Repossession of Property - split with partner, joint names on mortgage

Hi, I wonder if someone has or is in the same position as me.

I bought a property back in 2008 for 275K, with my partner (now ex partner). We had two children together. I left the property in 2011, and partner stayed on in property. Partner continued to pay weekly towards the mortgage, but never the full monthly amount. In August 2013 all payments stopped. I have not contributed to the mortgage after I left, as I am renting privately.

I have always been in contact with the bank to ask if there is any possibility that they can force the sale of the house, but the answer was NO, I had to get agreement from my ex partner, which no doubt, the partner was not interested.

In July of this year I was served with a civil bill to start repossessing process. I went to the Circuit Court and it was postponed until November when the case will be heard.

The current arrears is approximately 54K. The bank phoned me 10 days ago to send in Financial Statements, even though I indicated that I will not contest the proceedings, I would like for the house to be sold, and whatever the shortfall is, of course I know that I am liable for half of that.

My questions are as follows:

1. The ex partner has never been in contact with the bank to make any sort of arrangement with them, however today I got a message to say an email is on the way to me, re the mortgage and requires and answer by Wednesday. This gives me the impression that the ex want's to continue staying in the house, but he want's me off the mortgage.

2. Can the bank/judge order that I be taken off the mortgage?

3. Is it necessary for me to have a Solicitor represent me, even if I am not contesting the repossession.

I will appreciate any advice you might have on this subject.

Thank you

Let's take these in order of simplicity

2) No, the judge cannot order that you be taken off the mortgage.

3) No, you don't need a solicitor to represent you and I see little advantage in getting a solicitor.

You should give the following information for a more comprehensive answer. It will stop us guessing.

Information required for mortgage arrears and negative equity questions

Income details
Net monthly: 1660euro permanent employee (private sector)
I was unemployed for 3 years, only started working this year April. I received 258 from social welfare weekly
Net monthly income partner/spouse: Public servant - approximately 2400 per month
Income history: Been in public service for approximately 12 years
Amount of child benefit received (Should be €130 per child) - €260 (two children, aged 7 and 5)
Amount of Mortgage Interest Supplement received (MIS is the social welfare payment to unemployed people, don't confuse with TRS) - NONE

Personal circumstances so we can calculate your reasonable living expenses The Insolvency Service has published Guidelines for Reasonable Living Expenses based on the family size, whether or not you need a car for work, childcare costs and other exceptional circumstances. By filling in this information, we (or you ) can calculate what your reasonable monthly living expenses should be.
One adult family or two adult family - one adult
Do you need a car for work or do you use public transport? yes, car required
Number of children 0- 2 years old: - Null
Number of 3 years old children:
Number of 4 - 11 years old: Two
Number of 12 - 18 years old:
Monthly childcare costs: 700
Montly spend on special circumstances: e.g. exceptional healthcare costs



Home loanLender: EBS
Amount outstanding: 295000
Value of home: 200000
Interest rate: specify whether tracker or SVR or fixed rate 3.95 svr
Monthly repayment 1200
Amount in arrears 54K

Summary of discussions and agreements with the banke.g. in Marp since Jan 2011 . No discussions, as had no agreement from ex partner, only that I have advised on numerous occasions that the house should be sold



Credit Union Amount of shares - none
Amount of loan outstanding - 15K
Monthly repayment - 100
Term left 10+ years


Other loans and creditors - delete those which don't apply to you
None

Other savings and investments
None

Do you expect any lump sums in the medium term future? Redundancy, inheritances, injuries awards.
No

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

I don't care about keeping the family home.


Any other relevant information

What is your preferred realistic outcome? : "I will never be in a position to repay the home loan. So I want to sell the house and deal with the shortfall"

Laurette said:

1. The ex partner has never been in contact with the bank to make any sort of arrangement with them, however today I got a message to say an email is on the way to me, re the mortgage and requires and answer by Wednesday. This gives me the impression that the ex want's to continue staying in the house, but he want's me off the mortgage.

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Hi Laurette

You will have to just wait and see what the letter says.

It's not clear. Are the two children your children or are they his children with someone else? Does he have a partner living in the house with him?

Hi Brendan, thanks so much.

We were together for 7 years, both the children are ours, and I have full custody, with him the guardian. Yes, he has a partner living with him in the property.

This is a difficult one.

You are not paying anything. You are not able to afford to pay anything. So it doesn't much matter to you what happens the house and the mortgage.


