# Vulture fund demand letter



## Peabody (30 Oct 2018)

Hi all.
We received a letter from oyster this morning looking for full repayment of btl mortgage. It’s in my partners name and there has been a few missed payments. Genuine reasons but I know they don’t care about them.
Truthfully I don’t care about the property. It’s in negative equity and no profit was ever made from it. What I do care about however is my home which is in both our names. Will we be forever in debt to them. Will we have to sell our home. Feeling sick at the thought of this. There is not a hope of repayment. He has bad credit and my income isn’t sufficient to cover any loans. Thanks for reading.


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## elcato (30 Oct 2018)

When you say your home is in both names are you saying that you both bought your current property together ? It really depends on whether there is any equity in the home which is his or not. BTW try not to feel sick or over worry here. A solution will be found which will not put either of you out on the street.


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## Peabody (30 Oct 2018)

Yes we bought our current home together but he bought the btl with a different lender around the same time. Can they force us to sell our home if the btl is in his name only with a different lender. Btl is in negative equity but home  isn’t- not by a lot anyway. They are saying if it’s not repaid in 2 weeks they will appoint a receiver. Do they knock on your door. Do you go to court. Feeling v naive and lost. Where do people go for information


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## cremeegg (30 Oct 2018)

Peabody said:


> Will we have to sell our home.



The short answer is No.

The longer answer is that they can certainly threaten all kinds of things. And the bad news is that this can rattle around for years.

The fact that it is a different lender is very significant.

If you want more advice from AAM you will have to put up the full details. Dates amounts of the purchase, details of the arrears etc.


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## Peabody (30 Oct 2018)

Will do


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## elcato (30 Oct 2018)

Just be aware that a lot of these letters will threaten all sorts but are generally hot air and are there to push you to get a repayment. Don't fret from any of them and always do correspondence in writing. Do not ever entertain them if they phone or call (highly unlikely) to your home. Just tell them to put everything in writing and you will also deal with them in writing too. As pointed out read this thread and follow the template that's there to post and you will get good answers here.


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## Brendan Burgess (30 Oct 2018)

You should post this information. 
* Information required for mortgage arrears and negative equity questions*

He needs to check the mortgage agreement as it probably allows them to appoint a Receiver over the buy to let property. 

If he engages with them, there is a fair chance that they might agree to write off the shortfall if he agrees to sell the property, especially if it's a cheap tracker.

If they appoint a Receiver, it will be sold at less than market value and there will be substantial costs to pay. 

Your husband will owe the shortfall. 

They could get a judgement for this and secure it against your family home. 

That would mean that if you ever sell your home,  his share of the gain would be used to clear the shortfall. 

In theory, they could apply to the court to sell your home, but they won't do it, as Irish judges don't allow it.

But post all the information so that you can get a full answer. 

Brendan


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## Peabody (1 Nov 2018)

Brief update. Sorry for not completing the questionnaire but the long and short of it is he didn’t honor the agreement and they can appoint a receiver. They want him to sell the apartment himself through sherry fitz and come to an arrangement with them re shortfall. They’ll want to to look at his income but his contract his up next month and starting again late Jan feb. there is substantial arrears on management fees. How do we proceed. Do we let them take over the property and sell it themselves or take it on ourselves to. When do we tell tenants. Do we cancel direct debit. Has anyone an idea how much receiver fees and court fees are. If we sell it ourselves the shortfall would be 70k. If they sell it god knows how much it will be. We don’t know who to go to negotiate a write down. Completely lost


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## elcato (1 Nov 2018)

Whoa Slow down. We need more information to help you. First things first. You got a letter asking for the total owed. Have they now contacted you and asked you to sell the property and they will negotiate a settlement on the arrears ? How much rent are you getting from the tenants ? How much are the repayments as they currently stand ?


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## TLO (1 Nov 2018)

Bronte said:


> Going forward, it would be best if the bank let Mr. P sell the BTL and they write down his NE. The more he demonstrates he cannot afford it and the more he shows he owns nothing, the more likely a bank will do a deal.



