# What happens if we stop paying mortgage for 3 months?



## Emmaf (21 Jun 2013)

Very angry...here goes:

Contacted mortgage lender to ask if we could have a 3 month moratorium so I can take 16 weeks extra unpaid maternity leave. Currently on maternity leave.

Husband is self employed.  

No issues with debt  - no credit cards. The only money we owe is a car loan - very manageable.  Never missed a payment.

Mortgage - 27 years to go - never missed a payment.  

A bit of savings - currently enough for two months mortgage.  This is purely emergency money.  

Bank have refused the moratorium / payment holiday.

Really don't understand why!  Is it because we have savings? 

Angry and want to just stop paying mortgage for a number of months until I return to work.  What are implications of doing this?


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## joe316 (21 Jun 2013)

Well just my two cents, why should they let you take a break from paying it?

Its not that you are forced into not been able to pay (i.e. job loss or sickness) you are doing this by choice, so you obviously dont fit the criteria for a moratorium.

Either take just the one month extra maternity leave or go back to work. In all cases man up.

Sorry for being harsh but this sense of entitlement bugs the hell out of me. Unless it was stipulated in your mortgage contract that you can take a break then why should they allow you do this just to suit you?


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## Brendan Burgess (21 Jun 2013)

Why should the bank fund your additional maternity leave? 

I don't get it. 




> A bit of savings - enough for one months mortgage plus an extra  emergency month which we never touch just in case.  This is purely  emergency money.


It would seem that you view taking additional maternity leave as just such an emergency. Take two extra months instead of three and use the money you have saved for this.

Brendan

Edit: Post crossed with Joe's


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## leonmahon (21 Jun 2013)

Classic Irish moralising from the above posters. I'm sure every decision you two have ever made in your life wouldn't stand up to such strict scrutiny. 

OP wants to extend her maternity leave and is simply trying to figure a way to do it. Bank is not going to "fund" the leave - she'll still pay everything she owes. Perhaps if she wasn't a woman the sentiment may have differed. 

I am not an expert on this matter, and you would be advised to get some more concrete advice, but from where I am sitting, you could try the following:

- Start overpaying your mortgage by as much as you can afford
- Pay a small/token amount during the 2-3 month stretch
- Return to overpaying after you go back to work until you have cleared the arrears. 

I would contact my local Citizens Information Centre or MABS office, they should be able to provide you with some solid advice in a non-judgmental manner.


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## bugler (21 Jun 2013)

I don't see moralising. The OP is by her own admission "very angry" at her lender for refusing to adjust their contractual agreement to suit what is essentially a lifestyle choice of hers (and I don't in any blame her for seeking to take more time off). She is also considering strategically defaulting for a time if the bank won't bow to her wishes. 

It is very much a case of someone believing they have an entitlement to something and everyone else be damned.


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## dereko1969 (21 Jun 2013)

leonmahon said:


> Classic Irish moralising from the above posters. I'm sure every decision you two have ever made in your life wouldn't stand up to such strict scrutiny.
> 
> OP wants to extend her maternity leave and is simply trying to figure a way to do it. Bank is not going to "fund" the leave - she'll still pay everything she owes. Perhaps if she wasn't a woman the sentiment may have differed.
> 
> ...


 
Pompous much?

The points raised were not sexist or moralising they were trying to point out how the bank would be viewing the situation, there's no point posting on here if people are only told what they want to hear.

The OP is looking for a favour from the Bank, they've said no, so now she's thinking of just not paying the mortgage which would have serious ramifications for her credit rating which could impact on any future financial plans.

As you've stated you're no expert and your advice bears that out. Why over-pay now instead of saving that money to meet the payments for the three months, surely if this was an option there wouldn't need to be a moratorium?


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## STEINER (21 Jun 2013)

Emmaf said:


> Trying to keep emotions at bay...very angry...here goes:
> 
> Contacted mortgage lender to ask if we could have a 3 month moratorium so I can take 16 weeks extra unpaid maternity leave. Currently on maternity leave and getting 75% pay from employer.  This ends at 26 weeks.
> 
> ...



You shouldn't stop paying your mortgage without prior agreement if you have the money.  Check out your contract to see does it allow for approved payment holidays.  Although you say your mortgage is large, you really don't have a great deal of savings in place for this particular situation.  Hope all goes well with new addition.


