# Banks Looking to repossess/appoint receiver Investment Properties with cheap trackers



## Longford (17 Oct 2017)

Here goes,

Over the past 5 years I have been I have been working with my bank to continue paying mortgages on my investment properties, I am on tracker rates and have been paying a little princapal plus interest each month. The follow advice would be appreciated.
1. When I was sold the mortgages 10 years ago I was lead to believe I could continue to extend interest only indefinitely. I feel I was misold these mortgages ( I originally took mortgages with first active and they are now with UB)
2. If the banks are to repossess my propertys how long does it take, if I decide not to hand them back voluntary, can the whole thing be dragged out
3. How long does it take for bank to appoint a receiver
4. Can anyone recommend a solicitor who deals with these issues in case I have to go to court to fight my case

Many thanks for any advice given


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## MrEarl (18 Oct 2017)

Longford said:


> ....
> 1. When I was sold the mortgages 10 years ago I was lead to believe I could continue to extend interest only indefinitely. I feel I was misold these mortgages ( I originally took mortgages with first active and they are now with UB)



Whether it was said with good intentions at the time, or with intention to pull a fast one, neither can ever be proven.  There are lots of cases like your situation, including some I can think of that have since gone into Receivership.  Sorry to have to tell you this, but if it's not very clearly spelt out in writing that you can continue interest only indefinitely, then forget it.



Longford said:


> ....
> 2. If the banks are to repossess my properties how long does it take, if I decide not to hand them back voluntary, can the whole thing be dragged out



If they have the power to appoint a receiver and all documentation is in order, then it can happen in a matter of a day or two, once the final decision is made.  If not, the lender has to go to court and get a ruling to take possession of the property, so that's down to the timing in getting into court and having the case heard.

Handing properties back voluntary is an entirely different matter.  Banks often ask borrowers to do this to help save costs, speed up the process and sometimes for strategic reasons, such as if they have an issue with paperwork and can't appoint a Receiver without going to court.  Depending on the circumstances, it is sometimes possible to agree a voluntary surrender in return for full and final settlement (i.e. they don't come after you for any shortfall, if there is negative equity) - obviously this has to be obtained in writing though.

Do the properties have equity in them, or is there another good reason to retain them, or try to drag things out, despite the related level of debt ?  If yes, then can they be sold to pay off the debt and leave you with some cash, or refinanced perhaps ?  If not, then why would you want to delay the process (and perhaps risk running up additional costs for yourself as a result) ?



Longford said:


> ....
> 3. How long does it take for bank to appoint a receiver



Assuming the lender's paperwork is all in order, then a receiver can be appointed very quickly once the decision is made (i.e. in a day or two).  You can expect to receive a demand letter, calling for full repayment of all capital & interest shortly before the receiver goes in to take possession of the properties.  I've seen demand letters issued and a receiver appointed 24 hours later, to give you an example but it's down to the efficiency of the institution really.



Longford said:


> ....
> 4. Can anyone recommend a solicitor who deals with these issues in case I have to go to court to fight my case



Depends on the circumstances, as to whether a law firm might want to take on your case.  Some of the law firms will have conflicts of interest as they may do work for the banks or other funds, but two Dublin firms that come to mind are:  Kane Tuohy Solicitors or HJ Ward & Co.  I know both of these firms have represented other borrowers when in dispute with their lenders.

Before you go the legal route, I would first see if there is an alternative solution to your problem.  If something can be negotiated, it will be cheaper and faster than going the legal route.  If you are not experienced with the banking processes, then get someone who is, to assist you.


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## robert 200 (18 Oct 2017)

Hi Longford , in order to determine if your bank has the power to appoint receivers you must first request this documentation from them.

1. All copies of debenture.
2. All copies of security.
3. Deeds of mortgage.

Then refer to Mr.Earls solicitor recommendation to examine these papers.

As stated above receivers can be appointed immediately so you probably will have no option but negotiate if they have the power to appoint.

The  I.M.H.O. are experts in this field , i strongly recommend that you make contact with them.


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## Brendan Burgess (18 Oct 2017)

I strongly recommend that you complete the following so that you can get comprehensive answers: 

* Information required for mortgage arrears and negative equity questions*

They probably have the power to appoint receivers and when they do so, it will be completely out of your control. 

As you have tracker mortgages, these are extremely profitable.   In fact, in most case, the rent should be covering the full repayment to the bank. Why are you paying only "a little principal."? 

If you have positive equity in one of the properties or your home, it may be worth selling it to retain the other investment properties as long as possible. 

