D-Day Looms Large for Pensioner (Cerebus Mortgage)

Negotiator

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'My mate Dave' is 72 and retired several years on a very modest income/pension and has an interest only mortgage with Cerebus (formerly BOSI) of circa €200k but due to be cleared in full in 12 months time at the end of the mortgage term. There is approx €75k positive equity on his home.

He has a pension fund of €225k that he has not drawn yet and is due to mature in a few years time. However this money is to see him and his wife out for the rest of his days which could be many years as they are both in very good health.

My question is this: Do you think Cerebus would make a lump sum settlement at a discount of the full mortgage given his age and low level of income?

Has anyone any experience dealing with Cerebus? Are they doing deals?

I don't want to get into a debate about the morality of looking for a discount on the loan etc so please only reply if you can answer the above questions. Thank you.

Term of Mortgage: 10yrs Interest Only Tracker to be cleared at the end of the term (due December 2016)
Mortgage Amount: €200k
Value of Home: €275k
Age of Borrower: 72yrs Old
Willing to Offer: 60% of outstanding loan or €10k per year capital and interest until loan is cleared or home is sold after death of both him and his wife!


Any suggestions based on the above are most welcome. Much appreciated.

N
 
Where were the funds to come from originally when the mortgage was approved, the bank would have lent on the basis of funds being available to clear the mortgage in full after the completion of the interest only period so where are these funds now ?

Cannot see a deal, the monies are owing and the borrower knew this day was coming, that said a cheeky offer might get you somewhere after a long period of activity with the banks recovery and or legal people.
 
There have been no reports on here that discounts of the type suggested are being agreed in settlement of BOSI mortgages. Wishful thinking I'm afraid.
 
Thanks for the replies.

Good question on where the funds were to come from but at the time he would have had a decent income from his business but that dried up entirely around 2010. Even if he was to give up his entire pension pot it would only cover half of the mortgage after tax and leave him with nothing more than a state pension!

Thanks again for your input.

N
 
Approach your lender now well in advance of maturity to explore options, don't continue to ignore this as you say D day is looming for your pal and best to get agreement Asap on this one, especially given age etc, if he dies he may leave an unholy mess.

Also at 72 that pension pot must have matured, he must have access to that today.
 
Approach your lender now well in advance of maturity to explore options, don't continue to ignore this as you say D day is looming for your pal and best to get agreement Asap on this one, especially given age etc, if he dies he may leave an unholy mess.

Also at 72 that pension pot must have matured, he must have access to that today.

Thanks Palerider. I'm totally with you, the sooner he engages and moves towards a solution the better. I think he does have access to the pension pot but has rolled it up for another few years. Not exactly sure how it works but I do think he can access it now anyway. It just makes much more sense to withdraw the pension over time to minimize the tax liability and get more out of it.
 
Cerebus are being paid interest on a home in positive equity.
With the proper approach I think they would not (force) it and would be amenable to a sensible arrangement on the lines of interest + some principal.
Sense tells me they wouldn,t force sale on two pensioners.
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Can,t see how the k225 is a normal pension fund ? . Probably what is called an AMRF and he will have to take 5 % out per year.(am not 100% sure but other AAM can advise)
If its a pension( pot ) it can give them circa yearly income circa 20,000+ so along with old age pension I can see both they and Cerebus coming out ok.

Eg If cerebus get interest + k10 per year . Your friend keeps home + extra k10 per year.
 
Cerebus are being paid interest on a home in positive equity.
With the proper approach I think they would not (force) it and would be amenable to a sensible arrangement on the lines of interest + some principal.
Sense tells me they wouldn,t force sale on two pensioners.
.......................................................
Can,t see how the k225 is a normal pension fund ? . Probably what is called an AMRF and he will have to take 5 % out per year.(am not 100% sure but other AAM can advise)
If its a pension( pot ) it can give them circa yearly income circa 20,000+ so along with old age pension I can see both they and Cerebus coming out ok.

Eg If cerebus get interest + k10 per year . Your friend keeps home + extra k10 per year.

Thanks Gerry, I agree that common sense should prevail with regards dealing with 2 pensioners but hopefully they'll hold that view too. Time will tell I guess!

