House in negative equity, heading back to Australia, advice needed.

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tilly1

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Hi Everyone, im sorry to post this again.. I have read through a few previous threads but i just wanted to ask a few more questions.. I know some people will get angry about this thread so apoligies in advance.. Just genuinley looking for advice.

We have a 3 bed house.. Bought 2007 for 260K and now its worth €115.. Like alot of other houses, the price has dropped significantly.. Im Australian and have always had the intention of returning home which myself and Irish husband are in August.. We've tried to ride it out.. When recession first hit, it was wait another year, and then another year... But thats just made it worse... Ive tried looking into renting but my mortgage is €1100 and i would only get €750-€800 a month renting.. I would simply not be able to meet the rest of the payment from overseas.. Ive looked int the RAS scheme but they dont need anymore houses in my area.. I dont know what else to... If we just walk away, will they chase us over there? Im sure they will know where we are as I am listed as being Australian and born there? Could they make us come back to Ireland? Has anyone on this site every actually done it? I know is morally wrong... But i think peopole have suffered enough in the country for long enough.. Banks gets bailed out and all that but not your average Joe? I would really like to hear your thoughts on all this... thanks and sorry in advance...
 
Tilly, you'll have to change the title of the thread if you want to get responses.

Also your post is all over the place. Probably due to your stress. Do I understand you correctly. You are still in Ireland and want to emigrate to Australia and leave the house behind and are worried that the bank will come after you for the mortgage, is that it?
 
Try to renegotiate the terms of your mortgage to increase the tenure & reduce the monthly payments to fall in line with the rent you can secure for the house.

I reckon the bank would rather renegotiate than have another Client default.

Good luck.
 
Bronte said:
Tilly, you'll have to change the title of the thread if you want to get responses.

Also your post is all over the place. Probably due to your stress. Do I understand you correctly. You are still in Ireland and want to emigrate to Australia and leave the house behind and are worried that the bank will come after you for the mortgage, is that it?
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Sorry im not a regular poster.. Not very good at this stuff!! And yes very stressed.. What would you suggest i might change it to? And yes I am still in Ireland and going home to Australia.. And yes wondering if the bank will come after me or if i have any other options? thanks for getting back to me...
 
What exactly is the issue here tilly1?

Are you not able to make the repayments? Just because the property is in negative equity - thats not a problem in itself unless you need to sell for some other reason or cant make the repayments?
 
Horatio said:
Try to renegotiate the terms of your mortgage to increase the tenure & reduce the monthly payments to fall in line with the rent you can secure for the house.

I reckon the bank would rather renegotiate than have another Client default.

Good luck.
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Im with IIB.. they've changed there name now, just cant think of it!! ive tried everything with them.. Asked for memorandom so i could at least save to cover the rental difference.. We are to old to get the mortgage for any longer, already tried that.. tried interest only.. They will not help or negotiate anything.. As we are not in financial difficulty yet?!? You have to be defaulted at least 2 months before they can step in...
 
Sorry Everyone.. My post is all jibberish..

My problem is... My house is in negative equity of €135k!! I am going home to OZ in August with my husband who is Irish. We have tried negotiating with the bank.. Asked for memorandoms, interest only, extend the period but they wont help at all because we are not in financial difficulty yet?!? Obviously i cant sell it.. they wont let me anyway.. And if i rent it out ill only get €750/€800 per month and my mortgage is €1100 per month.. I would not be able to cover the difference from over in Australia. So i guess what I am asking, is will the debt follow us to Australia if we just pack up and leave? I am sure they will guess that is where we are as I am down as being Australian on all documents..
 
Tilly other people have gone to Australia and other places and have just left the house and mortgage behind. So far we have not heard of the banks going after them. That is your option 1. But you may live in fear in Australia of them coming after you to pay the balance of the debt plus costs in the future. Some people are doing that as they prefer it to the nightmare of living in Ireland with the debt. They are not going to make you come back to Ireland. In Australia you'll have to try and play games with PRSI numbers, addresses, names and never owning an asset etc. If you do go to Oz I'm sure you'll meet many Irish there who can give you some tricks.

Your Option 2 is to negotiate with the bank. You could tell them you're going and are thinking of handing back the keys. That will get the bank focused on dealing with you. If you have some savings that you are willing to pay the bank then maybe they will negotiate. For example you're in negative equity of 135K, they might do a deal for 50K It's far better for them that you hand them the keys, sign the papers and that the bank agreas to let you off the balance remaining. We do not know if banks are doing this, but you can try. If you're going for option 1 don't tell the bank you are going. Another option the bank might take with you is that the house is sold and the mortgage balance of 135K converted into a loan (at the same interest rate as the mortgage) and you try and pay that from Oz.

