assertion that the deal on the table isn't representative of a real solution and its certainly better than their as is solution, but if they believe something else exists that is more mutually beneficial then Im all ears and have asked twice in the thread but they refuse to answer.

meaning to me that this is the best solution that addresses both parties needs and if the OP isn't happy with it it means that they need to find a solution that just addresses their need i.e bankruptcy

djimi · 07-11-2013 2:43pm

If bankruptcy is the alternative then surely the smart move is to accept these terms and deal with the possibility of bankruptcy at the end of the mortgage term if you still cant clear the amount owed? If nothing else, it buys more time and keeps you out of bankruptcy, which should be the number one aim above all others I would have thought?

professore · 07-11-2013 2:43pm

whippet wrote: »

Only KBC can answer your questions with any accuracy.

However, I would imagine should you choose to reject the offer they have made they could consider repossession as it would show an unwillingness on your part to pay the mortgage.

They won't consider repossession until they are sure that you can't or won't pay and they can sell your house for more than the outstanding amount. Otherwise it blows a hole in their balance sheet.

I think with this split mortgage they will get the poor suckers paying something, then when inflation / the next housing bubble comes along, they will ask for the full amount of the "parked" part and those who can't pay up will be on the side of the road.

professore · 07-11-2013 2:45pm

djimi wrote: »

If bankruptcy is the alternative then surely the smart move is to accept these terms and deal with the possibility of bankruptcy at the end of the mortgage term if you still cant clear the amount owed? If nothing else, it buys more time and keeps you out of bankruptcy, which should be the number one aim above all others I would have thought?

Have a clean slate after 3 years vs paying back a debt until you die (and possibly your children)? I know which one I'd choose !!!!!

professore · 07-11-2013 2:47pm

Eldarion wrote: »

Can I borrow 100k from you to buy an Audi A8? Then in a few years can we forget half the debt since it's not worth the same as what I paid for it? I think we should be able to find a middle ground here somewhere...

If you have no means of paying it back, has the lender no responsibility for lending the 100K to you in the first place? Are they blameless and protected fully by the law, regardless what they do, while you are followed for the rest of your life? See I wouldn't lend you 100K, there's the difference.

D3PO · 07-11-2013 2:50pm

professore wrote: »

They won't consider repossession until they are sure that you can't or won't pay and they can sell your house for more than the outstanding amount. Otherwise it blows a hole in their balance sheet.

Repossession doesn't blow a hole in their balance sheet. Writing off debt from whatever is left after the sale of the repossession does ... which they don't have to do.

Which the bank wouldn't do unless they genuinely cannot see any other way forward.

I think with this split mortgage they will get the poor suckers paying something, then when inflation / the next housing bubble comes along, they will ask for the full amount of the "parked" part and those who can't pay up will be on the side of the road.

How does that make them suckers ? If as you suggest inflation would allow full repayment in the future then its incumbent on the bank to take this approach as its a sustainable solution whereby they wont los eout financially.

It also means the mortgage holder has a long term workable solution and gets to keep their home ...

D3PO · 07-11-2013 2:52pm

professore wrote: »

Have a clean slate after 3 years vs paying back a debt until you die (and possibly your children)? I know which one I'd choose !!!!!

Firstly you would have life assurance which would clear the outstanding mortgage in the event of a debt. Secondly a debt cannot be passed onto your children, there may be no estate to divvy up if there was debt but there equally would be nothing for their children to pay.

D3PO · 07-11-2013 2:53pm

professore wrote: »

If you have no means of paying it back, has the lender no responsibility for lending the 100K to you in the first place? Are they blameless and protected fully by the law, regardless what they do, while you are followed for the rest of your life?

Yes that's the long and short of it. The onus is on the borrower.

We don't offer non recourse mortgages. Knowing what that means would mean that you may make a more meaningful contribution to this thread as all your comments unfortunately indicate you really don't know how mortgages work in this country.

professore · 07-11-2013 2:59pm

D3PO wrote: »

How does that make them suckers ? If as you suggest inflation would allow full repayment in the future then its incumbent on the bank to take this approach as its a sustainable solution whereby they wont los eout financially.

It also means the mortgage holder has a long term workable solution and gets to keep their home ...

You ignored my point about the bank waiting until IT MAKES FINANCIAL SENSE for them to demand repayment in full. The bank is not a charity - so don't paint the deal it is offering as some sort of charity.

musicfan1ie · 07-11-2013 2:59pm

professore wrote: »

If you have no means of paying it back, has the lender no responsibility for lending the 100K to you in the first place? Are they blameless and protected fully by the law, regardless what they do, while you are followed for the rest of your life? See I wouldn't lend you 100K, there's the difference.

