# Bank advises they will not do deal with shortfall



## rion (7 May 2013)

Hi I hope I can get some advise, my partner posted a letter to his mortgage provider 3 weeks ago offering E10,000 as full and final payment for his house.  

 It is not affordable as his circumstances have changed so much since buying the property.  As explained to the bank he is on benefits due to health reasons.

They have since rang back to advise him that they will not be doing a deal and that they will send out the documents needed to hand back the keys.  

Is it ok to just send back the keys our should he try a different route first? 

Thanks Guys

Marie


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## Brendan Burgess (7 May 2013)

It's impossible to give meaningful opinions without more information. 

From other posts, I thought that he was totally insolvent and thinking of going to the UK to go bankrupt? 

The banks don't do deals on the shortfall before the house is sold.  Why does he not just sell it?  If he hands it back, it might not be sold for sometime and it will still be a secured debt. 

If he sells it first, then the shortfall will be an unsecured debt and he should be able to get it written off under a Debt Settlement Arrangement. 

But give the numbers if you want meaningful advice.


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## rion (7 May 2013)

Thanks Brendan I really appreciated your advice.

He has had the house on the market for the past 4 years at a very low asking price and he has only had 1 viewing.  As stated before it is a masionette with no garden, the likelihood of this selling anytime soon is very unlikely..

The area has a very bad name which wont help with the sell off this, he/we wanted to act on this as soon as possible, so as we would know all our options and maybe try find a light at the end off the tunnel.

We don't want to go down the UK route that was as a very last resort. 

Marie


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## rion (7 May 2013)

The 3 bed maisonette was bought for 150,000 and he still owes 141,000 and is in 10,000 in arrears.  He has a tracker mortgage. tks


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## Brendan Burgess (8 May 2013)

What is his proposal?  To hand back the house and €10,000 in full and final settlement? 

Where is the €10,000 coming from?  Why does he not clear his arrears with it? 

It sounds like a candidate for an Allsops auction with a low reserve.


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## Bronte (8 May 2013)

rion said:


> They have since rang back to advise him that they will not be doing a deal and that they will send out the documents needed to hand back the keys.


 
If he's on benefit's is he not entitled to MIS, mortgage interest relief.  He would not be advised to hand back the keys unless he gets a letter of unsustainability from the bank, (and not all banks will do this) as it could mean he would not be entitled to housing help from social welfare etc.


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## rion (8 May 2013)

Would it not be pointless paying off the arrears, this would be given to him as a gift or loan from family/friends to help if the bank would've come to some sort of dept agreement. Yes Brendan that was his proposal probably a bit stupid as said we have no idea on the best direction to take.

Do you advise him to go back to the bank asking if he could try sell it himself first threw allsops auctions?  Would sending back the keys have any other implications on him, would he still be able to avail off the personal insolvency act here and maybe Uk bankruptcy 

Thanks for taking the time to respond


Marie


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## rion (11 May 2013)

Hi my partner has recieved a letter from his mortgage provider with details of how to voluntarily surrender the property.  Please please if anyone knows of any reason with would have a bad affect on him when he applys for the PIA please advise us.

The letter goes like this: 

Please note that the bank is prepared to enter into vacant possession of the premises

The following should be noted in relation to voluntarily surrendering the property:

>  The company require full vacant possession and therefore all personal belongings must be removed from the property before handing back the keys.

>  A voluntary Surrender form must be signed by all parties to the mortgage in the presence of a witness.

>  A staff member of your local provider can witness your signature when your handing in the keys to the property.

>  The company will the secure the property and indepdent valuations will be carried out.  Once clear marketable title is obtained, the property is placed on the open market for sale.


Please note that all parties to the mortgage will be still liable for all monies owing and interest accruing on the loan untill it has been repaid in full including any costs that incurred in relation to the sale of the property.

Any surplus funds remaining once all monies due and owing (including all costs) have been paid will be reimbursed to you.  Please note however, in the event the company sells the property at a loss, you will be liable for the shortfall due and owing to the company.

Would anyone have any info on this.  He is looking to go down the personal insol route is this a route he should be taking handing back the keys now..  Thanks soo much in advance to anyone that can offer us some advise with this.


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## Brendan Burgess (11 May 2013)

As I said in an earlier post



Brendan Burgess said:


> It's impossible to give meaningful opinions without more information.
> 
> 
> But give the numbers if you want meaningful advice.


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## rion (11 May 2013)

Sorry if I sound clueless but I have no idea what numbers I should put up


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## Dr.Debt (11 May 2013)

Hi Rion, I remember your case from before. If Im not mistaken, your  partner has a mortgage of c.145K, an apartment worth about 45K and  negative equity of around 100K. If I remember it correctly he has very  little income and almost no other assets or liabilities.

I think  he is headed in the right direction by surrendering the apartment. I  think this was also the advice from most of the contributors, from your  previous post.

I think the main issue for your partner, is what happens after the apartment has been surrendered and sold.

In his case I believe that the answer is not a PIA but one of the following two options

1)  Let the bank sell the apartment and wait for their next move. Your  partner is not in a position to repay them anything so its unlikely that  the bank will pursue him too much anymore for the negative equity debt.  If your partner's circumstances don't change in the coming years, I  think you'll find that the bank will eventually write off the debt and  go away.

2) The 2nd option would be to seek a DSA (Debt  Settlement Arrangement) under the Personal Insolvency Act. There is no  guarantee that the bank would accept a DSA proposal, especially if your  partner doesn't have any real income to contribute to this on a monthly  basis. Once the numbers are crunched, i have a feeling that a DSA will not work in this case.

My advice to you is the same as before - Surrender the  appartment to the bank and wait for the bank's next move. There really  isn't much they can do in your case.

If your partner doesn't like  the uncertainty and pressure of waiting for the bank to act, then he  should probably look at bankruptcy. I dont think bankruptcy is necessary  in this case, although it would help to bring finality to the situation and enable him to draw a line under his predicament


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## PaddyBloggit (11 May 2013)

rion said:


> Sorry if I sound clueless but I have no idea what numbers I should put up



All here:

http://www.askaboutmoney.com/showthread.php?t=61289

but you'll have to post your answers in the following section (not on this thread):

http://www.askaboutmoney.com/forumdisplay.php?f=62


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## rion (11 May 2013)

Aww Dr debt really appreciate the info just with buying the house in the first he's scared now to put a foot wrong, never thought it would come to this.. once bitten twice shy.. Thanks so much!!


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## rion (11 May 2013)

Thanks Paddybloggit will have more time tomoro to look at these link thanks!!


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