Vulture fund demand letter

Brendan Burgess said:
You should post this information.
Information required for mortgage arrears and negative equity questions
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Forget about the Receiver for the moment. Should you be selling this property anyway? That is the first question you need to ask. If you provide the above information, then you will get some insight into that question.

If it turns out that you should sell the investment, then you should do that. And if they give you a discount, even better.

If if turns out that you should sell the investment, but refuse, then you will lose out on all counts.

Brendan
 
Brendan is right above. It will only take 15 minutes to fill out and you will get invaluable answers.
 
Net monthly income €6000
nature of income self-employed
Income history: coming to the end of 6 month contract. Will start again January. Unemployed for the previous year

Net monthly
€2000
Income history: paye full time
Amount of child benefit received €270


Personal circumstances so we can calculate your
two adult family
Do you need a car for work or do you use public transport? Yes 2 cars
Number of 12 - 18 years old:2
Monthly childcare costs:none
Montly spend on special circumstances: none



Home loan
Lender: Kbc
Amount outstanding: €155k
Value of home: €220k
Interest rate: tracker 2.75
Monthly repayment 830
Amount in arrears :restructured extended term because of unemployment

Summary of discussions and agreements with the banke.g. Extended term by 5 years capitalized arrears

Investment property - Delete if not applicable
Lender: oyster
Amount outstanding: 150k
Value of home: 130/140- one sold last year for 130
Interest rate: 4/5% not sure
Monthly repayment 838
Amount in arrears 4K
Monthly rent received 875

Credit Union
Amount of shares 0
Amount of loan outstanding 0
Monthly repayment 0
Term left 0


Other loans and creditors none

Other savings and investments none

Do you expect any lump sums in the medium term
No


How important is retaining the family home to you?



I really want to keep the family home even if it means having a large mortgage and negative equity for years to come.


Any other relevant information

Oyster to appoint a receiver in 2 week for investment property

What is your preferred realistic outcome?
He wants to hold onto the btl for a few years and then sell so there will be no shortfall
 
Is your income €8270?

If bank appoint a rent receiver you’ll be stuck with not receiving all the rent to pay the mortgage and I bet anything a rent receiver costs a pretty penny. And it will be you who is paying. So either you sort this out pronto or the bank will. If you’ve been given two weeks notice you’re likely too late. So I do not understand your husband acting like he has options?
 
The adviser arrived and said we should try and keep the property. We sent an email offered to pay the arrears and basically they refused. He said the last thing we want is a receiver to be appointed but that if this happens and there is a shortfall it’s an unsecured debt and they can’t realistically do anything about it except hound us for years and take his proportion of any sale. We are to keep in touch with him with any developments. If this is all true I am very relieved
 
Peabody said:
Yes we bought our current home together but he bought the btl with a different lender around the same time. Can they force us to sell our home if the btl is in his name only with a different lender. Btl is in negative equity but home isn’t- not by a lot anyway. They are saying if it’s not repaid in 2 weeks they will appoint a receiver. Do they knock on your door. Do you go to court. Feeling v naive and lost. Where do people go for information
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Here you say home isn’t in NE but also you say not by a lot, yet you’ve positive equity of 50k.

Why did the BTL go into arrears when the rent equals the mortgage?

Is the rental income declared to revenue, I’m guessing not.
 
Peabody said:
The adviser arrived and said we should try and keep the property. We sent an email offered to pay the arrears and basically they refused. He said the last thing we want is a receiver to be appointed but that if this happens and there is a shortfall it’s an unsecured debt and they can’t realistically do anything about it except hound us for years and take his proportion of any sale. We are to keep in touch with him with any developments. If this is all true I am very relieved
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So PIP confirmed the worst scenario is a rent receiver and yet you are relieved. Did the PIP tell you how much this will add to your debt? Which will eventually come out of your husbands equity in your home.

The bill will be arrears, costs, receiver costs, possibly penalties. Meanwhile there’s a tax bill looming I’m guessing.

Personally I do not believe in buying one’s head in the sand.
 
Yes that’s our current income. Really bad with money but that is just the past few months. It was just mine for a full year and 2k a month together with a mortgage payment and 2 kids is hard believe me. I agree with you about the options issues and I just want to get rid of it. Especially with his erratic income
 
He said only if we sell our home which I have no intention of. What do you advise I would really appreciate it. There is no tax due up to date on everything
 
Peabody said:
Yes that’s our current income. Really bad with money but that is just the past few months. It was just mine for a full year and 2k a month together with a mortgage payment and 2 kids is hard believe me. I agree with you about the options issues and I just want to get rid of it. Especially with his erratic income
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You two need to sit down immediately and do something, did both of you meet the pip?

