Defaulting on mortgage

What is the consequences of defaulting on your mortgage.

You get a bad credit rating but really that won't matter and can not borrow for the rest of life.
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You have that debt over you for the rest of your life and will go to jail for non payment. You will be forced to emigrate to some far away place and never to return. Serious consequences, we're not just talking about your name in the Stubbs Gazette here.
 
MiGs said:
What is the consequences of defaulting on your mortgage.

You get a bad credit rating but really that won't matter and can not borrow for the rest of life.

People say the rest of us have to pick up the tab..but we will for the rest of lives be picking up the tab of the current bad bank debts ... then our children will be still serving those debts.

Is it time that we just said the country is bankrupt.. and start over again.
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+1, I have little debt myself but am capable of having some empathy towards those who are now in negitave equity, whatever age they are.

If I were Ruam's friend the keys would be going back to the bank. Life is too short for that kind of stress. What an unholy mess this is!
 
Buddyg said:
You have that debt over you for the rest of your life and will go to jail for non payment. You will be forced to emigrate to some far away place and never to return. Serious consequences, we're not just talking about your name in the Stubbs Gazette here.
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If this is the case there are going to be an awful lot of people in jail.
 
Have you ever heard of anybody go to jail for non payment of a mortgage.

In the current climate the courts are looking favourable on people.
Allowing them time to put together some sort of repayment plan.

As been forced to emigrate to some far away. I think 2010 will be the year for a lot of people doing that.
 
Can anybody dispassionately spell out exactly what happens when you default on your mortgage.

I understand it as

1 . Default on a mortgage
2 . Bank send out arrears letters.
3. Further arrears Bank take legal proceedings to take possession of house.
4. Court Judgement .
5. Bank take ownership and sell property
6. The shortfall from the sale the bank then demands repyment from former owner.
7. ....................failure to pay that shortfall ....? what happens.....
 
Code Of Conduct On Mortgage Arrears might shed a little light on that for you MIGs:

[broken link removed]

All banks have to abide by this in how they manage their arrears.
 
jhegarty said:
The only different is that he would have been paying more because of the higher interest rates.
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That's actually a very good point which many people overlook, if the crash hadn't happened, it is a reasonable assumption to make that we would be paying more back to the banks because interest rates would be higher
 
Palabra, you contracted for a loan and promised to pay it off. If you do not then you become part of that bad debt portfolio. This means that you make the banks investments appear even more risky, even those that should not. Ultimately this destroys confidence in the bank and pushes up the rates banks can borrow at. Ultimately such a spiral simply impoverishes everyone in an economy.

From the sound of it you weren't (as orionstar21 seems to think) a particularly high risk candidate for a mortgage. You are able to afford it. To me you seem to be just aggrieved that we appear to be bank-rolling past profligacy on the part of a virtual oligarch.

You aren't the only one who feels aggrieved. Who hasn't been appalled by the evidence that has emerged of a culture of indulgent speculation and general foolishness. Not all of us though assume that our actions are so isolated as you and orionstar21 seem to think. Not all of us play the part of the 2007 ingenue that you wish to paint yourself as and cry "I didn't know", "Nobody told me", "No fair". Not all of us think that like children we can throw our toy out of the pram and get someone else to pick it up.

There are two aspects to look at in my opinion. Firstly (since it seems to be the part you are open to considering) is the mé féin (myself) aspect. You chose a property you liked. You went looking for a way to finance the purchase of that property. You contracted with a bank to lend you that money that you then agreed to repay. Now you don't fancy repaying it. Now you want to walk away from the agreement that you as a fully functional adult made. The reason you want to do this is pretty much so "cos you feel like it". The personal penalties for such a move are already documented. As another poster pointed out, you could run away and hide in another country and try to avoid it that way but there is little guarantee that this problem will simply disappear if you do. And contrary to the implication that his acquaintance has got away scot-free, it is still a not a non-recourse loan. He still owes the bank. "Handing back the keys" in certain parts of the US actually formally cancels the debt at the lenders expense, the lender CANNOT chase the borrower for any outstanding amount on the loan.