By all means get a solicitor to look at the documents to see if they can appoint a receiver. But in cases like this if you want to get someone to negotiate on your behalf, the right person is someone like Jim Stafford or some other PIP.

Brendan


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## Longford (18 Oct 2017)

Many thanks to every who took the time to reply. 
The investment properties are currently worth about 670k and amount owed is 764k Why I was trying to drag it out is because 14% increase in value would clear the outstanding mortgages. I will update forum when I get more news


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## Brendan Burgess (18 Oct 2017)

Do you have equity in your home? 

The main reason for dragging it out should be the very low interest rates, even if property values don't change. 

Brendan


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## Longford (18 Oct 2017)

Yes I have equity in my home


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## MrEarl (19 Oct 2017)

Brendan Burgess said:


> Do you have equity in your home?
> 
> The main reason for dragging it out should be the very low interest rates, even if property values don't change.
> 
> Brendan




Hello Mr. Burgess,

While I understand your logic of trying to retain the cheap borrowing, I am not sure if I agree with the principal of increasing the debt on the home to cover the shortfall here.

There is the point about protecting the castle, to consider - can Longford successfully raise additional debt on the residence at "normal" homeloan rates, does it make sense to increase the risk on the residence to introduce equity into the investment properties, when it may make more sense to try and cut a deal, then sell them on ?


*Longford,*

With due respect, you are hoping for 14% increase in property values to get you "out of jail" on the current problems, but you are not considering the fact that this may take a few years, is not guaranteed, assumes that you can continue to cover loan interest and any other additional charges that may be applied, won't be impacted by future changes in taxation etc.

If you were lucky enough to get to the stage where you got back to 100% Loan to Value (and I'm not saying it's impossible btw), is there subsequent logic for keeping these properties and if so, what is it ?  Would the rental income then be sufficient to cover the  loan repayments, or could you then afford to cover repayments by supplementing the rental income from other sources in say 2-3 years time and if so, why then and not now ?

Personally, I would be slow to increase risk on the family home and do some serious soul searching in terms of what you really want to get out of these investment properties, which you currently cannot afford to make loan repayments on etc.  Nothing personal, but try and step back a little from the personal attachment to the properties and ask yourself the hard questions - if you were considering buying them for the first time, with the current level of debt, repayments and their current value.  Does it then make sense ?


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## james j (19 Oct 2017)

Do whatever you can to keep receivers out because once they are in the only interest they have is in running down business to get quick sale . They are completely working in interest of bank in helping asset strip


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## Brendan Burgess (19 Oct 2017)

This is why you need to provide all the information asked for  and not have it dragged from you bit by bit. 

If the banks appoint receivers, you will lose your very low trackers and you will end up with a residual debt of probably around €200k. They will get a judgement for that and register it as a judgement mortgage against your home. 

If you sell your home, the equity might enable you to retain these investments and your solvency. 

Brendan


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## robert 200 (19 Oct 2017)

im with you Longford , you will be in positive equity within one year , its all about supply and demand.

if you ask  for the information i suggested it will take them about 2 months to acquire it , so you are now into 2018.


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## Brendan Burgess (19 Oct 2017)

Let's be very clear here. If the documentation gives them the power to appoint a Receiver, as it probably does, then Longford is in real danger of losing everything at short notice. 

This is not like a family home court proceedings which can be played for 5 years. 

The Receiver could go in tomorrow. Asking for information does not delay that. In fact, it could precipitate it. 

Brendan


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## james j (19 Oct 2017)

Keep out the deceiver if at all possible the secrecy and decisions taken on your behalf will baffle. Asset stripping. I wonder how many properties get back to owner once receiver appointed?


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## MrEarl (19 Oct 2017)

robert 200 said:


> im with you Longford , you will be in positive equity within one year , its all about supply and demand.
> 
> if you ask  for the information i suggested it will take them about 2 months to acquire it , so you are now into 2018.



Hello,

You seem to be very quick to jump to a conclusion here....


Do you know where the properties are and what demand is like for properties in that location ?
Do you know what condition they are in and what maintenance or potential structural issues there may be ?
Do you know whether or not there are any onerous conditions which may counteract potential property price inflation for these particular assets (i.e. a long term sitting tenant with a life long rent on a particularly low rent for example) ?

.. .the list of questions go on.

You either know a hell of a lot more about Longford's situation then the rest of us, or you are not giving good advice here - instead, just taking a flutter based on your view of what is going to happen in the property market.

