Anybody threatened with exclusion from MARPs arrangement?

I

Ireland.1

Registered User
Messages
156
Post drafted by family member:



Hello all,

Another sob story – but would be delighted to hear some feedback please.

I took out my mortgage in 2007. 5% rate, five year fixed rate, mortgage duration 25 years, annuity home loan for 275k.

Back in the day this was seen as quite prudent. Property is in working class suburb and would be lucky to fetch 200k if put on the market.

I am self employed, barely making ends meet but managing to pay interest on the mortgage each month. I am also engaging with MARPs.

Now this is were it gets tricky:

I was left a property in 2008 and stupidly re-mortgaged it for 100k. I have had the property valued this week and the value is less than what I re-mortgaged it for.

This property is luckily rented and I have a surplus of 100.00euro each month to go towards the payment of my main residence.

The provider for my main residence wants me to sell the second property. They say if I don’t do so I will be ejected from MARPs.

I have explained that I am sceptical to do so as I am left with a surplus amount each month (not much I know) to put towards my mortgage with them and if I sell the property I will be left with a personal loan as well as having to give them 100.00euro less each month. They don’t seem to grasp this or maybe I’m missing something ???

Thanks in advance.

John
 
I am not sure that you are being ejected from MARP as such.

The MARP is a process. It does not oblige the lender to give you any deal.

I think it's reasonable for the lender to ask a borrower who is in difficulty to reduce their overall lending and exposure to property.

Is the loan with the same lender? If so, then it is definitely appropriate for them to ask you to reduce the exposure.

Brendan
 
MARPS is not a body, it is a process for resolving mortgage arrears. You are dealing with the ASU dept of your Bank/B.Soc. When you have completed your FRS and submitted this to the Bank they will make a decision on your request for a reduction in loan repayments. This should not be regarded as a permanent solution to repaymant problems & will only give you breathing space to consider alternative options.
The position as presented by you above does appear to reduce rather than increase your capacity to meet loan repayments if you sell the 2nd property. I think you should point out that to the Bank and emphasise the logic of holding on to the 2nd property. If they still refuse to reduce your loan repayments you are entitled to appeal the decision & you should do this. There is no guarantee of a favourable result, but generally the structure works, where a full disclusure has been made.
 
Hi Brendan, no their loan is with a different lender. From what I hear they were told they would be excluded from MARP if they did not agree to what the bank had asked of them.
 
They can't be excluded from MARP! They should have a formal written reply to their request under MARP. Ask them for a copy of that response & ensure that the facts given to you verbally are correct.
 
Thank you 44Brendan. I will pass your comments on. From whats been said this particular bank are in the courts morning, noon and night so they are generally worried.
 
Ireland.1 said:
, no their loan is with a different lender. From what I hear they were told they would be excluded from MARP if they did not agree to what the bank had asked of them.
Click to expand...

There must be a reason, from the banks point of view, why they requested this. If the second property were sold would you be in a better position?

Presumably we are talking about Start mortgages, who are the main players in the courts and are quite agressive by all accounts.
 
I have a surplus of 100.00euro each month to go towards the payment of my main residence.
Click to expand...

In the context of a mortgage of €275,000, €1,200 a year is not signficant.

If you lose the tenant or if interest rates rise, your position will get a lot worse and this will affect your main lender.

I think that, on balance, you are better off reducing your overall lending.
So, I agree with the bank's insistence on selling the investment property.

Brendan
 
You must log in or register to reply here.
Back
Top