# Shortfall on voluntary sale on investment property, but mortgage free home - BoI



## Golden1951 (3 May 2014)

can anyone tell me if i do a voluntary sale with one of my properties and have a shortfall but have another property how long does it take the bank to put a charge/judgement on this property for the shortfall and what would this mean to us, we have very little money coming in, i know we will have to pay the bank an agreed weekly/monthly amount but would like to know how long all this takes


----------



## Dr.Debt (3 May 2014)

The 1st thing you need to know is that the bank cannot put a charge on your property without your consent / agreement however.......

If, when the house is sold there is a shortfall (as you are now anticipating) and if you decide not to cooperate with the bank placing a charge against your home, the bank may decide to take a court action against you for the shortfall. If they are successful in this court action they will receive a judgment against you. A court judgment can be enforced in a number of different ways and the most common ones are as follows :

1) They can apply for an installment order. They can ask the court to order you to pay a certain amount of your income each week/month. The court wont make the order if your income isn't strong enough.
2) They can apply to have the judgment set against your home, known as a judgment mortgage. If this happens you will have a judgment mortgage against your home and when the house is eventually sold one day in the future, the bank will be paid in priority.
3) They can apply to the court to have your home sold to repay the debt. Its very unlikely that it will take this action and very unlikely that such an action will be successful in your case.
4) They can appoint the city / county sheriff to seize some goods. The sheriff is normally only interested in large ticket items such as cars, boats , caravans etc etc.

In terms of a time scale, it will take months and possibly more than a year for the bank to obtain a judgment and even longer before that judgment can be registered as a judgment mortgage against your home.

It would be worth talking to a Solicitor who will advise you properly.


----------



## Golden1951 (3 May 2014)

Dr Debt
thank you for that information i have looked and looked at several posting but was getting nowhere, we are both 60 year old and living on social welfare and do not have a lot of spare money, we are anticipating that when we sell the property we will have a shortfall of about 45,000 depending on what price we sell the house for, we have had to drop it to nearly half its value to get any interest and we now have someone who is interested, we have been so worried that if we cannot come to some arrangement with the bank to pay the shortfall they would put a charge on our family home and make us sell it leaving us homeless, at least if it takes months or even years for this to happen, we will have some breathing space


----------



## Dr.Debt (3 May 2014)

My advice to you is not to agree any repayment schedule with the bank regarding the shortfall if you cannot afford it. You just inform the bank that you don't have the means and let them decide what to do.

The most likely action by the bank will be to get a court judgment on the shortfall and for it to register that judgment as a mortgage against your home. In most cases that will be the end of it. The judgment mortgage will cease to have affect after 12 years. If the house is sold within that 12 years the bank will get its money back.

If you decide to cooperate with the bank in having a charge placed against your home voluntarily, make sure you get good financial / legal advice on that. One important factor is that a judgment mortgage ceases to have affect after 12 years. A legal charge entered into voluntarily is likely to remain with the property until sold. No prizes for guessing which one the bank prefers.


----------



## Dr.Debt (3 May 2014)

Deleted


----------



## Golden1951 (3 May 2014)

so are your saying that if we dont agree with the charge and cant afford to pay the bank anything and they go for a court judgement on the shortfall and it is registered as a judgment mortgage it only last for 12 years so what happens to the debt of 45,000 say after this time does the debt die,


----------



## Dr.Debt (3 May 2014)

Yes, "it dies" after 12 years.


----------



## Golden1951 (3 May 2014)

thank you for your help and information will keep you informed if we get a sale


----------



## Golden1951 (6 May 2014)

Dr Debt
We have got a buyer for our property as discussed in previous thread, we owe the bank 165,000 and have sold it for 123.500 after costs  leaving us with a shortfall of about 45,000, the bank have appointed an estate agent in Dublin to deal with our estate agent/auctioneer, which we were very suprised they did, why couldnt our estate agent do it all himself, what we would like to know if you could help us with  is, does the sale go through and then the bank informs us what we owe them in the shortfall, or do they ask to put a charge on our other property before the sale can go ahead, you
 said not to agree any payment plan or agree to put a charge on our property (family home) do all banks do it the same way.  We are just worried that if they ask to put a charge on our house before the sale is finalised we could loose the sale


----------



## kaza (6 May 2014)

I think it is better that they employee the estate agent, because then the cost of the estate agent is on them and not you - which they will probably deduct from the sale of the property.


