# Voluntary surrender of the keys



## WRIGHTZER (2 Nov 2011)

Hi All

To begin with both myself and my partner had bad credit histories so we applied to Start Mortgages and in Sept 2006 they gave us a mortgage.
We knew the interest rate was high but figured with the country going well we would be able to remortgage with another lender once our credit ratings were ok. We were also told by the above lender that if we maintained our repayment record for 3 years we would be eligible for a reduced interest rate. This was a verbal declaration so we had nothing in writing. We at the time thought no more about this and continued to maintain a perfect payment record and after 3 years we asked about the reduced rate but were told that no such facility was ever offered by Start Mortgages. 

At this stage the economy was in the midst of recession and even though we were disallusioned with the response we had no choice but to continue making repayments. There was only one wage coming in so this combined with the other loans and bills was fast becoming a major struggle. We continued to make full repayments up until June 2011 and prior to this date we contacted the mortgage company to let them know we were going to have problems paying the mortgage. They sent us out the MARP documents to fill out. We filled them out and sent them back.

It took up to six weeks to get a proper response from them. We were not in arrears at this stage. Our payment at the time was 1080 euro and they offered us interest only which made a difference of 120 euro. At this point we had paid almost 76000 euro in payments with approx 4000 euro coming off the principal. The Marp procedure had recommended that we could afford approx 550 euro. 

We challenged the interest only option so they then offered to let us pay approx 550 euro for three months with a view to renegotiating all our other debt with our other creditors, which basically meant we would pay the other creditors less to give the mortgage company more each month. At the highest interest rate we paid approx 1650 euro and we are fully aware that eventually our rate will go back up to this level or higher as interest rates rise and we loose our TRS. We found this unacceptable as we wanted to pay all our other creditors in full. And even if we continued to pay our mortgage with full
repayments for up to fifteen years we would still only pay just over 10000 euro total off the principal.

We decided based on this not to pay anything.

I know this is not the way forward but we are at our wits end. We want to hand back the keys. We know that once we hand back the keys that they will still pursue us for the outstanding balance and any costs incurred by the lender also. We also know that because we signed a contract the law is on there side.

The main query that we have is has anybody ever successfully negotiated  a deal with Start whereby they take a write down on the outstanding balance considering that the property is now worth a lot less so by that rational if we have to take a loss why should'nt they after all they took a risk lending at those interest rates. 

And also you cannot get blood out of a stone. Its not that we do not want to pay our debts but we are really at breaking point and do not want our health and well being to suffer any more. Any advice on the best approach to take would be greatly appreciated. Even to get to talk to somebody who had handed back the keys  and what there life is like after they did so. I am sorry about the long winded explanation but i was just trying to give some backgroung to the situation. We are really worried that if they pursue us for the full outstanding amount combined with having to pay rent on another property after we hand back the keys on the mortgaged property that we will never be able to have anormal life. We just want to raise our children like everybody else and give them a good start in life and hopefully not make the same mistakes that we did.

Best Regards


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## Brendan Burgess (2 Nov 2011)

> We were also told by the above lender that if we maintained our  repayment record for 3 years we would be eligible for a reduced interest  rate. This was a verbal declaration so we had nothing in writing.


I have heard this before but Start denied that they ever said this or did this. In practice, people repaired their credit records with Start and then switched to another lender.

If you have some evidence for this, then you should apply to the Financial Services Ombudsman for it to be enforced. 

I know a few Start customers who are paying 5% which is less than PTSB charges. 




> At this point  we had paid almost 76000 euro in payments with approx 4000 euro coming off the principal.


This is meaningless information as you have not told us the amount borrowed or the intereest rate.



> At the highest interest rate we paid approx 1650 euro and we are fully  aware that eventually our rate will go back up to this level or higher  as interest rates rise and we loose our TRS.



This is confusing. They reduced the repayment, But they have not reduced the interest rate. The balance you owe is continuing to rise if you don't pay the full interest.


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## WRIGHTZER (2 Nov 2011)

Hi Brendan

Thanks for the reply. The original amount that  that we remortgaged with Start Mortgage was for 205165.00 Euro over a 39 year term at a interest rate of 7.9%...this rate reached as high as 9.6%..as the ecb rate reduced they reduced the interest rate quaterly inline with the ecb....our current rate is now 5.850%.  and this could change if ecb rates change.  

The interest only option is 120 Euro less full repayment, but if the interest rate rises the amount of interest only option will also rise, if we are not able to afford full repayments now how on earth would we be able to afford interest only if this happens...the marp showed our afordability was 550 euro per month..so they then sent out a 3 month agreement, and in those three months we would have to renegotiate our other debts...which are all up to date, as these are charging normal lending rates, so why should we reduce our payments with them.  I asked them if we did not renegoiate with other lenders would the lower payment of 550 Euro continue and they said no...it would be reviewed, so i asked what they meant and was told that if we did not renegoiated with the other lenders for lower repayments they would then be looking for a higher montly payment, and if we did lower our other montly outgoings they would be looking for the difference. The mortgage term is 39 years which brings our ages to 69, four years passed retirement.  So no room for adding on to mortgage term.

