Same prob as Moonfish: can anyone help? Please?

G

GinaB

Guest
I bought an investment property in 2006 as I owned no home of my own and it seemed like a good idea at the time. But since then my husband and I have divorced (he has his own debt probs) and I've been lumped with this property and I also rent a home for myself and the kids.

The repayments are about to hit €1,200 in September and the PTSB won't talk until I default which I don't want to do. I only make €450 in rent and my income won't support all these outgoings. I tried to change my DD to a fixed SO that I can afford but it can't be done according to my bank. I've phoned and written to the PTSB but no joy.

September is looming and the only thing I can do is cancel the DD and pay by cheque the €500 I can afford. It's a mess and I am pretty scared. I got the mortgage through a broker that is not defunct. PTSB restructuring dept told me that going to a branch or getting a solicitor involved will not make any difference.

I'm on a tracker and they have said that if I come off the tracker I can remain on interest only for 2 more years at the higher rate, which will involve circa €650 per month repayments. I don't know what to do! I could take this offer and try to sell the property which has a mortgage of €220k and is in a vg seaside location. Any help would be much appreciated. Gina
 
I am truly sorry to be horribly blunt ....

You are paying 1.200 monthly and getting only 450.
Interest rates will increase over the next year -you could be paying ,say, 1.400 a month this time next year.
Other costs are increasing NPPR, property tax -and you may have repair costs etc etc

On your present tracker mortgage there is a possibility you'll be paying, after getting rent, well over €1.000 every month. (Going on a variable interest only loan for two years only postpones the problem )

Is there any reason why you would spend that amount of money for a property that will not increase in value for several years ?

Why not default and let the bank take care of things? Nobody is going to punish you in any way, and I doubt that any bank could get a court to make a single mother of children with no assets pay the outstanding amount (i.e. difference between what you owe and value of property).

So sorry to say all that but paying so much every month seems crazy. However, i'm only basing my opinion on hat you have said and perhaps there are other factors I don't know.
 
oldnick said:
Why not default and let the bank take care of things? Nobody is going to punish you in any way, and I doubt that any bank could get a court to make a single mother of children with no assets pay the outstanding amount (i.e. difference between what you owe and value of property).

So sorry to say all that but paying so much every month seems crazy. However, i'm only basing my opinion on hat you have said and perhaps there are other factors I don't know.
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I'm also sorry for being blunt but advising people to default is reckless behaviour in my opinion. This debate runs on and on in this country, as if default is the answer to everything. Trying to find a solution with the bank is the best way to deal with things. You can only pay what you can afford and nobody can force you to do more than that. MABS or any financial advisor will help you to do this. They will act in your interests and try to ensure you can afford to look after your family first and foremost.
 
John-this has nothing to do with flippantly advising people who owe money to default, as your post rather insultingly suggests.
If there is any "reckless behaviour" it is the action of the PRTB and other banks in the first place -but that's another argument.

In this particular case - if the OP is truly in the dire circumstances she describes (and I can only go by what is stated) then default would appear the only option. Indeed, not going into default would appear to be reckless.
 
I agree with oldnick on this. Single mother with no hope of ever paying this amount off. I am sorry but the bank never did due diligence. They have to suck it up, and before anybody says "the taxpayer pays" etc, the taxpayer is already paying and getting nothing from it. I would prefer that if the taxpayer has to pay that it goes towards preventing societal breakdown/suicides etc by helping the people rather than helping anonymous international shareholders and reckless developers
 
Giving advice without knowing the full facts or without giving the OP an idea of the repercussions is reckless in my view. I'm tired of this "Victim" argument too. Nobody forces anybody to buy a house or to sign a loan agreement. I have great sympathy for the OP and I believe that the banks should take a hit but default has serious implications. Have you advised her of these? And before you accuse me of being something I'm not - I bought a house in 2005, I'm in negative equity and I was made redundant in june. I have an unemployed partner and two children but I'm doing my best to fulfill the commitments I made by discussing my situation with the banks involved and using the services of MABS.
 
GinaB said:
I bought an investment property in 2006 as I owned no home of my own and it seemed like a good idea at the time. But since then my husband and I have divorced (he has his own debt probs) and I've been lumped with this property and I also rent a home for myself and the kids.

The repayments are about to hit €1,200 in September and the PTSB won't talk until I default which I don't want to do. I only make €450 in rent and my income won't support all these outgoings. I tried to change my DD to a fixed SO that I can afford but it can't be done according to my bank. I've phoned and written to the PTSB but no joy.

September is looming and the only thing I can do is cancel the DD and pay by cheque the €500 I can afford. It's a mess and I am pretty scared. I got the mortgage through a broker that is not defunct. PTSB restructuring dept told me that going to a branch or getting a solicitor involved will not make any difference.

