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Refusing a split mortgage?

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24

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    #32
    professore
    Closed Accounts Posts: 5,857 ✭✭✭professore


    Back on topic.

    Look, I'm a big believer in personal responsibility and paying your debts. But if you cannot pay your debts, there has to be another option. It shouldn't be easy, but it should be there.

    A 3 year bankruptcy would seems the best option to me, if I were in that situation (thankfully not) and better than a "death by 1000 cuts" split mortgage. Also I simply would not trust the bank, there is nothing or no-one going to stop them doing something like taking your home in a few years time when it's worth more to them to do so. The previous years have shown they can literally get away with anything.

    Also the banks are partially culpable in this mess. So they should be open to get some of their money back.


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    #33
    flix1
    Registered Users Posts: 117 ✭✭flix1


    I'd like to thank you all for you input. So it may be helpful to explain. There is an overtone in some of these messages that appears to indicate that I'm trying to strategically default. The reality of it is job loss....I lost my job. When I bought the house, I could and did repay it regularly, on time and in full. I was lucky enough to find work that pays so low that I can't even meet the interest only requirements. The bank wants me to do the split mortgage, they dictated the amount of the split and how much I need to pay. The reality is that I can't even meet this amount. I now have a baby as well, so my circumstances have financially got worse. My question is that yes I'm prepared to go bankrupt...this is the most obvious solution at this stage. However I was hoping that there may be an option somewhere between this 'split' mortgage solution and bankruptcy. I don't want to go straight to bankruptcy as my first resort. Id appreciate more advice..and less judgement.


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    #34
    professore
    Closed Accounts Posts: 5,857 ✭✭✭professore


    djimi wrote: »
    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.

    So should the lender. At the end of the day, if our hypothetical case above loses his job, and goes on the dole for the rest of his life, there is no way he can repay the mortgage barring some miracle. I'm not arguing that he shouldn't have to pay it back - just that he can't. Bank has to take a hit in that case.


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    #35
    djimi
    Registered Users Posts: 13,237 ✭✭✭✭djimi


    professore wrote: »
    So should the lender. At the end of the day, if our hypothetical case above loses his job, and goes on the dole for the rest of his life, there is no way he can repay the mortgage barring some miracle. I'm not arguing that he shouldn't have to pay it back - just that he can't. Bank has to take a hit in that case.

    But why should the bank have to take a hit? I know that ultimately they probably will, but why shouldnt they be able to do everything legally in their power to reclaim every penny they are owed?

    The way I see it, its not different to any other financial transaction. If I have a BMW dealership and someone comes in looking to buy a car for €80k, do I have any responsibility to them to ensure that they can afford it? I dont see how its any different for a lender selling mortgages.


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    #36
    professore
    Closed Accounts Posts: 5,857 ✭✭✭professore


    flix1 wrote: »
    I'd like to thank you all for you input. So it may be helpful to explain. There is an overtone in some of these messages that appears to indicate that I'm trying to strategically default. The reality of it is job loss....I lost my job. When I bought the house, I could and did repay it regularly, on time and in full. I was lucky enough to find work that pays so low that I can't even meet the interest only requirements. The bank wants me to do the split mortgage, they dictated the amount of the split and how much I need to pay. The reality is that I can't even meet this amount. I now have a baby as well, so my circumstances have financially got worse. My question is that yes I'm prepared to go bankrupt...this is the most obvious solution at this stage. However I was hoping that there may be an option somewhere between this 'split' mortgage solution and bankruptcy. I don't want to go straight to bankruptcy as my first resort. Id appreciate more advice..and less judgement.

    Sorry to hear that OP. My advice: just tell them what you just said here. If they say "no" then go bankrupt. That's your "big stick" and the last thing they want. It's like looking for a pay rise and not getting one until you get a job offer somewhere else.

    Unfortunately you will lose your house but at the end of the day, it's only a house. It will give you a chance for a fresh start.

    Good luck!


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    #37
    professore
    Closed Accounts Posts: 5,857 ✭✭✭professore


    djimi wrote: »
    But why should the bank have to take a hit? I know that ultimately they probably will, but why shouldnt they be able to do everything legally in their power to reclaim every penny they are owed?

    The way I see it, its not different to any other financial transaction. If I have a BMW dealership and someone comes in looking to buy a car for €80k, do I have any responsibility to them to ensure that they can afford it? I dont see how its any different for a lender selling mortgages.

    None of you have obviously ran a business. IF you go for all or nothing with people in trouble you'll mostly end up with nothing.


