Case study AIB "Voluntary sale for less" scheme

S

StellaMan

Registered User
Messages
28
Hi, I wonder if somebody can help with some advice ... I have a similar situation to this one that ellenb talks about here, (it won't let me add a link to ellenb's thread, but it's entitled "Hopelessly insolvent and looking for advice on two choices to consider" & the last post was on the 9th May), but it's not identical & I didn't want to hijack her thread ...

We are in massive negative equity with our house and debt to our mortgage company, AIB (Our mortgage balance, including arrears, is €299,115.22, the house is worth about half that !!!). We haven't been paying anything towards our mortgage for months, probably well over a year, and prior to that we have only been making token payments. We also have other debts to Credit Card companies & BOI, all run up during my 4 years of unemployment, but these are all under control with regard to agreed monthly payments. We currently just about get by on my Job Seeker's Allowance & my wife's monthly Child Benefit.

We are resigned to losing the house, there is no way that we could ever be in a situation to pay this debt off, and as I am British (we have lived in Ireland for 12 years and have 4 dependent children, 3 of whom were born here), we may end up going back to the UK and seeking bankruptcy, however, there is a lot to consider before that happens, the main ones being my employment (I work in IT and there a lot more jobs in the UK than here in Ireland), the childrens' schooling (so we would like to be decided by August) & somewhere to live, which is obviously the most important one and what I am looking to resolve.

After a phone conversation with AIB last week, we have now received some documentation regarding the "Voluntary Sale For Less Scheme". As far as I can see, this scheme sees me homeless and yet still in massive debt to the bank, and I have been told by the council here (Tullamore) that I need to be "made" homeless, not "choose to become" homeless if I have any chance of getting housed in council accommodation. Whilst getting a council house is not my actual intention, I need whatever help I can get either to get a council house or to live in rented accommodation, I am new to this situation of having to have help to have a roof over my head, I am 54 and have never, until this all went wrong 4 years ago, needed this kind of help or advice !!!

If I refuse this scheme, will the bank then take legal action to have the house repossessed and if so, what sort of timescale would we be talking about ? I see from the other thread that people advise "forcing the bank's hand", but I don't want to be in the position where it looks like I have engineered a repossession, as I am worried that that may affect my chances of help from the council !!! What, for instance is an "unsustainability letter", should I be trying to get the bank to send me one of these ? Should I be trying to get them to send me a repossession order ? I really don't understand the options or the timescales !!!

I have no savings, we survive, just, from week to week, I don't care if I have to be declared bankrupt & I have every intention of getting back to work (either here, which will have to be in Dublin, or in the UK), but I have to do something, my wife is ill with worry and I'm not sure we can carry on like this much longer !!!

Thanks in advance for any help and/or anybody can give me ...
 
You might also ask AIB about the "mortgage to rent" scheme. Based on what you have quoted so far, you may well qualify.

This would involve you losing ownership of your house to the council or a housing association, remaining in your home and paying rent. In five years time, if your circumstances change again, you would have an opportunity to buy your house back.
 
Brendan - It is a long time since I spoke to the council, IIRC I asked them about both rental allowance & the council housing list and I was told that whilst I am a mortgage holder they couldn't help me on either count, or words to that effect. Should I write to them, do you think, with details of this scheme I have been offered, or do I need to get a more specific letter saying my mortgage is unsustainable ? If so, how do I get AIB to send me that letter ? Yes, I have been unemployed for 4 years now and I think I was getting MIS into my BOI account, but that was one of the ones that I owed money to, perhaps it is still getting paid into there !!! Would they have to give me that information if I wrote to them ?!?

Importer - I will ask, thank you, that may be an answer if we decide to stay here, but the problem with that is that there is no work here & due to disc problems with my back, there's no way I can commute to & from Dublin on a daily basis (the typical 'one thing after another' scenario) !!!

Whatever we do, though, if the bank do decide that they are going to repossess the house, approximately how long will that action take from the first letter to eviction, days, weeks, months ?!?
 
Brendan, on my "Statement of Account with AIB Mortgage Bank", there are monthly referrals to a Credit that is called "REVENUE TAX CREDIT", would this be the MIS you talk about ? If so, I have no idea where these payments are being made to !!!
 
No that is probably your tax relief at source going in to the account. Mortgage Interest Supplement is a payment you apply for through your local Community Welfare office, you get forms which the bank fills in showing original details of mortgage etc, do you ever recall applying for it? I would be surprised if the bank had not suggested you apply for it.
 
No, wbbs, as far as I know I have never applied for that, never heard of it as far as I recall !!!
 
It is a scheme whereby social welfare pay a portion of your interest payment, banks are usually fairly proactive in telling people apply for it as it ensures they at least get some sort of repayment every month.
 
Ahhh, my Social Welfare Officer did tell me that there was such a scheme (I didn't know its name though) but she told me not to apply for it as either my mortgage was too high or my mortgage repayments were too high, I can't recall which ...
 
Well there are rules but I would always advise someone apply anyway as if they pay out something then at least your debt is not rising as much as some interest is being paid.
 
