Case study can I be forced to sell with no arrears
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People interpret things very differently.
You made an agreement with the bank to pay back a loan over a specified period of time. A situation has arisen and you have had to renegotiate the terms of the loan effectively deferring the capital repayments.
So you are effectively in arrears on your capital repayments as you have not kept to the original agreement you interpret it that as the bank have allowed you to go interest only that you are not.
As Paddy says put up the full summary and perhaps people can give you an better answer.
You made an agreement with the bank to pay back a loan over a specified period of time. A situation has arisen and you have had to renegotiate the terms of the loan effectively deferring the capital repayments.
So you are effectively in arrears on your capital repayments as you have not kept to the original agreement you interpret it that as the bank have allowed you to go interest only that you are not.
As Paddy says put up the full summary and perhaps people can give you an better answer.
Thank you for the replies:
Mortgage PTSB 230,000 family home, current valuation by estate agent 180,000
Mortgage PTSB 90,000 former family home. Current value 65,000 at very best. This was our family home until we built new house, we planned to sell it straight away to fund our new home however we could not sell (2008) and are now stuck with 2 mortgages.
My partner was made redundant in 2009 and we struggled with only myself working but we never missed a payment. Last year we decided to emigrate as the struggle was too hard and our family had no quality of life. I contacted the bank and they agreed 9 months interest only on both properties.
Property 1 is empty as its in a rural location and we can not get a paying tenant
Property 2 is rented by my son and the rent is paid directly to the mortgage which the bank agreed, they have adjusted the capital amount to make it affordable.
Property 1: I requested extension to interest only to allow us find our feet and try and sell as there is no other solution but to sell. I received letter last week to sign agreeing to assisted voluntary sale confirming I will pay for another valuation etc and we have 6 months to sell. I have no problem in general with selling but I would have thought as we were never in arrears they could extend the interest only or stretch out the mortgage. There is no alternative being offered just sell.
Incidentally joe-90 we are not legally and technically in arrears as when we requested interest only the documents we signed clearly stated accepting interest only for a period did not affect our credit rating and did not put us in arrears!
Mortgage PTSB 230,000 family home, current valuation by estate agent 180,000
Mortgage PTSB 90,000 former family home. Current value 65,000 at very best. This was our family home until we built new house, we planned to sell it straight away to fund our new home however we could not sell (2008) and are now stuck with 2 mortgages.
My partner was made redundant in 2009 and we struggled with only myself working but we never missed a payment. Last year we decided to emigrate as the struggle was too hard and our family had no quality of life. I contacted the bank and they agreed 9 months interest only on both properties.
Property 1 is empty as its in a rural location and we can not get a paying tenant
Property 2 is rented by my son and the rent is paid directly to the mortgage which the bank agreed, they have adjusted the capital amount to make it affordable.
Property 1: I requested extension to interest only to allow us find our feet and try and sell as there is no other solution but to sell. I received letter last week to sign agreeing to assisted voluntary sale confirming I will pay for another valuation etc and we have 6 months to sell. I have no problem in general with selling but I would have thought as we were never in arrears they could extend the interest only or stretch out the mortgage. There is no alternative being offered just sell.
Incidentally joe-90 we are not legally and technically in arrears as when we requested interest only the documents we signed clearly stated accepting interest only for a period did not affect our credit rating and did not put us in arrears!
Brendan Burgess
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I am a bit confused by this. You want to sell. They have asked you to sell, so what is the issue?
This is how I see it.
1) You have a mortgage and have an original agreement to make certain repayments.
2) They have agreed to vary this agreement by accepting interest only for a period.
3) They are under no obligation to vary this agreement any further
4) You don't have a right to interest-only. You can ask, but they can refuse.
5) They cannot force you to sell as such
6) If you go into arrears, they can seek repossession of the property and then it will be sold for much less than you would get for it.
But back to the original point. Selling it seems to be in everyone's best interest. You should sign the forms agreeing to the sale. You should make whatever repayments you can in the meantime. If they don't grant you interest only, but that is all you can pay, then just go into arrears. I don't think that ICB records travel across borders.
I suppose my problem with the forced sale is if things get better for us will they allow us back out of a sale. And while I don't have a problem in principal with selling if I have to, I feel the bank aren't very helpful, there are people who are in arrears making no repayments and aren't been asked to sell. I am well aware what I borrowed and what I signed up to, but we also hoped house one would be long sold and it would have put a huge dent in the second house mortgage.
