I have a BTL that a vulture fund is selling through a Receiver. My loan balance is €180k and the property is up for sale for €75k. There will be costs of sale to come from this too, so it will leave a balance of over €110k which I'll still owe.
I took out this mortgage in 2005 with UB and have only ever been able to afford interest only repayments. Even though I was receiving rent, which was less than interest, I needed the money to live on.
Im married but the property is in my sold name. My husband and I have a family home (balance €200k value €370k). We have 3 kids and I work 30 hrs a week. We have no surplus income at the end of the month and are not big spenders either. We have no savings and live month to month. I have no other debt.
I have 3 questions:
1. After the vulture fund sells the property what likely action will they take? I take it that it wouldn't be worth their while obtaining a judgement against and then a judgement mortgage on my family home? (ie the cost of obtaining a judgement against unlikely to receive anything)
2. If after they sell the property I was able to get a loan of €5k from my parents do you think they might accept this as full settlement?
3. Should I consider personal insolvency options?
though I was receiving rent, which was less than interest, I needed the money to live on.
I hope the vulture fund do place a charge on the property. You are looking after yourself by investing in AVC's rather than dealing with your responsiblity.You do need to talk to an insolvency practitioner on this.
You owe them €110k.
You have €170k equity in your home, so I don't see why they would not get a judgement for the shortfall and register it against your home. They won't seek to repossess it, but if you ever try to sell your home, half the net proceeds would have to be used to clear the debt.
And contribute to your pension scheme?
Should I still contribute to AVC?
Hi I work in the private sector & in the last few years I started an AVC. I have it in moderate risk funds. Since the covid crisis the amount I have invested into AVC has decreased in value compared to what I have contributed. I am at least 20 yrs from retiring. Should I move the funds to low...www.askaboutmoney.com
Who says that there are no strategic defaulters in Ireland?
Excuse my ignorance, but does any interest accrue on this?You have €170k equity in your home, so I don't see why they would not get a judgement for the shortfall and register it against your home.
Yes it does at 8% simple interest. The % fig may have changed. The judgement just needs to be renewed every 6 yrs.Excuse my ignorance, but does any interest accrue on this?
If not, a 40 year old could sleep easy with this assuming 1) they were in their forever home; 2) inflation.
Wow. Even without compounding that's pretty steep. I wouldn't want this hanging over me.Yes it does at 8% simple interest. The % fig may have changed. The judgement just needs to be renewed every 6 yrs.
Then in real terms it's kind of like an interest-free loan that only needs repayment when your house is sold which could be in 40 years.was reduced from 8% to 2% in 2017.
And, I think it's simple interest. Although that doesn't matter that much with a rate of 2%.
Its been a good couple of years since I was involved in them so was not sure of the current interest rate.It was reduced from 8% to 2% in 2017.
And, I think it's simple interest. Although that doesn't matter that much with a rate of 2%.
So less than most mortgages.
Brendan
News | Holmes
Holmes provide a wide range of legal services nationwide, delivering quality, knowledge, experience and value; collectively working in partnership with our clients, investing in our people while supporting the communities in which we operate.www.homs.ie RATE OF INTEREST ON JUDGMENT DEBTS REDUCED
The rate of interest on judgment debts has been reduced from 8% to 2%, with effect from 1 January 2017, pursuant to the Courts Act 1981 (Interest on Judgment Debts) Order 2016.
This means that the interest accruing and payable by the debtor, once a judgment has been awarded in respect of a debt, will be significantly less at 2% rather than the 8% which was in place since 1989.
This will also impact on those situations where a judgment mortgage has been registered and the debtor wishes to have the mortgage discharged. In these cases, interest on the judgment sum from the date of judgment up to the date of payment is payable by the debtor and this interest amount will now be calculated at the reduced rate of 2% with effect from 1 January 2017.
I have no idea hof these vulture funds work, but two errors in that thinking:and given they have likely recouped their money from the sale of the property they are unlikely to go down this route
Only if it is a performing loan. They want to restructure the repayments, including possible write offs. Then can then sell it onto a bank.Sorry this situation is written on behalf of a friend and the avc was related to me and not this situation, I'm just giving advice. I previously worked in debt recovery and going legal in these situations wouldn't have been considered worthwhile or an option always pursued. Would a vulture fund be more likely to sell the debt on again rather than pursue a judgment mortgage for the cost of c4k. Judgement mortgages are only in place for 12 yrs.
A judgment mortgage isnt the only option open to them. They could seek a payment order, send the sheriff or petition for bankruptcy...Sorry this situation is written on behalf of a friend and the avc was related to me and not this situation, I'm just giving advice. I previously worked in debt recovery and going legal in these situations wouldn't have been considered worthwhile or an option always pursued. Would a vulture fund be more likely to sell the debt on again rather than pursue a judgment mortgage for the cost of c4k. Judgement mortgages are only in place for 12 yrs.
.. I haven seen plenty of receivers selling significantly undervalue in one case a 170k property for 25 k....
Mates?Why do they do that. Never understood that.
Usually, plus you can get paid on the double when you go after the equity. It needs regulation.Mates?
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