# Writedown!!!!



## Mr peabody (20 Oct 2016)

Hi, I am currently in negotiations with pepper to try and resolve a mortgage.

Details: mortgage of 300k drawn down in 2007.
Arrears built up to to 65K since due to being out of work for a period and never being able to make full payment(approx €2150.
€1300 paid on average monthly amounting to approx 125K since draw down.
Never failed to contact lender etc.
We are requesting a short term resolution to give a chance to get back on track for years but the mortgage has only been renegotiated for 7 months of the 9 year term.
In full time employment now with 40k income combined.

Pepper will not renegotiate a figure with us as a mortgage and know our credit rating does allow us to obtain credit elsewhere.

House value is 140K and valuer described as a "hard sell" as the location is very very remote.

Due to the fact we planned in staying in house til the grave the architect advised us during construction to put bedrooms upstairs with no planning so obviously the house cannot be sold this issue is resolved as valuers pointed out.

In April after looking at my accounts pepper said the mortgage was unsustainable and offered an assisted voluntary sale with the market value of the house being full and final payment.
Their valuer put this at €170k.

This is my family home on family land and I want to keep it at all cost.

I have a brother in the US that is willing to "buy" the property but can only raise €100K.
Is there any point offering this to pepper.

We have a credit union with no other debts. 

Any advice greatly appreciated as I'm at my wits end.


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## moneybox (20 Oct 2016)

Mr peabody said:


> House value is 140K and valuer described as a "hard sell" as the location is very very remote.
> 
> This is my family home on family land and I want to keep it at all cost.



On those points alone I reckon pepper will have a very very difficult time trying to force a sale on your home. You are making repayments, Brendan has said numerous times on this site that it's very difficult for banks to reprocess houses when there is evidence  of repayments bring made.

Country folk especially those living  in remote rural areas have a tendency to support each other in matters such as this.  No local person is going to touch your home.  Visions of The Field springs to mind


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## Mr peabody (20 Oct 2016)

Haha,all we are missing around here is the bull mccabe. We are currently paying €1000 a month +trs. The really annoying part is that when pepper said they would settle for the current market value we thought they might give us the mortgage on this new basis but they have absolutely no interest in this at all


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## Bronte (20 Oct 2016)

People with cash can be willing to buy a house without planning. In any case once 12 years (?) are up the council,can't do anything.  

How much is the house worth?


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## Mr peabody (20 Oct 2016)

Bronte said:


> People with cash can be willing to buy a house without planning. In any case once 12 years (?) are up the council,can't do anything.
> 
> How much is the house worth?



A mortgage broker I'm friendly with reckons 80k would be a lot for it. My parents house is 60m from it and my next-door neighbours farm is 100m on other side. It's 5.5 miles from nearest shop,school and village.


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## Bronte (20 Oct 2016)

Is your friend the broker telling you what you want to hear.

If it's true why would you be willing to pay 100k?

Why is there a value of 170k instead of 80k?

Does Pepper smell money/ your desperation to hold onto it.


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## Mr peabody (20 Oct 2016)

Bronte said:


> Is your friend the broker telling you what you want to hear.
> 
> If it's true why would you be willing to pay 100k?
> 
> ...



I've made my intention to hold onto it clear from the start whether that was right or not.
Even the valuer pepper sent out said that it would be a very difficult sell.
The 100K figure is only a proposal by my brother-the part I'm finding impossible to figure out is how to approach pepper with a cash offer as they seem as though they have no interest in negotiating.


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## Bronte (20 Oct 2016)

I think you need to hire an expert negotiator with Pepper experience. 

Also a mess with your brother in law.  

I note you ignored my questions.


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## Mr peabody (20 Oct 2016)

Bronte said:


> I think you need to hire an expert negotiator with Pepper experience.
> 
> Also a mess with your brother in law.
> 
> I note you ignored my questions.



My apologies,I didn't mean to ignore questions.

I think the broker is telling it like it is to be honest-as a house it's worth €120/130-pepper valuer put the 170k on it but realistically as a repossessed house in the location it's in its worth considerably less,in the region of 80/90k.

I'm willing to pay/do anything at the moment that gives the situation stability so that's my reason for having no problem offering 100k if I thought it would resolve the situation.

And it's my own brother that's willing to come up with the money if required.


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## Bronte (21 Oct 2016)

Still don't understand the Pepper valuation.

What are you now saying about the 120k, is that for a house in that area that is not repossed?

Better it's your brother. He should have a written watertight legal agreement with you.  How do you pay him and Pepper?


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## gnf_ireland (21 Oct 2016)

Why not let them put it on the market, and wait and see what kind of offers are made. If you are confident it will only make 80k odd, let your brother purchase it for 80k and then you buy it back off him or whatever way you decide to handle the transaction between yourselves.

