RIP Residential Investment Property - joint names with ex bank wont deal with arrears

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alex24

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Hi all,

I am at my wits end. I separated from my husband almost 4 years ago, not before I (very reluctantly) agreed to go on mortgage for two RIP's (Residential Investment Property Mortgages).

I have never had the keys for the place or received any rent etc.

Once we separated, I immediately wrote to the bank saying that I had no access to property or rental income and wanted to surrender properties. At the time had they been sold, there would have been minimal profit/loss. The mortgages were paid up to date at this stage.

Within a month of us separating, my husband started defaulting on the loan. As I had sent a letter, I would have thought accounts should have been flagged as potentially troublesome. He was receiving €2,200 per month in rent and repayments were circa €1,800.

I was not working as I just had a baby so could not pay these mortgages or in fact mortgage on family home. I went through courts for maintenance, which still is problematic and is constantly in default.

Year 1 I never heard from lender and assumed mortgages on RIPs were being paid. As part of preparation for family law case, I phoned up bank to get up to date balances and found that mortgages had not been paid for a year. From that point on, I constantly kept in contact asking them to escalate the accounts. At one stage they admitted they had fallen through the cracks and hadn't been passed over to arrears dept.

I phoned them constantly and begged them to turn cases legal so that at least, interest wouldn't continue to roll and that my husband wouldn't get to squander the €2k rental income. I checked with PRTB and they weren't registered and I reported it also to revenue as he admitted in court he wasn't declaring income. I wrote to my husband saying that we could lease properties to local county council and mandate income to lender, but he ignored my letter.

I thought the bank was ignoring the problem as they did not want to realise by now a substantial loss, so I tried other routes. I wrote to them saying that the two properties had tenants and requesting that they appoint a fixed asset receiver to at least collect rent. I never got a response, so I phoned bank and they denied receiving letter. I said letter had been sent by certified post and the guy laughed and said it was typical, so many letters got lost on the wrong desk. I got his email address and sent him letter as attachment. He said he would pass me on to legal dept.

I spoke to a manager in legal dept. and she said the situation was very serious and that she would take out file and do a full review and call me back within 2 days. That was 15 months and I still am waiting for a call back or response to my letter. I am currently seeking a legal separation but it has stalled ad my husband has failed to enter as much as an affidavit of means. We are in court every 2 months, the judge issues an order that he has 1 week to lodge it, roll on next court date and the same thing happens again and again. I am living in groundhog day.

Nothing is happening with these loans.

My husband and the bank are ignoring the situation (they still have no proceedings issued despite 4 years non payment) and I feel trapped. I am at a loss what to do and feel i can't move forward with my life with this time bomb waiting to explode. I struggle with my own mortgage, and while I can't make a full repayment, I make some payment monthly.

I contacted New Beginnings and they could offer me no help as there is no pending legal action.

I also think from a societal point of view if this is how banks are (not) dealing with really toxic loans, we have no hope of recovery.

I don't know what advice people can offer, if any, but I need to offload and hopefully somebody can see a solution that I'm missing. I can't talk to people in real life about this, but hoping that I can't see the wood from the trees and that a fresh set of eyes can give me a new perspective.

Thanks.
 
Your main concern should be your family home.

How much is it worth?
What mortgage is outstanding on it?
Who is the lender?
Is the mortgage in your joint names?

If it's in your joint names, you should not pay any more than the interest on the mortgage until this is resolved.
You should write to the lender and tell them this.

Is there one mortgage for the two RIPs? Which lender is it with? If, for some reason, you don't wish to name the lender, is it the same lender as your home?

If it is, then you should stop paying your home mortgage completely and notify the lender accordingly.

From a legal point of view, you and your ex are jointly and severally liable for both mortgages, assuming the home loan is in your joint names. This means that if he cannot or won't pay, you are liable in full.

You, very eloquently, describe a case of massive maladministration. It sounds as if you have documented it very well. Make sure to document each and every contact with the bank.

While the legal position is clear, I think it would be morally wrong for the bank to try to enforce a judgment against you for the RIPs mortgage. I am not sure how morals would play out in the court though.

Depending on your financial position, you will be able to apply for a Personal Insolvency Arrangement. I think that a good Personal Insolvency Practitioner would make the case that you should be left with your home and should be freed of the mortgages.

You should also contact the Financial Services Ombudsman with a complaint of maladministation. They will give you the name of the person to write to in the bank. If the FSO agrees that there was gross maladministration he could award you compensation. I think you should seek to have your name removed from both mortgages as you have done everything to resolve this. I don't know if the FSO would agree, but the lender may choose to do this.

But we need the additional information requested above.
 
Thank you for your reply.

The mortgage on the family home is in my sole name. It is with KBC and to be fair to them they are proactive but fair. The account is in arrears but in MARP and is being complied with. The mortgage is about 210k and value probably 250k. The total o/s on RIP's is now 685k with overall value of 300k.

The RIP properties have two separate loans both were taken out with FA and now under Ulster Bank. There is literally no management of the loans and I am fed up writing to them, phoning them and generally being ignored by them.

I am aware that I am jointly and severally liable and this is what terrifies me. I do think any reasonable judge should acknowledge that the Ulster Bank are complicit in allowing this problem to grow, but I am terrified to be at the mercy of the judge. I am also afraid that while I am seriously sacrificing things to try to keep KBC satisfied, it may be for no benefit in the long run.

I have two children in this house, otherwise I would gladly move into a bedsit and be turn with the battling.
 
Hi alex

The lenders complain when they are unable to get borrowers to engage with them.

In your case, you have done everything you possibly can and they won't engage with you.