As for the information you have suggested that Longford request....

How do you know that Longford will know specifically what to look for when that documentation is provided (no offence Longford ) ?
How do you know that it will take as long as you suggest to provide the documentation (if you request it via a Data Access Request the party has up to 40 working days from receipt of cheque and written request - but that does not mean they can't provide it in 3-5 days if they wish) ?  

How do you know that requesting such informaiton will prohibit the counter-party from appointing a receiver, while separately providing copy of the documentation requested ? A request for information or copy of documentation does not prohibit other action being taken, including the appointment of a receiver.




robert 200 said:


> im with you Longford .....



Are you really with Longford, or just encouraging Longford based on a personal view, without knowing the facts and having absolutely nothing to lose, so you can walk away leaving Longford to deal with the mess ?


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## MrEarl (19 Oct 2017)

james j said:


> .... I wonder how many properties get back to owner once receiver appointed?



I would suggest it's sub 5%, in fact I would suggest it's closer to sub 1% of properties.


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## MrEarl (19 Oct 2017)

Brendan Burgess said:


> This is why you need to provide all the information asked for  and not have it dragged from you bit by bit.
> 
> If the banks appoint receivers, you will lose your very low trackers and you will end up with a residual debt of probably around €200k. They will get a judgement for that and register it as a judgement mortgage against your home.
> 
> ...




It may also be possible to negotiate an alternative settlement, has this been properly explored ? I am not sure from what Longford has told us on this thread, that it has ?

It may further be the case that the borrower may be unable to obtain additional debt on their home due to lack of ability to service that debt, or a poor credit record.  I do not think we know the circumstances here to be fair Mr. Burgress ?

A large number of people obtained interest only mortgages on investment properties years ago, who were unable to cover capital repayments and instead relied on future hope value, or anticipated future increases in incomes which then failed to materialise.  Both borrowers and banks were very wrong to have entered into these arrangements, unless it was specifically for long term interest only arrangements with no personal recourse in the event of a loss on the deal.  We need to see what Longford's personal circumstances are here, before we can suggest using the equity on the personal home.

We don't know if the investment properties are better than the home and worth retaining ahead of the home.  Would one of the investments be suitable as an alternative family home, if the existing home was sold to discharge debt on the investment property/properties ?


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## Brendan Burgess (19 Oct 2017)

MrEarl said:


> I do not think we know the circumstances here to be fair Mr. Burgress ?



Which is why I said in my very first reply : 



Brendan Burgess said:


> I strongly recommend that you complete the following so that you can get comprehensive answers:
> 
> * Information required for mortgage arrears and negative equity questions*





MrEarl said:


> It may further be the case that the borrower may be unable to obtain additional debt on their home due to lack of ability to service that debt, or a poor credit record.



I would expect that is the case, so he should explore selling it.  It may not be the right solution, but it might enable him to remain solvent and keep his excellent investments. 

Brendan


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## MrEarl (19 Oct 2017)

Brendan Burgess said:


> ....his excellent investments.
> 
> Brendan



Appreciate the other points made, but do we know if they are "excellent" investments ?

A good loan rate is an important factor, but I'm sure you will appreciate that there are other important factors to consider and at the moment, we don't know the full information


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## robert 200 (19 Oct 2017)

Longford is perfectly entitled to request debenture documentation in order to make an informed decision of such magnitude concerning his future / pension.

To the best of my knowledge ( and I stand to be corrected ) no lender has appointed receivers if full interest and partial capital is being repaid.

The bank will bully , torment and threaten like Gestapo officers but they will continue to negotiate once this repayment level continues.


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## Longford (19 Oct 2017)

Hi All.

Just got in from work

I dont want to sell or release equity from my home (anyway I would not get mortgage). As this is gone over my head. The properties are in Dublin and getting good rent. 2 appartments and 1 house. These properties have been rented for the past 10 years so probably not in great condition. Im on .75% over ecb rate

I have a permanent job with gross income around 50k


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## Brendan Burgess (19 Oct 2017)

Longford said:


> I dont want to sell or release equity from my home



But you don't want to have a €200k judgement mortgage on it either if the banks appoint receivers. 

Brendan


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## robert 200 (19 Oct 2017)

Lets make this very simple - has anyone out there been subjected to their bank appointing receivers while they were making full interest and partial capital repayments?


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## Sarenco (19 Oct 2017)

robert 200 said:


> Lets make this very simple - has anyone out there been subjected to their bank appointing receivers while they were making full interest and partial capital repayments?