Thanks again for your input.

N
 
Cerebus are being paid interest on a home in positive equity.
With the proper approach I think they would not (force) it and would be amenable to a sensible arrangement on the lines of interest + some principal.
Sense tells me they wouldn,t force sale on two pensioners.
I have to disagree with you on this one Gerry! Playing the "poor old me" card can not work here. this is an interest only pension backed mortgage which the borrower was made fully aware of and has being paying interest only since inception. He was also fully aware that he must also fund a separate pension policy which should produce an adequate lump sum to clear the mortgage on maturity. He now has this policy ready for encashment and decides that rather than pay his mortgage with the proceeds he needs the pension to fund his lifestyle. Also remember that he has been living without the need of this pension for the last number of years presumably with OAP assistance which will still be retained.
He now decides that he wants to have his cake and eat it. I.e. The pension fund which was always designated to repay his mortgage should be used to fund his future lifestyle and sure the old bank should take pity on him and do a deal on the amount owing!!
Sometimes words fail me!! Are we now living in a country where only a fool feels obligated to pay back his debts? Dear God!!!
 
sure the old bank should take pity on him and do a deal on the amount owing!!

This 'old bank' that you are referring to is effectively a vulture fund. The original bank that lent the money decided a long time ago to exit the market and front load it's losses. Whether Cerebus get's back €1 or the full amount will have absolutely no bearing on the original lender/bank that you are effectively referring to. Cerebus made a commercial decision to buy the loan at a massive discount, there is a reason for that. This isn't a perfect world we are living in Brendan and people made mistakes and their circumstances may have changed. You know absolutely nothing about the borrower and his circumstances.

While no one has a God given right to getting any discount or write off on their debts, equally everyone has a right to defend their position and try to negotiate the best deal possible for themselves.....welcome to the real world! I am not suggesting people should be flippant about their debt obligations but bad debts and write offs are part and parcel of a functioning capital market.....build a bridge and get over it!

N
 
First of all, on the pension, personal pension plans and PRSA's do not have to be matured until age 75. Company pensions have to be matured at 70.

I'm with 44 brendan on the repayment though. "Dave" has been living in this house, living his life without having to touch the pension fund that has been accumulating over the years. Now it's time to pay back the bank, he can't suddenly say he needs the money, when he obviously doesn't. The bank are going to go after that pension fund. They will also look for it all in one go where Dave will have to pay tax at the marginal rate on it.
 
On reading SBarrett and 44Brendan .

I think whether Cerebus is a vulture or not is a moot point.
I think Mr Pensioner had better start to talk to them now.
There are queries over pension fund/draw down etc and it seems Cerebus has the potential upper hand.
44Brendan.
I ain,t a fan of {the poor oul me card} but the info on post was limited and it still ends up that Mr Pensioner needs to resolve this now before its taken from his hands.
With a bit of luck/sense the outcome can suit both he and lender.Had it been a clear( take pension funds)then maybe Cerebus couldn,t have bought it ?
Given the way Banks sold things in fluffy times maybe nothing was actually signed for?

Mr Pensioner really needs to sort NOW.
 
I took a hard stance on this issue Gerry as this is not a case where sympathy for the debtors circumstances will effect the outcome.
While accepting that Negotiator would feel that some sympathy and recognition of the circumstances should be applied here I'm afraid that the bank will not agree with him.
There is no indication of any malfeasance or malpractice in regard to the loan agreement. The funds were lent on the basis that they would be paid back on the due date upon maturity of the pension fund. The payments made into the pension fund were those that should have been used in reduction of the loan. The debtor did benefit from this arrangement in that he received tax relief on the payments. the pension fund was always designated to pay back the bank and should never have been regarded as being payable to the debtor. The fact that his circumstances have changed and he needs the funds for whatever purpose are irrelevant to this agreement.
Talking to Cerebus will not change anything IMO. It would certainly achieve nothing in the organization I work for. However there is certainly no harm in asking Cerebus for some mitigation as who knows what can happen?
 
Thanks for the replies, your input is much appreciated.

I'll let you know the outcome in due course!

N
 
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