----------



## Dr.Debt (6 May 2014)

I assume the bank has appointed its own estate agent to ensure that the sale of the property is being conducted at true market value. In other words the bank has appointed its own estate agent to check up on your estate agent. I wouldn't worry too much about that.

It may happen that the bank will insist on putting a charge on your home before cooperating with the sale of the 2nd property and you may have to do battle on this.If this happens you will need to get your Solicitor involved. Under Section 94 of the 2009 Land reform and conveyancing act, you can apply to the courts to make a direction to sell the property if the bank is unwilling to let this happen.


----------



## Golden1951 (6 May 2014)

Dr Debt
i suppose we will have to wait and see what the bank decide to do we just dont want to hold up the sale in case the people pull out, we just want it over and done with and get on with our lives, we have lost a lot of money on this property and even when its sold we still owe the bank 45,000 here's hoping that they let the sale go ahead and then come after us for the money, we could also leave the country (only joking) and hope they dont find us.
Its very unfair that people like us loose out and the banks always seem to get their money, whatever happens.


----------



## dub_nerd (6 May 2014)

Golden1951 said:


> Its very unfair that people like us loose out and the banks always seem to get their money, whatever happens.


Why is it unfair that the bank should get what you owe them?


----------



## Commercial (6 May 2014)

There may be other ways around this.
Is there debt on your home?
Can you provide a lump sum to the bank for a portion of the debt?
Who is the bank?

I know banks would prefer to get a portion of the shortfall in one lump sum now, rather than putting a judgment against your property.
Also, can the bank not renew the judgment in 12 years time? I have heard conflicting stories about judgments!


----------



## Golden1951 (6 May 2014)

commercial
No there is no debt on our home its mortgage free, we dont have any money to give the bank a lump sum, we borrowed money on our first house to build the one we lived in now, this was in 2006 planning to sell the first house to pay off the  mortgage, but as we all know the property market crashed and we ended with two properties and not being able to sell, we wish that we hdnt built again, there are loads of people in the same position as us because of the crash. the bank is the BOI


----------



## Golden1951 (6 May 2014)

Dub Nerd
we are not disputing that we owe them money and yes we will pay it back, but why should they put charges on a property that really has nothing to do with them, we have worked hard all our lives and always paid our way, but because of what happened when the property market crashed (mostly due to the banks) we find our selves in this position, have you no compassion for people who find themselves in this sort of situation it seems from the sound of it you havnt


----------



## dub_nerd (7 May 2014)

Yes I do have compassion. I think it's unfortunate. But obviously you do owe them the money and they are perfectly entitled to pursue your assets to get it back. I agree the banks played a part in the property crash, but so did the general public by buying into it. We're all paying for the banks, not just those who are in debt to them, so a loss for the bank is a loss for the rest of us. It seems to me a reasonable compromise that the bank can place a charge on your property, but is unlikely to move to repossess it. I hope things work out for you.


----------



## Golden1951 (14 Jun 2014)

Dr Debt
we have got a buyer for our property and we are selling at 122,000 leaving a shortfall of about 46,000, the bank is the BOI, i have spoken to the lady dealing with our case and i can say she is not helpfull at all we have been waiting 6 weeks to hear from them after receiving the offer only to find that we should contacted her (nobody told us this) i finally spoke to her and gave her the information she required ie solicitors fees, auctioneer fees, and she told me she would now be able to put forward a proposal to us, i asked her what she meant by this and she said we would know when we received it, i pressume it will be asking us what we are going to do about paying the shortfall back to them,  we do not want a charge putting on our property we live in and we will try to do everything we can to prevent this, we are prepared to make an offer of payment, but we are both on social welfare of 188 euro each so we do no envisage that we will be able to pay much, you said in a previous thread to me that we can refuse to have a charge put on the house, how would we go about this and could they stop the sale of the house if we do not agree.


----------



## Brendan Burgess (14 Jun 2014)

Golden1951 said:


> we borrowed money on our first house to build the one we lived in now,



Do I understand you correctly? 

You borrowed money to build the house you currently live in? 

But you don't want to pay it back? 

You don't want the bank to put a judgement on your current house? 

If this is what you are saying, it makes no sense.  If that is not what you are saying, I apologise for misunderstanding you. 

I think it's better that you become reasonable on all of this.  You need to accept that you borrowed money to build your home.  

You owe the bank €46,000 

You can't afford to repay capital on this, but you can afford to pay the interest on it, which would be around €172 a month. This is what you should do.

If you refuse that, the bank could and should 
1) Get a judgement for the debt
2) Register it against your home
3) Seek repossession of your home. 

