# Friend wants to let bank take house



## Angrygirl (9 Apr 2009)

Hey guys

My friend came to me last night as i own a property too and said to me she was thinking of not paying mortgage and letting bank take back her house, with all the cuts etc she is in debt and can't afford to pay everything anymore..

I was thinking this was a bit drastic and told her to try and come to some other solution as she really doesn't want her home to be repossed but she said she's no other option, she's lost all her savings she put into the property too 

How crazy is she to do this? what implication will this decision have on her? is there more than just her thinking of doing this?

I was no help to her at all and suggested she come on here and ask advice but she said ah sure nothing i can do so this is it now..
I want to be a friend to her so thought if anyone could answer the questions above she'd have more of an idea of what her decision means

Thanks


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## Guest116 (9 Apr 2009)

It is hard to say without knowing more details. Can she, for example, rent out a room or two to help her repayments? What type of mortgage is she on and what does she earn?

Basically handing back the keys is not really an option I think. Do a search, there are other posts about this.


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## Angrygirl (9 Apr 2009)

i'm not sure exactly the details of her mortgage but she said she's tried every way possible to cut back on stuff but she just can't manage, i didn't wanna ask exactly what she earns and stuff but she sounds like she's trying everything and just can't make ends meet

She's not as such handing the keys back she's gonna stop making payments and let them reposses


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## Guest116 (9 Apr 2009)

Doing that would destroy her credit rating meaning she would find it near impossible to borrow money again down the road. Plus there would be court appearances I would assume as the bank would bring proceedings against her?


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## Smashbox (9 Apr 2009)

Get her to contact mabs.ie about the debts she already has, they will help give her the right avenues to proceed.

Citizens Advice are also great to make an appointment with too.


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## Angrygirl (9 Apr 2009)

aristotle25 said:


> Doing that would destroy her credit rating meaning she would find it near impossible to borrow money again down the road. Plus there would be court appearances I would assume as the bank would bring proceedings against her?


 
she seems to think her credit will only be bad for 5 years and she's prepared to take that.. i didn't realise about court proceedings at all, think she assumes that the bank will reposses her home, she'll loose the money she invested and get a bad credit rating for 5 years and thats it

I feel very sorry for her to be honest that she's even considering this drastic action


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## Latrade (9 Apr 2009)

She's very crazy to think this is an answer. As pointed out it's not like you miss a couple of months and they say hay hum, we'll take the keys. There are summons, judgements and a very protracted legal procedure. Look at those who do get reposessed, it's up to 24 months in arrears etc, that's how long it takes.

Lastly, the banks don't really want the property because they can't sell it back, but moreso for your friend, if the bank don't get enough from the sale to cover the arrears, then they can pursue her for the remainder.


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## Angrygirl (9 Apr 2009)

Smashbox said:


> Get her to contact mabs.ie about the debts she already has, they will help give her the right avenues to proceed.
> 
> Citizens Advice are also great to make an appointment with too.


 
Yea i've suggested all this to her and i think she has looked into it alright, i dont really wanna push her as i don't know exactly how much she owes etc so i am just trying to find out implications for her if she goes down the route she is planning


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## gillarosa (9 Apr 2009)

Something along those lines exists in the US but its not the same here. Her best course of action is to speak directly to her Bank regarding the repayments, its an outside chance but they may be willing to extend the terms of her mortgage so the repayments are lower each month to help ease her cash flow situation. It sounds though reading between the lines that she may be a bit overwhelmed by the entire situation but putting her head in the sand and leaving her finances in the hands of an institution is never the best course of action. The old reliable is MABS, could you at least try to encourage her to contact them to request and appointment or look at information on their website to see if she can get any pointers or advice in the meantime.


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## Smashbox (9 Apr 2009)

This page is also helpful : http://www.itsyourmoney.ie/index.jsp?1nID=93&2nID=94&3nID=109&nID=421&aID=780

Tell her she needs to go speak to the bank manager to work out some kind of a payment plan. If she thinks she can just hand back the keys and all will be well, then she really has her head buried in the sand.

*Negotiate your options with your lender if you cannot keep up with repayments *
See if your lender will consider other more manageable repayment options, such as payment breaks, increasing the term of your mortgage or interest only/lower payments for a time. 

*Try not to miss repayments – it will negatively affect your credit history *
Missing payments on your loans or credit cards can have a negative impact on your credit history. Remember lenders will check this if you apply for a loan or mortgage in the future. 
If you have motor or store finance, also known as a hire-purchase agreement, find out (before you agree to anything or hand back your car) what options you have for ending your agreement if you have to. You will want to make sure that any loan or agreement you terminate early minimises the costs to you and the effect on your credit rating.


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## Guest116 (9 Apr 2009)

read this, may help... http://www.askaboutmoney.com/showthread.php?t=82335

Also, I think the bank would pursue for the mortgage payments as the bank wont just take the house back as it is likely worth less than the mortgage owed on it?


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## Angrygirl (9 Apr 2009)

Latrade said:


> She's very crazy to think this is an answer. As pointed out it's not like you miss a couple of months and they say hay hum, we'll take the keys. There are summons, judgements and a very protracted legal procedure. Look at those who do get reposessed, it's up to 24 months in arrears etc, that's how long it takes.
> 
> Lastly, the banks don't really want the property because they can't sell it back, but moreso for your friend, if the bank don't get enough from the sale to cover the arrears, then they can pursue her for the remainder.


 
Oh that's good to know, thanks for that.. persuing her for the remainder would only cause more problems eh, i'm gonna print out the replies to this thread and show her, this might make her think again


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## Smashbox (9 Apr 2009)

Angrygirl said:


> eh, i'm gonna print out the replies to this thread and show her, this might make her think again


 
Send her here to talk to us! We'll soon tell her!


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## Deiseblue (9 Apr 2009)

The level of repossesion by AIB and Bank of Ireland is tiny , is her mortgage with either of these Banks ?
If so she should definitely contact her lender in either Bank.


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## Bronte (10 Apr 2009)

I'm sure there are people doing what your friend is proposing to do all the time.  It is entirely possible that the house needs to be sold and that she cannot afford it.  But it would be far better for her to talk to her bank first so that she can limit her debts.  For example if the house can be sold quickly she won't have months of arrears and penalties etc.  Equally possible is that the bank will come to an arrangment that will help her out of this situation.


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## murphaph (10 Apr 2009)

I screwed up with my online banking and transfered 5k out of an account with only 1k in it! The account obviously went 4k into overdraft and Ulster Bank immediately wrote to me about it with a P.S at the bottom of the letter saying something like "If you are having difficulties with your finances contact us immediately and we will work out a different repayment schedule and we have seen this all before and will deal with it with the utmost confidentiality" sort of thing. I've never seen such a thing on a bank letter so obviously with the changing times banks are working harder to help and keep loans alive. It's in their interests to help your friend.


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## z101 (10 Apr 2009)

Can she not rent the house out and stay elsewhere? Can she not rent out a room or two while living there which is tax free under the rent a room scheme? Could she not just sell it as this would be less trouble to her if there is a shortfall than just dumping the problem?
Sound like she wants an easy way out, but needs to be a be more responsible in her thinking and for a start get some advice along with discussing this problem with her lender who might give her more generous terms to get through this.
The Ostrich solution she has come up with is not the best one.


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