Advice regarding mortgage arrears

Discussion in 'Mortgage arrears & negative equity case studies' started by sum81, 12 Feb 2019.

  1. sum81

    sum81 Registered User

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    17
    hi,
    I bought a house over 10 years ago with my brother. his left the country shortly after as he lost his job we lost touch as he doesn't want anything to do with the house or mortgage.
    I kept mortgage payments up and then I lost my job, at the same time out interest only arrangement expired and the mortgage payments jumped up to €1300 per month.
    I stopped paying altogether and haven't paid anything since.
    I've since married and had a child and we live in my husbands house. I've contacted the bank on numerous occasions but they are not interested in doing any sort of deal until my brother contacts them (which he wont).
    can you please advice if bankruptcy is my best option. just to note the house has been sitting idle for a number of years. value is 90k and balance of mortgage including arrears is approx. 280k.
    would really appreciate some advice as to what I should do?
    thanks
     
  2. NoRegretsCoyote

    NoRegretsCoyote Frequent Poster

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    280
    Would you not at least rent it out in the meantime to generate an income stream?
     
  3. Purple

    Purple Frequent Poster

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    8,755
    How can a €90,000 house end up with €280,000 in owing?
    If you paid the mortgage for a few years and then stopped after the repayment went to €1300 a month (€15,600 a year) how much was the house??
    €15,600 x 8 years is €124,800 so the house must have cost around €150,000 ten years ago and is still only worth €80,000. What happened to it?
     
  4. TLO

    TLO Frequent Poster

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    225
    Suggest trying to sell the house first. See if:

    1) your brother will agree to this.
    2) the bank will agree to this.

    Ideally, agree to a voluntary sale in exchange for a write-off of the shortfall. Failing that, force through the sale anyway. Chances are, that after all this time, the bank won't chase you for the shortfall. Bankruptcy is a last resort, and it's too soon to play this card.
     
    sum81 likes this.
  5. RETIRED2017

    RETIRED2017 Frequent Poster

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    778
    Don't agree to sell until you reach agreement with Bank in writing on shortfall first,
    The bank would be mad to write it off if you do not reach agreement before selling,
     
    sum81 likes this.
  6. RedOnion

    RedOnion Frequent Poster

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    2,682
    Well it depends on the interest rate.
    To get to 280k would be a compound rate of 8%. PTSB variable rates for example were above 7% in that time frame.

    @Purple question is valid, and you've actually strengthened it. How did a house costing at least 150k end up being worth only 90k now?

    Any chance of getting on topic and advising the OP?
     
    sum81 likes this.
  7. sum81

    sum81 Registered User

    Posts:
    17
    hi,
    thanks for advice. We bought the house for 270k in 2007 so the mortgage was 250k. as the house value has dropped significantly it is now only worth 90k. we paid the mortgage for a few years but due to arrears and payments building up its there is now at least 280k (if not more) owed.
    i really want to get closure on this but don't know where to start. ive contacted a PIP today and they are going to go through some options with me. would it be worth contacting the bank so see if there would right off the remaining debt. i will co operate with them but its my brother that wont give them any information.
    thank you
     
  8. sum81

    sum81 Registered User

    Posts:
    17
    Thanks for this advice. I think I’m going to approach the bank with this. Before I do though I need to know what costs I would incur if I sold property. Would you have any idea?