Secondly is the sinn féin (ourselves) aspect. Over the long term this sort of behaviour damages confidence in people who take out mortgages and as has been globally and dramatically demonstrated tends to freeze credit generally. Do you have children? Nephews? Nieces? Family? Do you wish it to become progressively more difficult for them to access credit? Do you wish banks to re-assess the conditions for mortgages and make them inaccessible to all but the wealthy few (as it once was)? How about business loans? Personal loans? All of these are used by people as tools to generate wealth and welfare. All these provide people with a flexibility and liquidity that otherwise they cannot enjoy. What would you have? Interest rates set at punitive levels? Limitations on personal movement and control in exchange for credit? It may seem unbelievable but there are people in this world who can only access credit on such terms and while I do not believe that it would happen here, to the major banks at least, it is not beyond the realms of the possible. Indeed there is evidence that it is currently thriving and expanding in certain areas of Ireland where access to reasonable credit so curtailed that people are borrowing from lenders who not only charge exhorbitant rates but may also engage in practices that ensure they get paid first at the expense of the borrowers rights.

It is disingenuous of you to suggest you are stupid. It is disingenuous of you to deprecate your own capabilities. By insisting that you didn't notice that property prices were soaring out of all proportion to the rest of the economy or to their intrinsic value you are implying that you were/are stupid and incapable of interpreting basic data. Don't be so hard on yourself.
 
Let me clear up a few things.

First I can afford to pay this mortgage at the moment. ( Who knows about the future)

I'm not one of these people who went crazy during the "good times" I didn't max my credit cards or buy a new Merc or any of that stuff. My only "crime " was to buy a modest three bed townhouse for my partner and her two kids and me to live in.

The reason I can afford to pay is because I run a small successful business. I pay my taxes (most) I pay my suppliers including my bank, I pay my car loan I pay my staff etc. and when everybody is paid I pay myself. I have no problem paying what I consider lawful debts.

My problem with my mortgage is that I believe I was the victim of a fraud, and as far as I'm concerned all bets are off.

Let me explain how the scam operated. When I took out the loan to buy the house, I had no idea that behind the scenes the lending institutions in conjunction with others ( developers, builders, other banks, the government and others ) were conspiring to artificially drive up the price of property.

They had been at this for years. The reason for them doing this was so that the fat cats at the top of this pyramid could gorge themselves on huge bonus payments.

In order for the banks to achieve this the first thing they had to do was dump the book of basic rules on how to run a bank. This mess we find ourselves in now
( and I'm not talking about the recession which I believe is a separate issue) is not an act of God. This was caused primarily by the lending institutions.

They were the one group involved in all of this who had the power to call a halt to the madness. All they had to do was to go back to the basic rules for running a bank. Most everybody else involved in this was to some extent or another caught up in the merry go round with no way to get off.

In places like Australia, Canada, South Africa and many other countries they simply don't have this problem. Why ? Because their banks operated in a normal businesslike way. When the manure hit the fan in the property market in the UK in the late eighties, we were completely unaffected. Why ? because our banks at the time were run properly.

　
Maybe if enough of us threw the keys back at them it would force the Government to do something other than wiping their arses and setting them on their merry way again.
　
　
　
　
 
First I can afford to pay this mortgage at the moment.
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Are you for real?

If you deemed the price of the house reasonable when you bought then nothing has changed. You are just ****ed off because you've wasted a hundred K by not doing your research. You are the cause of the problem.

Were you shouting about mortgage lending practices years back like I was? When banks were giving people 9-10 times their icome, driving prices up and everybody was complicit in it.
 
Palabra said:
My problem with my mortgage is that I believe I was the victim of a fraud, and as far as I'm concerned all bets are off.
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You are wrong.

The problem is you didn't bother doing any research before you bought. A blind man could see we were in a property bubble. The only reason you couldn't see that was because you either naively believed everything the sales people were telling you, or you simply didn't bother having a little think about things.