Yes, I'm personally aware of cases where that has happened.


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## robert 200 (19 Oct 2017)

Ok , so you are saying that a bank appointed receivers while the customer was making full interest and partial capital repayments on buy-to-lets , what bank?


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## Sarenco (19 Oct 2017)

Yes, I am saying that I am personally aware of cases where a lender has appointed receivers to rental properties where the borrowers in question were not fully discharging their scheduled repayment obligations but were meeting the interest on their loans 

I think the best course of action in these circumstances is to try and negotiate a reasonable settlement or restructuring of the loans with the lender in question.  If the OP doesn't feel confident doing so himself then engaging an insolvency practitioner to do so on his behalf seems like the sensible course of action.

Trying to be "clever" in these circumstances rarely works out well.


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## robert 200 (19 Oct 2017)

That is not the question I asked ( and I asked it twice ) and why can you not name the bank


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## Sarenco (19 Oct 2017)

I didn't say I couldn't name the lender - I simply chose not to.  Hope that's ok with you.


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## Brendan Burgess (20 Oct 2017)

There is no need to name the lender. This happens with almost all lenders.  Anyone who is not paying their full repayments on a buy to let is in danger of having a Receiver appointed.  

If they have substantial assets elsewhere or equity in their home, then it makes it even more likely.  If I were a buy to let lender and a customer had been paying their home loan in full while stretching out the cheap tracker buy to let, I would appoint a Receiver. 



Sarenco said:


> Trying to be "clever" in these circumstances rarely works out well.



Couldn't agree more. As I pointed out, doing a Data Protection request could actually make the bank take more interest in this case.

Brendan


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## robert 200 (20 Oct 2017)

No need to name the bullies - we will see them all next week making fools of our elected representatives.

I think we should allow Longford to decipher the "fake news"

The Robert


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## MrEarl (21 Oct 2017)

robert 200 said:


> Longford is perfectly entitled to request debenture documentation in order to make an informed decision of such magnitude concerning his future / pension.
> 
> To the best of my knowledge ( and I stand to be corrected ) no lender has appointed receivers if full interest and partial capital is being repaid.
> 
> The bank will bully , torment and threaten like Gestapo officers but they will continue to negotiate once this repayment level continues.




To the best of my knowledge, no one said Longford was not entitled to request documents. Did they ?

As for your point that Longford is entitled to request the documents in order to make an informed decision - I think you may be missing the key point in Longford's scenario - the debt is not being serviced in accordance with the legally binding loan contract(s), so the decision may not be Longford's to make, if the current situation is not resolved.

Regarding the rest of what you have said, you are speculating based on whatever experience and knowledge you may or may not have... but it's no more than that, mere speculation.  I don't think it's right for you to expect Longford to take a serious financial risk, based on your speculation.  Do you ?


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## MrEarl (21 Oct 2017)

Longford said:


> Hi All.
> 
> Just got in from work
> 
> ...



Hi Longford,

Thanks for the reply.

I respectfully suggest that you get a suitably experienced and qualified party to assist you.  They may be able to assist you in negotiating some form of compromise, or perhaps even a possible restructure of your debt (subject to various considerations).

The loan interest is in the region of €510 per month, I reckon.

How much more than the loan interest are you paying each month ?

Also, what is the gross rental income please ?

Ultimately, what I am wondering is do UB feel that you could be giving them more of the rental income (regardless of what the scheduled loan repayments actually are -  I'm guessing they are between €4,500 and €6,500 per month excl. any arrears).

Because you have had interest only for 10 years, have you saved some surplus rental income each year, or has it all be used to pay tax on the rent earned, costs directly associated with the properties, or loan repayments ?   If UB have been looking at this and concluded that you have not given them all net available rent for the last few years, this may be bit of a thorn in their paw.

It strikes me that if you could cover monthly repayments in the region of €2,800 - €3,000, then there are reasonable grounds to try and get the debt restructured.  That would necessitate the current loan rate being retained and the term being put back out to 25 years (with all arrears capitalised).   Depending on your age, they may not fancy agreeing to a new 25-year loan term, but then there is the option to agree a shorter loan term, but subject to a 25-year repayment schedule so as to keep the loan repayments a similar levels to those I am suggesting (with a bullet repayment at the end, most likely to come from the sale of the properties).

If the above won't work, then perhaps a deal can be agreed whereby one or two of the properties are sold, with net sale proceeds used to reduce the debt, then the remainder of the debt is rescheduled over an appropriate term, to get repayments close to matching the remaining available rental income.


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