Brendan


----------



## Golden1951 (14 Jun 2014)

Yes we did borrow money on our first house to build this one, and yes we do not dispute the fact that we owe the shortfall to the bank and we will try to make an agreement to pay  what we can on this debt, we are both over 60 and neither of us is in good health which has happened over the last few years and that is why we have got into this situation of having to do a voluntary sale on our property, we are not going to refuse to pay money to the bank but we do not want a charge putting on or property as it is all we have left, when we built our properties we were both in good jobs and hoping that when we eventually came to sell we would have money for our retirement this is now not going to be the case, when we were working we never missed a payment on our mortgage, but it just seems now the bank dosnt seem to care, and are doing nothing to help us


----------



## Golden1951 (14 Jun 2014)

all i am asking is if we refuse on the charge (not the arrangement) could they stop the sale going through


----------



## Golden1951 (14 Jun 2014)

Quote from one of your previous threads  saying they cant get blood out of a stone etc surely this applies to us 

Option 2A - Negotiate the bank's proposal 

In most cases, the banks seem happy enough to accept repayment of the shortfall over the remaining period of the mortgage at the mortgage rate. In other cases, they try to get the shortfall repaid much sooner. In such cases, you should ask to extend it. 

If you have good salaries, the bank will pursue the shortfall. 

If you are in dire straits, they can't get blood out of a stone, so while they won't write it off, they probably won't pursue it either. 

If you have a cheap tracker, you may be able to get the bank to write off some of the shortfall. But if you have a cheap tracker, it's very likely that you are much better off retaining the property, and renting it out.


----------



## Brendan Burgess (14 Jun 2014)

Golden1951 said:


> Quote from one of your previous threads  saying they cant get blood out of a stone etc surely this applies to us



Eh no. You have a mortgage free property which they can repossess and have the money owed to them paid in full.

That is why I suggest you stop codding yourselves and enter into meaningful discussions with them.

If you intend to pay the loan, why would you not want a charge on your home?  700,000 people in Ireland today have mortgages on their home. Most have mortgages much bigger than yours.


----------



## Springsteen (15 Jun 2014)

Golden 1951. I have great sympathy for your situation. At the genesis of your plan your circumstances were different, your plan was viable, and you could afford it. Unfortunately the world around you has changed. Who or what is responsible for that change is a irrelevant, and above all is a waste of energy. You are perfectly entitled to negotiate the best possible deal for the future security of your family. You are merely negotiating within the rules and best practice of the land. Don't mind the naysayers.

Offer the bank an amount per month based on affordability for 5 years as full and final settlement of the residual debt. If you can only afford 50€ that's all you can afford. If your figures are genuine they will have no reason not to accept it and would be foolish to proceed legally. The family home has extra security under Irish law. The residual debt outstanding is very small change to the bank. They may well threaten to pursue you for every cent. I don't see it happening.

Put this behind you and enjoy the rest of your life. You're nearly out of the woods, keep going. The very best of luck.


----------



## Bronte (16 Jun 2014)

Golden1951 said:


> all i am asking is if we refuse on the charge (not the arrangement) could they stop the sale going through


 
You're not being logical with this, and you are not in the driving seat, the bank is.  

The best thing is for the bank to allow the sale, and let them put a charge on your house, be cooperative with them, it is in your own best interest.  Hopefully they will just put the judgement mortgage on it and are unlikely to seek to repossess.  Retired 60 year olds on social welfare being evicted is not a headache the bank wants, that is your only power in all of this.  

Totally do not agree with your logic on believing that you should not be liable for the shortfall.  But I do sympathise with the situation you find yourselves in.  

In relation to retirement and health, it's actually better to either very rich or on social welfare, than somewhere in the middle.  The state will pay for everything for you.


----------



## Brendan Burgess (16 Jun 2014)

If the bank will do a deal with you as Springsteen suggests - €50 a month for 5 years, go for it. In fact, there is no harm in asking for it.  The banks have done some stupid things and they might agree to it. 

However, stay flexible. Don't go in expecting it and banging on the table if they don't agree. 

An ideal solution for you would be that they give you an interest roll-up mortgage for the deficit.  In other words, they charge you 5% interest a year, but roll it up. You make no payments. When you die, your home will be sold and the mortgage paid off. That would be a fair solution for everyone.


----------



## Gerry Canning (16 Jun 2014)

Dub Nerd; quote{loss to Bank is loss to all of us} 
Simply not so , BOI we do not own,nor Ulster , Ge , Start,Acc etc are no direct loss to us all.Indeed if they are not paid it saves Ireland money(not advocating non-payment) 

From Golden1951; 
I see no wish to not pay Boi ,just sad at situation, like a lot of people Golden is caught by downturn.
They did not fully understand that any Bank are fully entitled to chase their funds. 