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## Time (21 Jun 2013)

If you don't care about your credit rating then there is very little the bank will do in 3 months.


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## Emmaf (21 Jun 2013)

It stated in our original documentation, and were told when we signed up, that a special product feature on our mortgage is the ability to take a six month moratorium / payment holiday during lifetime of mortgage.  It cited maternity leave as one reason why you may consider doing this.  Forgive my sense of entitlement, but yes, I didn't see a problem, especially as we were fairly (I thought) safe in lack of debt and small savings.  We put a large deposit on the house and while the value has fallen, we are not in negative equity.  

i queried this over the phone and was told the bank no longer offer this product feature, and thats that.  Yet we were never alerted of this change in product feature until we requested it!  Thats what annoyed me.

Forgive me for feeling slightly aggrieved.  It seems the lender can change the goal posts on what we signed up to at any time and tough luck to us.  

I posted on here because when I asked the same question to the person on the phone in bank, she was highly unprofessional in her response, saying yes, they can change the rules anytime, end of story.  I asked could we come in and discuss with someone and she said no.  She actually raised her voice to me and said we have no option but to do what she said.  I simply wondered was not paying for 3 months an option and what would happen.  

Anyway, thanks for the responses that focused on the question I asked.  If anyone has any further advice regarding appealing this based on what i believed to be part of our contractual agreement with the bank, I would like to hear.


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## dereko1969 (21 Jun 2013)

Of course you should have mentioned that! However, if it was not included in the terms of your mortgage and was only included in advertising then the bank probably does have the right to change it. There's a difference between documentation and mortgage terms, I would hazard a guess that there is a get-out clause in the terms of the mortgage to that effect.

There is no requirement on the bank to allow you a moratorium, that is the plain fact of the matter. There's no point in complaining to the ombudsman because by the time a decision is reached you will be back at work.

How close to taking the unpaid maternity leave are you?


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## Brendan Burgess (21 Jun 2013)

> I maybe should have mentioned but It states in our original  documentation that a special product feature on our mortgage is the  ability to take a six month moratorium during lifetime of mortgage.


Emma

If your contract allows it, then you simply insist on it. 

If your contract doesn't mention it, but "other documentation" does, then you will be entitled to it. 

Unfortunately, they say that the Central Bank has told the banks that even in these cases, the borrower must complete an SFS, which is nonsense. 

You should not rely on what you were told on the phone. Notify the bank in writing that you will be taking a moratorium and they are to confirm that they will not be taking the money from your bank account. 

Brendan


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## Gerry Canning (21 Jun 2013)

Brendan Burgess said:


> Emma
> 
> If your contract allows it, then you simply insist on it.
> 
> ...


Good advice from Brendan,

On anything to do with Banks put it in writing, keep a copy ,ask for acknowledgement of your letter.
The Banks are all over the shop on Mortgages and their staff are running around like headless chickens .
I wish you well.


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## Emmaf (21 Jun 2013)

Thanks for the advice.  We did actually complete a SFS.... what do you mean that its nonsense to have to complete one of these - just curious.


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## Brendan Burgess (22 Jun 2013)

Sorry, I wasn't very clear. 

1) It's nonsense that you are required to complete an SFS.
2) They say that the CB requires this - I suspect that the CB has not required it. 

You have a contractual relationship which gives you a right to reschedule your mortgage.  The SFS should only be completed as a basis for the bank to make a decision. 

The bank has looked at your SFS and has decided that you have sufficient funds not to need a moratorium, so, based on this, they correctly refused you the moratorium.

But it appears you have a right.

1) Which bank is it? 
2) What documentation says you are entitled to it? 
3) What is the exact wording?


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## Emmaf (24 Jun 2013)

Brendan, to answer your questions:

1.) AIB

2.) A Payment Holiday of up to 6 months over lifetime of mortgage was mentioned as a product feature on advertising of the loan at time we took it. Mentioned many times by advisor - maternity leave given as a specific reason for availing of it.  I thought it was in writing on our Offer of Loan from AIB.  Have gone through all documentation.  The Offer of Mortgage Loan refers to the following only in relation to moratoriums / payment holidays:

3.)'Part 3 / Pre-Drawn Requirements
The policy document relating to the mortgage Protection Policy stipulated in Part 1 of the Particulars of Offer of Mortgage Loan and any additional or substituted policy or policies approved of and accepted by the Bank must be lodged with the Bank.  The policy document will be held by the bank for the duration of the mortgage Loan term but may be substituted with an alternative policy with the Bank's prior consent.  Please note that where flexible repayment options are availed of (i.e. Interest Only Repayments, Deferred start / Moratorium or Payment Holidays) the mortgage cover should, if possible, take account of the non reducing capital sum arising from these and any subsequent repayment breaks'.

