Struggling with 2 invst properties, have kept up with ppr home, can it be repossessed

I'm at my ends wit.

My husband and I have 2 investment properties which we bought about 4 years ago. We also have our own joint mortgage. On and off throughout the years we have struggled to keep up with 3 mortgage repayments with tenants moving in and out and now my husband has been cut to 2 days a week and we have been unable to rent one of our houses which is old and nobody wants to rent anymore as there is such fierce competition with all the new houses to rent on the market.

We already pay 300/400 towards one investment mortgage every month but we cannot pay anything now towards the second investment property. I have looked at all options, mortgage only (which is very little difference), selling (can't sell for last 2 yrs, now in serious negative equity, no-one wants to rent it).

If the bank end up repossessing my husbands investment house, will the judge allow a repossession on our joint home house, considering we have 3 children, my husband's reduced hours and our financial circumstances. We have never missed a paymet on our home house.

Appreciate your time

Re: Struggling with 2 invst properties, have kept up with ppr home, can it be reposse

If you have used your PPR as a means to secure the mortgages for the investment properties, then I think the bank would have the right to take your ppr in order to pay off all loans as that is what you signed up.

What is the market value of your house?, investment property 1,& investment property 2 versus what the outstanding mortgage on each at the moment? If we knew approx values then maybe could provide some advise as possible way out of dilemma. Also have you any savings, funds or other?

I think you need to also get in contact with MABS asap for advice

Re: Struggling with 2 invst properties, have kept up with ppr home, can it be reposse

If you cannot keep up the payments then the bank can certainly repossess the investment house. They can also repossess assets which are collaterally charged. So it may be that your other assets, the second investment property and your home are also collaterally charged. Even if they are not, where a property is repossessed in this climate it is more than likely that you will still owe a balance to the bank taking into consideration the legal costs and interest and penalty charges if any, and possibly negative equity. The bank can then seek to register a charge for any outstanding sums due to them on any other assets you own.

If the investment property is in your husbands sole name and the family home in joint names then the bank can still register a judgement mortgage against the family home.

They can then go for a well-charging order for sale of the house. If you have not been involved in the investment properties in any way ( as guarantor or as joint mortgagor or if there is a collateral charge) then the bank can only go after your husbands equity in the family home. There is a strange anomaly at the moment in relation to well-charging orders and registered and unregistered title but that will be eradicated come December and is not worth explaining here as it is unlikely to affect you.

However it is unlikely where you are clearly making efforts to repay your loans and debts that an order for sale would be granted. These are primarily granted where a person does not make an effort to pay and doesnt prove that they don't have the ability to do so.

Re: Struggling with 2 invst properties, have kept up with ppr home, can it be reposse

Thank you very much vanilla and chlipps

Firstly we had bought our investment properties prior to getting a joint mortgage, therefore our home was not used as collateral (i hope I understand and have that right). My husbands investment property is in his sole name (prior to our marriage) while our own home is a joint mortgage in both names however the site remains in my name only.

Our joint mortgage is about 175,000 (there might be about 50,000 equity if it sold?). Our investment properties are both in negative equity and neither would sell in this market. Repayments are approx 900 on each property. Even with a sale on either investment property there would be a short fall on each to the bank of approximately 30-40,000

While I have spoken to a few solicitors, the only advice they can give (or are allowed to give???) is to advise me what the banks can do.
What I really need to know if what a judge might order or do I even have a 60:40 chance in a court of keeping my own home. I really don't care how long the battle is, or if we lose both investment properties but I could not face losing our home. It is only a matter of time before my husband is completly let go which We are trying to not think about.

Thank you again for your advice

Re: Struggling with 2 invst properties, have kept up with ppr home, can it be reposse

Thank you for your time,

However If it was that simple then Yes I would have sold. The property as currently been on the market now 2 years. There is not even been a sniff at it. Even if we got an offer it would be be a shortfall of about 40,000 (thats only one property). Will the bank allow a sale at that price and then how how is the shortfall repaid?

What I really wanted to know is the opinion of someone with experience in a court of law. Has onyone out there been in a position that they are keeping up with PPR repayments and one investment property however are now in a position that they cannot pay anything towards the 2nd investment property which is in my husband's sole name prior to marriage. Do you think a judge would allow a sale on our main PPR considering we have 3 children and our inability to pay anything on second investment (which has been vacant now for over 4 months- can't even rent it, complete disastrous buy)

Thank you again for your time.