In addition you need to do the money management thread to get to learn about budgeting.
 
Peabody said:
Investment property - Delete if not applicable
Lender: oyster
Amount outstanding: 150k
Value of home: 130/140- one sold last year for 130
Interest rate: 4/5% not sure
Monthly repayment 838
Amount in arrears 4K
Monthly rent received 875
Click to expand...

I am assuming that although you don't know the interest rate, it is not a tracker.

Even if there were no threat of a Receiver being appointed, you should probably sell this property.

Annual rent: €10,500
Costs - say : €2,500
Interest €7,000
Profit before tax: €1,000

This is not worth holding onto.

The risks are huge
  • Property prices might fall
  • Your tenant stops paying rent
  • Your husband loses his job

You should ask Oyster to write off the shortfall if you agree to sell it voluntarily and then do so.

Even if they refuse to write off the shortfall, you should still sell the house.

Brendan
 
Peabody said:
if this happens and there is a shortfall it’s an unsecured debt and they can’t realistically do anything about it except hound us for years and take his proportion of any sale.
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That is a very cavalier attitude.

At the moment, your shortfall appears to be about €10k.
If they appoint a Receiver, they will not care too much about the price they get.
The Receiver will have to be paid.
So the shortfall, for which your husband will be liable, will be about €50k.

They will get a judgement against him for this. So he will probably never get credit again, nor you either.

It will attract interest.

If you ever sell your home, after the mortgage is cleared, they will get their €50k + interest from his share.
Even if you don't sell your home, they could seek an order for possession. Although it is unlikely that they would get one, I would not like the risk hanging over me.

Brendan
 
BB I’m not sure what the vultures et al will do down the line. But I imagine in a few years when it’s worth their while they will start going after income and equity in family homes.

For example the Ralf Kane judgement that many were hoping for got shot down, eventually, last month.

In 5 or 10 years time the Pip’s blase attitude that the banks won’t do anything, will not be worth the paper it’s not written down on. And in 10 years with interest plus costs, that by now large positive equity is looking really good to go after.
 
Forgive me if I’m taking this up wrong. 10k shortfall and 40k receiver in receiver fees!! The btl is in his name and we are not married
 
You may not be married, but you own a home together. He has a good income, plus he owns half the equity in the home. In a few years the equity he owns will be a lot more. That’s what the bank will go after.

65k equity, of which his is 32.5 k.
 
So offer to sell it ourselves hopefully without a receiver being appointed and deal with shortfall after sale?
 
Bronte said:
BB I’m not sure what the vultures et al will do down the line. But I imagine in a few years when it’s worth their while they will start going after income and equity in family homes.
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Fully agree, which is why I said:

Brendan Burgess said:
I would not like the risk hanging over me.
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This is not a good investment and should be sold anyway. Attempting to hold onto is probably futile and could cost around €40k.

Peabody

The lender can simply appoint a Receiver under the terms of your mortgage. (I am assuming that the mortgage documentation allows this. Get your solicitor to check.)

It's not as if they have to go to Court and spend years trying to get an order.

If they had to go to court, then it might be worth fighting it in the hope that it would increase in value over the coming years.

Brendan
 
I’ll try to get him to sell it himself. That pip went on about if they wouldn’t accept the payment of arrears that he should say he has moved into the property. I don’t agree with this at all. Will the shortfall be classed as an unsecured debt and if so how can they force sale or put a lien on family home
 
Peabody said:
I’ll try to get him to sell it himself. That pip went on about if they wouldn’t accept the payment of arrears that he should say he has moved into the property. I don’t agree with this at all. Will the shortfall be classed as an unsecured debt and if so how can they force sale or put a lien on family home
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It’s unbelievable that you didn’t tell us everything the pip suggested. That might get the bank to hold off on the rent receiver and to allow time to sell it yourselves. Which is clearly your best option now instead of racking up more debt.

And that sounds like a good strategy to me. Why are you against it. They can put a lien on the family home via a well charging order I think it’s called. It would be registered on your title.so later when you need to sell, prospective buyers will insist it’s removed.
 
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