Given Golden1951,s poor financial position today I see that BOI will put judgment on their home.Whether it is voluntary or forced is down to conditions that can be agreed.
As long as judgment is not enforced Golden,s can safely stay in their home.
Brendan ; {Bank could and should seek repossession.}
From reading the threads your comment is a bit harsh.
They have under 19,552 .Take out interest  2,064leaves them 17,488.

It could well be that Boi with leave them in situ and on their deaths take their money.
I think an agreed terms on Judgment could be fairest option.  

Question for you both? 
Over 60 ,worked all your life , so maybe come 66 you both will get contributory old age pension  ie more than 188 each.


----------



## Bronte (16 Jun 2014)

Golden1951 said:


> all i am asking is if we refuse on the charge (not the arrangement) could they stop the sale going through


 
Is the house rentable? How much would it achieve?


----------



## Golden1951 (18 Jun 2014)

to Gerry Canning

thanks for your post and helfull reply we too thought that Brendan Burgess replies a bit harsh but i suppose everyone has their own opinion and he might think differently if in the same situation as us.  We are not trying tog et out of paying off the shortfall and are quite willing to come to some arrangement with the bank as you say we are just caught in a downturn and our situation in the past years has changed through no fault of our own we did not ask to become ill and not be able to work, which i might say we have done since the age of 15 and never asked for any money from the state untill now.  We have just found that the bank we are with just does not seem to have any compassion for people like who find them in this situation, yes we are in a good position that we do have another property (which we live in) and we are not being made homeless like a lot of people, we have always paid our way and where looking forward to good retirement which we now know is going to be a stuggle.  hopefully we can come to some arrangement with the bank and we will try everything possible to do this.


----------



## 44brendan (18 Jun 2014)

I think the most helpful and likely successful solution offered is that of Springstein. Accept that the bank staff have a job to do and that job is to recover as much of the shortfall as possible from you. They will threaten all sorts of action but realistically are unlikely to progress with any. They can certainly go for a judgement on the shortfall and register that against your PDH. But as per earlier commentary by Dr Debt that judgement will be statute barred in 12 years. Progression to sale on foot of a judgement is possible, but is virtually unknown practically where a family home is involved. Access what you can afford monthly and offer this payment to the Bank over a 3/5 year term in full settlement of the shortfall. If they fail to agree let them work away with their legal action. I have plenty of experience of these deals from the perspective of the Bank and generally banks are realistic and will accept that you can only pay what you can afford!!


----------



## Golden1951 (1 Jul 2014)

as said in previous threads we have got a buyer for our property and have been waiting over 2 1/2 months now since the offer for the bank to tell us if they will allow the sale to go through due to there being a shortfall, i have rung and rung the bank and tried to speak to the lady who has been assigned to our case, i leave messages on her answer machine but to no avail, the estate agent is forever ringing us to see if we have heard anything as he has the lady on the phone everyday asking what is happening and is also threatening to pull out of the sale if nothing happens soon.  has anyone else had this problem its the BOI and to be quite honest i am astonished that the cant even have the decency to return my calls and let me know what is happening as it is them in the long run that is getting the money at the end of it all


----------



## 44brendan (1 Jul 2014)

Forget phone calls if they are being ignored. This is now a bank problem rather than yours. Remember to look at my previous post. get confirmation from the estate agent of the offer (written). Forward this to the Bank, outlining details of your unanswered phone calls. State the urgency of a quick response and that if they fail to respond early and the sale does not close as a result of this you will be contacting your solicitor on the issue. Register the letter and copy to the Bank CEO.
I agree that this aoppears to be a disgraceful way of doing business, but incompetent people are not confined to the banking sector!!! If you act in a competent and professional manner in your dealings with them you should be entitled to the same service from them. keep us advised on how you get on and try to retain your sanity


----------



## Golden1951 (2 Jul 2014)

thanks for that we have heard from our estate agent that he has had confirmation on behalf of the bank (from the agent in Dublin that acts on behalf of the bank) that they will accept the offer, so the person wanting the property has put  a down holding deposit with the auctioneer, we however have heard nothing STILL from the bank and we are not going to contact them again, hopefully the sale will go through and then it will be up to the bank to chase us for the shortfall, we too can then show them the same courtesy of not answering there phone calls or letters. will keep you advised


----------

