Ptsb to offer write off to landlords in arrears and negative equity

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Pat Sorrn

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I have read on various news sites today, that ptsb are going to offer some landlords a deal. It will apply to landlords who have property in negative equity with no possibility of paying the balance. It's not clear who will get the deal but the idea seems to be that you sell your property to ptsb and they would write off the remaining loan balance.
It looks like a great deal, but would be interesting to hear other people's opinions
 
Just to clarify, PTSB do not appear to be buying properties. Instead, it would appear that they will let negative equity landlords sell their but to lets (BTLs) on the open market at which point the difference between the sale price and the outstanding mortgage will be written off.

It is an excellent idea. For PTSB it helps clean up their ledgers. For negative equity landlords it is an excellent opportunity to exit a "no win" situation. The downside might be for tenants who may be asked to vacate so as to facilitate the sale.
 
TLO said:
Just to clarify, PTSB do not appear to be buying properties. Instead, it would appear that they will let negative equity landlords sell their but to lets (BTLs) on the open market at which point the difference between the sale price and the outstanding mortgage will be written off.

It is an excellent idea. For PTSB it helps clean up their ledgers. For negative equity landlords it is an excellent opportunity to exit a "no win" situation. The downside might be for tenants who may be asked to vacate so as to facilitate the sale.
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when it comes to receiver sales , tenants are often in situ upon sale , not sure this situation here will change that ?
 
It looks more like a normal market sale, with the outstanding morttgage being written off rather than the bank taking back the house and selling. I would imagine vacant possesion would apply in most cases, with the tenant having to leave.
 
When contacted, Permanent TSB said it was writing to certain buy-to-let mortgage holders who have been in arrears for a long time, to explore their willingness to surrender properties for sale by the bank.
“For customers who are offered and who agree to a voluntary surrender in this initiative, the bank has agreed to clear any arrears or shortfalls that remain on the loan after the property has been sold and that it will not seek any further repayment by the borrowers in respect of the relevant mortgage.”

The bank said the offer is restricted to certain buy-to-let mortgages and is being made following a detailed review of the loan accounts by the bank.
The offer is limited to customers who the bank believes have no means of meeting the repayment terms of the loan or the shortfall debt which will arise upon the sale of the property, the spokesman said.
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For sale by the bank is mentioned in this piece in the Indo
 
That might be so that the bank can maximise the sale price. If you know that any deficit will be wiped clean, there's no incentive not to sell to a friend for a low price.
 
Why oh why do the people who messed up get the deals.

No one will write off the negative equity on my buy to let, because I am not in arrears.

This nonsense makes me so cross. These landlords should be forced into bankruptcy.
 
cremeegg said:
Why oh why do the people who messed up get the deals.
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1) Ireland's procedure for repossessing mortgaged properties is far too long winded.
2) It would appear that PTSB omitted to include the ability to appoint receivers in their BTL mortgage agreements.
 
cremeegg said:
Why oh why do the people who messed up get the deals.
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It is a practical solution.

It will apply only to people in negative equity and heavy arrears. They were never going to pay their mortgage anyway.

The courts system is loaded against the lenders. They can't do much if the borrower won't pay.

But this is the moral hazard issue. If you raise it in public, you get savaged.

Brendan
 
Brendan Burgess said:
It is a practical solution.

It will apply only to people in negative equity and heavy arrears. They were never going to pay their mortgage anyway.

The courts system is loaded against the lenders. They can't do much if the borrower won't pay.

But this is the moral hazard issue. If you raise it in public, you get savaged.

Brendan
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brendan , i thought endless delays in repossessions were only really limited to prime residences , surely a judge would have little sympathy for a BTL mortgage holder not working with their lenders , i agree its politically very sensitive to have a lot of people loosing their homes but i doubt there is much sympathy for BTL owners who are in trouble with repayments ?
 
I wonder will there be a clause precluding legal action for those taking it if they were to avail of the facility?

I also wonder if I'll be able to avail of it with very low arrears but very large negative equity.
 
As Brendan stated above, this is a very sensible approach by PTSB given that they unable to appoint Receivers with a power to sell. (They can appoint rent receivers.) Given that they cannot appoint a "normal" type of receiver, they have to apply to the Courts for re-possession which is timely and costly.

Agreeing a voluntary sale produces much more money for PTSB.

It is clear that PTSB will be very selective in the cases that they chose to offer such write offs. They have made it clear that they will only write off debt if they are satisfied that the borrower has no capacity to make any contribution towards the residual debt. Borrowers will need to submit a statement of affairs before any decision is granted.

Any borrowers who are offered such a deal and who have debt owed to other creditors should immediately seek the advice of a PIP, as a PIA could be used with the PTSB debt utilised to "cram" down other debt.

Jim Stafford
 
cremeegg said:
This nonsense makes me so cross. These landlords should be forced into bankruptcy.
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But Cremeegg,

Obviously, from the PTSB POV - this 'write down' solution is financially more preferable for them - then to 'force' bankruptcy upon BTL owners.

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Now to test PTSB's willingness to assist in the termination of tenancies (in order for those properties to be sold under vacant possession..)

As the properties have PTSB Rent Receivers in place, there's no spare cash from the BTL owners to financially induce tenants to leave (as PTSB can see this from BTL owners financial statements).

Indeed, it could be argued that it's cheaper for PTSB to fund a BTL's PIA & provide a financial inducement to BTL tenants for them to voluntarily end their agreements.

One tenant I have, won't leave the house (but will continue to pay the PTSB Rent Receiver) until another 'suitable house' is available to rent. As far as he is concerned (and I fully agree with him) it will take a court order, sheriff and Garda to evict his family.

Far easier for me to go bankrupt - and let the PTSB deal with all this stuff - unless they pay an inducement of some sort.
 
Another thing that crossed my mind..

.. PTSB should also guarantee a clean ICB record in the event of sales occuring through vacant possession of BTL properties.

I.e the credit record should be "qualitatively better" then that of a bankrupt. So that same can apply for credit again ASAP to get a family home ( if the BTL landlord is currently renting themselves, as I am).

Otherwise, what's the point in PTSB offering this settlement?

Could it be that this offer is only available to those BTL landlords that have a family home?

As this would provide more leverage for PTSB to ensure landlords deal with the mess that is the untimely termination of tenancy agreements / eviction of tenants.
 
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