Lender says they are taken possession of investment property in 10 days from today.

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mrpepeless

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I urgently need an advice on what to do about my mortgage arrears.

My bank wrote to me today to say they are taking possession of my two investment properties.

One of the property is in arrears of €6,000 and the other is in arrears of €8,000.
The arrears was because the bank refuse to accept interest only payment and they were charging principal and interest on both properties.

The rent on mortgage one is €500 monthly mortgage is €980.
The rent on mortgage two is €780, monthly mortgage is €1,050.
I am paying €470 monthly to cover interest only on each mortgage.

My question now is how do i resolve this issue with the bank?
 
Is it €470 total or €940 total payment being made to bank? If total rent is €1,280 where is the rest of the rent you receive going?
 
mrpepeless said:
The arrears was because the bank refuse to accept interest only payment and they were charging principal and interest on both properties.
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Do you have a full term interest only mortgage?

If not, the bank is fully entitled to demand the full repayments.

You are in arrears, because you are not making the full repayments not because the bank refuse anything.

They cannot take possession without a court order.

They can appoint a rent receiver.

Would you like to post up the actual wording of the letter?

Brendan
 
It would be good to know the institution.

As Brendan said, they can appoint a rent receiver easily enough. You will still own the property, but any decision relating to it is taken away from you. Bank of Ireland would have done this with loads of investment mortgages in arrears.

You should put up more detail on what you have offered the bank and what they responded with.
 
Apparently not. They do it all the time without court orders. Or maybe they are administrative orders of the court?
 
Maybe the power to appoint a Receiver is incorporated in the Mortgage document as it is in a Compaany Mortgage
 
dewdrop said:
Maybe the power to appoint a Receiver is incorporated in the Mortgage document as it is in a Compaany Mortgage
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I understand that the majority of the Lenders, who have provided loans secured on either commercial properties or residential investment properties, have the power to appoint a property receiver (to collect rent, sell the property etc) included in their mortgage documentation.
 
Thank you for the response.
This is the full text of the letter to me.

We refer to the loan facility made to you by IIB Homeloans (now KBC Bank Ireland plc) (the “Bank”) pursuant to the above mentioned account (“the Loan Account”).
Please note that as of today’s date, the arrears on the Loan Account stand at €10,569,15.
Under the terms of your loan facility all sums outstanding by you including the capital balance are immediately due by reason of the default by you in making the scheduled repayments.
Accordingly, we hereby demand repayment of the balance outstanding on the Loan Account within 10 days of today’s date. The balance outstanding on the Loan Account as of today’s date is €216,784,07, which amount is inclusive of arrears in the sum of €10,569,15.
In the event that you do not discharge the full sums due owing within 10 days we will be entitled to take legal action to obtain judgement for the sums due together with interest and costs.
As a result of your defaulting on the terms of your loan facility we are now entitled to possession of the property. We hereby call upon you to deliver up possession of the property within 10 days of the date of this letter.
Pursuant to the terms of Indenture of Mortgage executed by you we are entitled to appoint a receiver over the property. In the event that you do not deliver possession of the property within 10 days from the date of this letter we intend to appoint a receiver over property. This appointment will be made without further notice to you. The Bank may also issue legal proceedings in which it will seek possession of the property.
Please note that you will be liable for the cost of such actions. An approximate guide of the costs of such proceedings would be €10,000. This estimate is merely indicative of the costs of such proceedings and in certain circumstances the costs can substantially exceed this amount. If proceedings are protracted this will increase the overall costs incurred. The estimate provided is in compliance with Section 134 of the Consumer Credit Act 1995. You will also be liable for the payment of your own costs (including legal costs) and (if ordered by Court) the cost of any other part (if any) involved in such proceedings.
Please note this demand is without prejudice to and shall not be construed as a waiver of any rights or remedies which Bank may have, including the right to make further demands in respect of sums payable to it.

all advice will be highly appreciated
 
What does your solicitor say?

I presume you can't pay the arrears?

How much have you been paying per month over the last year?
 
jdwex said:
Is it €470 total or €940 total payment being made to bank? If total rent is €1,280 where is the rest of the rent you receive going?
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I am paying total of €940 for the two properties.

One of the tenant on the property is out of job,his payment is never regular. Asking him to vacate the property will mean the house may be unoccupied for months.
There was a time when the property was vacant for 5 months,the property is in county Westmeath. the property value now is in the region of 160,000 to 190,000.
 
jdwex said:
Is it €470 total or €940 total payment being made to bank? If total rent is €1,280 where is the rest of the rent you receive going?
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The differential goes towards the insurance and maintenance of the property.
 
It's hard to know. Fill in the Case Study format to get more comprensive ideas.

Most lenders are happy if they get all the rent. But they presumably think you can pay more, but are not prepared to.

Brendan
 
Brendan Burgess said:
What does your solicitor say?

I presume you can't pay the arrears?

How much have you been paying per month over the last year?
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we have been paying 470 euro every month. The property was vacant for over five months and we informed the bank,yet we were still the 470 euro. but they insisted on the full payment.
The present tenant is paying 500 euro monthly. His payment is never regular because he is out of job.
 
I received the same letter yesterday saying exactly the same thing as mrpepeless got. I'm wondering does this now mean that a Receiver has to be appointed within the 10 days or what can I do to avoid this happening - apart from the obvious of paying the mortgages which I am not in a position to do. I have two BTL properties, the only rent coming in for the past couple months is 300eu - which I give to the bank. I have just one tenant in one house as his partner moved out, and the other property is vacant all summer.
 
In both your cases, why did you not evict a non paying tenant immediately?
There is a large pool of tenants in ireland, at the right price.
Did both of you consider lowering the rent to attract a better, more stable tenant?

If distance to manage the property is an issue, there are mgmt companies offering this service. You would only lose a months rent and they could handle vetting, lease, keys, rent collection, etc.
 
Trustmeh wrote:
Code: 
There is a large pool of tenants in ireland, at the right price. 
Did both of you consider lowering the rent to attract a better, more stable tenant?
Hmm, maybe not so in Westmeath.

The best course of action is to speak to a solicitor on the matter. It sounds like the process is now at a stage where there is little choice with regards to resolving the matter- as the letter has stated, pay arrears or hand over the property.
 
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