Alternatively wait for the offers to come in, none comes in including from your brother, and you ask for a writedown to 100k on the same interest terms you have at the moment

The problem you have is if you offer 100k, the questions will be asked about the valuation and where you got the money (and how much more can be raised). By putting it on the market, if you are confident it will not get other offers, then it strengthens your position considerably

But is that a gamble you are willing to take ? If Pepper believe its 170k value, they won't accept 100k ! Why would they?


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## moneybox (21 Oct 2016)

Gnf_ireland that is excellent advice. 
The OP has stated he lives out in the sticks, actually he lives way out in the sticks. House prices may have climbed in Dublin. Cork and Galway but anyone will tell you that out in the rural areas they have barely moved since the crash. One just has to look at the many rural towns and villages around the country and note  new semi's can be purchased for as little as €130,000. People are gravatating towards the cities for employment as there is absolutely zero opportunities for them in the country side.
  No way will anyone pay €170,000 for a house located many miles from services of any kind unless they are some sort of hermit. Pepper must have pulled that valuation from some old document going back to the boom years.


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## Mr peabody (21 Oct 2016)

That's the most frustrating aspect for me-we have no problem renegotiating the mortgage at €170k at an inflated interest rate which you would imagine would be good business for pepper. I am in no way looking for any sort of freebie but it baffles me that pepper have no interest in coming to a reasonable solution for both parties.


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## Bronte (21 Oct 2016)

gnf_ireland said:


> Why not let them put it on the market, and wait and see what kind of offers are made. If you are confident it will only make 80k odd, let your brother purchase it for 80k and then you buy it back off him or whatever way you decide to handle the transaction between yourselves.
> 
> Alternatively wait for the offers to come in, none comes in including from your brother, and you ask for a writedown to 100k on the same interest terms you have at the moment
> 
> ...



That's where I was getting to, but couldn't get any kind of realistic value from the OP.  Like this is so obvious what can I say.  But its a high stakes game all the same. With everything to lose for the OP.


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## Bronte (21 Oct 2016)

Mr peabody said:


> That's the most frustrating aspect for me-we have no problem renegotiating the mortgage at €170k at an inflated interest rate which you would imagine would be good business for pepper. I am in no way looking for any sort of freebie but it baffles me that pepper have no interest in coming to a reasonable solution for both parties.




Mistake 1 your logic of Pepper. 

(please take all views into consideration)

Mistake 2 

Your desire to keep the house, heart over money - you to call this - very tough this


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## gnf_ireland (21 Oct 2016)

Bronte said:


> That's where I was getting to, but couldn't get any kind of realistic value from the OP. Like this is so obvious what can I say. But it us ax Hugh stages game all the sane. With everything to lose for the OP.



Yes any strategy here is risky for the OP. The problem is what is the alternative ? if they really want the house they either magically find 170k to buy it from Pepper, or put it on the market to get a more accurate valuation which allows them a better negotiating position, and hopefully get it for 80-100k. 


Back in 2010, a relative of my wife was selling her house in Dublin and got it valued. The number quoted was 'silly season' in my view, but that is what she believed it was worth - that's what she was told. She offered us a 100k discount on it, but could not understand why we declined it. Sadly she passed away a short while later, and the house was sold within 3 months - for 250k less than the valuation. If the original valuation have been more accurate, we may have bought the house (family discount or not). 
What I am trying to say is, Pepper has no reason to do business currently at less than 170k. Until they can see the market value is lower than that, they will go on their professional valuation. 

The fact they don't appear to be willing to let you continue to borrow 170k from them is a completely different matter


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## Bronte (22 Oct 2016)

I forgot something important.

How will ownership be organised if your brother pays 100k?


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## Mr peabody (22 Oct 2016)

Bronte said:


> I forgot something important.
> 
> How will ownership be organised if your brother pays 100k?


Ownership to be in his name and I would repay the debt


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## Bronte (22 Oct 2016)

Havent you forgotten something, how are you going to pay him if Pepper get an instalment order against you?

What if your valuation is wrong.


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## Mr peabody (22 Oct 2016)

Bronte said:


> Havent you forgotten something, how are you going to pay him if Pepper get an instalment order against you?
> 
> What if your valuation is wrong.


But if I was to repay him "rent" to the value of the mortgage repayment on the house can pepper have a grievance with that because I have to rent someplace to live.


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## Bronte (29 Aug 2019)

I see now that you brought this issue up before.

Why didn't you let Pepper sell the house and buy it back?  You could have gone bankrupt etc also.  I don't understand why you didn't when the value was very low.  Particularly when you had a brother willing to help you.


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## cremeegg (29 Aug 2019)

Peppers logic becomes apparent.


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## Mr peabody (29 Aug 2019)

Bronte said:


> I see now that you brought this issue up before.
> 
> Why didn't you let Pepper sell the house and buy it back?  You could have gone bankrupt etc also.  I don't understand why you didn't when the value was very low.  Particularly when you had a brother willing to help you.


