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