I'm on a tracker and they have said that if I come off the tracker I can remain on interest only for 2 more years at the higher rate, which will involve circa €650 per month repayments. I don't know what to do! I could take this offer and try to sell the property which has a mortgage of €220k and is in a vg seaside location. Any help would be much appreciated. Gina
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Why are you wasting money on renting when you own a home? Would it not make more sense to move into your own home and avail of the rent a room scheme to help pay any shortfall in the mortgage. If it's in a good location it might be worth hanging on to it.
 
You do make a good point in saying that giving opinions without knowing all the facts could be reckless. But on that basis there would be litle point in AAM. AAM is a discussion forum with opinions going to and fro based on (usually) limited information.
As I said to OP at the end of my reckless(!) opinion I am only basing it on the facts given and perhaps there are other factors I don't know.

There have been many threads and posts on the whole aspect of who is responsible for what (e.g. banks, govnt or public) , debt forgiveness or restructuring, moral hazard etc etc. There's little point repeating them as few people will shift their primary position.

We could all swap sob stories and I,too, am feeling very bitter about my own position
(failed business, invested everything in property based on section 23 incentives about to be canceled, value of property now worth less than the loan ).
But I know that basically I screwed up -except for govnt reneging on sec 23 promise.
I'm an old guy who should have known better.
I'm not a woman now on her own with kids to support sinking ever deeper into debt.

When one reads of the Op's position (if true and no other salient facts) surely some sense of charity towards ,yes, the "victim", dictates that she gets out of this loan trap asap.

I'll continue to pay my bank for worthless property but certainly I wouldn't begrudge her not doing so.
 
Point taken oldnick and you make it very well. Apologies if I offended anybody but my own situation has forced me to have firm (and often frustrated) views. I wish Gina B well and I really do not begrudge her debt forgiveness. The sooner she gets out of this debt trap, the better.
 
John -I too apologise for coming across a bit grumpy. Everyone is so damn frustrated nowadays at things that we tend to be a bit more jumpy than normal.
Your situation is tough and I sincerely wish you all the best.
 
oldnick said:
John -I too apologise for coming across a bit grumpy. Everyone is so damn frustrated nowadays at things that we tend to be a bit more jumpy than normal.
Your situation is tough and I sincerely wish you all the best.
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Despite the stress of the current situation it is nice to see regular posters making amends and getting along on AAM :)
 
Firstly, your renting your own home so the bank can't take that, so you're in a better position then a lot of people are.

form the sounds of it, and being realistic, all you can do is default as, without knowing your full circumstances, it seems you have no chance of making up the shortfall (why is the rent so low BTW). My own thoughts is that you would be best to try and sell the property and try and make some deal with PTSB to write off the rest. the alternative is that in 2 years time, you'll still be in the same position with the risk to the bank being that the value of the property will be significantly less
 
Hey GinaB

we have sent a letter to the bank i'll let you know what happens its up the the lender really i heard some of them are more approacable then others
 
It's an INVESTMENT property, not a home. It needs to be examined in that light.
  • You can't afford the ongoing costs (mortgage).
  • These ongoing costs are going to increase: new residential charge of €200, added to the NPPR charge which will almost certainly rise; possible interest rate increases.
  • There is unlikely to be significant capital appreciation in the near future; there may be further capital losses (based on current property market trends). You clearly don't have the current resources to sit it out until (if ever) prices rise to bubble levels again, and in the meantime it is costing you more and more money.
Sell it.

At least that will stop your situation getting worse at a rapid rate (accumulating unpaid interest on large mortgage). Even if the sale price falls short of the mortgage, the amount outstanding will be significantly less than what you currently owe.

Then make an arrangement with your bank to pay down the outstanding amount (if any) over an extended period if necessary.
 
Did the PTSB tell you to default and that then they would deal with you?

Is the house solely in your name?
 
i'm in the same boat as gina and lumped with a massive repayment monthly income is 1600 and rent is 850 the amount owed is 270,000 does anyone think repayments of 1600 for 35 years is excessive.we are thinking of seeing a solicitor paying our own mortgage and then paying 800 into investment mortgage crazy.but can a solicitor do anything for us
 
damson said:
It's an INVESTMENT property, not a home. It needs to be examined in that light.
  • You can't afford the ongoing costs (mortgage).
  • These ongoing costs are going to increase: new residential charge of €200, added to the NPPR charge which will almost certainly rise; possible interest rate increases.
  • There is unlikely to be significant capital appreciation in the near future; there may be further capital losses (based on current property market trends). You clearly don't have the current resources to sit it out until (if ever) prices rise to bubble levels again, and in the meantime it is costing you more and more money.
Sell it.

At least that will stop your situation getting worse at a rapid rate (accumulating unpaid interest on large mortgage). Even if the sale price falls short of the mortgage, the amount outstanding will be significantly less than what you currently owe.

Then make an arrangement with your bank to pay down the outstanding amount (if any) over an extended period if necessary.
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If the property was bought in 2006, the mortgage is costing €1400 pm and the rent is €450pm it's safe to assume the property is worth significantly less than the balance on the mortgage. In that case you can't sell because the bank won't release the deeds.
 
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