Morgage negotiations with bank what do i say

J

johnpdolan

Registered User
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Hi

My bank has asked me to write a letter telling them the problems i am having in meeting the repayments on my house, i am also in negative equity to the sum of 50k.

Does anyone know what i should write on this letter, a bank official told me to be brutally honest and that is no problem but what does he mean when he says make them a proposal? What can i ask them for and more to the point does anyone have any idea of how this process might work out for me and my family?

John
 
Hi John
The main thing is that the bank is aware that you appear to be having difficulty in meeting your mortgage repayments. They are required to work with you, once you're co-operating, in trying to get you to a better place. This might mean interest only for a period or extending the term of the mortgage, for example, but will more than likely lead to some form of reduced repayments for a defined period of time.
As the bank official mentioned, you need to be upfront with them when providing financial information to them and coming up with a proposal on what you are in a position to pay on a monthly basis, taking into account your other financial outgoings. You need to be honest and realistic with these figures otherwise you may find yourself having to renegotiate another deal in a few months time.
I know this is probably a stressful time for you, but you are not alone, there are thousands others in the same position as you, and it is in the banks interest to agree to something that works for both you and them.
The proposal and the agreement will most likely be for a specific period e.g. 6 or 12 months, at which time it will be looked at again to see has your circumstances changed/improved.
 
Since 01/01/2011 there is a process called MARP in place with all banks for dealing with mortgages that are the PPR or if you just have one property.

see here
[broken link removed]

for the guidelines.

The form is 12 pages long and can be found on the website for each lender.

I would recommend you go down this formal route as opposed to writing a letter as such, they will ask for all the detail anyway so may as well do it now.

In addition the MARP process is separate from all your other dealings with the bank
 
Thanks rudolph

I have already been on interest only with the bank so don't think that is an option

Should i tell them they can have the keys and its their problem
 
That's one option John but you need to have a good think about that. You will still be liaible for the debt, it will be on your credit record so you may not get credit from any other lender for a long time, and what will you do by way of rehousing your family? The bank may consider continuing on the interest only arrangement for another period, if you can't actually pay any more the only other thing they can look to do is to repossess and generally speaking banks don't want to do this, for a variety of reasons, unless there is no other option.
 
Hi Johnpdolan
Dont hand back your keys...if possible give the bank some figure of money that you can repay per month...and when they ask you for a plan tell them you need their help in figuring out how best both you and the bank can be satisfied. they want their money you want to pay and they are the experts so let them figure out how best to achieve this...
Personally I think that the banks havent a clue what to do to sort out this kind of problem and they cannot end up with everyone's property and everyone on the street ..what would they do with all of the property ..rent it back to the people who owe them money ??
I dont know the answer but then I dont think the banks. the Government, Central bank or the ECB know the answer either ..so hang in there till some "genius" works it out..
Good luck and there are 1000s of people in this country in exactly the same position as your self ..hang on
 
Thnks for all the advise, one more thing, if i am in arrears am i better getting back on proper terms with bank so as to help my case for help or will being in arrears strenghten my case with them that i am no longer able to afford the agreed terms when i was employed and actually earning, not like today when i have no income at all
 

What is your actual income John? Do you get any benefits or is your partner working, and why can you not make the repayments? Is it down to paying other debts than your mortgage? This will dictate how your bank deals with you, and you need to make sure any offer you do make is affordable for you and whatever you do, don't offer more than you can reasonably afford - be realistic about it, the bank would prefer a realistic approach as well, rather than you running into difficulty in a few months, and having to go back to them again.

www.frost.ie
 
At the end of the day John your position unfortunately is what it is. The bank will need to try and work with you to keep the mortgage 'alive' and, hopefully, things will pick up for you at some stage in the future. The fact that you are currently in arrears is down to your work/financial situation and as long as you are engaging with them and trying to work through it with them they should be sympathetic to your situation. As I said before most banks don't actually want to repossess, its only if all else fails or the borrower is not playing ball that they will move to repossess.
 
Rudolph is right - they do not want to repossess your home. The reason I'm asking about other debts is that a lot of people will get into trouble because they try to pay other debts at the same time, or even put the likes of an unsecured debt ahead of the mortgage, which is their top priority. And if john can get a handle on his current state of affairs, he'll be in a much stronger position when it comes to dealing with the bank re his mortgage because he'll know where his money should be going.
 
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