# Bank of Scotland - advice on long term deals



## Needshelp (14 Jun 2013)

Hi all - I am trying to help a friend who is dealing with mortgage arrears with bank of Scotland. Does anyone know if they are doing any sort of longer term deals for people who are paying what they can but not likely to be able to increase payments. Is the family home and they don't want to lose it.

Details below and advice appreciated 


Personal and income details
Net (i.e. after tax) Income self: nature of income e.g. self-employed/public servant etc  : 400 pw. 
Income history: e.g. "I was made redundant in June 2011 and have not had any work since..." :  employed mid 50's - pay cuts overtime cuts etc has impacted take home pay 
Net income partner/spouse: nature of income
Income history: partner on long term disability - 188 ow and unable to return to work 
number of children- 1 remaining at home 
Amount of Mortgage Interest Supplement received : don't qualify for same 
Home loan
Lender: bank of Scotland Ireland 
Amount outstanding: - 100k
Value of home: 200k
Interest rate: specify whether tracker or SVR or fixed rate : unsure of rate but it is an svr
Monthly repayment - 830 but only paying 400 
Amount in arrears - 4k

Summary of discussions and agreements with the banke.g. in Marp since Jan 2011 . Have been on interest only since then. 

Been in reduced payments for 18 months or so of400



Other loans and creditors - delete those which don't apply to you
Overdraft - 1,000
Credit Card - 3,000 with ptsb - interest frozen and have agreement to pay 10 euro per week 
Credit Union e.g. Loan of €5,000 against shares of €2,000 - none 
Car loan e.g. 10,000 left at 7% - none 
Family 
Vodafone - unpaid bill 500 euro - repaying 10 per week

Other savings and investments - none 


How important is retaining the family home to you? 
Which of the following best describes your situation?

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

At the moment 400 is max they can pay and that leaves no room for emergencies etc - given first persons employment situation there is no prospect for income increase in the future and one partner is unable to return to work. 

They would like to get a long term deal based on their repayment capacity that allows them to keep the family home. Are bank of Scotland doing such deals ?

Thanks in advance


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## Dr.Debt (14 Jun 2013)

Is there any likelihood of an inheritance or lump sum payment from employment down the line.

In my view this couple are not able to pay much more than the 400 from their current income however if there is some chance that they may come into some money in the future I would recommend them to talk to their bank about a split mortgage.


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## Needshelp (14 Jun 2013)

Hi

Thanks for reply. There is no likelihood of inheritance or lump sums becoming available in the future.

Any suggestions on how we should approach the bank or are they coming up with solutions in cases like this ?

Thanks


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## Dr.Debt (14 Jun 2013)

This is a tricky situation for your friend because the house is actually in positive equity and the banks own interest will be best served by selling the house, in which event it will recover its money in full. Make no mistake, the bank will be pushing for this option.

If there was some chance of a windfall down the line, then the bank may agree to a split mortgage but this doesn't appear to be a runner either.

The bank will not agree to a writedown as the property is in positive equity.

I think your friend has two main options :

1) Either concede that the mortgage is unsustainable, agree to sell the house and buy a less expensive house for 100K

OR

2) Make an all out effort to increase the family income by about 600 per month
either through part time work or whatever else.

I hope it works out

Dr.Debt


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## Needshelp (14 Jun 2013)

Thank you


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## Gerry Canning (14 Jun 2013)

As long as you are reasonably paying what you can afford on a Family Home and since you are covering the Interest element, I just CANNOT see repossession here.

The Bank will look for their money and will try to get as much as possible.

If you can continue to afford the interest only , stay with that. 
I would be inclined to let the Bank tell you what the options are , please DO NOT be bullied into anything above affordability.
I am not saying they will bully ,but their job is to squeeze until you ache!!!
I wish you well.


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## maggi (14 Jun 2013)

I am in a absolutely in a similar situation and last year wrote to Certus to pass on my requests for options to be opened including a write down of some of the debt. I kept ringing them and eventually lodged a complaint against them for not passing on my request etc. The end result was that I received €100 cheque as an apology! 
I am paying interest only and am in arrears to the tune of €87000. Again the house is not in negative equity and the complete amount owed is 220K which includes the arrears. The house is currently valued at €750 and we are paying interest only for the last two years. My husband was ill and subsequently has lost his capacity to earn so I cannot see us ever getting back to paying a full mortgage. We are currently paying €650 each month but have to submit appraisals and bank accounts each 6 months which is painful and tedious. 
I now have to complete a new application and I am thinking of asking for a split mortgage your views would be welcome.
Thanks a million


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## Commercial (14 Jun 2013)

I am dealing with Certus/BOS on a number of home loans and their view is minimum interest only, and a plan in place to get to capital and interest. However, they will squeeze you as much as they can.
I am not aware of any split mortgages being done, but if you are in positive equity the bank will see this and look at the either voluntary surrender route or repossession.
However, in today's climate you should be well protected under MARP provided you are illustrating that you are paying the most you can.
They will not do writedowns on family homes and I have not heard that they offer split mortgages


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## T&R (15 Jun 2013)

I too am on interest only with BOS and was told to keep submitting my paperwork every 6 months which is a pain. They are not offering split deals at the moment. Its reduced payments or interest only an apply every 6 months. I find Certus excellent to deal with. The issue is in the UK where the decisions are made they seem to have no idea how bad things are here. As has been previously posted don't let them bullly you into the wrong decision but if you agree a deal stick to it, this makes it easier for you in the longer term.


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## Needshelp (24 Jun 2013)

Thanks for all your input.

We have put in for another short term deal. However we have been looking into the new insolvency piece and given circumstances are not going to change for going down this route we are considering going for a pia - does anyone think this is worthwhile in this instance and are we right in thinking that there is an agreement On payments for x years and then there is a write of on the shortfall?

This couple are heading to mid fifties with one on long term disability and no likelihood of salary increase but they do want to hold onto their home.

Does anyone know if you can get a view from a pip before formally engaging them ?


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## cremeegg (24 Jun 2013)

salmon9077 said:


> As long as you are reasonably paying what you can afford on a Family Home and since you are covering the Interest element, I just CANNOT see repossession here.



I agree that in the short term repossession is unlikely, however time is not the borrowers friend where less than the interest is being paid each month.

At present this person has €100k equity in the house. If arrears build up over time this equity will be eroded.

Better to trade down now into a mortgage free €100k house than be repossessed in 10 years time and then have no equity.


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## maggi (26 Jun 2013)

Thanks for all the advice - I will try for a split mortgage with BOS and see what happens - I am so fed up with this 6 month deal all the time. It started with a year and now its down to six months. Will keep my fingers crossed and hope for a postive outcome.


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## dub_nerd (27 Jun 2013)

Needshelp said:


> Thanks for all your input.
> 
> We have put in for another short term deal. However we have been looking into the new insolvency piece and given circumstances are not going to change for going down this route we are considering going for a pia - does anyone think this is worthwhile in this instance and are we right in thinking that there is an agreement On payments for x years and then there is a write of on the shortfall?
> 
> ...


 
As I understand there is no automatic write off of secured debt under a PIA. The lender has to agree to it, and with the loan secured with a property in positive equity, why would they do that? From what you're saying, this person can afford to pay off the debt and have a hundred grand left in their bank account. I think you're suggesting that someone with a 100k in the bank should be gifted another 100k, but I may be picking you up wrong.


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