So I see no advantage to you in facilitating the repossession of the house. Quite the opposite in fact.

It's likely to be the cheapest option for him and for his partner to stay in the house and pay what they can on mortgage repayments. Presumably the cheapest option for him, is good for you, in that if he has cheap accommodation, he has more money available to pay maintenance. Likewise, if he has a decent house to live in, he has a place to mind his children.


Over time, the house may rise in value and clear the negative equity, which would be good for you. Or maybe his financial position will improve and he will be able to take over the mortgage in full.

If the house is sold, then you will be jointly and severally liable for the shortfall of €95,000. This means that it will hang over both of you for a very long time. It's not €47,500 each. It's joint and several. In other words, if you pay off half of it, you still owe the other half.

The temptation for most people in these situations is to make life as difficult as possible for the ex. Don't.

Now let's look at it from his point of view...
You are paying nothing towards the mortgage but you are still an owner of the property. If he keeps up repayments, eventually, the negative equity will disappear by a combination of capital repayments and price rises. Let's say that after 10 years, there is €20k equity. You will still own half the house. He will need your permission to sell it or get a new mortgage. So he probably wants you off the mortgage and off the title deeds. I don't really see what he can say in the email to you , except to ask you to help him to keep the house by not facilitating the repossession.

It's possible that his new partner might want to buy your share of the house and take over your share of the mortgage. If that happens, you should grab it with both hands. It's unlikely that the bank would allow this, unless his partner has a lump of cash with which to pay off the arrears.

The court is very unlikely to grant the lender an order for repossession
If you ex wants to keep the house, he will get to keep it simply by paying something to the lender and by showing up in court.

If he pays nothing and doesn't show up in court, and you do show up in court agreeing to the repossession, there is a small, but very small, chance that the court might grant an order.

Hi Brendan
Thank you for the comprehensive reply. I am glad I got in touch. I totally agree with you, I don't want them to repossess the house, and have no issues with him staying there, like you say I am still the owner of the house, no matter what happens, and after a couple of years there will be equity in the house, and if sold there will be something in it for both of us. The only thing that I am not willing to do,is to sign documents to say that he his fully responsible and that I have no comeback or a share in the house, because if he defaults, regardless of what I signed, the bank will still come after me for the money (am I correct here?). I hope you don't mind, but the minute I get this correspondence from him, I would like it if you can give me guidance.
Thanks

Laurette said:

,is to sign documents to say that he his fully responsible and that I have no comeback or a share in the house, because if he defaults, regardless of what I signed, the bank will still come after me for the money (am I correct here?)

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Correct, you would be liable.

However, if his girlfriend had the money to pay down the negative equity, it would be worth considering signing those documents. YOU can always make them conditional on him never going into arrears. For example, if the mortgage goes into arrears, then you retain your share in the house.

Brendan

Hi Brendan
I have received a notification from the ex partner, stating that he will be applying for a split mortgage. Please will you explain to me what the process is in regards to that. ie. Does my name get taken off the mortgage, if I agree? Have I got any recourse in getting back some of the mortgage payments that I made whilst I was in the property (3 years)? I am keen on your advice re the fact that there will be some equity in the house in years to come, so how would this effect me.

The projected shortfall (if repossession were to occur) is 95K + arrears of 54K = 149K that you are jointly and severally liable for.

Your name doesn't get taken off the mortgage if you agree to sign.

Recourse re. mortage repayments = no chance. You have arrears of 54K on a property currently worth 95K less than you paid for it!

In a split mortage a certain amount e.g. 100K will be warehoused for a certain amount of years which will eat into any equity that may eventually accrue.

Laurette said:

Have I got any recourse in getting back some of the mortgage payments that I made whilst I was in the property (3 years)?

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This is all irrelevant now. That is history. The only relevant figures are the current value €200k and the current mortgage balance €295k. ( I assume that this includes arrears.)

You occupied the house while you made those repayments, so you got value for them.


I have received a notification from the ex partner, stating that he will be applying for a split mortgage. Please will you explain to me what the process is in regards to that. ie. Does my name get taken off the mortgage, if I agree?

Let's say that the lender agrees to a split mortgage of €200k active and €95k warehoused interest free. That means they won't charge any interest on the €95k and he won't have to make any repayments on it. But you will both continue to owe that money.

A split mortgage will pay off the mortgage at a slower rate than full repayments.

But a split mortgage is a lot better than immediate repossession, so you should facilitate it.

Brendan