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    #38
    djimi
    Registered Users Posts: 13,237 ✭✭✭✭djimi


    flix1 wrote: »
    I'd like to thank you all for you input. So it may be helpful to explain. There is an overtone in some of these messages that appears to indicate that I'm trying to strategically default. The reality of it is job loss....I lost my job. When I bought the house, I could and did repay it regularly, on time and in full. I was lucky enough to find work that pays so low that I can't even meet the interest only requirements. The bank wants me to do the split mortgage, they dictated the amount of the split and how much I need to pay. The reality is that I can't even meet this amount. I now have a baby as well, so my circumstances have financially got worse. My question is that yes I'm prepared to go bankrupt...this is the most obvious solution at this stage. However I was hoping that there may be an option somewhere between this 'split' mortgage solution and bankruptcy. I don't want to go straight to bankruptcy as my first resort. Id appreciate more advice..and less judgement.

    Have you tried negotiating a lower repayment rate with regards to the split mortgage? It doesnt seem very smart of them to suggest a solution like this and then demand terms that cant be met.


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    #39
    djimi
    Registered Users Posts: 13,237 ✭✭✭✭djimi


    professore wrote: »
    None of you have obviously ran a business. IF you go for all or nothing with people in trouble you'll mostly end up with nothing.

    Im not talking about the practicalities of chasing money; Im well aware that it may require a negotiation in order to get paid.

    My main gripe is with this attitude that a lot of people seem to have that the banks gave the money out so they should be partially responsible if it cant be repaid. Its not a right that any borrower has to ever expect their debt to be reduced just because they bit off more than they could chew initially.


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    #40
    lima
    Registered Users Posts: 1,239 ✭✭✭lima


    flix1 wrote: »
    I'd like to thank you all for you input. So it may be helpful to explain. There is an overtone in some of these messages that appears to indicate that I'm trying to strategically default. The reality of it is job loss....I lost my job. When I bought the house, I could and did repay it regularly, on time and in full. I was lucky enough to find work that pays so low that I can't even meet the interest only requirements. The bank wants me to do the split mortgage, they dictated the amount of the split and how much I need to pay. The reality is that I can't even meet this amount. I now have a baby as well, so my circumstances have financially got worse. My question is that yes I'm prepared to go bankrupt...this is the most obvious solution at this stage. However I was hoping that there may be an option somewhere between this 'split' mortgage solution and bankruptcy. I don't want to go straight to bankruptcy as my first resort. Id appreciate more advice..and less judgement.

    If the baby was planned then I have to say it is not a good thing to bring a child into your world. It seems in Ireland it''s 'Have a baby and worry about affording one after'


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    #41
    flix1
    Registered Users Posts: 117 ✭✭flix1


    lima wrote: »
    If the baby was planned then I have to say it is not a good thing to bring a child into your world. It seems in Ireland it''s 'Have a baby and worry about affording one after'

    I'd like to thank you for your helpful judgement of my life...how easy it is for you to sit at your computer and judge me. I'm sure you never found yourself in a spot of trouble where a bit of shared experience was helpful to you.


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    #42
    flix1
    Registered Users Posts: 117 ✭✭flix1


    djimi wrote: »
    Have you tried negotiating a lower repayment rate with regards to the split mortgage? It doesnt seem very smart of them to suggest a solution like this and then demand terms that cant be met.

    I haven't tried that yet. I received the communication today and I just don't know where to go from here. I don't know whether to go back to them and try to explain for the 100th time that this mortgage is not sustainable or just go straight to bankruptcy. I was really hoping that someone here may have found themselves in a similar situation.


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    #43
    Sleepy
    Registered Users Posts: 24,247 ✭✭✭✭Sleepy


    djimi wrote: »
    Have you tried negotiating a lower repayment rate with regards to the split mortgage? It doesnt seem very smart of them to suggest a solution like this and then demand terms that cant be met.
    All depends on the details.

    The OP could consider spending a few hundred a month on maintaining lifestyle to be necessary expenditure whereas, presumably, the person working out such expenses in the bank would be using a similar income/expenditure framework to that employed by the insolvency practitioners for their definition of "reasonable living expenses". Not saying that's the case but without a detailed income/expenditure and more, we're just taking the OP's word that the repayments on the split mortgage can't be met.


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    #44
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    Sleepy wrote: »
    All depends on the details.

    The OP could consider spending a few hundred a month on maintaining lifestyle to be necessary expenditure whereas, presumably, the person working out such expenses in the bank would be using a similar income/expenditure framework to that employed by the insolvency practitioners for their definition of "reasonable living expenses". Not saying that's the case but without a detailed income/expenditure and more, we're just taking the OP's word that the repayments on the split mortgage can't be met.

    precisely.

    Now Im not judging the OP or saying this is them but you hear people saying these are my basic expenses sky sports, internet et all included in them.

