# mortgage in arrears



## gina45 (18 Aug 2009)

we re mortgaged out house to pay debts when we had to close our business and we didnt want to declare bankruptcy.  Because they saw us as a bad debt they only would give us mortgage of 180 grand at a fixed rate of 7% our mortgage is over 25 years. We basically had no choice but to accept we had three small children at the time and was terrified we would end up in jail for non payment of debts..
I have now been reduced from 40 hours to 13 hours in my job and had to take pay cut also .. i receive job seekers benefit for the days i dont work. my husband only works part time also but because its only every morning he cannot seek extra help.. we cant pay our mortgage we are now in arrears of 9 grand and paying half the payment  a month.. we pay 643 .. our repayments are 1335 on 180 grand. its just impossible.. they have refused our offer in feb  and didnt even write to me to let me know.. i found out only recently when i rang up about something else.. we received help of 292 towards our mortgage..
now they are saying its court time basically and costs will be 20 grand.. will a judge throw us all out on the street even though we are trying our best to pay.. we seriously cant pay anymore or even go near the arrears yet till our situation improves which i cant see happening very soon.. any advice and please do not be judgemental we did our best at the time..


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## Guest116 (18 Aug 2009)

No chance of being thrown out on the street as you are paying something towards the mortgage, no judge will do that.

Could you go interest-only on the mortgage?


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## suemoo1 (18 Aug 2009)

nobody will be judgemental, alot of people are in the same boat, im in a bad situation myself (though not quite as bad as yours is at the moment).. i think once you are paying something towards the mortgage the judge (if it goes to that) will no way throw any family on the street.. keep written records of everything that goes on betweeen yourselves and the bank.. have you been in contact with citizens advice and/or mabs as i believe that they will help and advise and i think in mabs case act on your behalf to come to agreements with banks etc.. best of luck


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## Guest116 (18 Aug 2009)

There is code of conduct that banks have to follow when dealing with mortgage arrears, as set out by the Financial Regulator. Just search for "ifsra mortgage arrears" in google.


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## nediaaa (18 Aug 2009)

The judge will instruct the bank to accept the reduced amount as he will take into account your situation and see you are trying your best. This is compared to people burying their heads in the sand.
  Well done. Your honesty will shine through


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## Bronte (18 Aug 2009)

What offer did you make to the bank?  Did they actually write to you and tell you that the costs would be 20K?  What is the value of the house? Is there an option of selling it if necessary.   You should definitely try MABS who are experts at negotiation with banks.  You should not be the only one dealing with this, are you able to speak to your partner or a parent, it can help in easing the burden.


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## gina45 (18 Aug 2009)

thanks everyone for your replies .. yeah i  receive mortgage interest supplement of 292.. we have been to mabs and have talked believe it or not to bill hobbs . eddies brother.. we emailed eddie looking for advice and its basically the same as everyone here ... i was amazed he got in contact for for no cost... as i said we are on fixed rate of 7 & and we now owe more than we borrowed because they just keep adding the interest because we can only pay half.. they are *stepstone mortgages* which are a sub prime lender and they wont agree to anything but the full amount and its just impossible to pay. does the mortgage cod of conduct apply to them also i thought it was different for sub prime lenders.... . unfortunatley we have to eat and pay other bills lke esb etc as well.. we never lived well and we worked hard to get what we have and now we are just basically sinking fast.. i dont know what s to become of us.. usually i am quite up but just last few days the demands from them and the threat of legal action has took it tole on me.. but i am a survivor and i know we will get through it but its not easy and saying no to my teenagers has become a constant thing in there lives.. i just hope we can send them to college one going next year to get a better life and better jobs and we had... thanks everyone for your comments much appreciated ...


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## Sunny (18 Aug 2009)

Going by how you describe things, it sounds like they have not lived up to their responsiblities under the Code Of Practice by not engaging with you to discuss your difficulties. From this point on, it is very important to note any contact you have your lender, ask for everything in writing and I would also mention to them that you are going to contact the Financial Regulator with regard to their handling of the situation. They may well be able to prove they are in compliance with the Code but I have my doubts from what you describe. 

As other posters said, no judge will grant an order against you if you are seen to be dealing with the issue so don't worry yourself sick. There are plenty of people in the same situation.


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## gina45 (20 Aug 2009)

thanks everyone for the advice... i think eventually i may have to seek legal advice but at the moment i feel much more at ease with the situation.. thanks everyone
can i just say i think this is a great site...


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## senni (20 Aug 2009)

Dear Gina45

Stepstones mortgages is a sub prime lender owned by KBC ( used to be IIB Homeloans, it is not an irish bank, google it. ) This parent company is very aggressive in their phonecalls, letters ,etc they even send out a representative to your door, waiting in their cars for you to return , with response to arrears.I feel that they "bullying" clients, into paying, I say this from experience. I also feel that this company will shortly pull out of ireland and they are trying to recoup as many loses as possible.This does not mean that u are off the hook if they pull out, its just to let you know how aggressive they are , in recouping loses made in ireland.They use very scary tactics in relation to making sure you keep the repayment schedule agreed going.

My advice, after dealing with them is.........

