# US citizen returning home - Bank Ignoring the Circumstances



## steve119 (18 Feb 2013)

Hello,

I am being relocated to the US (I/Kids are US Citizens - Wife has 10 year VISA). We bought our house here in a rural area for nearly 300K, it went up past 400K in the boom and is now worth around 145-150K. We owe 225K aprox.

We were able to find a buyer and then approached the bank giving them our full financial situation as well as the fact we are leaving no matter what etc etc. Everyone we talked to has asked why we didn't just walk away since we are not coming back but we are attempting to do the right thing.

We are living month to month (some months more effectively than other months) although we have never missed a mortgage payment - might be a negative.

We jumped through all the hoops with the bank (including a proposal for partial payment of the shortfall via a new loan) and they came back with an offer that shortens our payback period and moves us from a tracker to a variable rate. The result is a payment there is no way we could make.

We are now strongly considering walking away and although we have written a final letter, I doubt the bank will budge and allow the sale.
*
Question : *As I said, we are not coming back but you never know the future. What are the consequences of walking away? I have seen many threads on a 12 year statute of limitations but what does that really mean? Does it mean if we returned in 12 years we could buy a house with cash and have no issues (I say cash as our credit score would prob be 0 - we have no savings right now).

When does the 12 years start? From the time we leave, from the time the bank sells the house? From the time of a judgement which could effectively add a few years?*

Thanks,
Steve

Personal and income details
*Income self: Employed - Being relocated permanently to US
Income partner/spouse: Homemaker
2 Kids
*Home loan
*Lender: 
Amount outstanding: 225K 
Value of home: 145k
Interest rate: Low tracker
Amount in arrears - None
*
How important is retaining the family home to you? 
*Which of the following best describes your situation?

I don't care about keeping the family home. 

*Any other relevant information

What is your preferred realistic outcome? 
*Agree a monthly payment (loan amount) that is reasonable - Would include a partial write-off


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## Brendan Burgess (18 Feb 2013)

Hi Steve

This is very frustrating. 

A fair deal for both sides would be that you would pay off the shortfall over the remaining term of the loan at the current mortgage rate. 

They should allow you to sell the property and you acknowledge that you will repay the loan.



> Agree a monthly payment (loan amount) that is reasonable - Would include a partial write-off


I don't know why you think that there should be a write-off?  Is it in exchange for the early repayment of the tracker? 

You could argue that as you are repaying a tracker early, you will expect to get a credit of 20% - so if you pay off €150k, it will be treated as a payment of €180k leaving you with a shortfall of €45k. 

I think you should settle for a 10% credit. I think you should put this in writing to them and give them option A or option B, an immediate return  of the keys and they can do what they like with it. 

You may have to get the name of the Chief Executive and post the keys to him to get a bit of action on it.  You could also give them the name and contact details of the buyer. 

Brendan


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## steve119 (18 Feb 2013)

Thanks Brendan,

The reason for the partial writeoff is to make sure we can afford the monthly payments. No point in agreeing something we know isn't financially viable. From the banks perspective I would think the tracker angle would make it more palatable.

Any thoughts on the ramifications of leaving the keys if say we returned in 15 years time (I truly doubt this will happen but you never know).

Thanks,
Steve


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## demoivre (18 Feb 2013)

steve119 said:


> Thanks Brendan,
> 
> The reason for the partial writeoff is to make sure we can afford the monthly payments. No point in agreeing something we know isn't financially viable.



If you have difficulty with repayments how will the bank enforce repayments on an unsecured €80k term loan with you in a different jurisdiction?


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## steve119 (18 Feb 2013)

demoivre said:


> If you have difficulty with repayments how will the bank enforce repayments on an unsecured €80k term loan with you in a different jurisdiction?


Our original reason for negotiating was to keep a clear name in this country. Secured or unsecured we would end up with a judgement at some point.


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## 44brendan (18 Feb 2013)

Broadly agree with the above responses. Unfortunately the Bank appears to have left you with no option, other than to take the remedy as suggested by BB. have no concerns about a return in >10 years time. The relevant statute of limitations would be 6 years, but you will have no good/bad credit record established, following a reasonable absence from the country. The Bank do have recourse to you outside the jurisdiction and may consider it worth ther while in employing an agency to track your new whereabouts. However, by making sure you maintain all records of your correspondence and lack of any reasonable response from the Bank, you will have a very acceptable defense i respect of any attempt by the Bank to take proceedings against you.


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## steve119 (18 Feb 2013)

Thanks Brendan,

Our proposal was very close to the one BB laid out but was ignored. I didn't realize they could pursue us in the US - perhaps that is why they are not bending whatsoever?


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## Time (18 Feb 2013)

They will be forced to write it off eventually. It is very expensive to attempt to obtain judgements against people living abroad. The risks generally out weigh the benefits.

They would only bother where there were very large amounts of money involved and there were visible assets that could be sold.


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## Brendan Burgess (18 Feb 2013)

On reflection, ask you solicitor if they will prepare contracts for sale with the purchaser and a draft of the letter of permission which they need from the bank.

Bring these contracts and the letter into the bank and give the bank the choice of the contracts or the keys. Give them 3 working days. If you don't get the letter of approval, then just give them the keys. 

If you feel like it, you might choose to pay off the shortfall between the sale price you agreed and the outstanding balance, but only do so if you are financially very comfortable.