    Sorry but food, heat clothing and accommodation are your basic expenses everything else is a luxury

    and when I say food and clothing I mean aldi & pennys not Tesco and gucci as some people think are reasonable when they cant afford their other bills


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    #45
    djimi
    Registered Users Posts: 13,237 ✭✭✭✭djimi


    Sleepy wrote: »
    All depends on the details.

    The OP could consider spending a few hundred a month on maintaining lifestyle to be necessary expenditure whereas, presumably, the person working out such expenses in the bank would be using a similar income/expenditure framework to that employed by the insolvency practitioners for their definition of "reasonable living expenses". Not saying that's the case but without a detailed income/expenditure and more, we're just taking the OP's word that the repayments on the split mortgage can't be met.

    True. Im taking the OP on their word that when they say they cant afford it it is because there is no money there at all rather than there is no money there after Sky Sports has been paid for, several cinema trips have been taken care of and multiple Chinese takeouts enjoyed!


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    #46
    professore
    Closed Accounts Posts: 5,857 ✭✭✭professore


    djimi wrote: »
    Im not talking about the practicalities of chasing money; Im well aware that it may require a negotiation in order to get paid.

    My main gripe is with this attitude that a lot of people seem to have that the banks gave the money out so they should be partially responsible if it cant be repaid. Its not a right that any borrower has to ever expect their debt to be reduced just because they bit off more than they could chew initially.

    In ordinary circumstances I agree with you, but there are many cases in the last few years where this is not the case. The banks are holding back the whole country at the moment, they need to go through their books and do deals with the worst cases. Clearly the OP is one of these if he is prepared to go bankrupt. Otherwise they will end up with a flood of bankruptcies on their hands.

    It's not a moral argument I'm making - it's a practical one.


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    #47
    professore
    Closed Accounts Posts: 5,857 ✭✭✭professore


    djimi wrote: »
    True. Im taking the OP on their word that when they say they cant afford it it is because there is no money there at all rather than there is no money there after Sky Sports has been paid for, several cinema trips have been taken care of and multiple Chinese takeouts enjoyed!

    This I agree with.


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    #48
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    professore wrote: »
    In ordinary circumstances I agree with you, but there are many cases in the last few years where this is not the case. The banks are holding back the whole country at the moment, they need to go through their books and do deals with the worst cases. Clearly the OP is one of these if he is prepared to go bankrupt. Otherwise they will end up with a flood of bankruptcies on their hands.

    It's not a moral argument I'm making - it's a practical one.

    From a practical standpoint your not always correct though. In some cases the only debt a person who wants to go bankrupt will have is with their mortgage bank.

    In that case bankruptcy would be to the benefit of the bank as all asset sales outside of the house, potentially the second car, some furniture, shares etc would also find their way to them as well as possibly some of the bankrupted persons income for a period of years.

    They also would have no legal costs from a repossession so although they will still lose out they may lose less.

    Practical decisions aren't always black and white to say bankruptcy is the worst thing that could happen for a bank isn't factually correct. It may be , it may not.


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    #49
    flix1
    Registered Users Posts: 117 ✭✭flix1


    I spoke with the Personal Insolvency board and this is how things stand. My income is lower than the guidelines of personal expenditure, meaning that after Id be given my allowance to live on, there would be nothing left to repay to the bank...this may give you an idea of how things stand.


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    #50
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    flix1 wrote: »
    I spoke with the Personal Insolvency board and this is how things stand. My income is lower than the guidelines of personal expenditure, meaning that after Id be given my allowance to live on, there would be nothing left to repay to the bank...this may give you an idea of how things stand.

    by the sounds of it a split mortgage is of no use to you. That said there is no other option that would be of use either.

    Clearly bankruptcy sounds the best option if your income doesn't even meet the guidelines of personal expenditure in a bankruptcy hearing.


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    #51
    professore
    Closed Accounts Posts: 5,857 ✭✭✭professore


    D3PO wrote: »
    From a practical standpoint your not always correct though. In some cases the only debt a person who wants to go bankrupt will have is with their mortgage bank.

    In that case bankruptcy would be to the benefit of the bank as all asset sales outside of the house, potentially the second car, some furniture, shares etc would also find their way to them as well as possibly some of the bankrupted persons income for a period of years.

    They also would have no legal costs from a repossession so although they will still lose out they may lose less.

    Practical decisions aren't always black and white to say bankruptcy is the worst thing that could happen for a bank isn't factually correct. It may be , it may not.

    I would be surprised in that case that the bank would offer any deal; why would they? I suppose they would only offer a deal when bankruptcy is a worse option for them?


