ExPartner refusing to sell property / pay full mortgage

[Ailis Ni C]

I am writing on behalf of family member. He separated from his partner 6 years ago not married and no children. House was rented for a number of years, rent was covering the mortgage ok; house was in negative equity so was not sold with hope it would come back to value. She then insisted against his wish that tenants should vacate property and she return to reside in the house with her new partner and 2 young child and she requested restructure of mortgage.

He is now married and renting. Bank proposed mortgage be extended to 30 years and lower monthly repayment; he recieved financial advice that he should not sign restructure and should not pay anything towards mortgage.

Property now falling into arrears. He has proposed paying half of arrears (currently about 10000) if she would agree to sell house or put her new partners name on mortgage. She is refusing all offers continues to reside in the house paying less than half of the mortgage payment.

Bank do not appear to be interested. Despite letters sent seeking their input - no reply recieved.
What to do? he does not want to be a bad debtor feels stuck at present.

Any suggestions welcome. Is court the only way to go to request sale of property?
Thanks

 

[Lucuma]

Hi, I just saw that you got no replies, this is an old post so I assume it's resolved by now, however just to say yes he can go to court to try to force her to sell but that could cost him 10-20k in legal fees, hence why very few if any go down that route for houses that are in negative equity.
I think he should just do nothing and the bank will repossess and force a sale. Maybe when she starts getting letters from the bank about repossessing she will agree to a sale then, hopefully market value now will cover the outstanding mortgage. I think the advice he received was bang on the money and he should just do nothing and let the bank do the hard work to get her out and sell the house.

 

[Bronte]

Bank do not appear to be interested. Despite letters sent seeking their input - no reply recieved.
What to do? he does not want to be a bad debtor feels stuck at present.

So far the bank may not be interested but they will be eventually. Looks like she is playing along by paying something which is enough to keep the bank away. For now.

What letters are you referring to?

Does his ex have a good job?

 

[Ailis Ni C]

He has written numerous letters since 2014 pointing to his wish to address the current situation responsibly, noting that arrears continue to mount as mortgage payments are not being paid in full since ex moved tenants out of house and moved in against his wishes. Letters noted that ex was refusing to move out so house can be rented as had been done successfully for +2 years; letters also noted that he is open to voluntary sale of property if ex not agreeable to making full payments or renting property out in order to ensure full payments can be made.

Ex does not have well paid job, unsure of exact income.

Latest correspondence has suggested that bank now have the right to assess couples who have separated as single and may now agree to a restructure for ex without his consent on basis that he is not co-operating; has anyone heard of this? I would have thought legally this would not hold up.

He has made efforts to work with the bank, and in afore mentioned letters had requested a meeting with them to consider options but they refused insisting that a restructure was the only option which he was refusing to sign. He is not agreeable to sign up to a 30year restructure for a mortgage he wishes to get out of.

All ideas welcome.

 

[Bronte]

The brother

I can well see why he doesn't want to sign but is he being realistic. He has to understand he is liable for this mortgage. Fully liable, not half liable. And if he doesn't get his ex on board by denying her this restructure she might cause him massive problems. I understnad she holds the cards, and if she gives up, and stops paying, she has zero income available and then they will come after him.

You have not given us any figures. Mortgage, NE, monthly repayment, interest rate. How much she is paying. Arrears total is 10K apparently and rising.

If he has a good income the bank is sitting pretty. And not only will he end up with paying the arrears, he will have to pay extra interest and all sorts of legal costs that the banks will add on.

The Ex

Let's look at it from the ex point of view. She wants to stay in the house, the bank is offering her a restructure that she can repay. But your brother is preventing her achieving this. She presumably hasn't a hope of another house, so she will stick to this one for sure. Especially as she has children. It is in her best interest to hold onto the house.

So with that she will be willing to pay the mortgage with the ultimate aim of owning the house. She is probably avoiding the problem down teh road of the fact your brother is half owner and will have some rights to the proceeds of the property but that is currently, to her, an irrelevancy.

Based on the court cases that Burgesss analysed it seems very unlikely that a family home will be repossessed where some kind of meaningful payment is being made.

The Bank

They don't care one whit about any of the relationship issues. Nor do they really care about the arrears, if they did they would have taken the house and sold it. And big bad bank evicting a family is a no go currently in Ireland. But they have an ace up their slieves. Your brother. Unless he is broke? Even if he is, the NE if it's not much, they can eventually get the house, family home or not.

