# Mortgage docs invalid as solicitor ceased practice



## lavaghman (3 Sep 2014)

I purchased a second property in 2005 via an Irish Bank mortgage which is now in serious negative equity. Take into account the following:

- The Solicitor who gave a Solicitors undertaking has ceased practice(due to high court order) which invalidates the original  signed mortgage documents. 

- The updated folio documents were never registered with land registry and when an attempt was made to register them recently they were rejected by land registry.

- The bank now wishes to issue a replacement Mortgage pack for me to sign 
   and in addition is willing to pay all legal costs for registration of deeds etc.

-  My Current A/C & home mortgage is with the same bank

-  I am not in arrears on either home or 2nd property mortgage 

Question: I am attempting to sell the property for half the original value which we leave me owing 30% of the original mortgage loan. I am in very a difficult financial position but continue to honer all my debts/mortgage repayments.  *Ideally I would like the bank to write off this debt(after property sale) or I am open to other ideas*(I have another small loan with with the same bank)          

I welcome your opinion.


Thanks

James (from Dublin)


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## Gerry Canning (3 Sep 2014)

Looks like you have a debt and Bank now have a problem.

I do not see how 1st Solicitor ceasing would invalidate original docs.

I am sure Bank would be delighted to pay for regularizing Mortgage Docs.

You now have an opportunity to discuss the account with the Bank.
If they havn,t good title it may well be in their interests to come to some sort of arrangement on sale/shortfall, and also amalgamate the other debts you have.

Try to be flexible and reasonable .
Effectively you and Bank should end up with a position where you are not (screwed) on debt and they are not hammered due to title issues.


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## lavaghman (3 Sep 2014)

Thanks for your reply Gerry.

In addition I have received "Off the record" professional advice indicating that I should initially cancel my Direct Debit for this mortgage(Although my Bank A/C is with the same Bank as the Mortgage)!


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## Steven Barrett (3 Sep 2014)

I was at a very interesting seminar last night on restructuring debt. One of the speakers was the head of the credit department in a bank and he said that any cases that came in to him with a legal argument, he wouldn't be able to action. It would just be passed to the legal department and they would fight you on it. 

He said that everything comes down to affordability. You have to show the bank that after your mortgage on you PPR and your reasonable cost of living, you can pay them X amount a month. If you put a well constructed offer to them, you have a better chance of coming out of it in 5 years time with the rest of the debt paid off. 

You have absolutely no chance of just asking them to write off the debt if you sell the property. 

It's worth giving a debt specialist a call. Eugene McDarby of Money Village is very good in Dublin and has been doing debt restructures for 8 years now. 

Steven
www.bluewaterfp.ie


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## lavaghman (3 Sep 2014)

Hi Steven,

Really appreciate your detailed feedback & advice.

Thanks


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## Bronte (3 Sep 2014)

lavaghman said:


> - The Solicitor who gave a Solicitors undertaking has ceased practice which invalidates the original signed mortgage documents.
> 
> -
> I welcome your opinion.


 
Very interesting James, it isn't true that the undertaking invalidates the mortgage documents.  

What you do have though is *leverage*.  I presume that is why you are asking the question.  So you could discuss with your bank that you'd allow the legal registration to take place if the bank writes down the mortgage debt.  

It seems the title can not be registered or is it just the mortgage?  Without you signing something the bank can not perfect the title nor their right via the mortgage to your property. 

Without an actual test case on this the above is how I see it. 

And apparently about 1/3 of Irish mortgages during the boom are defective.


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## Steven Barrett (3 Sep 2014)

Bronte said:


> And apparently about 1/3 of Irish mortgages during the boom are defective.



I wouldn't be surprised if it was higher. 

There is still the fact that the bank did lend the OP the money and he owes it back to them. 

This is not really my area, so excuse me if I'm wrong on this, but if he prove that the mortgage is defective, won't they become an unsecured creditor? Even then, he will have to threaten them with insolvency but there is still the power of veto if they own a large enough portion of the debt. 

Steven
www.bluewaterfp.ie


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## Bronte (3 Sep 2014)

SBarrett said:


> There is still the fact that the bank did lend the OP the money and he owes it back to them.


 
Absolutely, and he should pay his debts as he owes it, but you can be sure a poster or person in the real world doesn't come on here with money problems unless they are seeking a way out.  

No idea what happens if the mortgage is defective.  But it's telling the banks are not going into court with this.  They are afraid a test case might go the wrong way.


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## Steven Barrett (3 Sep 2014)

Bronte said:


> Absolutely, and he should pay his debts as he owes it, but you can be sure a poster or person in the real world doesn't come on here with money problems unless they are seeking a way out.



Of course. We don't know all of the OP's financial situation so we don't know the full picture. 

As I said, debt restructuring isn't my thing but as a financial advisor, I do get a fair few calls from people looking for advice. You would be amazed at the amount of people who owe the banks a fortune and have a few quid themselves but are looking to hide it or only want to offer them the 3 apartments in Leitrim but want to keep the RIP in Dun Laoghaire.


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## Vanilla (3 Sep 2014)

The mortgage isn't defective: what has happened is that the original mortgage is now in an outdated format which makes it impossible to register. If OP doesn't sign new mortgage docs, then the bank can, in the alternative, take an action to court to register a mortgage against the property which may result in additional legal fees due by OP on top of the principle.


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## lavaghman (5 Sep 2014)

I appreciate all your advice. A few more points to add:

- I have never defaulted any any debt including with this Bank (To date)
- I am in a very difficult financial position but just about managing to survive  
- I have no other assets etc hidden away 
- The bank are not going to court yet because I have not as yet refused to cooperate and progress with signing the mortgage doc's and registering the title.

Vanilla - Thanks for your advice -  *In what way is the original mortgage in an outdated format - Surely this must happen on a regular basis ?*

Thanks all.


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## Brendan Burgess (5 Sep 2014)

You will not find a way out through some loophole like this. Your best bet is to provide all the information and you have some chance of getting good advice. 

Information required for mortgage arrears and negative equity questions


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