# Want to hand back keys on investment property



## Bard123 (17 Jan 2012)

I am separated from husband, in arrears on family home and investment property. I cannot deal with trying to pay a bit to both banks, and the stress is, really affecting me. I have tenants in the property but after paying reduced payment to the bank (Bank of Scotland) and life insurance there is nothing left, the property is in negative equity and I cannot continue making myself ill with the worry. What should I do? I cannot seem to get an advice anywhere and dont know if I should give tenants notice and hand keys back or wait for them to repossess. If the bank repossess, would I have to go to court and what would the time frame be. Ex not interested and has left it all to me to sort out (see other thread). Someone from the bank is coming to see me on monday so would like to have some plan of action ready. Any advice would be greatly appreciated. thanks


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## Knuttell (17 Jan 2012)

Bard123 said:


> but after paying reduced payment to the bank (Bank of Scotland) and life insurance



I may have picked this up wrong but there is *no requirement to pay for life assurance on a rental property *indeed if its on your PPR you could approach the Bank and say either the policy is paid or they are paid...I would imagine they would waive that particular requirement.

Have you negotiated an interest only payment plan with the lender or approached MABS?

You could try posting in the money makeover section.

Its a tough situation and I hope things work out for you.


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## Bard123 (17 Jan 2012)

Hi Knuttell, have spoken with MABs they told me to continue paying life insurance (had been living in property up until 2 yrs ago).  Already on interest only payments, but due to situation only paying half of the interest payment.  Cannot cope with 2 banks and 4 kids on my own. Really dont know where to turn to


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## Bronte (18 Jan 2012)

Bard, can you post up the figures please.  It's very hard to advise you on what to do if you don't give us the full financial facts.  

From what you have posted it looks to me like you have to let the bank take the property.  In your situation your priority should be to clothe and feed your family, heat your home and stay well and healthy.  Nothing else really is important.  

Does your ex have a job/assets?

Do not worry about the person from the bank, I would advise you to let her see how you live now with the 4 kids etc and have a friend/relation there as a silent observer for your own reassurance. And for confirmation of what the bank worker tells you/tries to convince you to do/puts pressure on you to do.  I have a relation who  had a visit from the bank recently (second time) but they can't get blood from a stone and the bank person was a very nice lady.  But they are on a mission from the bank.  I'll post the story on an old thread of mine when I find it.


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## Bard123 (18 Jan 2012)

Hi Bronte, family home 385k - PTSB over 23 yrs rate 5.8% paying 500 pm, rental property BOS Certus - 285 k 23 yrs left as well 3.9% paying 400 pm. Dont know what bank have done about arrears I am assuming that they added to balance of mortgage, have private health care but that is going to go when up for renewal. Ex has credit card which I am paying for him 50 pm as I know that he wont pay it.Have house insurance on both houses about 150 per month, car tax and ins no other major outgoings I have no credit cards or loans, except the 4 kids! I am receiving maintenance (ex has mental health probs)  but not near enough to pay even interest only on family home


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## Bard123 (23 Jan 2012)

Update ; Had a meeting today with Bank of Scotland (Certus) told them of my financial situation and that I literally couldnt cope with the stress of having to cope with rental property.  His suggestion was that I voluntary surrender the property back to the bank, which I know is really the right decision. He said the property would go to public auction and we would be liable for the shortfall.  Does anyone know if I would have to go to court when they come looking for their money, it really does worry me because I know that I cannot afford to pay it.


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## 44brendan (23 Jan 2012)

Certus are realistic and although you will be liable for the shortfall I don't see them taking any action in respect of this given your financial circumstances.
Why are you paying €50 pm on your ex's Credit Card? If the card is in his own name it is his problem. I acknowledge your comment re his health, but realistically if he cannot pay, you should not regard this as your responsibility. Particularly given your own financial issues & family circumstances.
I would advise you to co-operate with Certus on re-posession and put aside any immediate worry on the residual balance.


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## Ann1 (23 Jan 2012)

Just a thought Bard123 regarding the family home....When you bought the investment property was the family home used in any way to secure the investment property loan.


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## Brendan Burgess (23 Jan 2012)

Bard123 said:


> Update ; Had a meeting today with Bank of Scotland (Certus) told them of my financial situation and that I literally couldnt cope with the stress of having to cope with rental property.  His suggestion was that I voluntary surrender the property back to the bank, which I know is really the right decision. He said the property would go to public auction and we would be liable for the shortfall.  Does anyone know if I would have to go to court when they come looking for their money, it really does worry me because I know that I cannot afford to pay it.



Hi Bard 

BoS can't get blood from a stone and don't want to. They will not give you a letter saying that they won't pursue the shortfall, but in practice, they won't. 

You will be converting the secured debt into an unsecured debt and when the new personal insolvency legislation comes into force, you will be able to get this formally written off. 

The only thing which surprises me is that they want to repossess and auction it. I would think it would be better to try to sell it through an auctioneer first. 

I would suggest that from now on, you pay BoS only whatever rent comes in from the property. Don't pay anything more than that. 

Brendan


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## Bard123 (23 Jan 2012)

Hi 44Brendan, with regards to credit card for ex, some of the purchases on their were for the home so I want to try and pay some of it off.  Hi Ann1, we lived in rental property for 5 years so at the time it was our family home before we moved into current home.  They are completely separate mortgages and neither property was used to secure either mortgages.  My worry is that Bank of Scotland will apply charge to family home for residual balance and whatever hope I have of trying to keep it will be gone


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## Bard123 (23 Jan 2012)

Hi Brendan,  Have been paying BOS rent minus life ins and house ins.  But cannot do this anymore financially or mentally.  Am going to give tenants notice and contact an auctioneer for a valuation.  Unfortunately not a lot of properties are selling in rural ireland and while property is still in my name I have to continue with house ins etc which i cannot afford


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## Brendan Burgess (23 Jan 2012)

Bard123 said:


> Have been paying BOS rent minus life ins and house ins.  But cannot do this anymore financially or mentally.