I want to appeal the decision and need advice on how best to do so.   They have refused a three month payment holiday.  No reason given, though you seem to think its because we proved we could pay a few months.  Can I ask them to reconsider or for a 2 month or one month payment holiday instead? What would you advise as best way to approach?  thanks.


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## 44brendan (25 Jun 2013)

Based on the above post it would appear:
1. The loan documentation does not include an entitlement to a mortgage payment holiday! While this may have featured in the promotional material, you would have a poor case in using this as an excuse to not pay the mortgage in line with the formal agreement.
2 The clause quoted by you under (3) relates to mortgage protection cover only. It does not imply any automatic requirement to repayment breaks.
3. Yes you are entitled to appeal the Bank's decision under MARP criteria. However, if your SFS indicates that you have an ability to meet the repayments, then you are unlikley to be successful.
4. Finally, you can cancel the Bank DD and just not make repayments for 3 months. This will affect your credit record but is unlikely to have any direct consequences from the Bank, provided you resume the repayments, and clear the arrears over time. 
Historically banks were inclined to be flexible in situations such as yours. However, they have now closed down on all payment holiday requests and tend to refuse where clients have an ability to meet the full repayments. This is somewhat unfair, but unfortunately it is reflective of the current credit market and bank approach to clients.


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## AlbacoreA (25 Jun 2013)

So the bank sold/advertised the mortgage with mortgage payment holiday but didn't put it on the actual agreement. I wonder how common that is.


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## Emmaf (10 Sep 2013)

Update: Appealed the decision based on the fact that a product feature of our mortgage was the ability to take a payment holiday / moratorium.  Its taken until this week, and a huge amount of chasing up on our part but we have been granted a 3 month moratorium.

Strangely though, in the letter we received authorising the moratorium they state: 'I acknowledge receipt of your application for support under the Mortgage Arrears Resolution Process'.  At no point were we in arrears (see original post).  Should we be seeking clarification that this process we have completed is part of a standard mortgage moratorium  and not a formal Mortgage Arrears Resolution Process.  Could this affect future credit ratings or does it matter?  Thank you. Emma.


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## sparky11 (11 Sep 2013)

I have had a similiar issue with EBS. On taking out our mortgage with them we were informed that we could avail of a 6 month payment holiday break. The manager at the time even went as far as saying that we could take a full 6 month break or 2*3 month break. Similiar to o/ps story, family reasons (newborns, kids starting school/college etc.) were cited as the main reason for taking such breaks. I can still picture the manager telling us about this and at the time I was thinking what a great idea.

Anyway roll on 10 years and when I enquired about taking such a break the EBS had the audacity to say that they never offered payment holidays and more or less accused me of making it all up. They are sticking to their guns and are adamant that these conversations never took place. Obviously, I do not have anything in writing to say that a holiday break was part of the mortgage so I just have to grin and bear it. Fair play to you for chasing them up and well done with the result.


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## ryaner (11 Sep 2013)

@Emmaf, do check to see if they are counting the payment holiday as a payment holiday, or as arrears. It'll cost different obviously.

The bit about it being under the arrears resolution process is very cheeky. On the change that you do fall into arrears in future for whatever reason, this would show up.


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## Slim (12 Sep 2013)

Emmaf said:


> . Could this affect future credit ratings or does it matter? Thank you. Emma.


 
I think it is likely that this will appear on your ICB record as 'M' for the three months and may indeed affect your ability to get credit in that period.


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## NewHere08 (19 Sep 2013)

Sparky11, we had the same issue with EBS.  We were advised that a payment holiday would be possible at a future time several years ago.  However, recently when we tried to avail of it, we were advised that they never allowed it (and I remember the guy etc but apparently I'm wrong!).  We are not in debt, but did manage to get a period of interest-only (going the SFS route).


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