Defaulting on mortgage options

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ecstatic

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Hi,

Im giving serious consideration to defaulting on a property i own in Dublin.

What are my options and how should i go about it with the banks ?

Im defaulting as i reckon the place is maybe worth half of what i paid for it.

I understand others who might say well you signed up to it etc etc however this is not a consideration as they valued it and it was valued incorrectly. Im 29 years of age and dont want to be holding negative equity so i may aswell look at the default option. My emotions are not a consideration my financial well being longterm is.
 

nediaaa

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do not under any circumstances default because the repercussions of defaulting will live with u long after the negative equity.Eg, You would never be able to get a credit card and therefore never be able to book a flight on one of ryanairs lovely jets.
 

mf1

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"however this is not a consideration as they valued it and it was valued incorrectly."

Did they force you to buy it? No, you bought it and they lent you money on it.

"my financial well being longterm is. "

If you default, your financial well being long term is effectively shot!


mf
 

BJRsols

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by defaulting, the interest still continues to mount until it is paid off in full.

It's only negative equity of you intend to sell!!

Better to rent a room or move out completely and rent it out than give up. But, to each their own

Never mind about credit cards, but you will not get credit.. mortgages and all.
 

Romulan

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Everytime I read a post like this, I think its a wind-up.

No one forced you to buy it.

The banks will not let you walk merrily away.
 
G

Guest116

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What is your remaining mortgage?
What type of mortgage do you have and at what interest rate?

Can you rent some rooms?

What are you planning to do even if you do "default" (this is not an easy route and it is invitable that a judgement will be made against you and you will still owe money at the end of it, you won't be able to just walk away from the debt).
 

TheBigD

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however this is not a consideration as they valued it and it was valued incorrectly.
If you thought it was valued incorrectly then why did you not object there and then? And if you thought it was overvalued then why did you agree to the purchase price?

I think you're just cutting ur nose off to spite your face if you default.
 

so-crates

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This isn't the US. "Jingle mail" isn't an option. The repayment of the mortgage is tied to you not to the house so if you do default and the house is ultimately sold, you are still liable for the difference between the sale price and the mortgage (and the bank will not have the same incentive to hold out for the best price so the difference (the negative equity if you will) will likely be larger than if you sold yourself.).

Defaulting is the surest way of realising that potential negative equity ... wise up.
 

ecstatic

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Right bought for 555K was valued at 700K at some stage and now id suggest its valued at 400K.

Im looking for advise as to what happens to someone who has done it not ramblings about my morality.

The way i look at it its probably valued at 200-400K.
Mortgage remaining is probably around 450 - 470.

To take me to court costs bank a lot of money with a lot of hassle. I can afford to pay the mortgage but sure if everyone else is doing it why dont I.

Im looking to state to the bank look im going to default unless you take it back and to add it to your bad debt loans. Under these circumstances i may decide to throw them an extra 30k ontop and allow them to take a 150K drop in value of the mortgage. However if they decide they dont want it well then they can goto court. Its possible for me to relocate abroad at the moment so credit is not a big concern.

Constructive advise please.
 

ecstatic

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Defaulting and pulling banks through courts takes a minimum of 3 years.

Wise up im looking for financial advise not moral advise.

Back in 1930's im omaha the government wrote off mortgages for farmers.
 

mf1

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Defaulting and pulling banks through courts takes a minimum of 3 years.

Wise up im looking for financial advise not moral advise.

Back in 1930's im omaha the government wrote off mortgages for farmers.

Oh, such confidence!

I think you should just tell your bank that the property is their's, outlining all of the most cogent reasons you have already identified yourself. I'm absolutely certain that once you explain to them the error of their ways that they will agree with you. :rolleyes:

mf
 

so-crates

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Hmm - dunno what you define as "morality" but I think everyone has queried your sense not your morals.

Right since you want it explained in baby terms - the value of property is not absolute. At the time when it was valued for your mortgage similar properties were selling for €X. Now they aren't. Mortgages are loans taken out secured on your property. The fact that the property is now worth less than the mortgage is actually a risk to the bank not to you unless you decide to sell the property. Basically you gambled on the value of the property exceeding the value of the mortgage. You've lost the gamble if you decide to realise the risk now by liquidating the asset.

You want the bank to give you a get out of jail card to the tune of €150k (you aren't being generous if you decide to "through them an extra €30k ontop" - you are being ridiculous). Given their current propensity for chasing debts through the courts, I think they will simply laugh in your face. Now if you were to say that you can't afford the mortgage it would be different matter but that isn't what you are saying. What you are saying is that you can afford the mortgage you just don't want to because the property the mortgage is secured on is worth less.


Simple truth is you can't walk away - you don't have a leg to stand on. By all means bring your proposal to the bank. It would be interesting to see how they would respond.
 

so-crates

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Back in 1930's im omaha the government wrote off mortgages for farmers.

And they did this because the farmers didn't want to pay? Or rather was it because the farmers couldn't afford to pay? (Hmm, lets see, post-1929 crash and serious liquidity crisis combined with an environmental catastrophe...)

Argentina made a habit of defaulting on its national debt - would you like to cite them as examples of bailouts also?
 

jhegarty

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Constructive advise please.


Here is what will happen based on your plan.

The bank will sell the house as quickly as it can. Will get about €300k.

They will then sue you for the other €170k that is owing.

You don't seem to understand that while the bank gave you a loan to buy a house , they didn't sell you the house.
 
G

Guest116

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What are your monthly repayments and what kind of rent could you get if you rented it?

Have you looked at any other options that let you keep the property and not try to "default" ?
 

jaycen

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Ok, here's how it works (from what I understand).

You decide it's not worth your time/money paying the bank for the property and decide to hand the keys back to the bank.
They will take the keys and attempt to sell the house to recoup some of their loss, the rest they will sue you for, the court will find for them as you chose to take the mortgage out and so on.

You will end up paying the difference and the court costs (often more than the difference) they'll figure out an easy payment paln for you that will probably take the rest of your working life to clear.

It's really not worth it unless you're going to become bankrupt, you'd be better off working with the bank to reduce your payments over a longer term if it's tight.
 

elcato

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Im looking to state to the bank look im going to default unless you take it back and to add it to your bad debt loans. Under these circumstances i may decide to throw them an extra 30k ontop and allow them to take a 150K drop in value of the mortgage. However if they decide they dont want it well then they can goto court.
Please, pleeeease give me an invitation to go into the bank with you to hear you tell them this. I would love to see the reaction. They will have a great funny story to tell in the canteen for months starting with 'You wouldn't believe what a customer said the other day ....' and then the laughter will be heard for miles. I really suggest you do this and then you can bring me to court for advising you to do it when you end up paying back the defaulted money over the rest of your life.
 
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