voluntary sale for loss

I am hoping someone can offer some advice as we are in a difficult situation.

We have a property which was a Btl and is in negative equity. We have been on interest and part capital repayments for the past few years. We both encountered job difficulties and moved to a non EU country 2 years ago.There is about 7k arrears at present.

The bank have now deemed the mortgage unsustainable. They have sent us (they have a correspondence address for us as we were co-operating with them) a voluntary sale for loss offer. The minimum sale proceeds the offer says we need to pay out at closing is 240k. The estate agent has now advised the house is only worth 205k.

The bank say if we don't get the 240 they MAY revise the offer. We owe about 250k. I told them (prior to receiving the estate agents valuation that I thought their minimum sale proceeds figure was unrealistic). Problem is we are very reluctant to sign the offer and send back confirming we will pay the 240 when it now looks like we won't get that much.
I am afraid the bank will hold us to it and we don't have a lump sum to make up the difference.

Once they have the signed offer I think it is likely they will be vague over any requested variations to the offer and then when we have contracts signed for the sale probably for 205/210k or so they will hold us to the 240 and we will be left in a real bind.

I am wondering if we would be better off just doing a voluntary surrender and let them chase us for any shortfall, that way we won't have to worry about them holding us to an agreement we can't fulfill.

I just don't trust them. Case manager not v approachable. It seems crazy to sign up to something that you know in advance is not going to be achievable.

We have 3 kids and we just want to move forward and make the most of what has been a difficult move abroad due to necessity.TIA

1) You should edit your post to make it more readable. Paragraphs help break up big blocks of text.

2) "I am wondering if we would be better off just doing a voluntary surrender and let them chase us for any shortfall, that way we won't have to worry about them holding us to an agreement we can't fulfill."

Signing the agreement does not change your liability in any way. In fact, it might limit it to €240k.

Doing a voluntary surrender means that it will take them some time to sell it and it won't get as much as an orderly voluntary sale. Your deficit will be much bigger and it will hang over you.

A voluntary sale is always much better than a voluntary surrender.

3) You should complete the following to get comprehensive advice

Information required for mortgage arrears and negative equity questions

For example, if you have a cheap tracker mortgage, then you are paying down the capital fairly quickly and may be out of negative equity before they manage to repossess the property.

Thanks for the reply Brendan and your suggestions.

The offer states that the shortfall is paid out at the tracker rate at 150 per month or so.

I am concerned that they will hold us to the 240k at closing before they agree to release the property and we will only have 205/210 to give and hence we could potentially be used by the purchaser to close but the bank will have us over a barrel.

As I said, you should fill this in

Information required for mortgage arrears and negative equity questions

As it's a tracker, you are paying off the capital very quickly, so a voluntary sale is unlikely to be a good financial decision.