EBS Advice Please : No Arrears : EBS not offering long term resolution

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minus_equity

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Hello,

I'm just seeing if I can get advice from people on this forum. My mortgage is no longer affordable, since my wife had to give up work due to ill health.

I submitted an SFS at the start of the year, with IMHO as the middleman dealing with EBS. The upshot of that is the bank has offered us a year long interest only forbearance period. The bank says they cannot offer us a long term solution yet because we are not already in arrears.

I am not happy with this because, there is no certainty about whether EBS will offer us a longterm solution after the 1 year forbearance period. I will then have to submit an SFS again and go through the process again. The IMHO agent advised that because of laws brought in by Joan Burton, the banks cannot offer us a long term plan until after this year long period Is this true? I feel like the bank is kicking the problem down the road just because we are not in arrears already.

Income details
Net monthly (i.e. after tax) Income self:
Net monthly income partner/spouse: nature of income
Income history: €3320
Amount of child benefit received: €260
Amount of Mortgage Interest Supplement received (MIS is the social welfare payment to unemployed people, don't confuse with TRS)

2 Adult Family, 1 Income
1 car needed for work
Number of children 0- 2 years old:1
Number of 3 years old children: 1

Monthly childcare costs: N/A my wife is looking after the children in the home




Home loanLender:EBS
Amount outstanding: 321,000
Value of home: 130,000
Interest rate: SVR
Monthly repayment 1650
Amount in arrears 0

Currently in 1 year interest only plan with EBS



How important is retaining the family home to you? Which of the following best describes your situation?

I am in an apartment with 2 kids. We are hopelessly in negative equity with no prospect of being able to sell the apartment in the medium term. Ideally we would like to move into a house. I would rather rent a home than try to continue pay a mortgage on the apartment
 
What long term resolution would you propose?

How much are you paying each month at present? Are you making the full repayment?

At first sight, it seems that a voluntary sale would be the best option for you. EBS is one of the few banks which is doing deals on the shortfall. I think you should agree that your mortgage is not sustainable and sell the apartment.

How much will it cost you to rent a home suited to your needs?

Brendan
 
Is it true that a bank cannot offer a long term solution until one is in arrears? Surely not. Is it not better to tackle the problem once they know about it rather than complicating it by arrears?

How many years left on the mortgage?
What is the earner's age?

Based on what you've posted, selling and renting would be the best solution. There is too much NE, property is not suitable for a family, mortgage is unsustainable.
 
Thanks for your responses.

Brendan my monthly repayments up until recently were €1650. I have just been offered an one year interest only option which will mean my monthly repayments will be €1064 from now on. I am making the full repayments and have never been in arrears at great cost to our living standards. 3 bed semis in my area seem to rent for around 1200 to 1300 pm. I was told that if I sold the apartment I would be pursued for the remainder. Regarding a long term solution: I would like an extended period of time (5-6 years) of reduced payments to allow us to improve our financial situation, make savings, reduce capital etc. At the end of that period we would hope to improve our situation financially ie. my wife can work part-time, reduced childcare costs because the children are older. At the end of that period we may be able to sell with a more manageable remainder.

Bronte: 27 years left on mortgage. Earner is 36

shweeney: I purchased the 2 bedroom duplex apartment in 2006 for 370,000. A similar unit in the complex sold for 130,000 recently.
 
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A friend of mine is using IMHO to sell house and Grant Thornton will then work out lump sum PIA amount towards writing off the balance - EBS pay for IMHO / Grant Thornton. This works if some family member can provide the lump sum.
 
Thanks epicaricacy. Regarding the lump sum PIA, could that be paid back over a number of years. Assuming a 150,000 would be remaining after a sale, what kind of lump sum would be acceptable.
 
minus_equity said:
I submitted an SFS at the start of the year, with IMHO as the middleman dealing with EBS. The upshot of that is the bank has offered us a year long interest only forbearance period.
Click to expand...

What is IMHO's advice to you overall?

On rereading this, it seems clear to me that this apartment is not suited to your needs and is in hopeless negative equity. You will never be able to buy a home, so your credit record is not that important to you.

I think you should ask IMHO about a voluntary surrender, shortfall deal, PIA or even bankruptcy.

Brendan
 
minus_equity said:
Thanks epicaricacy. Regarding the lump sum PIA, could that be paid back over a number of years. Assuming a 150,000 would be remaining after a sale, what kind of lump sum would be acceptable.
Click to expand...

Grant Thornton suggested a full and final lump sum PIA of 20 - 25K on a projected shortfall of 100 - 120k (He hasn't made a decision as of yet regarding the sale of his house). My friend is in the fortunate postion that he can source the lump sum from a family member. My friend contacted IMHO and explained his circumstances re. his wish to sell the family home. IMHO then referred him to Grant Thornton for an initial telephone consultation in which proposed figures were discussed. Why not contact the IMHO and see if they will put you through to Grant Thornton? They might agree that a 5 year PIA is a runner? All of this can be arranged prior to you having to make any final decision and it's free of charge!!! It's a no brainer really. The advantage of the family / friend LUMP SUM PIA over the 5 year option is that it's all over there and then and you can re-start your life.
 
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Thanks epicaricacy

Hi Brendan, IMHO was talking about 6 years of reduced payments based on affordability. The repayments would be mostly on the capital. The idea is that things should have improved by the end of that period: capital reduced, improved prices, my wife may be able to return to work etc We would be in a better position to sell the apartment then.

I was put off doing a shortfall deal as I would be pursued to the max of my affordability for the shortfall for 5 years, so that in addition to rent would be tight.

However, according to your information a shortfall deal may be more reasonable. One question; I would like to retain an outside chance of purchasing house, If I enter PIA is that ruled out?
 
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