Why is the EBS not chasing the mortgage shortfall?

Discussion in 'Personal Insolvency, bankruptcy, etc' started by J Hayes, May 10, 2017.

  1. J Hayes

    J Hayes New Member

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    My family and I currently live abroad with no intention to return to Ireland in the near future. In long term mortgage arrears with the Bank (EBS) since 2013 and was renting out the property while working on a resolution. PIA rejected in 2015 with voluntary surrender as the only remaining option. Keys were returned and tenant removed at the Banks instruction.

    Almost 2 years later, the property is still vacant and the Bank have made no attempt to actively engage with me or sell the property. In recent months, they have ceased communications altogether. Since the process started, my wife and I have started a family (one child with two on the way!) and are surviving on a single income.

    Any guidance on whether a resolution is achievable at this point and how I could go about it?

    I also wonder what EBS are waiting for and whether they are in a holding pattern with this plan to offload impaired loans in the near future?
     
  2. cremeegg

    cremeegg Frequent Poster

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    I am not a lawyer.

    Wait six years from the last time you acknowledged the debt and I reckon the house is yours, debt free.
     
  3. aristotle

    aristotle Frequent Poster

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  4. RedRed

    RedRed New Member

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    Wasn't the original poster asking about how to get EBS to come to the table and find a solution, particularly with AIB's stated objective of getting rid of NPL's? I think referring to statute of limitations is missing the point. EBS has obviously gone radio silent.
     
  5. TLO

    TLO Frequent Poster

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    This could go on for years. Chances that EBS doesn't know what to do with the returned property. Or maybe it is caught up in the Central Bank's tracker redress review? Or maybe, because the property was originally a family home, EBS might have to get a court order to allow for it's sale? Hard to know.

    Suggest forgetting about it.
     
  6. J Hayes

    J Hayes New Member

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    [UPDATE]

    Recently received notification that the property in question has finally been sold!

    Would be very interested to hear peoples thoughts on what will happen next, given that I have no assets of note and 2 more dependents since they were last in contact?

    Does the Bank typically look to start negotiations on the residual unsecured debt (~€100k) or do they immediately go the insolvency/bankruptcy route (noting I don’t live in Ireland and cannot be served)?

    I had made a lump sum settlement offer in the past as part of a PIA submission, which was rejected out of hand. Interested to see if they will revisit this.

    Appreciate all the advice so far!

    J.H
     
  7. Brendan Burgess

    Brendan Burgess Founder

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    They are very unlikely to do anything.. they wont spend money chasing you abroad as they have little chance of success. They might sell it to a fund who might hassle you.

    Or if you return, they might seek an order against you..

    Brendan
     
  8. TigerDebt

    TigerDebt Registered User

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    Hello J Hayes,

    I am in a similar position but still in the country. My mortgage was/is with EBS. Voluntarily sold home in 2014 at a huge loss. The residual debt is just sitting there as I cannot afford to repay and I do not qualify for PIA. EBS would not do a deal or come to a settlement. For the first two years I tried to come an arrangement but they didn't want to know. For the last 15 months its just radio silence. For the life of me I cannot understand their strategy.

    The only option I have now is to wait 6 years and apply the statute of limitations. I'm in limbo but at least I have my sanity!
     
  9. J Hayes

    J Hayes New Member

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    Appreciate the quick response Brendan - no sure whether I should have expected more pragmatism from a re-capitalized lender, but I imagine the ‘do nothing’ approach will change closer to debt expiry in 2023. Have you seen any evidence of Banks actively engaging on unsecured debt post-sale of property?

    TigerDebt,

    I think the mistake we made was assuming the Bank has a long term plan at all (unless you count head in the sand as a viable strategy.) Happy to compare notes if you want to PM me.

    Thanks,
    Darren
     
  10. Brendan Burgess

    Brendan Burgess Founder

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    If you are insolvent, why don't you go bankrupt?
     
  11. Bronte

    Bronte Frequent Poster

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    For those waiting for the statute of limitations watch out. This happened in the crash in England in the eighties I think it was. But the clever banks came after people who got back on their feet at year 5 and 11 months (or whatever it was at the time).

    People abroad will be unlikely to be chased by banks, especially if they are anywhere further than the UK.
     
    RedOnion likes this.
  12. J Hayes

    J Hayes New Member

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    Thanks Bronte.

    Understanding the Statute of Limitations is set at 6 years to allow lenders to find alternate solutions to insolvency/bankruptcy (and presuming the proposed 2017 amendment to reduce this to 2 years was being debated on these same grounds), I would fully expect a creditor to engage with a debtor or sell on the residual debt long before the 6 year expiry.

    Has anyone seen evidence of Banks actively engaging on unsecured residual debt post-sale of property?

    J.H
     
  13. IdesofMarch

    IdesofMarch Registered User

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    EBS usually do not chase residual debt owed to them by the borrower. This is because they have entered into a mortgage indemnity bond (usually referenced in opening paragraph of the loan offer), so they get paid for any residual debt outstanding (subject to the T & C of the bond) by the bond.
     
  14. RedRed

    RedRed New Member

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    Wow that’s pretty interesting. Can you provide a bit more colour on that? Any other banks in same situation or just EBS? Never heard of that before.
     
  15. IdesofMarch

    IdesofMarch Registered User

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    Just EBS overtly, you would have to do your own research to discover the level of credit default insurance that other lenders signed up for.
     
  16. J Hayes

    J Hayes New Member

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    I checked my original loan documents and a mortgage indemnity bond WAS taken out and added to the total loan amount. While EBS’ future strategy remains as unclear as ever, this at least explains why they have shown no appetite to do a deal.

    I also received a letter from EBS stating they will be submitting monthly details of the residual debt to ICB going forward - standard practice I imagine!

    J.H
     
  17. IdesofMarch

    IdesofMarch Registered User

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    New Central Credit Register requirement I'm afraid