Saddled with Joint Mortgage in Negative Equit

S

selenak

Registered User
Messages
29
Age:
29
Spouse’s/Partner's age:
Ex - 27

Annual gross income from employment or profession:
E45,000
Annual gross income spouse:
Ex - unemployed

Type of employment:
Private sector

Expenditure pattern:
Save €300/month

Rough estimate of value of home
E180,000
Mortgage on home
E300,000 -been paying mortgage for three years now
Mortgage provider:
PTSB
Type of mortgage: Tracker, interest only, fixed rate
Tracker
Interest rate
ECB + 2.25%

Other borrowings – car loans/personal loans etc
None

Do you pay off your full credit card balance each month?
No

Savings and investments:
E60,000 savings. Shares valued at approx 10K
Do you have a pension scheme?
Yes, valued at 6-7K.

Do you own any investment or other property?
No

Ages of children:
None.

Life insurance:
No.

What specific question do you have or what issues are of concern to you?
Bought property in Co Meath with ex-partner in 2007. 100% mortgage.
Relationship has broken down.
She has left with our cat & contributes nothing towards the mortgage.
I realise it is her responsibility to do so, but I cannot make her pay much as I would like to.
I cannot sleep at night with worry over how much money I owe for a property that has devalued so much.
Ideally I would like to use some savings to offset the negative equity but I feel I would be leaving myself wide open if she comes back with a claim to the property.
I cannot see the bank giving me a mortgage of nearly 7 times my salary to buy her out.
What should I do?
 
You are currently in negative equity of about 120,000. You and your ex are both responsible for all of this, but having split up you want to each be responsible for half (which you could pay off with your savings). I would certainly not pay off any negative equity while it is jointly another person's. Have you approached your bank to see whether they will allow you (with her consent of course) to put the house (and mortgage) into your name solely? Have you considered seeing if the bank will let you sell the house and get 2 separate loans for the negative equity. Would she be amenable to this if you agreed to shoulder more than half the debt? It would at least allow you to move on.
I would start by sending her a letter reminding her that she is responsible for the mortgage just as much as you are and demanding that she let you know what she intends to do within a certain time-frame.
Sybil
 
I don't think selling is an option. I would certainly consider it & take the hit in order to move on with my life, but realistically I highly doubt any bank will give her a 60K loan, considering she is unemployed without any savings, and the loan is to cover negative equity.
The only avenue I can see is to try & get the deeds put solely in my neme - even if the mortgage has to stay in both.
I could then pay off a lump sum & have a more manageable monthly repayment to pay by myself.
If anybody has any other ideas I would be very appreciative.
 
I think these situations are becoming more and more commonplace. I think you really need to talk to a decent solicitor who will advise you on how to proceed. She has totally abandoned her responsibilities and has left you take all the stress and strain while she still owns half the house. Surely a good solicitor could sort this situation out ASAP.

As for you, you have done very well to save 70K in total. That is a substantial amount of money which will reduce your mortgage significantly and give you a manageable monthly repayment should you get the house in your own name.

Actually probably best to contact her in writing first to see what response if any you get, so that you will have a substantial starting point when consulting legal advice.

Best of luck.
 
Thanks guys,

I suppose I know what I have to do. I know Ill need to see a solicitor, I just hate the thoughts of it. TBH the ex has pretty much disappeared, havent a breeze where she is now. I've no address or anything.
I've tried to explain the situation to the bank, but once the mortgage is being paid in full & on time (which it is) they dont really care who is paying it.
The last thing I want is to end up with a decimated credit rating out of this.
Dont ask me how I was involved with somebody so irresponsible - young & stupid I suppose. You live & learn ( an expensive life lesson methinks : ) )
If I were to get the property in my own name & paid a lump off the mortgage - would the repayments go down, or would the length of the mortgage just shorten?
 
Hi Selenak,

As pointed out (and accepted by you), you should get a solicitor involved in this.
Just to add something to the equation - be careful about your lump sum! Could there be any way you ex could have any claim on this? I assume you have this covered off - I'm just flagging it....

Also, make sure the impending Civil Union act (due for introduction in Jan)will not change your situation legally. I know you have been seperated for a while, but you need your solicitor to advise you on whether the amount of time you spent living in the house as a couple would entitle your ex to any rights that you may not have thought of.

Finally to answer your question on paying a lump sum off the mortgage. As far as I know you can request your bank to either; reduce your monthly payments or keep your payments at the current level and reduce your term. Double check with your bank.
Best of luck with it and well done on having the rainy day fund.
 
This is an absolute mess. Something that will break you financially but you should make sure not to stress over it. What's done is done.

Personally I would just stop paying the mortgage. You will get a good few years in your house for free. With the political and banking situation you might stay in your house for ten years before being forced out.

I would make sure your mess becomes her mess though.
 
Maynooth said:
This is an absolute mess. Something that will break you financially but you should make sure not to stress over it. What's done is done.

Personally I would just stop paying the mortgage. You will get a good few years in your house for free. With the political and banking situation you might stay in your house for ten years before being forced out.

I would make sure your mess becomes her mess though.
Click to expand...

That is pure moronic advice - you're advising someone to ruin the credit history on pure speculation? do you not read the papers? have you not seen the amount of repossessions that are taking place?
 
Hi there, I would be reluctant to take Maynooths advice. You are in an OK situation in that you do have savings. Are you looking to move? Can you pay your mortgage? A few years ago we paid 25K off our morgage and that reduced the term by 3 years. Speak to you bank, your not in a bad way that I can see.

The reality is you are like so many of us, who bought houses at the peak and have seen the value of our homes decimated, but unless you have to sell there is nothing you can do so no point in worrying about it.