 

[Ailis Ni C]

Mortgage outstanding 250000
Current Value 180000
Monthly Repayment 1200
It is a tracker
Ex is paying approx 500 monthly

Ex has recently notified my brother to say that the bank have offered her a restructure and will not require my brother's signature on the basis that he has been non co-operative re previous restructure offered. Is this possible?. My brother has sent further letters x3 to the bank in the last 6 weeks requesting to meet them to discuss the mortgage and consider options available to him given he does not have access to the house(ex lives there with new partner and 2 children from new relationship) and given the current circumstance. He has received no reply from the bank.

My brother has returned to college part time following being made redundant; he is currently working also 4 days pw and earning a mere 20000 approximately per year. Therefore he has a low wage and this is unlikely to change anytime soon. He has approx 10000 savings.

Brother is married with child on the way. He wants to find a solution and address the debt but can't afford to be tied into mortgage of property for 30plus years when he can not live in or rent out the property due to ex and her new partner and kids insisting on staying where they are and paying only part of the mortgage.

All suggestions welcome.

 

[Brendan Burgess]

Mortgage outstanding 250000
Current Value 180000
Monthly Repayment 1200
It is a tracker
Ex is paying approx 500 monthly

I presume he is not making any monthly repayments?

The interest on €250,000 @ 1% a year is €2,500.
She is paying €6,000 a year, so she is paying down the capital i.e. your liability to the bank by €3,500 a year.

With a shortfall of €70,000, this will be repaid in around 15 years or so, assuming house prices don't change. If house prices increase, it will go into positive equity sooner.

Once the house starts approaching positive equity, her tune will change completely. She will want his name off the deeds and the mortgage. He will be able to be difficult at that stage and set his terms for agreeing to it.

The longer he holds out, the more equity he will be building in the house.


Your brother's options

1) Move back into the house himself
He is a joint owner of the house and can move back in at any time.

2) Go bankrupt

Therefore he has a low wage and this is unlikely to change anytime soon.

This is a perfect time for bankruptcy, as he has low earnings. Although I am not sure what it will achieve for him. He doesn't need to worry too much about the debt.

3) Try to do a deal on selling the house now
"He has proposed paying half of arrears (currently about 10000) if she would agree to sell house or put her new partners name on mortgage."

No. He should not pay anything.The bank will not allow him off the mortgage while it's in deep arrears, unless her new partner has a very good income and is willing to replace him.

3) Take a High Court action to force the sale of the house
This is pointless as it would cost a lot and just leave him with a debt of €70,000.

4) Sit tight
This is what I would do. He is not paying anything. He is in deep arrears and on a low income so he won't be able to get a mortgage himself for a long time to come. At some stage in the future when the house is in positive equity, he might consider taking legal action to force the sale of the house.


What should he do in the meantime?

He could write formally to her and point out that he owns half the house. He could say that when the house moves into positive equity, he will take formal legal action to have the house sold and his debt paid off. If she wishes to avoid this, then she must take steps now to have his name removed from the mortgage.

In the meantime, he reserves the right to move back into the house whenever it suits him.

The problem with this is that as she is in deep arrears, it's very unlikely that the lender will allow your brother's name off the mortgage.

If he does send such a letter, she might reduce her repayments to make sure it takes longer to get out of negative equity.

He can write to the lender and formally object to any restructuring. But then she, and he, will be in arrears. At least if the mortgage is restructured and paid according to the restructuring, his credit record might improve.

What is the market rent for the house?
If she pays at least the market rent for the house, then your brother is not losing out. If she is paying less than the market rent, then your brother is losing out.

For example, let's say that the rent is €1,000 per month, then he could write to her saying that she should pay at least this amount to the lender. If she pays any less, then he should send her a bill for rent arrears every month. She will ignore it, but when this issue is finally resolved, he will be able to claim that she has rent arrears of €20,000 and he wants this before agreeing to selling the house or agreeing to take his name off the deeds.

Brendan

 

[Lola 16]

Wow. This is incredibly similar to the situation that I am in.

Im sure the ex is reasonable and understands how this is affecting everybody involved. Maybe she wants a fair chance to try and get the brothers name taken off and is working with the bank to try and achieve this?

 

[Ailis Ni C]

Thanks for very helpful information Brendan; it did help. I'm happy to report a positive outcome for my brother. Despite ongoing issues with mortgage payments not being made by the ex and this leading to a lot of stress over the last year, the good news is that following the threat of court proceedings his Ex agreed to sell the property which had returned to value. Must also note the benefit of having a savvy solicitor in addressing this matter.

 

[TX1]

Just to throw a spanner in the works ... if the sister who moved back in was married to her new partner would the house be protected by the Family Home Protection Act? Technically she would be living there with a spouse and children despite it being co owned with another former partner.