I think you should continue to write to them but don't stress yourself any further about it.

You should find out from the Ombudsman who the point of contact in UB is for making a complaint and then make a complaint about maladministration.

Brendan
 
Thanks Brendan, I fear from your answer and lack of response from others, that I really am screwed and at the mercy of a judge. I just wish lenders were obliged to manage loans whereas at the moment the mortgage conditions are to curtail interaction and there is nothing there to force them to actively engage with mortgage holders.
 
alex24 said:
Thanks Brendan, I fear from your answer and lack of response from others, that I really am screwed and at the mercy of a judge.
Click to expand...


Don't think the lack of response means you've no hope. I would think it's more likely that BB has given you the best advice. I certainly agree with his summary of the situation.

If it's of any help to you I've been able to demonstrate to the FO how Ulster bank 'ignore' their customers. So I completely 'get' your points on how they lose letters, ignore you, promise to reply, will esculate it to the next peerson and you hear nothing further etc.

This is going to be difficult but you are going to have to step back from this on the RIP's. In the sense of worrying about them. At this stage the debt is insurmountable so there is nothing you can do to sort it out. Your husband has quite clearly already decided this.

Think about it like this, what can UB do to you. You've very little equity in your home, and the less you have the better, you are just barely covering your mortgage, KBC are happy with you, you've demonstrated that you've done your best to deal with UB, you've two kids to bring up, your ex is a financial disaster, yet you are managing to keep a roof over your families head. You should have nothing to fear from a judge.

Make sure you document absolutely all your dealings with the banks, only send post by recorded delivery etc. Very soon now we'll have the new insolvency regime and you will finally be able to sort out this mess and start again.

For your own wellbeing I really think you need to offload to someone, a parent a sibling maybe. Bottling it all up is not good for you and the children. You are doing your best as a mother and no one could ask for more. Best of luck.
 
Thanks Bronte. I appreciate your reply and will try to take on board your comments. Sometimes the ticking time bomb is very loud though!:)
 
No Payments being made on rental properties

I've posted on this topic before, but things have moved on considerably since last time so will give summary and update.
k, this is a long story and I don't know what help people could give, but just looking to see if anyone has had a similar experience or could help with offering a different perspective as I am at a loss. Mods, if it is in wrong thread, please move.

5 years ago I split with husband, I had just given up work as we had a new baby. We had two rental properties on great tracker interest only rates with good rental income. When we split up, ex wouldn't pay maintenance, for first time in my life, I had to get social welfare. They wouldn't help at first as on paper I owned two properties and was getting good rental income. The rent went in to ex's bank account though and he paid mortgages. I was desperate for money so needed to prove I wasn't benefitting from property.

I wrote to bank, my ex and his solicitor stating that as I had no access to rent or properties, that I wanted to surrender the properties. This basically put bank on notice that we were split up and only one party had control of the properties. A month later (May 2009) ex stopped paying mortgages and basically squandering the rental income, meanwhile we were in and out of court about maintenance and arrears as he was only paying intermittently.

I phoned bank every month begging them to take back properties, issue legal proceeding appoint a receiver etc. to no avail. In Oct, 2011 I wrote to bank asking them to appoint a rent receiver so that at least my liability would not increase further. They ignored letter, but I called and spoke to a manager in legal dept. She said it was a shocking case, and she would call me back within 48 hours. I'm still waiting for that call.

Last July, I finally got granted a divorce and judge ordered that ex must discharge mortgages from rental income. He ignored the order and despite two attachment and committal hearings, he continues to get away with it. It is now over 5 years and bank has issued proceeding on one property and not the other. There have been no payments, tax, NPPR, LPT on either property. When bank issued proceedings, I issued a defence and a counterclaim for bank's negligence and failure to exercise a duty of care. There is currently €2200 rent pm on the properties. The bank made an agreement with ex to accept €550 on apt (the one with court proceedings issued) and €1100 on house. We were in court in May and 2 payments of €550 had been made since March and none on house. The bank asked the judge to strike out proceedings as there was a sustainable arrangement in place that was working. I was speechless, as I had witnessed them reluctantly agreeing to adjournments, where substantial repayments had been maintained in the medium term.

Anyway, I said I did not want proceedings to be struck out as my liability was continuing to grow and that I wanted my counterclaim to be heard. The judge agreed with me and adjourned the case until later this month but ordered the bank to file an affidavit confirming that only €1100 had been paid in 5 years, why they made an agreement without me, why no proceedings had issued on the house and also to serve both sets of tenants with a notice of the situation. Counsel for the bank were not happy bunnies.

We are back in court later this month, and I have still not heard from the bank. They were also ordered to write to me explaining their inaction etc.

I can not figure any of this out and am at my wits end. I have a divorce decree ordering him to pay, but that has been worthless. The bank are willing to leave him hold onto the properties and spend the rent. I hear all the time about tenants losing their homes because of rent increases and yet these are not being repossessed despite not being family homes.

I was speechless when bank tried to strike out the proceedings, I just don't get any of it. Has anyone ever heard of something like this? Am I too close to see the bigger picture? Any advice, fresh perspectives are very welcome. How does this compare to other people with rental properties in arrears.
 
Hi Alex

There is no need for a separate thread on the update, so I have merged them.

Are you doing this on your own, or are you using a solicitor?

It was suggested to you last year to complain to the Financial Services Ombudsman. Did you do this?

It's odd that they have not appointed rent receivers or sought possession, especially as they are cheap trackers.

It sounds as if your counter-claim is the right strategy.

You say that the court case is set for "later this month". When exactly is that?

Brendan
 
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