Option 3 is to go to Mabs to help you negotiate with the banks, and you stay and try and sort out the debt.

Option 4 is to go to Australia, rent the house and get the bank to agree that any rent that comes in goes to the mortgage but that they will not increase the debt. I know one person whose bank agreed for the time being that the rent coming in would be ok as a repayment. As a landlord I would though advice you that it will be near on impossible for you to manage to rent a house from Australia so you would need someone who would take care of this for you.

If you're very stressed you should think about talking to someone.
 
I would go to MABS . Or outline your desperation to the bank. Or go into arrears so they'll listen to you. Exhaust all other options before you flee. It may seem like an attractive option, but on one hand you are throwing away all the money you've ever put into the house, some of which can be salvaged if you can work something out with the bank.

On the other hand, while I personally don't think the bank would manage get you in Australia (which is just one person's opinion), you seem like the kind of person that may always worry about it. If you think you might be living with fear constantly in the back of your mind over there, consider that. And consider your husband, will he have to sever all ties with Ireland? What if he needs to come back to look after a sick relative?

Take a deep breath and step back. You're in a messed up situation, but unlike some others you're lucky in that you still have some options. The stress is only going to cloud your judgement. Go for some long walks in the mountains and take the time to think about everything. Then try anything you can to get your repayments down to 750 p/m. Then go and enjoy the sun.
 
tilly1, take Bronte's number 1 option. Just turn your back and walk into the sunset. They will never seek you in Australia. Just don't tell them of these intentions.
 
I know of one case recently who approached their situation as follows:
Bought house in 2007 for ~450k (had relocated to Ireland with work). Have since moved back to US. Put house on market for 360 k. House has recently gone sale agreed for 330k with banks consent. Vendor had a tracker mortgage (greater than 400k). Bank accepted the 330k as full and final settlement.
Vendor continued to pay mortgage even after they returned to US, so played ball with the banks and built a decent case that they had done everything possible to secure a purchaser at a very good price. If the bank hadn't agreed to the reduced selling price, then I'm sure next option was to hand back the keys.
Negotiation with the bank was done through a solicitor as far as I know. Most purchasers will run a mile from a sale that involves further negotiation with the bank, but if the price is fair and there's a chance of a good deal, then some buyers may hang in there (depends on the price and house I suppose).
In short, if I was you I would put the house on the market and see if you can get a buyer. Definitely worth trying to build a case where you tried to deal with the problem & the banks before just throwing the keys back. Will only stand to you if they ever do come after you.
Only my tuppence worth !!
 
tilly1 said:
I dont know what else to... If we just walk away, will they chase us over there?
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To date there is no anecdotal stories of people being chased but IMHO as more people pursue this option it becomes increasingly economically advantageous for the banks to engage service providers to pursue this debt in countries where there is a critical mass of debt. The fact that they may pursue you may still mean that they have a very slim chance of recouping anything, if you don't have any assets it is a bit pointless to pursue you.

tilly1 said:
Could they make us come back to Ireland?
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No, they can legally pursue you and register a judgment but then the laws of your country of residence will come in to play. Look at the cases of people moving to the UK to declare bankruptcy.

tilly1 said:
But i think peopole have suffered enough in the country for long enough.. Banks gets bailed out and all that but not your average Joe?
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Don't fool yourself that your action would be taking a stand for the average Joe. Where we are at with the banking sector in Ireland the average Joe left behind will have to pick up the tab for those that cut and run.
 
tilly1 said:
We have a 3 bed house.. Bought 2007 for 260K and now its worth €115.. Like alot of other houses, the price has dropped significantly..
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That is a huge percentage drop, are you sure this is correct??
 
cashier said:
That is a huge percentage drop, are you sure this is correct??
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I thought that too but where I live the properties were selling for 400k at the absolute height of the boom and there is currently one for sale for 179k - so depending on where it is this could be correct.
 
There is another option - modification of option 1 really - before you go to Australia, to go to the UK for a few months and go bankrupt there. The bankruptcy will be recognized in Ireland, so the bank won't be able to pursue you in Australia.

I don't think just throwing back the keys is a good idea - the bank could then pursue you in Australia even years later, and who knows that they won't?
 
truthseeker said:
I thought that too but where I live the properties were selling for 400k at the absolute height of the boom and there is currently one for sale for 179k - so depending on where it is this could be correct.
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Me too, selling for 400 in boom but sold for 160 recently. City location.

I see nothing wrong with Tilly's value.
 
I wouldn't advice op to apply for bankrupty down under, it would be like going from the frying pan into fire. They are going there for a fresh start.
 
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