1) Go to your social welfare officer and apply for Mortgage Intersest Supplement. It is possible that they will pay almost all the interest on your mortgage.

2) You have to find a job, whether that is in Tullamore, Dublin or London. I think you have to find a job first and then decided the next step.

3) If you get a job in London, perhaps you should move there first and get set up before bringing your family over?

So you want to retain your house as long as possible.

If you are getting MIS, it's unlikely that AIB will seek to repossess the house so your wife and children can stay there indefinitely.

However, when you get a job, they will stop paying you MIS.

If AIB decide to instigate formal repossession proceedings, it will take them probably a year get you out if you choose to resist. However, that will be a very stressful process.

I think that you can explain your situation to AIB and agree to sell the house in time. They should agree if you agree to voluntarily surrender it.
 
If you agree to a voluntary surrender you also consent as far as I know within the terms of that document you referred to also owing the remainder of your mortgage plus interest in line with your original terms and conditions of your mortgage offer until it is paid in full.
 
Palerider said:
If you agree to a voluntary surrender you also consent as far as I know within the terms of that document you referred to also owing the remainder of your mortgage plus interest in line with your original terms and conditions of your mortgage offer until it is paid in full.
Click to expand...

I don't think that "consent" is the right word.

You "acknowledge" that you owe it. I don't think that the letter changes the borrower's liability at all.

Brendan
 
To my understanding, some of the mortgage documentation drawn up mid-boom is a little bit weak in this area. Some of the loan documentation is not strong in the area of what happens if the security is worth less than the amount owed. The banks are visibly trying to cover their tracks here and I think nobody should assume that its just an other innocent piece of paper to help the bank workers fill their day.
 
Hi Stellaman, just wanted to say hi and can probably understand what you guys are going through.
I have found MABS and this boards in particular very helpful up in regards the few options we have.
In relation to MIS ( mortgage interest supplement) you may be eligible if no adult working more than 30 hrs a week. MIS can be applied for through your local community welfare officer, but you can download form from citizens information website. Part to be completed by mortgage company and part by you and part by previous employer (if applicable).
We may not be eligible for MIS due to arrears but are applying anyway with fingers crossed. If a no, it at least shows we exhausted all avenues.
We also have house up for sale and have had verbal confirmation that we can sell but will be liable for any shortfall if we get an offer.
With regards applying g for social housing, I am no expert but this is what I understand of the process. In outlet situations you must have a letter from mortgage company that basically says it is time to consider voluntary sale, voluntary surrender etc. This is a letter that must be sent under code of conduct and given you haven't paid anything in over a year, you might well have already received such a letter? Worth checking all correspondence from them to see.
MABS advised us yesterday that they would be surprised if we don't get that letter very shortly, however our bank have said they won't issue and are now offering a long term solution of 3 years interest only. If we get the MIS it will buy some time to try and sell. If not, then we probably have only a few months before some big decisions have to be made.
Similarly, we have our eldest due to start school in Sept and more stressed by that as in where will she be going, than the rest.
You have some string options though so please try not to let the situation completely dress you guys out-and I am too aware how easy said that is. But if its one thing I have realised its that nothing is more important than your family and health. Best of luck
 
Sorry forgot to include re social housing info-ring the co council you want to apply to for the application form as there is quite alot of stuff to get sorted, including the letter from the bank.
What we were told us that we can be assesed for housing need even if house is not sold. This alone can take up to 12 weeks so the sooner you can do this the better.
If when application is approved yet house not sold but say you voluntary surrendered and had to leave, you should still be entitled to rent supplement, but only if no one working more than 30 hrs a week.
You can only go on so ial housing waiting lust once propert is sold though. If you are aiming to love back to UK then this shouldn't be too much of an issue if it just tides you over for short term. Alternative is to try and get an interest only arrangement and divert to mortgage instead of other unsecured debtors to buy some more time. Doubt anyone could kick you out if you we're at least paying the interest??
 
Yes, we are thinking about me going over to England & the family following, once I have a contract, been paid and found somewhere to live, that's one of the reasons I need to know how much time it may take for the bank to evict us ... so many things to think about :( !!!

Brendan Burgess said:
1) Go to your social welfare officer and apply for Mortgage Intersest Supplement. It is possible that they will pay almost all the interest on your mortgage.

2) You have to find a job, whether that is in Tullamore, Dublin or London. I think you have to find a job first and then decided the next step.

3) If you get a job in London, perhaps you should move there first and get set up before bringing your family over?

So you want to retain your house as long as possible.

If you are getting MIS, it's unlikely that AIB will seek to repossess the house so your wife and children can stay there indefinitely.

However, when you get a job, they will stop paying you MIS.

If AIB decide to instigate formal repossession proceedings, it will take them probably a year get you out if you choose to resist. However, that will be a very stressful process.

I think that you can explain your situation to AIB and agree to sell the house in time. They should agree if you agree to voluntarily surrender it.
Click to expand...
 