Bronte's advice from six years ago is still valid today.  Offer to voluntarily sell the BTL in exchange for a write-off of the shortfall.


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## Peabody (1 Nov 2018)

I know deep breath,in a bit of a flap. He rang Cabot offered to pay the arrears but they said the entire loan was in default and their client would not accept this offer. They either want full repayment or sell it. They would then address the balance. Their explanation was that Ulster bank had already demanded full repayment before they bought the loan - we have no recollection or paperwork relating to this and there has been missed payments ( I only found out about these 3 weeks ago when filing returns ,atmosphere in the House is great at the moment by the way)The monthly mortgage repayments are 810. Rental income 875. First time it has ever covered the mortgage in 15 years- yes 15 years!. He wants to fight it and I’m resigned to it


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## elcato (1 Nov 2018)

Peabody said:


> we have no recollection or paperwork relating to this and there has been missed payments (


Ask them (in writing) to forward the written letter requesting this to you as you seem to have not received it. No offence but your husband is right to at least stand up to these people. how many missed payments ? What is the total outstanding debt and what is the current expected value if you sell ? You may be in a stronger position than you think.


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## Peabody (1 Nov 2018)

No offense taken The missed payments are about 4K. I will ask them for that letter. Will it do anything though. They maintain the previous bank sent it. A few months ago I requested all information that ulster bank and Cabot had on us nothing back. Forgot about it. Regretting it now.  Recorded the phone call almost felt sorry for him. He was just following a script


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## Peabody (1 Nov 2018)

The estimated value is about 110/120. Mortgage is 150k management co looking for 4K plus 4K in interest. 5 missed payments


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## elcato (1 Nov 2018)

Peabody said:


> A few months ago I requested all information that ulster bank and Cabot had on us nothing back. Forgot about it. Regretting it now.


Send it again reminding them that all correspondence from now on must be done in writing. Reply to all letters from now on and keep copies of them. Until you get a copy of this keep answering that you are awaiting their response.
EDIT: So your arrears after selling would be about 50k assuming you can get an agreement about the management fees.


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## Peabody (1 Nov 2018)

Thank you. Are we naive in thinking we can manage this ourselves


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## cremeegg (1 Nov 2018)

You need to establish if they can appoint a receiver without going to court. Your way forward is very different depending on the answer to this question.

If they cannot, (and I suspect that is the case) then by all means "stand up" to them. 

If they can appoint a receiver without going to court, then the opportunity to sell yourself without a receiver being appointed is a valuable one, that you should co-operate with.

The answer is contained in your mortgage contract.

Bear in mind that you are not anywhere looking at your home being sold. Brendan said in post 7 above that in theory they could apply to the court to sell your home. As there is a mortgage with a different lender on the home, I think that would prevent a sale in any case, as well as the judges not allowing the sale of a home in these circumstances.


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## Peabody (1 Nov 2018)

I’m after ransacking the house I can’t find an oyster agreement- letters about it but nothing physical. Have they just used the old Ulster Bank one?


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## elcato (2 Nov 2018)

Peabody said:


> I’m after ransacking the house I can’t find an oyster agreement- letters about it but nothing physical.


Are you talking about the mortgage contract ? Or some correspondence that states they can appoint a receiver ? I'm not sure of the legality of appointing a receiver. If they are saying they can based on the fact that UB sent out a demand letter previous then ask them for a copy of that same eltter when requesting all info on file. Remember these guys are hoping you don't know the law and chance their arm with such statements. Maybe someone here can explain how a receiver can be appointed in the first place ?


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## Peabody (2 Nov 2018)

We have someone calling up today. He is a pip. He said we don’t need this but he’ll advise us and write any letters we need to do. Our accountant recommended him to us. I found letters from Ulster saying they can appoint a receiver if there was a default - he also had arrears with them too. Trouble is i can’t find that loan agreement. He really wants to fight this. I’m 50/50. Based on his current income I think there won’t be any write down. He’s a contractor and could be let go anytime. They also sent him a statement of financial affairs request. Do we exaggerate childcare family loans etc.Also thank you for your help and replies,people are in the dark and you are providing comfort .


