# Lender says they are taken possession of investment property in 10 days from today.



## mrpepeless (23 Aug 2013)

I urgently need an advice on what to do about my mortgage arrears. 

My bank wrote to me today to say they are taking possession of my two investment properties.

One of the property is in arrears of €6,000 and the other is in arrears of €8,000.
The arrears was because the bank refuse to accept interest only payment and they were charging principal and interest on both properties.

The rent on mortgage one is €500 monthly mortgage is €980.
The rent on mortgage two is €780, monthly mortgage is €1,050. 
I am paying €470 monthly to cover interest only on each mortgage.

My question now is how do i resolve this issue with the bank?


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## jdwex (23 Aug 2013)

Is it €470 total or €940 total payment being made to bank? If total rent is €1,280 where is the rest of the rent you receive going?


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## Brendan Burgess (23 Aug 2013)

mrpepeless said:


> The arrears was because the bank refuse to accept interest only payment and they were charging principal and interest on both properties.



Do you have a full term interest only mortgage? 

If not, the bank is fully entitled to demand the full repayments. 

You are in arrears, because you are not making the full repayments not because the bank refuse anything. 

They cannot take possession without a court order.

They can appoint a rent receiver.

Would you like to post up the actual wording of the letter? 

Brendan


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## Time (23 Aug 2013)

> They cannot take possession without a court order.


This! The cannot enter the properties without an order.


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## Luternau (23 Aug 2013)

It would be good to know the institution.

As Brendan said, they can appoint a rent receiver easily enough. You will still own the property, but any decision relating to it is taken away from you. Bank of Ireland would have done this with loads of investment mortgages in arrears.

You should put up more detail on what you have offered the bank and what they responded with.


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## Time (23 Aug 2013)

Surely they would need a court order to appoint a receiver?


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## Brendan Burgess (23 Aug 2013)

Apparently not.  They do it all the time without court orders.  Or maybe they are administrative orders of the court?


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## dewdrop (24 Aug 2013)

Maybe the power to appoint a Receiver is incorporated in the Mortgage document as it is in a Compaany Mortgage


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## Luternau (24 Aug 2013)

dewdrop said:


> Maybe the power to appoint a Receiver is incorporated in the Mortgage document as it is in a Compaany Mortgage



I believe that is the case with BOI Investment Mortgages.


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## MrEarl (24 Aug 2013)

dewdrop said:


> Maybe the power to appoint a Receiver is incorporated in the Mortgage document as it is in a Compaany Mortgage



I understand that the majority of the Lenders, who have provided loans secured on either commercial properties or residential investment properties, have the power to appoint a property receiver (to collect rent, sell the property etc) included in their mortgage documentation.


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## mrpepeless (27 Aug 2013)

Thank you for the response.
This is the full text of the letter to me.

We refer to the loan facility made to you by IIB Homeloans (now KBC Bank Ireland plc) (the “Bank”) pursuant to the above mentioned account (“the Loan Account”).
Please note that as of today’s date, the arrears on the Loan Account stand at €10,569,15.
Under the terms of your loan facility all sums outstanding by you including the capital balance are immediately due by reason of the default by you in making the scheduled repayments.
Accordingly, we hereby demand repayment of the balance outstanding on the Loan Account within 10 days of today’s date. The balance outstanding on the Loan Account as of today’s date is €216,784,07, which amount is inclusive of arrears in the sum of €10,569,15.
In the event that you do not discharge the full sums due owing within 10 days we will be entitled to take legal action to obtain judgement for the sums due together with interest and costs.
As a result of your defaulting on the terms of your loan facility we are now entitled to possession of the property. We hereby call upon you to deliver up possession of the property within 10 days of the date of this letter.
Pursuant to the terms of Indenture of Mortgage executed by you we are entitled to appoint a receiver over the property. In the event that you do not deliver possession of the property within 10 days from the date of this letter we intend to appoint a receiver over property. This appointment will be made without further notice to you. The Bank may also issue legal proceedings in which it will seek possession of the property. 
Please note that you will be liable for the cost of such actions. An approximate guide of the costs of such proceedings would be €10,000. This estimate is merely indicative of the costs of such proceedings and in certain circumstances the costs can substantially exceed this amount. If proceedings are protracted this will increase the overall costs incurred. The estimate provided is in compliance with Section 134 of the Consumer Credit Act 1995. You will also be liable for the payment of your own costs (including legal costs) and (if ordered by Court) the cost of any other part (if any) involved in such proceedings.
Please note this demand is without prejudice to and shall not be construed as a waiver of any rights or remedies which Bank may have, including the right to make further demands in respect of sums payable to it.

all advice will be highly appreciated


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## mrpepeless (27 Aug 2013)

Do you have a full term interest only mortgage? 
Not a full time interest only.


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## Brendan Burgess (27 Aug 2013)

What does your solicitor say? 

I presume you can't pay the arrears? 

How much have you been paying per month over the last year?


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## mrpepeless (27 Aug 2013)

jdwex said:


> Is it €470 total or €940 total payment being made to bank? If total rent is €1,280 where is the rest of the rent you receive going?



I am paying total of €940 for the two properties.

One of the tenant on the property is out of job,his payment is never regular. Asking him to vacate the property will mean the house may be unoccupied for months.
There was a time when the property was vacant for 5 months,the property is in county Westmeath. the property value now is in the region of 160,000 to 190,000.


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## mrpepeless (27 Aug 2013)

jdwex said:


> Is it €470 total or €940 total payment being made to bank? If total rent is €1,280 where is the rest of the rent you receive going?



The differential goes towards the insurance and maintenance of the property.


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## Brendan Burgess (27 Aug 2013)

It's hard to know.  Fill in the Case Study format to get more comprensive ideas. 