For example, does it make sense that a small house in the middle of no where, where there are no jobs, should sell for 10 - 15 times the average industrial wage? Of course not, it makes no sense.

I'm sorry you couldn't see that.

You are an adult. You are not a child. Take personal responsibility for your decisions.

Blaming others for your own mistakes is a terrible trait. You are in your 50s - you should know this by now.
 
Lets be honest and I know some are no matter how much money the bank were willing to give anyone they didnt have to apply for the loan and get themselves in all that debt I am particularly sorry for people who are like the OP or people with kids but people were very naive to think banks are not trying to make a profit for their shareholders like any other business. I believe if you should be annoyed with anyone (other than yourselves for your greed/recklessness) it should be the politicians for creating a situation where the banks were effectively encouraged to do this and if that article in the sunday tribune I was reading at the wkd is accurate they are still trying to keep house prices articificially high...for whose benefit? The Government obviously to keep the stamp duty and other associated taxes coming in and of course to generate as much profit as possible like any business...

Come on some people really have to take some responsibility for their own actions and we have to make sure all this greed on everyone's behalf doesnt happen again for social reasons.
 
ufc said:
you are wrong.

The problem is you didn't bother doing any research before you bought. A blind man could see we were in a property bubble.

Blaming others for your own mistakes is a terrible trait. You are in your 50s - you should know this by now.
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+1
 
PS you should rent it out asap while you can find someone stupid/desperate to give you anything near the mortgage payments for it. THats my charitable act for the day...and I am not joking. Good luck with it seriously you will just have to be more frugal with your spending it could be a lot lot worse believe me.
 
"Were you shouting about mortgage lending practices years back like I was? When banks were giving people 9-10 times their icome, driving prices up and everybody was complicit in it. "

Where exactly were you shouting about it BuddyG? Cos with 17 posts it certainly wasn't around here!
 
lightswitch said:
"Were you shouting about mortgage lending practices years back like I was? When banks were giving people 9-10 times their icome, driving prices up and everybody was complicit in it. "

Where exactly were you shouting about it BuddyG? Cos with 17 posts it certainly wasn't around here!
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Politicians, friends, the million or so other forums on the web.
 
lightswitch said:
"Were you shouting about mortgage lending practices years back like I was? When banks were giving people 9-10 times their icome, driving prices up and everybody was complicit in it. "

Where exactly were you shouting about it BuddyG? Cos with 17 posts it certainly wasn't around here!
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So the fact that he wasn't here meant he was silent? :rolleyes:

His comment was in relation to the OP.
 
SO-CRATES.

So,not only are people to foot the bill for the banks and government cartel scheme, not only are people loosing their homes, not only are people loosing their jobs with the white and blue collars packing their bags but we are to be told over and over again by people like you that we are blind, ignorant and stupid of what was clearly our own problem brought on by our own greed. I would agree if it was people with more than one house, but not with one they want to call home. I knew for one that there was a property bubble and wasnt dumb enough to buy something overpriced like some, but at the end of the day, I did need somewhere to live and as there was no regulation in the rental market or the buying market...... I decided well why pay rent if its the same price as a mortgage?

My point is, regardless of how clear the signs are or were you still need a home. People knew the bubble was false. I would have opted to rent NO PROBLEM if rent was actually rent rates and not mortgage rates. We are slaves to the monetary system. Economists dont predict booms and boosts, International bankers create them. No one questions the origins of money. No one is stupid here. If a guy in stood in front of me with a gun and told me swans were black, I'd have to just say yes swans are black. Why, because he has a gun. But I know swans are white but I'd have to deal with it. Just like the government telling us theres a water shortage, THE PLANNET IS SURROUNDED BY THE STUFF! I then hear people say but its too hard to pureify salt water.. .... But its somehow easier to purify crude oil but no one questions that.

Again, my point is, yes everyone knew the bubble was false but you have to deal with it. You still need to survive. You still need a home.
 
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