Thanks Bronte. By the time my brother put the money together and we were able to put the proof of funds to them they spent a couple of months deciding on it a then proposed the split offer.


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## NoRegretsCoyote (29 Aug 2019)

You spent €300k on a new build on what I presume was free land.

Out of curiosity, how big is the house?


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## Dazzler123 (29 Aug 2019)

Ah here. As it turns out... you ARE the reason for high interest rates in this country. Purposely putting in extra rooms in contravention of planning ? Theres only one reason for that...rdiculous


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## Mr peabody (29 Aug 2019)

Dazzler123 said:


> Ah here. As it turns out... you ARE the reason for high interest rates in this country. Purposely putting in extra rooms in contravention of planning ? Theres only one reason for that...rdiculous


Having had to jump through a million different hoops to get planning for a house with no neighbors in a very remote setting I don’t think a glorified attic conversion constitutes a major planning issue.


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## Dazzler123 (29 Aug 2019)

Mr peabody said:


> Having had to jump through a million different hoops to get planning for a house with no neighbors in a very remote setting I don’t think a glorified attic conversion constitutes a major planning issue.



Not a major issue other than it affecting the ability of anyone, including a bank to sell the Property?


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## Mr peabody (29 Aug 2019)

U


Dazzler123 said:


> Not a major issue other than it affecting the ability of anyone, including a bank to sell the Property?


Unfortunately at time of construction I never thought it possible that the current situation would arise


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## Dazzler123 (30 Aug 2019)

Mr peabody said:


> U
> 
> Unfortunately at time of construction I never thought it possible that the current situation would arise



Really? Because your original post indicates that you never paid a full monthly payment from the date the loan was drawn down. Given that the mortgage was presumably drawn down in stages to build the house, you would have been very likely aware you would not be able to repay as various tranches were drawn down. Then you made a change to the plans which presumably addrd to the build cost?

Sorry. But this is a prime example of why we pay the highest interest rates.  300k for a house build must be some house too


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## Mr peabody (30 Aug 2019)

Dazzler123 said:


> Really? Because your original post indicates that you never paid a full monthly payment from the date the loan was drawn down. Given that the mortgage was presumably drawn down in stages to build the house, you would have been very likely aware you would not be able to repay as various tranches were drawn down. Then you made a change to the plans which presumably addrd to the build cost?
> 
> Sorry. But this is a prime example of why we pay the highest interest rates.  300k for a house build must be some house too


Self employed in construction at time of drawdown. Mortgage broker advised me to consolidate 2 business loans into the mortgage. 
Lender had no problem with this as there was large equity at the time. 
Attic conversion cost approximately 5k extra at time of build and was done at the time as I felt it was a lot easier to do it then than down the road. 
FULL mortgage payments made for 16 months after final drawdown and moving into the house up to the crash and there was absolutely no financial issues during drawdown so I don’t know what you are gettin at there?


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## Dazzler123 (30 Aug 2019)

Mr peabody said:


> Self employed in construction at time of drawdown. Mortgage broker advised me to consolidate 2 business loans into the mortgage.
> Lender had no problem with this as there was large equity at the time.
> Attic conversion cost approximately 5k extra at time of build and was done at the time as I felt it was a lot easier to do it then than down the road.
> FULL mortgage payments made for 16 months after final drawdown and moving into the house up to the crash and there was absolutely no financial issues during drawdown so I don’t know what you are gettin at there?


Yeah fair enough i stand correcred. It seemed to read that you never made a full payment. But the planing issue is a big negative against you.  Seems to me at worst, that its a deliberate attempt to scupper and sale in the future and at best, its simply ignoring plsnning laws


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## Bronte (30 Aug 2019)

Dazzler123 said:


> Yeah fair enough i stand correcred. It seemed to read that you never made a full payment. But the planing issue is a big negative against you.  Seems to me at worst, that its a deliberate attempt to scupper and sale in the future and at best, its simply ignoring plsnning laws


But when he did the attic conversion he was hardly thinking there is going to be a crash, I'll lose my job and I'm going to do this so the bank can't sell the house down the road.


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## Mr peabody (30 Aug 2019)

Dazzler123 said:


> Yeah fair enough i stand correcred. It seemed to read that you never made a full payment. But the planing issue is a big negative against you.  Seems to me at worst, that its a deliberate attempt to scupper and sale in the future and at best, its simply ignoring plsnning laws


To be honest at time of construction in my naïveté I didn’t even know it could affect the sale and this was down to the fact That I never in any way even thought that the sale could ever possibly arise.


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## NoRegretsCoyote (30 Aug 2019)

I'm still none the wiser as to how much of a house €300k would build you in 2007.


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## Mr peabody (30 Aug 2019)

House is 2400 sq ft. That’s €125/sq/ft. With a lot of planning stipulations put in place(extra stonework,natural slate etc) surely not outrageous for peak time boom???


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