Re: Struggling with 2 invst properties, have kept up with ppr home, can it be reposse

I can see you are worried about this, but the answer is already in my last post- if it can be shown that you are not deliberately avoiding making payments, then it is unlikely. That is the best anyone can say- if the bank went all the way to trying to obtain a well charging order before the Registrar then it would depend on the individual circumstances of each case, whether there has been any change in caselaw the meantime and sometimes on the attitude of the individual Registrar.

Re: Struggling with 2 invst properties, have kept up with ppr home, can it be reposse

Sorry to hear your situation. I can't really give advice, but wanted to ask, isn't it better to have a 80 or 100k debt than a 300 or 400 one? Thats seems obvious to me, but others have said before here not to rush into selling properties.

Re: Struggling with 2 invst properties, have kept up with ppr home, can it be reposse

Firstly you need to go and talk to the bank and ask them what are your options. All I can see is you both going further into debt and sometimes it can be better to cut your losses. It may be better for you to sell all 3 properties, I can't figure this out unless we have all the figures. I know it's difficult but do not get emotional about the family home. You can always buy another home. Alternatively it may be better to sell the 2 investment properties at a loss and add the loss to your home mortgage, this would only make sense if you can then make that repayment. I know this is very difficult but you both have to sit down and go through all the figures and think long and hard about it. Talking to the bank may give you other ideas, they are dealing with lots of similar situations every day.

Re: Struggling with 2 invst properties, have kept up with ppr home, can it be reposse

Thank you all for your advice.

If I could sell both investment properties,then I would tomorrow. Both are old houses and there are newer cheaper houses on the market. Even advertising them at a complete loss and deficit of approx 80,000 We still can't sell them and have had no offers. one is rented and one we can't rent at all. Even if we could sell the thought of repaying 80,000 deficit to the bank and nothing to show for it is just unthinkable,untop of our own mortgage and other loans,itsjust not possible.

Selling the home house is not an option -been in family for so many years. Even at that, houses just aren't selling at the moment.

Does anyone know how big big developers who are in difficulty(millions) to banks manage to keep their home house,if nothing else?

ps- I don't understand NAMA either

Thank you again

Re: Struggling with 2 invst properties, have kept up with ppr home, can it be reposse

Lynda said:

Even if we could sell the thought of repaying 80,000 deficit to the bank and nothing to show for it is just unthinkable,untop of our own mortgage and other loans,itsjust not possible.

Does anyone know how big big developers who are in difficulty(millions) to banks manage to keep their home house,if nothing else?

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Is it not better to owe an extra 80K instead of what you currently owe? Is 80K manageable to you? You have to think about it. Lynda what is wrong with the property you cannot rent out? Why don't you do the money makeover section so that we can get a better idea of your financial situation? We may spot something that you haven't.

Big developers are treated diffently as they owe so much the bank has to accommodate them.

Re: Struggling with 2 invst properties, have kept up with ppr home, can it be reposse

Approx figures might explain better

Total mortgages,including hs ins and life ass per month - 3700
Income from rent, children allow, own mortgage repayment 3100

That currently still leaves deficit of 600 (as cannot get one property rented)

Our total disposable income after we pay towards own mortgage and investment not including 2nd investment is
450 per week.This has to pay for both of us and 3 kids petrol,food,clothing,childminder utility bills, heating,tax, tv license car ins.
If we keep up with 2nd investment mortage then we would be left with approx 250 per week.

Also its only a matter of time before husand is completley let go.

We dont' go out, needless to say!

Re: Struggling with 2 invst properties, have kept up with ppr home, can it be reposse

You can always rent or sell a house - obviously you've priced yourself out of the market. On the rental front, remember that some income is better than no income - so you are always better off renting at a lower price than not renting at all.

Is it not better to owe an extra 80K instead of what you currently owe? Is 80K manageable to you?

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80K is getting towards personal loan territory. Is it more likely that a bank would prefer to let you sell and owe 80k unsecured than to allow interest to start rolling over on your current debts. If you continue with you current deficit and cant pay the mortgages, it wont be long before you put another 80k on the total anyway. Would be well worth talking to the banks about this and doing something with their agreement.

Re: Struggling with 2 invst properties, have kept up with ppr home, can it be reposse

Bronte said:

Big developers are treated diffently as they owe so much the bank has to accommodate them.

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Isn't this where it is all gone wrong.....those who borrowed millions, speculators, developers etc. treated in a nice way by the banks...but as soon as ordinary Joe borrows less than half a million & cannot repay the loan, the bankers are out to get him/her....even though it will be this ordinary joe that will be propping up the banks, for years to come..........off topic comments, but its shameful on the banks part

Re: Struggling with 2 invst properties, have kept up with ppr home, can it be reposse

Lynda... I think you need to discuss the options with the bank asap as better they know you realise the situation rather that they thinking that you are avoiding them.