Hi ellenb, thanks for your input ... yes, we've also had a lot of help from MABS and their initial suggestion was that we pay €200 a month to AIB so that they are at least getting something and they would probably let us be. It worked, but the trouble with that is that over the past 3 years, what with inflation, my wife losing almost €180 a month in child benefit and me losing about €60 a month in Social Welfare payments, we didn't see the point in giving them that €200 which we could no longer afford when we had arrears that were way beyond what we would ever be able to repay !!!

We have no tumble drier, and living in the Midlands with 7 in the house you *need* one, we have an oven that needs replacing as it doesn't work properly, we have no car tax, no NCT, we need a plumber but can't afford one, the children's schools want money non-stop and we have no social life, and that's still without paying AIB a bean ... the only real way out I see is bankruptcy, and even that's expensive in Ireland !!!

I am contacting some people in the UK to see if the letter we have about this "Voluntary sale for less" scheme is good enough to get us help with housing, but in the short term I am looking for contract work there and as Brendan suggested, I may go over there first & leave the family here until I have things sorted, not easy on any of us though, especially me wife ...

As you say (and a couple of others mentioned above) even if we sell the house, AIB still hold us liable for the outstanding balance, so I can look down the bankruptcy route or sell this house for 150k & then owe AIB 150k for nothing !!! I know which I prefer, sod the "stigma" involved !!!

I will contact the local council with this letter as well, and maybe Dublin, as that is where all the work is, but at the end of the day I think my wife just wants to go home ... she is unhappy here in the Midlands and the stress of it all is making her ill, she worries about everything and how we are going to pay for school trips, uniforms, books, the things we need for the car (which is making some funny noises !!!), the oven & not being able to get the washing dry (it rains here all the time !!!), but at least thanks to talking to people on here I think she can relax about the house being repossessed in a matter of days or weeks !!!
 
I hear you barking. You do what you have to do and best of luck with everything. People just have no idea what the stress is like until they are in this situation, especially with young children. Hope it all works out for you.
 
Hi Stellaman and welcome to AAM. First off your situation is totally unsustainable and needs to be sorted. And what a terrible life you are currently living. It's time for change.

1. You need to start making decisions instead of the bank prevaricating. Have you and your wife decided where you actually want to go and do you both agree? Based on what you've posted the UK seems like the best option. It seems you both want to leave the midlands.

2. Could you scan and post the AIB document called 'Voluntary sale for less' please. Just photocopy and black out any identifiying features.

3. Can you confirm if you are actually receiving MIS. Mortgage Interest Supplement (the one the local authority pays you towards your morgage if you cannot afford it).

This will not be paid in certain circumstances. For example they are not going to pay on a mortgage of 1 million etc.

You mentioned rent supplement and also social housing. You are not eligible for either of those currently as you are in a house. The rent supplement is when you go and rent a house and the local authority/community welfare officer helps with your rent, and social housing is when they give you a house and you pay a minimum rent. ( I might have it a bit off on who pays what - check with welfare.ie or go to citizen's advice).

For those last two there can be problems in getting them if you 'give up' or 'voluntarily surrender' your house. So in relation to what you decide you want you need to be very careful that whatever arrangement you come to with AIB does not mean you lose out on the right to those types of aid.

The is all very complicated because each 'right' has it's own rules and sometimes people in the local authority don't understand the rules themselve and indeed they do change all the time.

It might be better if you understood the rules in relation to each one, and to find that out maybe post a very specific question in the correct part of AAM.

4. Letter from AIB for UK housing

If you go to the UK are you not going to rent yourself, or do you intend to apply for rent/social welfare there? Cannot see how a letter from AIB would be needed in the UK.

5. Liability for outstanding mortgage.

That's if you go with the sale of the house, don't worry about the outstanding balance. The reality is you cannot afford it and then they will get nothing from you. In addition you have the lovely clean option of going bankrupt in the UK. You can have a job in the UK and a reasonable standard of living, including being allowed earn enough to house a family of seven. This just has got to be better than your current living arrangments and resultant stress of no light at the end of the tunnel. As you've outlined you've a good chance of a job in the UK and none where you are.

6. Speed of repossession

This seems to be worrying you a lot. The Irish judicial system moves at a snail's pace. In addition banks are very very slow on home repossesions. I can just see the headlines now if AIB moved on a family of 7, you're down the bottom of the pile in speed therefore. In any case even by the time they got the case into court, the master of the High Court has stated on the radio that if you come with any valid reason for a 'stay' he will give you the time you need. And that could be another year or two after the long period before they even manage to get you into court.

If you don't believe what goes on, I advise anyone to go down to the High Court and see what is actually happening. Or read the reports in the newspapers.

7. AIB negotiation and tactics

You've got a very strong postion because you are what AIB doesn't want - a family of 7 hardship case. So they want you to agree to sell. I would call their bluff and say yes to the orderly sale, give yourself a decent time period of say 6 months to a year, but they have to agree to write down the debt and give you a letter of unsustainability.

I wish you the best of luck and the first new day of a new dawn for you is for you to start making decisions yourself with your wife and move on from this awful time.
 
You must log in or register to reply here.
Back
Top