A second question I have, I have just received the documents to sign for house 1 and they are heading it buy to let property: it was never a buy to let it was my home for 11 years, can they reclassify it and are there any implications to that, it is part variable and part tracker.
Thank you in advance for any help.
A second question I have, I have just received the documents to sign for house 1 and they are heading it buy to let property: it was never a buy to let it was my home for 11 years, can they reclassify it and are there any implications to that, it is part variable and part tracker.
Thank you in advance for any help.
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Brendan Burgess
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This is very confusing.
Do you want to sell or not? Can you clarify what you actually want?
If you have emigrated, why do you want to retain a house which you can't rent?
If you are thinking of coming back to it, then you should try to keep it if you have a cheap tracker.
Because you have a cheap tracker, ptsb would like you to sell it. Because the Central Bank has given the banks targets for "sustainable solultions" and because a repossession or agreed sale couunts as a solution, then there is pressure on ptsb to force this through.
If this is your family home or if you intend to return to it as your family home
and If you are paying the interest in full,
I doubt if a judge would give them repossession.
You will need to check the Code of Conduct on Mortgage Arrears to see if propery owned by overseas residents is covered. Prsumably temporary absence abroad does not exclude it, but emigration for the long term probably would.
and
Do you want to sell or not? Can you clarify what you actually want?
If you have emigrated, why do you want to retain a house which you can't rent?
If you are thinking of coming back to it, then you should try to keep it if you have a cheap tracker.
Because you have a cheap tracker, ptsb would like you to sell it. Because the Central Bank has given the banks targets for "sustainable solultions" and because a repossession or agreed sale couunts as a solution, then there is pressure on ptsb to force this through.
If this is your family home or if you intend to return to it as your family home
and If you are paying the interest in full,
I doubt if a judge would give them repossession.
You will need to check the Code of Conduct on Mortgage Arrears to see if propery owned by overseas residents is covered. Prsumably temporary absence abroad does not exclude it, but emigration for the long term probably would.
Yes it is the family home and I would like to keep it if at all possible, if it comes to it and we have to sell then so be it. I don't know what the future holds, we have 2 year visa so we could be home soon, something could happen to bring us home, who knows I can't see the future and if I could I would have definitive answers. Maybe I should adopt the attitude of never mind the house never mind the bank here's your keys back, but I'm not I am trying to find a short term solution to enable me to pay my debts I am NOT trying to run away from them! Clearly there is not much help out there for people who are genuinely trying to find a way through this mess. If I am being forced to sell and there is no way out of that once I sign the documents them I am as well off handing the keys back and walking away.
Brendan Burgess
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Hi Left
If you sell you will be left with a shortfall which you will have to pay over time.
If you hand back the keys, they will sell it for a lot less and hit you with legal and security costs as well, so the shortfall will be much higher.
You can put an alternative proposal to the bank. Just pay the interest and see how it goes. It will take them a long time to take legal action to repossess it.
Brendan
If you sell you will be left with a shortfall which you will have to pay over time.
If you hand back the keys, they will sell it for a lot less and hit you with legal and security costs as well, so the shortfall will be much higher.
You can put an alternative proposal to the bank. Just pay the interest and see how it goes. It will take them a long time to take legal action to repossess it.
Brendan
Brendan Burgess
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That sounds as if you are in the Mortgage Arrears Resolution Process - MARP.
You can appeal it if you want to buy more time. But first, you need to think clearly about what is best for you. If you are getting no income from this house, then maybe you would be better selling it.
If you just want more time, then you can appeal it.
Brendan
You can appeal it if you want to buy more time. But first, you need to think clearly about what is best for you. If you are getting no income from this house, then maybe you would be better selling it.
If you just want more time, then you can appeal it.
Brendan
Under the new code isn't the appeal process now outside the MARP process? Of course, as the OP was likely in MARP prior to the introduction of the new code on 01 July he or she may still be subject to the provisions of the prior code. Is the seeming difficulty here that the OP has two houses and two mortgages, lives in neither and is uncertain what he or she wants in the medium to longer term? I don't see that either of the houses would be classified as a PPR under the code and so would not be expected to attract those protections.