Most lenders are happy if they get all the rent. But they presumably think you can pay more, but are not prepared to.

Brendan


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## mrpepeless (27 Aug 2013)

Brendan Burgess said:


> What does your solicitor say?
> 
> I presume you can't pay the arrears?
> 
> How much have you been paying per month over the last year?



we have been paying 470 euro every month. The property was vacant for over five months and we informed the bank,yet we were still the 470 euro. but they insisted on the full payment.
The present tenant is paying 500 euro monthly. His payment is never regular because he is out of job.


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## eclipsed (28 Aug 2013)

I received the same letter yesterday saying exactly the same thing as mrpepeless got.  I'm wondering does this now mean that a Receiver has to be appointed within the 10 days or what can I do to avoid this happening - apart from the obvious of paying the mortgages which I am not in a position to do. I have two BTL properties, the only rent coming in for the past couple months is 300eu - which I give to the bank. I have just one tenant in one house as his partner moved out, and the other property is vacant all summer.


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## Trustmeh (29 Aug 2013)

In both your cases, why did you not evict a non paying tenant immediately?
There is a large pool of tenants in ireland, at the right price. 
Did both of you consider lowering the rent to attract a better, more stable tenant?

If distance to manage the property is an issue, there are mgmt companies offering this service. You would only lose a months rent and they could handle vetting, lease, keys, rent collection, etc.


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## LDhood (29 Aug 2013)

Trustmeh wrote:

```
There is a large pool of tenants in ireland, at the right price. 
Did both of you consider lowering the rent to attract a better, more stable tenant?
```
Hmm, maybe not so in Westmeath.

The best course of action is to speak to a solicitor on the matter.  It sounds like the process is now at a stage where there is little choice with regards to resolving the matter- as the letter has stated, pay arrears or hand over the property.


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## Trustmeh (29 Aug 2013)

LDhood said:


> Trustmeh wrote:
> 
> Hmm, maybe not so in Westmeath.



Alcoholics have enablers - failed Landlords blame everyone but their own bad decisions. Looks like these 229 landlords are at least making the effort.

http://www.daft.ie/searchrental.daft?search=1&s[cc_id]=c7&s[search_type]=rental&search_type=rental&s[sort_by]=price&s[sort_type]=a

Sort by price and see what the "bottom" of the market is getting.


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## honest (29 Aug 2013)

mrpepeless said:


> The rent on mortgage one is €500 monthly mortgage is €980.
> The rent on mortgage two is €780, monthly mortgage is €1,050.
> I am paying €470 monthly to cover interest only on each mortgage.


 It would be interesting and I think relevant to know if this was always the case since you took out the mortgages?   I assume you took out the loans on the 2 investment properties in the "celtic tiger" era?   Interest rates were a bit higher then?   Did you pay the full mortgage amount then, or have you just recently gone in to arrears?    Can you afford to make up the balance of the mortgage from your own earnings or savings, as many investors are having to do?   If you have been in arrears for 5 or 6 years and especially if you can afford to pay additional money / the balance, I think the bank is right in repossessing at least one of the properties, if not both. 

  If the property is rented / capable of being rented for €500 a month now, it must be in reasonable condition in a not-very-bad location.  There is no reason why you could not have rented it for €450 or €400 to someone a month for the 5 months instead of leaving it empty.  Maybe the bank thinks you can pay more, but are not prepared to?  There are plenty of properties in the country which cannot be rented for the €500 p.m. you are currently getting, so you should count yourself lucky in one way. Why not offer the bank all of the rent you can get - and pay for repairs / insurance / maintenance yourself at least?  Its likely you could have afforded to at least do that when you took out the loans - did you?


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## lopin (29 Aug 2013)

You dont get a better tenant by lowering the rent, more than likely you will get a worse tenant


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## Trustmeh (29 Aug 2013)

lopin said:


> You dont get a better tenant by lowering the rent, more than likely you will get a worse tenant



  Supply and Demand still rules.

What you WILL get if you lower the rent - is more callers. From that pool of callers - it us up to YOU the LL to vet each one - and determine what you deem is a "good tenant". What I consider as a good tenant - always pays on time - never rings me to fix anything - is not necessarily my neighbors choice.

In my RL experience, raising the rent too far will limit me to only one type of tenant - one on some form of SW relief. The more I charge the rent too high - the more SW relief is needed to pay my rent. 

I can price the good tenants out of the market by raising the rent just a little too much. No income families with multitudes of children will be my ONLY advert-callers. Sure they pay up no problem - its O.P.M. that they are spending - they don't even quibble on the rent.

If i want to attract a tenant that gives my neighbors no trouble - and can also afford to pay every month - then i have to price it keenly with the supply that exists around me.


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## no_moolah (30 Aug 2013)

Hi mrpepeless

I got the same letter as you and i'm with the same bank. They didnt repossess the property they just appointed a receiver to take in the rent. 

That was approx 5 weeks ago now and no word from them since.

NM


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## cremeegg (2 Sep 2013)

Trustmeh said:


> Supply and Demand still rules.
> 
> What you WILL get if you lower the rent - is more callers. From that pool of callers - it us up to YOU the LL to vet each one - and determine what you deem is a "good tenant". What I consider as a good tenant - always pays on time - never rings me to fix anything - is not necessarily my neighbors choice.
> 
> ...




+1 

This is my experience too. A good tenant knows they are a good tenant and can negotiate a better price.

A tenant who is willing to pay any price is usually bad news.


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## AlbacoreA (2 Sep 2013)

I had the opposite experience, tbh. Though its a while back, so perhaps its changed in the last couple of years, and it was an area with a shortage of housing so no problem with demand. But I would expect it varies depending on the demand in the area, the ceiling of the RA, and the condition of the property.


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