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## Brendan Burgess (2 Nov 2018)

Brendan Burgess said:


> You should post this information.
> * Information required for mortgage arrears and negative equity questions*



Forget about the Receiver for the moment. Should you be selling this property anyway? That is the first question you need to ask. If you provide the above information, then you will get some insight into that question. 

If it turns out that you should sell the investment, then you should do that. And if they give you a discount, even better. 

If if turns out that you should sell the investment, but refuse, then you will lose out on all counts.

Brendan


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## elcato (2 Nov 2018)

Brendan is right above. It will only take 15 minutes to fill out and you will get invaluable answers.


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## Peabody (2 Nov 2018)

This man is coming up soon and I’ll do it then and give you his recommendations


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## Peabody (4 Nov 2018)

Net monthly income €6000
nature of income  self-employed
Income history: coming to the end of 6 month contract. Will start again January. Unemployed for the previous year

*Net monthly 
€2000*
Income history: paye full time 
Amount of child benefit received €270


*Personal circumstances so we can calculate your *
two adult family
Do you need a car for work or do you use public transport? Yes 2 cars
Number of 12 - 18 years old:2
Monthly childcare costs:none 
Montly spend on special circumstances: none



*Home loan*
Lender: Kbc 
Amount outstanding: €155k
Value of home: €220k
Interest rate: tracker 2.75
Monthly repayment 830
Amount in arrears :restructured extended term because of unemployment 

Summary of discussions and agreements with the banke.g. Extended term by 5 years capitalized arrears 

*Investment property - *Delete if not applicable 
Lender: oyster 
Amount outstanding: 150k
Value of home: 130/140- one sold last year for 130
Interest rate: 4/5% not sure
Monthly repayment 838
Amount in arrears 4K 
Monthly rent received 875

*Credit Union *
Amount of shares 0
Amount of loan outstanding 0
Monthly repayment 0
Term left 0


*Other loans and creditors none*

*Other savings and investments none

Do you expect any lump sums in the medium term 
No


How important is retaining the family home to you? *



I really want to keep the family home even if it means having a large mortgage and negative equity for years to come.


*Any other relevant information 

Oyster to appoint a receiver in 2 week for investment property 

What is your preferred realistic outcome? *
He wants to hold onto the btl for a few years and then sell so there will be no shortfall


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## Bronte (4 Nov 2018)

Is your income €8270?

If bank appoint a rent receiver you’ll be stuck with not receiving all the rent to pay the mortgage and I bet anything a rent receiver costs a pretty penny. And it will be you who is paying. So either you sort this out pronto or the bank will. If you’ve been given two weeks notice you’re likely too late. So I do not understand your husband acting like he has options?


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## Peabody (4 Nov 2018)

The adviser arrived and said we should try and keep the property. We sent an email offered to pay the arrears and basically they refused. He said the last thing we want is a receiver to be appointed but that if this happens and there is a shortfall it’s an unsecured debt and they can’t realistically do anything about it except hound us for years and take his proportion of any sale. We are to  keep in touch with him with any developments. If this is all true I am very relieved


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## Bronte (4 Nov 2018)

Peabody said:


> Yes we bought our current home together but he bought the btl with a different lender around the same time. Can they force us to sell our home if the btl is in his name only with a different lender. Btl is in negative equity but home  isn’t- not by a lot anyway. They are saying if it’s not repaid in 2 weeks they will appoint a receiver. Do they knock on your door. Do you go to court. Feeling v naive and lost. Where do people go for information


Here you say home isn’t in NE but also you say not by a lot, yet you’ve positive equity of 50k. 

Why did the BTL go into arrears when the rent equals the mortgage?

Is the rental income declared to revenue, I’m guessing not.


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## Bronte (4 Nov 2018)

Peabody said:


> The adviser arrived and said we should try and keep the property. We sent an email offered to pay the arrears and basically they refused. He said the last thing we want is a receiver to be appointed but that if this happens and there is a shortfall it’s an unsecured debt and they can’t realistically do anything about it except hound us for years and take his proportion of any sale. We are to  keep in touch with him with any developments. If this is all true I am very relieved


So PIP confirmed the worst scenario is a rent receiver and yet you are relieved. Did the PIP tell you how much this will add to your debt? Which will eventually come out of your husbands equity in your home. 