OK, but this isn't costing you anything financially?


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## Brendan Burgess (23 Jan 2012)

I think you should abandon the PTSB home and move back into the BoS property



> 385k - PTSB over 23 yrs rate 5.8% paying 500 pm, rental property BOS Certus - 285 k 23 yrs left as well 3.9%



Advantages 
Lower total amount outstanding
Much lower interest rate
By all accounts, a more comfortable house for you and your children. 

Brendan


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## Bard123 (23 Jan 2012)

Hi Brendan, yes i have thought about moving back to BoS property, but as I am relying on maintenance to pay mortgage, if ex loses his job (again) because of his mental health problems I will have uprooted the kids in vain.  I cant really afford the full interest payment on rental property at present (even with the rent coming in) and BoS wont let me continue on reduced payments for much longer I know that I will end up losing here as well as there is no way I can cover mortgage payments but hoping that I can give them a little bit of stability for a while before the inevitable happens


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## Bronte (24 Jan 2012)

If the rented property is better, and it certainly has a lower interest rate you'd be better off moving in there particularly as the mortgage is much lower.  If your ex loses his job you will be entitled to mortgage interest relief from the government which will help to pay the mortgage.  You have a much better chance long term of keeping the family home, and having a lower mortgage and lower interest rate on that is the reasoning for the advice on moving back into the BOS property.  Plus apparently it is a better house.  

You are wasting your time paying your ex's credit card, it's probably not even paying the interest on the card and is good money after bad.  

You asked the question, what would the bank do with the shortfall, yes they can seek a judgement mortgage on the family home and they will do this if there is equity in it.  Does not matter if one is secured on the other or not.

As long as you continue to rent you should deduct costs and then pay over the rent to the bank.  It will take them some time I guess to get their act together on selling.

As an aside it's intersting that the new approach this year is more of a reality from banks, first time I've heard mention of a bank suggesting repossession and selling at auction.    

How much would the normal payments be on the BOS property, and how much can you pay.  

At the end of the day, what will happen is that even if the bank takes you to court for the shortfall (which would be stupid in your situation) they can only get an instalment order for what you can afford to repay and in your case that would be zero.  

Don't forget that your ex is not out of the loop on these borrowings either.  If he has income or assets they can go after these.


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## 44brendan (24 Jan 2012)

You will need to make any decision quickly. Advice from Brendan B should be considered carefully. If you move into the 2nd property it becomes your family home and you are protected by MARP requirements. 
Stop paying the credit card as this is not a priority. Think about approaching MABS or someone who can help you think through all of the options & make a sound decision.


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## Bard123 (24 Jan 2012)

Many thanks to you all for your sound advice.  I really have considered it and think the best option is to move back to rental property.  Does anyone know if there are any legal implications to me leaving this house (apart from the obvious), ie. will bank say that I have abandoned property will it look worse for me if they take me to court.  I will obviously have to hand back keys, house wouldn't sell as it is unfinished. Many thanks for continued advice


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## ClaireM (24 Jan 2012)

Brendan Burgess said:


> The only thing which surprises me is that they want to repossess and auction it. I would think it would be better to try to sell it through an auctioneer first.
> 
> I would suggest that from now on, you pay BoS only whatever rent comes in from the property. Don't pay anything more than that.
> 
> Brendan




The OP has said that BoS have asked for a voluntary surrender, is this not different to a repossession?


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## Bard123 (24 Jan 2012)

As far as I know it just means that they dont have to chase you through the courts for the property.  Am just wondering can the PTSB apply a charge to rental property for residual balance?


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## Bronte (25 Jan 2012)

Bard123 said:


> think the best option is to move back to rental property. Does anyone know if there are any legal implications to me leaving this house ie. will bank say that I have abandoned property will it look worse for me if they take me to court.


 
No it is not worse to leave one house for another.  Can't see how this would be relevant in court.  You are nnot abondoning a house, you are leaving an unfinished property for a better home for your kids.  You should do what makes financial sense.


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## 44brendan (25 Jan 2012)

Best advice is to keep the Bank advised on what you intend doing. Let them know your financial position and that you will co-operate with a volunary repossession of the property. (effectively this means that you will co-operate in the sale of the property & should avoid any Court proceedings). When you are established in the 2nd property write to Certus and advise them that it is now your family home and that you will co-operate in paying what you can afford in line with MARP requirements.


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## Bard123 (16 Mar 2012)

Hi, just thought I would give an update.  I have found a wonderful solicitor who is well used to dealing with the banks regarding property issues. On his advice and all who replied here I will be moving back into the rental property. He has written to PTSB and advised them that I am willing to sell the property I am currently in providing they write off any remaining balance if the property sells. (Given current personal situation, they won't have much choice, I hope).  Although it isn't really what I want, I know that if I don't,  PTSB will repossess. (The solicitor is not going to charge me untilI feel that I can afford to pay something - what a nice man!) I have now stopped paying them and making the full interest only on rental propety.  Many thanks to all of you for your honest and sound advice, it is heartwarming to see that people will offer their time and expertise to others in touble . Will let you know what PTSB say.  Thanks again


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## Bronte (19 Mar 2012)

Well it's great to get some good news, and it's nice to hear that a kind solicitor is helping you out.  There was another thread on here about how a solicitor, in Cork I think,  managed to negotiate with the bank for a client.


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