Whilst some of your figures are not really clear, i think that your second investment property mortgage is approx 800 euro??... why not drop the rent to say 500 euro per month and have some few quid coming in and help free up some cash

What ages are your children? Have you potential to get part-time job somewhere?
What is your husbands job.. what other work can he do....
Are you shopping in low cost supermarkets...Have you weekly budget and cutting spending to the minimum
etc,,

Have you any other savings? Is selling your home and moving into the un-rented property an option? Would tenants in the 1st rented house consider purchasing it from you? Many other questions that may have apparent answers if you fill out in the money makeover forum...As per other posters above, u might be better off to list everything in the money makeover forum as then easier for everyone to interpret them.

Re: Struggling with 2 invst properties, have kept up with ppr home, can it be reposse

Thank you Chlipps

Selling home house is just not an option. Children are all very young. Husband is in construction. Am very careful with money and always shop around for best values. We need to put money into 2nd investment house inorder for any tenants to consider renting it (this is going to cost at least further 3,000 (on a property which is already in serious negative equity), however I will seek advice maybe in the money makeover forum and see if there is something that I have overlooked.

Thanks again everyone for your advice.

Re: Struggling with 2 invst properties, have kept up with ppr home, can it be reposse

What happened the house you inherited? Is it one of the one's mentioned above?

Re: Struggling with 2 invst properties, have kept up with ppr home, can it be reposse

Selling home house is just not an option. Children are all very young. Husband is in construction.

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Lynda - you simply can't afford to say this. It is unlikely that your home will be repossessed but why live in it with a judgement registered against it?

You need to reduce your exposure to property. Sell whichever property you can.

Children are all very young.

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I am not an expert but I get the impression that kids adapt better than adults. OK, they may have to change school mid term. Sure it will be disruptive. But it will be far more disruptive to be ruined financially.

If there are emotional ties with the house and you can't sell it, then why not rent it for a few years until you get sorted out? Move into the house which you can't rent. Assuming it is in within commuting distance of your work.

Let's be quite clear - people are going to have to make major adaptations to cope with their changed financial circumstances.

Brendan

Re: Struggling with 2 invst properties, have kept up with ppr home, can it be reposse

Hi Bronte,

The house I inherited is very complicated (life assurance policy was cancelled by late father prior to his unexpected death. I still agreed to take on house even though there was still a big mortgage however the property market had not crashed and my father (had at the time) believed there to be equity of about 100,000 and wanted me to have it. However things went pear shaped and the bottom dropped out of the property market. This house, even though names not on mortgage, would be our 3rd investment property. I have not mentioned this in above as the legalities are still very complicated and probate has just been finalised.
This property however is being managed by a third party and the rent covers the mortgage, just. Even with a sale it would now just break even (possible equity of 10-15,000), we have completely left it open to offers and nothing in over a year.

I do however appreciate all the advice from everyone and will speak with the banks (not sure which one to start with but !)

Thanks again

Re: Struggling with 2 invst properties, have kept up with ppr home, can it be reposse

csirl said:

You can always rent or sell a house - obviously you've priced yourself out of the market. On the rental front, remember that some income is better than no income - so you are always better off renting at a lower price than not renting at all.

80K is getting towards personal loan territory. Is it more likely that a bank would prefer to let you sell and owe 80k unsecured than to allow interest to start rolling over on your current debts. If you continue with you current deficit and cant pay the mortgages, it wont be long before you put another 80k on the total anyway. Would be well worth talking to the banks about this and doing something with their agreement.

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This is great advice in my opinion. Especially the sentence I've put in bold.

OP, your properties are worth something, obviously just not worth what you're asking. I know it's hard. You (like many others) are still stuck in the celtic tiger frame of mind i.e. it's great to have property and it will go back up in value some day etc... Those days are gone now. But you do have options. You're not on the street. You have income. All is not lost. Your debts are only going to rise. Sell now at a greatly reduced price. Forget all about what those houses were worth 3 years ago. What are they worth TODAY? Offload them, be shut of them.

Re: Struggling with 2 invst properties, have kept up with ppr home, can it be reposse

Lynda,

Clearly this is proving extremely costly from a financial and personal perspective.

Take a leaf from the book of professional investors (in any market) who would find themselves in the same position as you; de-leverage.

You MUST sell your two investment properties. Put them on the market with a clear objective of timely sale, not price. Reduce the price until they sell - and they will, have no doubt. Just don't drag it out. You should aim to have them sold within 6 months.


If you find yourself relieved of:

• The cashflow demands
• The substantial additional financial risk
• The personal costs

that you current arrangements are having on you and your family you will be in a much improved state.