The lenders have to develop systems where people who act responsibly are rewarded. 

Brendan


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## Bronte (19 Feb 2013)

steve119 said:


> Secured or unsecured we would end up with a judgement at some point.


 
Not necessarily so. How on earth are they going to pursue you in the US for 80k NE. It's totally outragerous they didn't let you sell when you had a buyer. 

I think you're worrying about something that may never happen because you are the type of people to try and do the right thing and still the bank will not play ball.  In addition all the evidence on AAM and elsewhere would suggest that banks will not really deal with you until you default.  

Don't forget you have the option of US bankruptcy (make sure for your wife this won't affect her right to visa/residency). If what we're let to believe on David Drumm and Sean Dunne you can lead the banks a merry dance with no result so you really think they're going to come after you. Anyway as far as I can make out US bankruptcy is quite accommodating.


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## steve119 (19 Feb 2013)

Thanks all for the feedback. The main reason we accepted the relocation was the opportunity to potentially get out of the living day to day scenario so the hope is we have some financial means in the future (To BB - We def couldn't pay off the shortfall in one go - we actually have no savings).

It sounds like even if we have the ability to pay it off in the future, default at this point makes sense and the bank/court may be more willing to work out a payment plan should there be a judgement.

If there isn't, and that sounds the most likely, at least we know in our own minds we were willing to work something out.


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## 44brendan (19 Feb 2013)

A judgement could be obtained against you, even if you did leave the country. If you had vacated the property the Court would generally agree to service of the summons by post at your last known address. 
However, as you will be outdide the jurisdiction and have no substantial asets worth pursuing, it is unlikley that any bank will progress beyond obtaining a judgement. This will have no real effect on your credit record if you return in 5/6 years time.


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## Time (19 Feb 2013)

I would respectfully disagree.

If the judge knew the property was vacant, service by post would not be allowed as the defendant is entitled as a matter of law to have knowledge of the existence of the proceedings. In such circumstances service by other means would be necessary such as a notice in a newspaper or the bank would have to apply for permission to serve documents outside the state. 

There is no way in hell a judge would count posting a letter to a known vacant house as valid service.


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## RichInSpirit (19 Feb 2013)

*Black listed and ICB*

I think the banks will be rooting through the ICB's records in 5 or 6 years time looking for customers to borrow money off them. 
That's just my gut feeling.


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## steve119 (20 Feb 2013)

I sent a certified letter yesterday morning laying out the situation and when I put in the tracking number today it says "Delivery Refused - Return to Sender".

I sent it to the same exact address all previous paperwork had been going to.

Anyone know any reason the bank would accept letters and acknowledge them but refuse it if it requires them to sign for it?


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## 44brendan (20 Feb 2013)

Doesn't make any sense. Keep the envelope as proof that it was refused and resend by ordinary post.


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## Time (20 Feb 2013)

Security guard could be instructed not to sign for anything. They could be expecting service of certain documents so are now playing silly buggers by refusing all registered post.

I wonder which bank it is?


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## steve119 (20 Feb 2013)

I'd prefer not to say the bank so it doesn't possibly identify me (longshot I'm sure) but they have now requested email or fax.

Good advice on saving the envelope though as I still prefer stronger proof that it was received in case it is ignored.


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## Time (20 Feb 2013)

No bother. I has my suspicions as to which bank it is. 

It would be interesting for them to have to explain to the FSO why they are rejecting registered mail.


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## Brendan Burgess (20 Feb 2013)

steve119 said:


> I sent a certified letter yesterday morning laying out the situation and when I put in the tracking number today it says "Delivery Refused - Return to Sender".



That has to be in breach of the Consumer Protection Code and Mortgage Arrears Code. 

Having said that , why not email the letter and point out that the delivery was refused? 

I must say, doing the right thing does not seem to be paying any dividends. 

At this stage, I would be tempted to pack your bags and head off. I am not sure , I would even bother telling them.  On reflection, send them the keys and a letter setting out your attempts to resolve the matter. 

I very much doubt they will bother pursuing it. If they did, I very much doubt an Irish judge or a US judge would have much time for them.

Brendan


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## steve119 (21 Feb 2013)

Brendan Burgess said:


> At this stage, I would be tempted to pack your bags and head off. I am not sure , I would even bother telling them.  On reflection, send them the keys and a letter setting out your attempts to resolve the matter.



We have had a set date for leaving from the beginning so it is now looking like abandonment is going to be the remedy. We set a date for reply with a reasonable proposal but there is a good chance the buyer is going to say forget it if there isn't any reply within a week. The bank knows all this and although I have offered to meet in person to help the process along, they seem to be intent on dragging their feet.

I'm pretty much prepared for the nuclear option and am documenting accordingly.

Thanks for everyone's feedback.

PS I paid everyone involved (except the bank) costs so I'm not screwing anyone over (again, except the bank) even though we don't really have the money.


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## steve119 (27 Feb 2013)

Just an update - The bank responded to my final letter and essentially said "it was against policy" to do any deal whatsoever.

They will only accept a payment scheme we clearly cannot afford so we have been left with no choice but to give back the keys and not pay a penny of the negative equity.

We are currently putting together all of the backup documentation to show the ridiculousness should it ever actually come back on us but we are at the point where it is time to just move on (our move is coming up quick).

Thanks again to all.


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## PaddyW (27 Feb 2013)

Good luck in the US Steve, hope all goes well for you.


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