What happens if I voluntarily surrendered my house?

W

whatelse

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Here's the brief...........

18months in arrears. Health wise- poor, unable to work. Awaiting on DA decision. No prospects of been able to afford ANY repayments. Have two young kids (2&3 years) was given a mortgage while still a College student! Hate living where I'm living now as am far from family, friends and need support. What happens if I voluntarily surrendered my house?
 
That's the stock answer - but seeing as it looks like the OP won't have anything to contribute to the shortfall for the foreseeable so they will be chasing nothing.

Have you actually talked to the bank about your circumstances? As it concerns your very health then I would get moving and do what you feel you need to do. Open communications with the bank, explain the situation and why you need to move, and that you are prepared to surrender the property.

I'd like to think they'd be open to writing off some of the remaining debt at least, but who knows..
 
You are in arrears and cannot afford the repayments. Then you should engage with your bank so they can start the process of letting you sell the property or selling it themselves. If you have no job, no income and no assets they will in all likelihood write off your debt. It will affect your credit rating for a few years which is not really something to worry about and will eventually be sorted.
 
Sorry to hear about your cistcumstances. I would agree with the fact that you need to talk to your lender but make sure you talk to the RIGHt person in your bank!
 
Thank you for the replies. I have met with the bank a few days ago and they said to pay ANYTHING into the account, something is better than nothing was their exact words.
I have done out my detailed budget and there is no ANYTHING! Every cent is accounted for and they well knew that as there wasn't one thing the bank could say for me to reduce payments/spending on.
When you say chase me for the shortfall how long will that last for? As I said I don't see things improving any time soon.
The longer I keep the house, the more interest, etc building up?
 
whatelse said:
I have done out my detailed budget and there is no ANYTHING!

Every cent is accounted for and they well knew that as there wasn't one thing the bank could say for me to reduce payments/spending on.

The longer I keep the house, the more interest, etc building up?
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You are correct the longer you keep the house the more arrears are building up. Did the bank actually look at your budget? And did they tell you there was no way you could pay anything to them. Was this the local bank manager?
 
Im not anyway a legal expert but does anyone know if it is illegal to give back the keys if the house is in negative equity, house was purchased based on an independant bank valuation, in theory the house still belongs to the bank. why would we be paying the shotfall, did any homeowner get advise as to the possibility of negative equity and the consequences this would inflict, I don't know if the banks not informing customers prior to the contract of the responsibilities of the purchaser if the house was to fall into negative equity, if some lost their money on an investment and wasn't properly advised they would be straight on to the ombudsman. I just wonder if there is a case for the banks failing to properly advise customers of negative equity before buying. They offered home insurance life assurance ppi and nothing to secure the householder against negative equity, just want to know your views on the matter, it may be off the wall but I just think we are being scape goats.
 
Handing the keys of your house back to a bank employee does nothing except give a random stranger a set of keys to your house. It does not give them possession of it, the legal work still has to be done, you can voluntarily surrender it legally or let them repossess it, voluntarily will cost you less probably in legal fees.

Then bank doesn't own the house, you do, they have a mortgage secured against it.

As for the negative equity aspect of it, would people have listened! I was sick and tired of telling prospective mortgage holders that house prices do not always rise and that houses were too expensive but they looked at me like I was mad. I remember asking a 27 yr old what was their hurry to buy the overpriced 3 bed semi at 250k in small rural town, they told me prices always rise and that it would be worth 500k in a few years. No amount of telling them that was not the case would do, they just did not believe me, strangely enough the valuer refused to value the house at 250k even though it was the sale price of that particular development, he felt it was also overpriced, the other houses had been sold at that price.
 
I do think people were of the impression that if they didn't buy now that house prices would keep rising and I would have thought at the time that house prices would have stablized but what happened was clearly as a result of a banking ecomomic disaster. Just on the point of the mortgage is it not the owner that has the mortgage secured on the property. I would have thought the bank can reposess the house if payments aren't met. I know when I bought I was afraid of them rising to unreachable prices and I think thats the constant message relaid in the media and banks. I appreciate you advising, but I believe the people who bought in those years did so because they genuinely feared house prices would keep rising if they didn't buy and the renting was seen as money down the drain and often overpriced for the properties rented so alot of factors to consider and weigh up. I just wish the banks were honest with customerrs in warning them of consequences of negative equity as it never entered anyones head. I believe that people feel a little sick and its not fair to add to the missery to those genuine people who set up homes and have now so much misfortune to deal with and no light at the end of the tunnel. I wish the banks would admit some liability in these cases and act fairly when approached by distressed customers.
 
Why would you think that you have to give up your home? Nonsense start thinking of ways to keep it not lose it.
 
Why can't people accept that they were also to blame. Many chased rising prices as a way to make a fast buck. Many got caught. prices go up as well as down. I sympathise with all those caught out. But the same thing happened hear in 1980 and 1990. It should have served as a warning. Prices can go up and they can fall.
Please accept some responsibility it is not all the fault of the lender.
 
Have you applied for Mortgage Interest supplement?

The state does expect you to pay €24 per week towards your accommodation and that will be the case whether you are renting and getting supplwmet, in local authority housing or getting mortgage Interest supplement.

Have you been to MABS? Have you done a standard financial statement for the bank under the MARP?

If you get MIS you may be able to stay in your home and hopefully as you are young at some stage in the future you will eb able to work and mark payments yourself again or the government have come up with a solution.
 
PiedPiper said:
Why would you think that you have to give up your home? Nonsense start thinking of ways to keep it not lose it.
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Why do people want to cling on to their home when it is only a liability. In the OP's case they cannot afford it and don't want to live in it.
 
Steve Thatcher said:
Why can't people accept that they were also to blame. Many chased rising prices as a way to make a fast buck. Many got caught. prices go up as well as down. I sympathise with all those caught out. But the same thing happened hear in 1980 and 1990. It should have served as a warning. Prices can go up and they can fall.
Please accept some responsibility it is not all the fault of the lender.
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Well said Steve, but it's rare on AAM that any over stretched borrower will admit that they were also to blame (along with the banks reckless lending and poor regulation)
 
PiedPiper said:
Why would you think that you have to give up your home? Nonsense start thinking of ways to keep it not lose it.
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Did you actually read the OP's post? I know it would stop your whistlestop tour of telling people they don't have to pay anything and don't have to give up their house, but it may be worth a shot.
 
Because they are not to blame simple as. Are you on another planet, of course the guy in the street is not to blame for this individually or collectively, this is the fall out from globilization and corportate greed the manager of AIB cant be paid a lotto win as an annual salary unless some one is paying wake up and smell the coffee
 
Bronte said:
You are correct the longer you keep the house the more arrears are building up. Did the bank actually look at your budget? And did they tell you there was no way you could pay anything to them. Was this the local bank manager?
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I met with head office in town- the arrears recovery dept. Yes they looked at my budget and could clearly see my income and outgoings. They said even if the MIS was paid in that would do. But I honestly can not see the point if I'm not happy living here, my health is poor and I need support from my family all the while interest & arrears just keep coming.
 
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