The bill will be arrears, costs, receiver costs, possibly penalties. Meanwhile there’s a tax bill looming I’m guessing. 

Personally I do not believe in buying one’s head in the sand.


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## Peabody (4 Nov 2018)

Yes that’s our current income. Really bad with money but that is just the past few months. It was just mine for a full year and 2k a month together with a mortgage payment and 2 kids is hard believe me. I agree with you about the options issues and I just want to get rid of it. Especially with his erratic income


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## Peabody (4 Nov 2018)

He said only if we sell our home which I have no intention of. What do you advise I would really appreciate it. There is no tax due up to date on everything


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## Bronte (4 Nov 2018)

Peabody said:


> Yes that’s our current income. Really bad with money but that is just the past few months. It was just mine for a full year and 2k a month together with a mortgage payment and 2 kids is hard believe me. I agree with you about the options issues and I just want to get rid of it. Especially with his erratic income


You two need to sit down immediately and do something, did both of you meet the pip?

In addition you need to do the money management thread to get to learn about budgeting.


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## Brendan Burgess (4 Nov 2018)

Peabody said:


> *Investment property - *Delete if not applicable
> Lender: oyster
> Amount outstanding: 150k
> Value of home: 130/140- one sold last year for 130
> ...



I am assuming that although you don't know the interest rate, it is not a tracker.

Even if there were no threat of a Receiver being appointed, you should probably sell this property.

Annual rent:  €10,500
Costs - say :         €2,500
Interest           €7,000
Profit before tax: €1,000

This is not worth holding onto. 

The risks are huge 

Property prices might fall 

Your tenant stops paying rent
Your husband loses his job 

You should ask Oyster to write off the shortfall if you agree to sell it voluntarily and then do so.

Even if they refuse to write off the shortfall, you should still sell  the house.

Brendan


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## Brendan Burgess (4 Nov 2018)

Peabody said:


> if this happens and there is a shortfall it’s an unsecured debt and they can’t realistically do anything about it except hound us for years and take his proportion of any sale.



That is a very cavalier attitude. 

At the moment, your shortfall appears to be about €10k. 
If they appoint a Receiver, they will not care too much about the price they get. 
The Receiver will have to be paid.
So the shortfall, for which your husband will be liable, will be about €50k. 

They will get a judgement against him for this.  So he will probably never get credit again, nor you either. 

It will attract interest. 

If you ever sell your home, after the mortgage is cleared, they will get their €50k + interest from his share. 
Even if you don't sell your home, they could seek an order for possession. Although it is unlikely that they would get one, I would not like the risk hanging over me. 

Brendan


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## Bronte (4 Nov 2018)

BB I’m not sure what the vultures et al will do down the line. But I imagine in a few years when it’s worth their while they will start going after income and equity in family homes. 

For example the Ralf Kane judgement that many were hoping for got shot down, eventually, last month. 

In 5 or 10 years time the Pip’s blase attitude that the banks won’t do anything, will not be worth the paper it’s not written down on. And in 10 years with interest plus costs, that by now large positive equity is looking really good to go after.


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## Peabody (4 Nov 2018)

Forgive me if I’m taking this up wrong. 10k shortfall and 40k receiver in receiver fees!! The btl is in his name and we are not married


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## Bronte (4 Nov 2018)

You may not be married, but you own a home together. He has a good income, plus he owns half the equity in the home. In a few years the equity he owns will be a lot more. That’s what the bank will go after.

65k equity, of which his is 32.5 k.


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## Peabody (4 Nov 2018)

So offer to sell it ourselves hopefully without a receiver being appointed and deal with shortfall after sale?


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## Brendan Burgess (4 Nov 2018)

Bronte said:


> BB I’m not sure what the vultures et al will do down the line. But I imagine in a few years when it’s worth their while they will start going after income and equity in family homes.



Fully agree, which is why I said: 



Brendan Burgess said:


> I would not like the risk hanging over me.