Brendan Burgess
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Hi DebtCert
I didn't think that the case was a MARP case either, but the letter gave them a right of appeal, which suggests that the lender is treating is as MARP.
I thought it was all part of the same process? What has changed?
I didn't think that the case was a MARP case either, but the letter gave them a right of appeal, which suggests that the lender is treating is as MARP.
I thought it was all part of the same process? What has changed?
As I understand it, and I am open to correction on this, the CCMA previously set out a five stage process being communication, information, assessment, resolution and appeal. The new code introduced on 01 July reduces the process to the first four stages only. Thus, page 21 of the 2013 CCMA makes it clear that where a lender refuses to make an offer or makes one and it is turned down the effect is that the borrower is now outside the MARP and that the protections of the MARP no longer apply. My interpretation is that you do not stay within MARP by virtue of lodging an appeal:
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This is part of my problem, we weren't in arrears at all on either property, we engaged with them before we left home and advised we were going away on temporary work visas. Prior to this we never missed and payments and never had interest only period. It seems to me they are treating us as if we have been in arrears. I'm confused and stressed by it all, I don't want to sign something that forces me to sell when,if I come home when my work visa runs out, I have no home to go to.
Also my first home which is now rented by my son, they have reclassified this as a buy to let, when it never was,we actually lived there for 11 years before moving into our new home, the only reason we still have it is we couldn't get it sold when we moved. As asked before does anyone know if there is any implications to me signing these forms stating the house is a buy to let (when it's not).
Thanks again for all help.
Also my first home which is now rented by my son, they have reclassified this as a buy to let, when it never was,we actually lived there for 11 years before moving into our new home, the only reason we still have it is we couldn't get it sold when we moved. As asked before does anyone know if there is any implications to me signing these forms stating the house is a buy to let (when it's not).
Thanks again for all help.
It sounds to me that you are a reluctant landlord (you never intended to be one). The bank see the property as a BTL - and you are renting this with the banks knowledge. Ultimately, your loan documentation should show how the bank classified the loan at time of mortgage drawdown.
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Brendan Burgess
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Your former home is definitely an investment property. You get rent from it. It is not your principal home.
You don't need to sign the voluntary sale form. You can wait to see what develops.
You are not in arrears, but you will go into arrears if you can't meet the full repayments.
If they intend to repossess, then they will have to write to you telling you that they will be issuing legal proceedings.
At that stage, you could agree to sell it or you could fight the repossession in court.
So I would say, don't sign the form. If you don't sign it, it doesn't matter what is written on it.
You don't need to sign the voluntary sale form. You can wait to see what develops.
You are not in arrears, but you will go into arrears if you can't meet the full repayments.
If they intend to repossess, then they will have to write to you telling you that they will be issuing legal proceedings.
At that stage, you could agree to sell it or you could fight the repossession in court.
So I would say, don't sign the form. If you don't sign it, it doesn't matter what is written on it.
Brendan Burgess
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You should also contact the Central Bank. It is their stupid targets policy which is forcing the lender to seek a "sustainable solution".
ptsb can now claim to have offered you a sustainable solution, so they have reached this part of the target.
If they issue legal proceedings against you, then they will have achieved the second part of their target.
ptsb can now claim to have offered you a sustainable solution, so they have reached this part of the target.
If they issue legal proceedings against you, then they will have achieved the second part of their target.
Thank you,
A very reluctant landlord is correct, but im doing what i can with respect that house also, i pay the Ptrb & household charge, income tax etc on it.
If i pay what I can they might not get a repossession order.
I might sign the forms for "the buy to let" crossing off the term buy to let and initialling it, keep a copy and send the original back. Surely then no matter what happens they cannot say I accept it was a buy to let? They aren't trying to get me to sell this one so for now this is ok.
Maybe I should get the independent advice on the one they want to sell!
A very reluctant landlord is correct, but im doing what i can with respect that house also, i pay the Ptrb & household charge, income tax etc on it.
If i pay what I can they might not get a repossession order.
I might sign the forms for "the buy to let" crossing off the term buy to let and initialling it, keep a copy and send the original back. Surely then no matter what happens they cannot say I accept it was a buy to let? They aren't trying to get me to sell this one so for now this is ok.
Maybe I should get the independent advice on the one they want to sell!