Wife not a borrower, should her details be filled in on SFS ?

A married couple have their own principle dwelling mortgage free. About 8 years ago the husband borrows money in his own name for an investment property, now in arrears and negative equity. He has been asked by the bank to fill out a SFS ( Standard Financial Statement ). The SFS asks for details of household expenditure and income of both people, not just the borrower. Relations between the couple are not great, and while co-habiting, the husbands borrowings and other problems have put a strain on the marriage. Should the husband put the wifes income on the sfs? Has not the wife the right to keep her modest income to herself without bailing out the husband, when she is not a borrower? The bank do not have the couples dwelling house as security, only the husbands investment property.

The following could happen

The lender could repossess the investment property and sell it.

The husband then owes the shortfall e.g. €100k

The bank can then register a judgement against the family home, and seek its sale.

Let's say it's sold for €400k. She will get €200k, the bank will get the €100k and he will get €100k.

So it really depends on what they want to do. She has a full legal right to refuse to give any information. But the lender has no obligation to do a deal e.g. switch to interest only or hold off repossessing the property.

As always, it's a good idea to fill in the Case Study format to get a full answer.

Thanks for the reply.

Brendan Burgess said:

The bank can then register a judgement against the family home, and seek its sale.

Let's say it's sold for €400k. She will get €200k, the bank will get the €100k and he will get €100k.

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I did not think it likely that the bank would go to the expense and trouble of throwing the wife out of the family home when she was not involved in any borrowing, and in fact she has the deeds of the family home with her solicitor.

I suppose for the purpose of the SFS its no harm to disclose her income, as the payment of the household utility bills etc benefit them both.

I guess the question is will the bank expect her to support her husband financially the same as if it were a joint mortgage? If so, I could see them splitting up, might be the final straw. I think the best thing for her to do is go to a solicitor. Thanks anyway for your thoughts on it.

jimboy said:

I did not think it likely that the bank would go to the expense and trouble of throwing the wife out of the family home when she was not involved in any borrowing, and in fact she has the deeds of the family home with her solicitor.

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Well there's a lot of assumptions there. In my opinion banks are getting tougher and are going to start going after equity in houses one of these fine days.

My advice is to fill out the SFS jointly as it's a nonsense that the income of both is not going to pay the joint expenses of the household.

Of course there is nothing stopping them selling the house, and her buying a house in her own name out of the proceeds, unless of course it was done to thwart the bank, that's what I would be asking a solicitor about. What can and cannot be done. Entrenched positions are not ideal, not where there is a family home and a marriage at stake, all for one and one for all etc. Husband must be under immense stress.

But I would try and negotiate that the investment debt is treated like a mortgage and the husband pay it back over time, which is what they are presumably at trying to figure out the family finances.

(Actual figures might be an idea to post up so we can see what is the real financial impact)

Not obliged to do so as technically, she is not a party to the loan so the lender has no right to demand her financial information.

That said, if he is looking to come to an arrangement and needs to demonstrate affordability, then he will need to outline her contribution to the household expenditure.

One option would be to volunteer to sell the property on behalf of the bank and then offer a lump sum full and final settlement payment towards the shortfall. Certain Banks are accepting informal once off payments or lump sum PIAs. Anthony Joyce is a good man to talk to for this arrangement. The lump sum is usually a fraction of the shortfall amount e.g. 15k on 200k shortfall.

The Bank would never get a Court in this Country to allow it to sell the family home, as the wife has the protection of the family home protection act 1976. I was wondering what collateral did the husband use to obtain the loan, have the couple children, this would allow me to identify solutions to their current situation, there are many options open to the husband at the moment.