Get legal advise too, to ensure that your ex cannot claim anything from you or the property since she left..

best of luck, P..
 
I wouldn't worry about the Civil Partnership thing, it hasn't been passed yet and you have broken up already. Surely no-one thinks it is going to be retrospective?
Sybil
 
Mmm I dont think just not paying and living there for ten years anyway is an option. Is this a common attitude of people in negative equity? Not for me anyway - the stress would kill me.
OK spoke to the bank. They say that they can't just take her name off the mortgage. She is legally bound to pay it. I know that - its just that she doesn't care.
I also cant get a mortgage in my name to buy her out because of the LTV.
I have an appt with a solicitor to see is there anyway I could take her name off the deeds. I know my ex won't have an issue with this - if I can track her down.
So dilemma - if I get the deeds thing sorted - do I a) use all my savings to try & bring the mortgage down. b) hold onto the money in case of an unemployment situation.
BTW in answer to an earlier Q I dont really want to live in this place. It was supposed to be a "starter home" ( rue the day i heard those words). However I do recognise that i would like to move. I don't need to move.

I'm wondering is throwing 70K (which it took me a long time & work & a bit of luck to get together) at this problem the solution. If property stays going down is it a bit like closing the stable door after the horse has bolted?

Should I hang onto my money & just keep making the repayments out of my salary - tight & all as it is
 
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Maynooth said:
This is an absolute mess. Something that will break you financially but you should make sure not to stress over it. What's done is done.

Personally I would just stop paying the mortgage. You will get a good few years in your house for free. With the political and banking situation you might stay in your house for ten years before being forced out.

I would make sure your mess becomes her mess though.
Click to expand...

No idea what he means by getting "10 years before being forced out". Even allowing for the new rules that might come in, banks aren't waiting 10 years before repossessing and if anyone thinks something drastic is going to happen to change this then they are living in cloud cuckoo land.

In addition, if you did follow this advice, it's questionable if you'd ever get another mortgage in Ireland at any stage in the future.

You do need to take serious legal advice on this. Bear in mind that if (and I accept it's a big if at the minute) you were to hold on to this house and in 10-20 years time ended up selling it for a profit, you ex may have a claim on it, or could make life awkard for you at any stage if you did try to sell without her permission.

Did your solicitor get you to sign a co-habitation agreement when you bought? That may clarify your options if you did

There was a piece in one of the papers last Sunday about at least one bank now offering negative equity loans. If that was feasible (and the bank was not named), then potentially selling the house, splitting the loss between you and your partner 50:50 and walking away might be the best option, leaving both of you with a personal loan of €50k (which you're savings would cover). You'd still be out of pocket but at least starting afresh. However, if she took the cat, she might need some legal persuasion to do this.
 
A reposession is the only way to force her to share a debt burden. Look at it this way.

YOur credit history will be shot but you can get years out of your house. You have 60K in savings and without paying a mortgage you can clear another 60K easy enough. Which should mean you can buy a place outright and you will have little need for credit.
 
Hate to be pessimistic but I would think it unlikely anyone would advise her to allow her name be removed from deeds but stay on mortgage. That would leave her with total liability for the loan but no benefit from ownership, not fair to you I know and there is no benefit to ownership at the moment due to the negative equity but I am sure she would be advised legally to provide for the 'what if' scenario. Equally no bank is going to split the negative equity into 2 loans where one of the parties is not working, at the moment they have you on hook for full amount so why give up that.
 
Maynooth - Im pretty sure that with a recourse mortgage, as Irish mortgages generally are, I would lose the property, all my savings, and my credit history & any future chance of getting a mortgage if I stop paying.

Mpsox - I'm going to investigate further into your suggestion. This would be my best case I think.
If and this is a big if the loan to pay the balance was completely split in two & even if she never paid a penny of it, it would have no effect on me.
I just need to convince ex this is the way forward. I also need to convince a bank that she's good for it.
My concern is that they'll look at the current situation - loan being paid all is dandy , and not want to risk her defaulting on a seperate loan.
Now I'm regretting being so candid with the bank.
I dont suppose you remember which paper this article was in?
 
Point taken wbbs. Its worth a shot though. nothing ventured, nothing gained. I have to try to do something.
 
Mpsox said:
Did your solicitor get you to sign a co-habitation agreement when you bought? That may clarify your options if you did
QUOTE]

Who needs co-habitation agreements when your in love?

No didn't have one. I know it was stupid, but I'd be a lot wiser in the future.
Click to expand...
 
Not sure if you want too, but if you need to find her, can you contact her parents if possible? they may or may not be forthcoming...

S.
 
selenak said:
Maynooth - Im pretty sure that with a recourse mortgage, as Irish mortgages generally are, I would lose the property, all my savings, and my credit history & any future chance of getting a mortgage if I stop paying.

Mpsox - I'm going to investigate further into your suggestion. This would be my best case I think.
If and this is a big if the loan to pay the balance was completely split in two & even if she never paid a penny of it, it would have no effect on me.
I just need to convince ex this is the way forward. I also need to convince a bank that she's good for it.
My concern is that they'll look at the current situation - loan being paid all is dandy , and not want to risk her defaulting on a seperate loan.
Now I'm regretting being so candid with the bank.
I dont suppose you remember which paper this article was in?
Click to expand...

Link to it is here

[broken link removed]
 
Thanks for that. I cant believe they were offering the loan over the same time scale as the original mortgage. That would be a definite runner for me. The only thing is the condition attached -
"the only condition imposed by the bank was that the separating couple were asked to take on the negative equity loan jointly."
Thanks for all your help guys. I'm not looking for a magical solution here.
Just weighing up the pros & cons of various options is a massive help - & it makes me feel a lot less isolated. I cant really discuss with my family because I dont want to worry them.
 
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