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    #52
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    professore wrote: »
    I would be surprised in that case that the bank would offer any deal; why would they? I suppose they would only offer a deal when bankruptcy is a worse option for them?

    Legally they have to offer a deal under MARP (Mortgage Arrears Resolution Process) . They have no say in the matter they have been mandated to by the Government in that regard.


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    #53
    flix1
    Registered Users Posts: 117 ✭✭flix1


    See that's it...I don't even know why the offered me this deal...it's there in black and white on my sfs...I can't make the repayments...even on interest only. I'm defaulting on other loans to pay the amount Im currently paying. I've explained all of this to them. I've been using credit cards and overdrafts to pay them but I've had to put a stop to that.


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    #54
    professore
    Closed Accounts Posts: 5,857 ✭✭✭professore


    D3PO wrote: »
    Legally they have to offer a deal under MARP (Mortgage Arrears Resolution Process) . They have no say in the matter they have been mandated to by the Government in that regard.

    In that case they offer a poor deal that they know won't be accepted?


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    #55
    Sleepy
    Registered Users Posts: 24,247 ✭✭✭✭Sleepy


    flix1 wrote: »
    I spoke with the Personal Insolvency board and this is how things stand. My income is lower than the guidelines of personal expenditure, meaning that after Id be given my allowance to live on, there would be nothing left to repay to the bank...this may give you an idea of how things stand.
    How do you intend to pay rent if you go bankrupt under those circumstances? Most rental prices aren't far off the mortgage cost for similar housing...


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    #56
    professore
    Closed Accounts Posts: 5,857 ✭✭✭professore


    flix1 wrote: »
    See that's it...I don't even know why the offered me this deal...it's there in black and white on my sfs...I can't make the repayments...even on interest only. I'm defaulting on other loans to pay the amount Im currently paying. I've explained all of this to them. I've been using credit cards and overdrafts to pay them but I've had to put a stop to that.

    See post #54 for a possible reason.


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    #57
    professore
    Closed Accounts Posts: 5,857 ✭✭✭professore


    Sleepy wrote: »
    How do you intend to pay rent if you go bankrupt under those circumstances? Most rental prices aren't far off the mortgage cost for similar housing...

    He states he has other debt too, this will be gone ... so any rent supplement he gets can be used for rent. He'll be in the same boat as anyone else on SW.


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    #58
    flix1
    Registered Users Posts: 117 ✭✭flix1


    Sleepy wrote: »
    How do you intend to pay rent if you go bankrupt under those circumstances? Most rental prices aren't far off the mortgage cost for similar housing...

    I have no idea. I was hoping we could move into a 1 bed somewhere, or push comes to shove...back to parents and see if we could get a mobile home or something...I honestly can't even think that far ahead...I don't know. I just don't know.


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    #59
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    professore wrote: »
    In that case they offer a poor deal that they know won't be accepted?

    They cant really do that as there is an in built dispute process if the deal they are offering you is unreasonable. However such a dispute process is no use to the OP.

    If they cant even meet the minimum criteria for income allowed as somebody who would go bankrupt the unfortunate facts are the OP's situation is so dire that there is no mechanism that can get them out of the hole they are in with the bank.

    The best course for the OP is to go bankrupt. Hit the rest button and start again. Its not all doom and gloom for the OP people fear bankruptcy more than they should.

    Although I accept in this country it is far too onerous and really needs to be updated.


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    #60
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    flix1 wrote: »
    I have no idea. I was hoping we could move into a 1 bed somewhere, or push comes to shove...back to parents and see if we could get a mobile home or something...I honestly can't even think that far ahead...I don't know. I just don't know.

    OP you will be ok there are social welfare mechanisms out there ot help. Rent allowance, hardship grants etc etc don't worry you wont end up on the street.

    Nor should anybody wish that to be the case. Theres no point in people rubbing things in here, hindsight is 20/20 you made an error and are suffering for it.

    Cut the cord reset things and get on with your life.

    I think your next step OP is to contact the bank in writing. Reject their proposal; for the split mortgage, advise them you will be filing for bankruptcy and see what happens.

    They will either come back with something else or let the process follow though.

    As obvious as it is, if you haven't already done so you need to get in touch with MABS (Money advice and budgeting service , & FLAC (Free legal advice centre)


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    #61
    professore
    Closed Accounts Posts: 5,857 ✭✭✭professore


    D3PO wrote: »
    Although I accept in this country it is far too onerous and really needs to be updated.

    I believe it was updated recently to 3 years instead of 12? I can't find any hard evidence online though, it's all encouraging you to go bankrupt in the UK, which takes 1 year due to the "onerous" Irish bankruptcy terms.


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