BOI have declared my mortgage 'unsustainable' but I am not in arrears

Danmo said:

That's a pity Pat2 and must have been very disappointing after jumping through all those hoops. I wonder if anyone makes it through the process successfully. There's not much about it on the web...

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Just one from a number of false starts to solutions but sure that's the nature of the beast.

I believe around 100 have got across the line. No harm in giving it a try, nothing to say you won't make it 101! Here's some information I had saved, it's a little dated but might provide some idea of the workings. The second link is very insightful.

http://www.housing.ie/Housing/media/Media/Mortgage to Rent Scheme/Mortgage-to-Rent-Scheme.pdf

[broken link removed]

Thanks.

Hi Danmo

This is a very frustrating case.

The Central Bank rules are probably preventing Bank of Ireland from offering you a sustainable solution. When they run the figures, they show that your mortgage is unsustainable, so they must tell you that. As far as I am concerned, you are a perfect candidate for interest only - indefinitely.

€[email protected]% = €9,300 a year or €770 per month.
You are paying this and therefore there is no advantage to the lender in repossessing your home.

Continue paying it and don't worry too much about it. I have been visiting the courts recently, and out of over 400 cases, we saw oly two repossessions where the borrower actually showed up in court. And they had paid nothing at all since 2011 and 2012.

One woman who showed up had paid nothing at all, not a red cent, since 2009, and had her case adjourned.

You may get a letter from their solicitor telling you that they will be issuing proceedings. If you do, then write back saying that you are not in default and you are paying the agreed repayments in full.

Bear in mind that you may at some stage appear in court. Make sure that you have built up a very good file. Based on what we have seen, you are in no danger whatsoever of losing your home. You may get a lot of legal letters, you may even have to go to court, but you will not lose your home.

You should not be trying for Mortgage to Rent in my opinion either. You lose ownership of your home.

By the way, if you were paying Eurozone average interest rates, your interest would be €400 a month.

Brendan

Central bank has confirmed that interest only payments on a mortgage is a long term sustainable solution, tell the bank this, also tell them that no court in Ireland will grant a possession order against your principal residence if you can prove affordability of interest only payments. Tough luck Mr Bank.

advice said:

Central bank has confirmed that interest only payments on a mortgage is a long term sustainable solution, tell the bank this, also tell them that no court in Ireland will grant a possession order against your principal residence if you can prove affordability of interest only payments. Tough luck Mr Bank.

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That is correct but only in circumstances where "the sale of the property provides sufficient surplus funds on death to redeem the outstanding mortgage balance".

In other words, in order for lifetime interest-only payments to be considered a sustainable loan modification, the borrower must be in a position to demonstrate that:- (a) he/she will be in a position to meet the interest payments throughout their lifetime (in practice this means that there will have to be substantial accrued pension entitlements in place to meet the interest payments post-retirement); and (b) that there is sufficient equity in the relevant property to discharge the loan from his/her estate (normally this means that the borrower would have to be in positive equity at the time of the loan modification but if the borrower will be entitled to a lump-sum on retirement that would be sufficient to clear any negative equity then I don't see why this couldn't be taken into account under the Central Bank Guidelines)

I appreciate that Brendan is of the view that if a borrower can simply meet the interest payments on a mortgage at the time of the loan modification then that should be considered a sustainable mortgage. I happen to strongly disagree with this viewpoint but, more importantly, the Central Bank does not agree with Brendan's opinion that this arrangement constitutes a long-term sustainable mortgage.

Based on the facts as presented, I would have thought that the OP would have an uphill battle trying to demonstrate that his/her mortgage is sustainable once the current interest-only period comes to an end.

Edited to add: Apologies, I've just realised that the OP is currently making full principal and interest payments. For as long as that continues there's obviously no problem although I'm sure it's tough going. Would trading down to a smaller property be possible?

Hi Danmo ,

Any word back from IMHO?

Hi Robert
Better still. I got word from the Bank. They are looking at a longer term arrangement for me.