You miss the point of a mortgage. By your logic, no bank would ever grant a mortgage. Say I earn 50k for this mortgage of 100k. I can comfortably repay this so long as I have a job. Anybody can lose a job, regardless of their salary or stage of career. Potentially, this mortgage falls into arrears. The bank can't foresee this, neither can the borrower.

djimi · 07-11-2013 2:59pm

professore wrote: »

Have a clean slate after 3 years vs paying back a debt until you die (and possibly your children)? I know which one I'd choose !!!!!

Its not exactly an easy three years though is it, and correct me if Im wrong but your record of bankruptcy doesnt just go away once your debts are cleared?

djimi · 07-11-2013 3:02pm

professore wrote: »

If you have no means of paying it back, has the lender no responsibility for lending the 100K to you in the first place? Are they blameless and protected fully by the law, regardless what they do, while you are followed for the rest of your life? See I wouldn't lend you 100K, there's the difference.

This is one of those things that has really annoyed me the past few years. Why would the lender have any responsibility towards you for lending you the money? Did they do so with a gun to your head? Ultimately the borrower is the one who went to the lender to borrow X amount, and ultimately it is up to them to ensure that they can pay it back. It might sound harsh, but its the reality.

professore · 07-11-2013 3:03pm

D3PO wrote: »

Yes that's the long and short of it. The onus is on the borrower.

We don't offer non recourse mortgages. Knowing what that means would mean that you may make a more meaningful contribution to this thread as all your comments unfortunately indicate you really don't know how mortgages work in this country.

I certainly do know how they work. I'm making the point that it's a ridiculous situation that the banks have some sort of exalted position compared to other businesses in Ireland. No other company directors could have acted so irresponsibly with no criminal consequences as the banks did. It was the very definition of reckless trading.

“297A.—(1) If in the course of winding up of a company or in the course of proceedings under the Companies (Amendment) Act, 1990 , it appears that—

(a) any person was, while an officer of the company, knowingly a party to the carrying on of any business of the company in a reckless manner; or

(b) any person was knowingly a party to the carrying on of any business of the company with intent to defraud creditors of the company, or creditors of any other person or for any fraudulent purpose;

the court, on the application of the receiver, examiner, liquidator or any creditor or contributory of the company, may, if it thinks it proper to do so, declare that such person shall be personally responsible, without any limitation of liability, for all or any part of the debts or other liabilities of the company as the court may direct.

(2) Without prejudice to the generality of subsection (1) (a), an officer of a company shall be deemed to have been knowingly a party to the carrying on of any business of the company in a reckless manner if—

(a) he was a party to the carrying on of such business and, having regard to the general knowledge, skill and experience that may reasonably be expected of a person in his position, he ought to have known that his actions or those of the company would cause loss to the creditors of the company, or any of them,

djimi · 07-11-2013 3:06pm

professore wrote: »

I certainly do know how they work. I'm making the point that it's a ridiculous situation that the banks have some sort of exalted position compared to other businesses in Ireland. No other company directors could have acted so irresponsibly with no criminal consequences as the banks did. It was the very definition of reckless trading.

I think you are starting to veer off into irrelevant territory here. What has banks reckless trading got to do with how much people were borrowing from banks and their ability to repay it?

professore · 07-11-2013 3:07pm

musicfan1ie wrote: »

You miss the point of a mortgage. By your logic, no bank would ever grant a mortgage. Say I earn 50k for this mortgage of 100k. I can comfortably repay this so long as I have a job. Anybody can lose a job, regardless of their salary or stage of career. Potentially, this mortgage falls into arrears. The bank can't foresee this, neither can the borrower.

That's why the house is there, it can be repossessed. That's what person giving you the loan is supposed to be skilled in - risk assessment. Force people to take out loss of income insurance? Bankruptcy is always a possibility?

professore · 07-11-2013 3:09pm

djimi wrote: »

I think you are starting to veer off into irrelevant territory here. What has banks reckless trading got to do with how much people were borrowing from banks and their ability to repay it?

How were they able to borrow from the banks in the first place? Fair enough, a couple or individual with a good savings record and good career prospects given a reasonable mortgage amount - by all means pursue them to the nth degree. But the case of johnny bricklayer left school at 16 to work on the buildings, giving him a mortgage for €350K? Please !!! You're telling me he's the irresponsible one?

djimi · 07-11-2013 3:13pm

professore wrote: »

How were they able to borrow from the banks in the first place? Fair enough, a couple or individual with a good savings record and good career prospects given a reasonable mortgage amount - by all means pursue them to the nth degree. But the case of johnny bricklayer left school at 16 to work on the buildings, giving him a mortgage for €350K? Please !!! You're telling me he's the irresponsible one?

Yes, I am. The borrower should know if they can repay the mortgage or not, and the risk involved if their circumstances should change for the worse. If you are earning €25k a year and you get offered a mortgage of €350k (hypothetically of course) then you are the one who is agreeing to the repayment conditions, so its up to you know if you can afford them. Not the bank or anybody else. People need to start taking responsibilities for their actions.

Refusing a split mortgage?

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