This is not a good investment and should be sold anyway.  Attempting to hold onto is probably futile and could cost around €40k. 

Peabody 

The lender can simply appoint a Receiver under the terms of your mortgage.  (I am assuming that the mortgage documentation allows this. Get your solicitor to check.) 

It's not as if they have to go to Court and spend years trying to get an order. 

If they had to go to court, then it might be worth fighting it in the hope that it would increase in value over the coming years. 

Brendan


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## Peabody (4 Nov 2018)

I’ll try to get him to sell it himself. That pip went on about if they wouldn’t accept the payment of arrears that he should say he has moved into the property. I don’t agree with this at all. Will the shortfall be classed as an unsecured debt and if so how can they force sale or put a lien on family home


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## Bronte (4 Nov 2018)

Peabody said:


> I’ll try to get him to sell it himself. That pip went on about if they wouldn’t accept the payment of arrears that he should say he has moved into the property. I don’t agree with this at all. Will the shortfall be classed as an unsecured debt and if so how can they force sale or put a lien on family home


It’s unbelievable that you didn’t tell us everything the pip suggested.  That might get the bank to hold off on the rent receiver and to allow time to sell it yourselves. Which is clearly your best option now instead of racking up more debt.

And that sounds like a good strategy to me. Why are you against it. They can put a lien on the family home via a well charging order I think it’s called. It would be registered on your title.so later when you need to sell, prospective buyers will insist it’s removed.


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## Brendan Burgess (4 Nov 2018)

The shortfall will be an unsecured debt.

But they will go to the court and get a court order for its payment. 

If he does not pay it, they can get convert it into a judgement mortgage. 

Brendan


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## Peabody (4 Nov 2018)

So I kick him out of the house due to stress of this issue. He keeps paying the mortgage ,give it a year or two and then sells it. It just sounds so unbelievable and convenient. My head is spinning. I think I need to speak to a solicitor and get details of all possible outcomes or should I stick with pip?


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## Bronte (4 Nov 2018)

There's no need for a panic scenario. Didn't the pip suggest to you a -strategy.  Meaning he doesn't really move out. 

It's to put you and your partner in the driving seat with the bank and prevent the rent receiver. Once that is done you put the house up for sale with the banks permission. Why did you go to pip, the expert in this area, if you refuse to act on his advice. Did you pay the pip?


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## Peabody (4 Nov 2018)

He said we should try at all costs not to have a receiver appointed. 
Offer to pay the arrears. He dictated the email to be sent and they came back that day to refuse the offer 
He also said if they refused the offer to say that he has moved out of the family home and into the investment property as they will find it harder to repossess property. - he would not be moving out. 

He would not accept any payment for his advice - it was offered-and said he would be happy to continue helping us. 
My concern is that the situation is a serious one that needs to be addressed urgently and I need advice from people who know what they’re talking about. 
I’m not saying he doesn’t know what he is saying but it’s important I get sound advice. The panic part is we have 11 days to make full payment and if no payment is received a receiver will be appointed. This is the last thing I want. I need to have this resolved by the end of this week.


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## Peabody (9 Nov 2018)

They have emailed us to say their client has refused our offer of a consensual sale and it will now go into receivership. Anyone know what happens now. What’s the procedure? I need to let the tenants know


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## Bronte (9 Nov 2018)

You don't mean receivership, you mean a rent receiver will be appointed. He will collect the rent.  He will pay himself and he'll pay some of the mortgage and this could go on for a very very long time and cost you a lot of money.

I don't understand why you don't go with the Pip's suggestion.

(The tenant's do not realise in all probability that the Receiver is not obliged to repay them the deposit and the Receiver will leave them in blissful ignorance of that, so if the tenant's are leaving for whatever reason, they shouldn't pay the last months rent.)


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## Peabody (9 Nov 2018)

Oh he sent him a really sweet email last night saying I have kicked him out and he is now living there. The reason we didn’t go ahead with the advice is because he backtracked and said they would look into it to see if he was really living there. We had told them there was tenants living there.


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## Peabody (9 Nov 2018)

Should he cancel the dd it’s due out again next week


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