1. Keep paying the same amount each month 643, no mater what, it must b paid.
2. Never pay less than this as they will " cause you untold grief "
3. Keep calm with them and stand your ground that you will continue to pay 643.
4. Even if they say they will not accept 643, pay it anyway.
5. Have you a paying in book.get one if you dont have one, they provide these. 
6. Open a file at home and keep all correspondance that you enter into with them,in it.Preferably in writing or e mail.( i e mail them cofirming payment each month and i keep all e mails. ..This is very important )
7. If you do make any agreement by phone with them, write that down and send it to them by registered post as proof of correspondance, or again e mail them.
8. No judge will allow any mortgagae company to throw out any family at the side of the road if they are paying a commited amount monthly.
9. keep all lines of commuincation open, as every time you do not take a call or respond, they charge fees onto your account, along with all the other fees thay are puting on same.
10. Ask for a mortgae statement now and look at same and ask for another one in 6 months time.
11. You take control, do not let them control or frighten you, remember though, keep calm and use pleasant language , though it may kill you to do so. 
12. Have you applied for motrtgage interest help from your local " healthboard "
13. Get a copy from your broker of your mortgage application .

Keep your chin up, thousands are in the same boat, you will come through this, remember your family is important and Take Back the Control on your mortgage as what you are currently doing is correct.

Good luck and God Bless.... Senni


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## bond-007 (21 Aug 2009)

What sanctions can be applied where a lender runs roughshod over them?


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## Locke (21 Aug 2009)

bond-007 said:


> What sanctions can be applied where a lender runs roughshod over them?


 
Haven't heard of any sanctions yet, although the act only came in in Feb 2009 so they could be in the process of sanctions.

I would expect though, a severe fine would be handed down or a ruling in favour of the customer to a certain point. To my knowledge, the Regulator is going to be focusing strongly on this over the next 12 months so all financial institutions have to get there act together regarding.


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## gina45 (23 Aug 2009)

thanks everyone for their answers and i will carry out the instructions that eveyrone has given me... and i will write that letter to to fianna fail.. what a good idea but cant see them listening to little old me.. thanks everyone.. great site ...


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## Madangan (25 Aug 2009)

I sympathise greatly and I agree with most of what other posters have said BUT and I am not trying to wind you up or be a negative nellie but a note of caution: It is possible to get a court order for possession of a family home..the Courts dont like doing this but in circumstances where the Judges feel that there is no realistic possibility of the Mortgagors repaying the arrears in the medium turn coupled with impending serious negative equity the Courts have in the past (and will do again)issued orders for repossession. The fact that you are clearly doing your best and the fact that the Bank are behaving badly augur well for you BUT in the past (the last recession)I have seen judges take the view that it is better for the people involved to lose the house rather than sink deeper and deeper into debt where there is no realistic hope of short to medium turn improvement in the finances. A case of Judicial cruel to be kind!

This probably will not and does not apply in your case and Judges have genuine antipathy towards the high interest rates of the sub prime money lenders but its really important not to have false info on repossessions either.

Lastly and this is not what you want to hear but at the end of the day given the awful stress you are under and if you are not in negative equity but fear you soon will be and dont think there will be a major improvement in finances any time soon it is worth considering trying to sell....Im not suggesting you should but it should at least be considered.... 

I do sympathise and for what its worth I have had very close friends and immediate(siblings and parents)family in similar situations in the nineties and its horrible beyond words, houses and businesses went and yet they (and we) survived, battle scarred but we lived to fight another day.

Best of Luck!!!


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## gina45 (6 Oct 2009)

can i just say that in an earlier message someone said our house must be valued at 400 k but thats not the case our house is valued at 290k..and our mortgage was for 180k and the repayments are 1335 a month at a fixed rate of 7 percent.. 
i wrote to them again requesting a review of our situation and maybe for the fixed rate to be dropped to variable which might help us to make payments as it would be lower.. yesterday i received a letter  asking me to sent finiancial report which i am in the middle of doing.. the letter also stated that if approved it would drop to  the standard variable euribor rate... which i have no idea is... and that 1000 euro would be added to our mortgage if approved.. 
today i got a letter from solicitor stating that we owed 10k in arrears and our mortgage is now 194.975.92 which is more than we borrowed and thats 20 k will be put onto us for court costs but that would be more than that.. 
i rang them and they are putting court on hold untill i send in paper work and see if its approved.. 
can anyone tell us is this the way to go... advise pleaseeeeee


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## gina45 (7 Oct 2009)

can someone please advise me i have to send papers in .. i just want to know if you think its a good idea to sign for a variable rate.. will this reduce our payments


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## Madangan (7 Oct 2009)

Gina,

You are right to fill in the report..be honest..while putting on a positive spin at same time if possible..not mutually exclusive!

If they offer you option of variable rate then whether its best for you to accept or stay on fixed depends on what exactly is being offered.

If variable rate is lower then on face of it seems a good idea BUT

can Bank raise it to any rate whatsoever E>g even higher than say the fixed rate  then do you trust them not to do this???