We received a letter from the lender about our current interest rate, after ringing them about something.  They sent us a letter saying that our mortgage is the following " Variable Rate " type mortgage meaning that the rate varies in line with the underlying market rate on which it is priced (euribor). this rate Euribor rises and falls in line with market rate conditions.  We decided to look at our contracts and it mentions nothing about this rate of lending.  All other letters received over the years in relation to interest rates they all said the following..as a result of changes in the headline rate of the European central bank, the interest rate will be.....i don't understand the euribor and what i understand is that at the moment the rates is lower then ecb, but was higher over the years.  But i don't understand the Euribor..i have questioned the lender about this and i just get the same text..as stated above...in the contracts in special conditions...condition 22 it says the following the rate of interest applicable to this loan will vary in line with market interest rates.  it will be "directly" affected by the rise and fall of the European Central Bank rate.  So if we have been charged Euibor rates where they wrong in charging us this rate, or is this a term used behind the scene that we don't understand.

I Hope this makes a bit more sense.

Thanks


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## Graftgirl (2 Nov 2011)

Hi Wrightzer,
start will have to introduce a new product for their customers that are performing and no longer pose the risk that they once did.
 Sub-prime lending is supposed to be a short term fix but so many of us are stuck now, negative equity etc means that we are with a sub prime lender for the foreseeable, their performing loans should be looked at differently..
Just think when other banks where giving low interest loans in the boom sub-prime lenders where raking it in, the interest rates where so low and yet they where charging between 6% and 9% they were cleaning up..
The financial regulator will have to also help us a bit more as Start mortgages dont have a standard variable rate and charge what ever they feel appropriate for each account, is this really fair?? They should give their customers a standard variable rate after a certain period of time. How long is a customer with Start mortgages considered high risk??


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## wbbs (2 Nov 2011)

Part of problem here is Start are actually correct in asking you to renegotiate your other debts first and prioritise your mortgage.   If you look at the MABS (Money and Budgeting Service) website it will say the same thing, your first priority is the roof over your head.    I would imagine most mortgage lenders would say the exact same thing, the one I worked for certainly did and would not entertain any mortgage reduction until such time as all other unsecured lenders were contacted and an attempt made to reschedule that debt first.   Now of course there are exceptions, you can't risk having a car repossessed if you need it for work etc. but in general secured debt comes first.


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## oldnick (2 Nov 2011)

Some of the replies are a bit off track...

OP asked a couple of questions 
- any chance of renegotiating with Start  ? I suspect that OP knows the answer. Based on the info given there is no chance. 

OP also asks, and I think this is the real question,   what experience has anyone of life post-foreclosure ? Sadly, OP, this is a new phenomenon and I doubt that anyone here can really answer.
Can anyone advise OP ?


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## bbsrs (6 Nov 2011)

Go  to the uk declare bankruptsy , much more civilised affair in the UK and your free in 12 months .


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## Alwyn (25 Nov 2011)

I agree with bbsrs.  We are hoping to travel to the UK shortly and hope to file for bankruptsy there.  We see it as the only way.  The banks are not listening to people so the only answer is to hand back the keys.


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## Time (26 Nov 2011)

I wish you the best of luck with it.


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## so-crates (27 Nov 2011)

WRIGHTZER said:


> We received a letter from the lender about our current interest rate, after ringing them about something.  They sent us a letter saying that our mortgage is the following " Variable Rate " type mortgage meaning that the rate varies in line with the underlying market rate on which it is priced (euribor). this rate Euribor rises and falls in line with market rate conditions.  We decided to look at our contracts and it mentions nothing about this rate of lending.  All other letters received over the years in relation to interest rates they all said the following..as a result of changes in the headline rate of the European central bank, the interest rate will be.....i don't understand the euribor and what i understand is that at the moment the rates is lower then ecb, but was higher over the years.  But i don't understand the Euribor..i have questioned the lender about this and i just get the same text..as stated above...in the contracts in special conditions...condition 22 it says the following the rate of interest applicable to this loan will vary in line with market interest rates.  it will be "directly" affected by the rise and fall of the European Central Bank rate.  So if we have been charged Euibor rates where they wrong in charging us this rate, or is this a term used behind the scene that we don't understand.



Basically, the EURIBOR reflects the cost for one bank to borrow euros short-term from another bank. At least for banks that are deemed safe, that is! It would have been affected by any changes to the ECB rate and pretty closely tracked it for years hence the reason why the ECB rate changes were blamed for changes in your rate. It is probably the three-month EURIBOR your mortgage is tracking. Have a look here at some details about it, EurIBOR. I couldn't find a graph of the EURIBOR against the headline ECB rate but if you look at the ECB website you can get historic graphs there for the ECB rate?


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## Alwyn (27 Nov 2011)

I ask myself that on a daily basis - why am I bothering to make any payment at all?  Maybe I should be saving the money for when I am turfed out onto the side of the road.


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## Time (27 Nov 2011)

Yes. With careful handling of the bank I reckon you could manage 3 to 4 years before being turfed out.


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## Alwyn (27 Nov 2011)

Funny thing is, if I stop making the payments I am currently making, within 3 to 4 years I will be able to purchase a property within the area I am currently living with cash and no mortgage!  
On the down side I would not feel right staying in my home and not producing a cent to the provider.  Maybe I need to find some backbone!


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## Alwyn (27 Nov 2011)

Unfortunately my mortgage is with a bank that did not avail of the bailout.


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## Time (27 Nov 2011)

I wouldn't let that cloud your judgement.


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## Alwyn (27 Nov 2011)

What would a Judge think of myself paying part payments per month?
I heard an awful story on the radio some weeks ago, Liveline I think it was were some lady said she had people dressed in camouflage clothing come onto her land and she felt intimidated.  It really frightened me as she has the same provider as myself.


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