If the rate is somehow tracking a EURIBOR rate then ask them what this rate is at the moment..get everything in writing..what exact rate is it tracking and how?? I would be very surprised if they offer you any type of tracker type product..certainly tracking the ecb rate is a thing of the past..But if they do then depending on fine print this may be a good option for you!

Is the €1000 a breakage fee from the fixed rate?? Seems too low

What will they do with the arrears...roll them onto the back ot the mortgage?? Extend your term??

In summary you have to be seen to be doing your level best so fill in the report and send it with a covering letter saying that if you are approved you need to know the exact terms of what you are being offered before you accept it..i.e you do not want them to automatically change anything until you know exactly what you are getting into.. once you hear back and if you have been approved then make your decision.

Lastly if you ultimately end up in court..get a solicitor but if you cant then always turn up..the judge will see that you are doing your best and will not be an ogre to you..worst case scenario if an order for repo was given..I would attempt to sell the house rather than have the bank do it for you!! I think you are still some distance from that however


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## gina45 (7 Oct 2009)

thanks so much you always give sound advice... i will tell you how i get on ...


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## gina45 (8 Oct 2009)

our fixed interest rate of 7 % ends in 2010.. and its a thousand euro to end it.. does that mean in 2010 our mortgage goes back to variable rate.. or what happens then.. are we stupid to try change to what they are suggesting or should we stick it out till 2010 .. not sure what month as yet...


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## so-crates (9 Oct 2009)

You need to check your loan documentation. It will tell you what the options are at the end of the fixed rate period. Usually you go from a fixed rate to some form of variable rate. The €1000 is their charge for allowing you to slip off the fixed rate early. It reflects the cost difference to them of you being on the fixed rate and on the variable rate.

I would ask what the rate is you would be going onto and what the options are at the end of the fixed rate.


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## gina45 (12 Oct 2009)

the deal they are offering me is not going to help us.. the arrears they said is a different issue and the euribor rate will bring our mortgage down to 4 percent so that will  be 1133 a month.. i seriously think they think i am stupid.. thats two hundred only lower than the orginial money. i am now waiting for appointment with free legal aid because it will go to court now.. i am so depressed this moment .... i have tried and tried and tried and getting no where and i am basically terrifed i will lose my home now in court..


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## gina45 (12 Oct 2009)

the guy i spoke to said that sub prime lenders go back the euribor rate.. i am now wondering if we go back to the euribor variable rate next year we are lost... because its 4 percent and can go up much higher..  the fixed rate ends in july 2010... i said i had already made an proposal and did not know it was refused till august and he said i was told in march that it was refused. .. i was not that is a lie.. and i feel now they are trying to cover themselves now.. i seriously worried about what is going to happen to us now.. terrified


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## Deb___ (13 Oct 2009)

gina45 said:


> our house is valued at 290k..and our mortgage was for 180k
> 
> our mortgage is now 194.975.92



Gina, I honestly think the only sensible option is to put the house up for sale. Madangan  already mentioned this as an option and I do think it's the best one.

Children are very adaptable. They will adjust to a new home no problem. You can make it a positive thing. A home isn't the four walls you have mortgaged there, a home is where your family is, where you live with your loved ones.

Where did you get the valuation figure of 290k? Is that a recent figure? Can you check on daft.ie what other similar properties are going for in the area? If it's really 290k then I would sell asap for 250-260k, be shut of that mortgage and use the extra 50k or so as a nest-egg. Rents are getting cheaper. Rent for a while, leave your nest-egg grow (there's some good savings plans available - see http://www.askaboutmoney.com/showthread.php?t=90481 for info on best interest rates etc) and relax, safe in the knowledge that you've offloaded that debt. 

The 50 will grow and, in time, if you wish, you might be able to buy again. Or if you raise the kids in a rented house, nothing wrong with that. Some beautful houses going these days for cheap rent.

But if this court process proceeds, I don't know if you *can* sell then. So I would move on this fast before the court procedure starts.

If it ends up being re-possessed it will sell for a song - take control now and sell it yourself for a higher figure.


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## so-crates (14 Oct 2009)

Good point Deb___ I hadn't noticed that valuation post. Gina, have you tried to sell? There is no point holding onto a house you can't afford if the option of selling is available. Deb___ is right, your home is more important. Don't confuse the two.


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## uzami (14 Oct 2009)

if your fixed rate is dropping from 7% to 4% variable thats approx €485 per month savings

194,000 x 3% = €5820pa which is a saving of €485pm in interest

Can you get them to confirm the monthly repayment? The figures you quoted below don't add up.

Also are you claiming Tax Relief at Source (TRS)?

As a quick note - not too sure about stepstone being covered by the code of conduct for mortgage arrears - or being a regulated entity.

Stepstone is 100% owned by Lehman Brothers - now in administration with PWC. The KBC association was only a sales & marketing agreement.

[broken link removed]

Stepstone is not a retail credit firm - therefore not a regulated entity.

You might want to get your TD to raise questions with regard to how an unregulated entity can be allowed to collect on consumer mortgages in an unresponsible and unreasonable manner. 

What broker did you use originally to obtain the mortgage? They as a regulated entity should be able to assist you in dealing with the terms of the mortgage as they originally sold it to you....


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