Sub Prime Lender query

[Mr peabody]

Hi, Im just looking for a bit of info regarding mortgage.

Self employed in Construction in 2007 when mortgage was taken out with Start mortgages . Net income of approximatly 40k at time of application- Work ceased in mid 2008 and began self employment in different sector in 2010- current net income of approx 25k with the potential to make a little more.

My wife works part time on a net income of 9k- she had a jobseekers allowance payment of 135 euro per week but that was discontinued this month.

Childrens allowance of 400 euro per month.

Mortgage Interest supplement was payed at a rate of 275 euro per week in 2011.


PERSONAL CIRCUMSTANCES.

Two Adults in household

two cars required for getting to work as we live in a very rural location

Two children between 4 and 11

One child between 12 and 18

All children in school so no childcare costs.


HOME LOAN

The loan is with Pepper

Amount 356k

Value of house-approx 150k

Interest rate- SVR of 6.9%

Repayment-2,120

Arrears-15k

We are currently in MARP process - pepper have been very unwilling to put some sort of medium term agreement in place. have paid a minimum of 850 euro per month for 80% of the lifetime of the loan and TRS was paid at a rate of 500 euro per month from 2008 until earlier this year-it is now at a rate of 160 per month and we voluntarily increased payments to 1000 at the beginning of this year.

CREDIT UNION

There is a CU loan of 4k with approx 3.5k in savings- monthly repayments of 240 euro. Pepper keeps putting on considerable pressure to clear this loan but I am unwilling to do so as this is our only source of a small loan for car replacement , medical emergencies etc.

We have no other loans and unfortunately no savings or investments.

No lump sums on the horizon.

It is of the utmost importance to keep the house as it is the family home and was built on family land.


Whether it is relevant or not I feel that the house is of very little value to the bank as it is built in a very remote, rural location without any landscaping done on a large site and would be difficult to sell. I am willing to make a substantial payment but with the Loan to Value, The extortionate interest rate and the lenders unwillingness to make any sort of arrangement for longer than a couple of months the whole thing is pretty daunting. .

Any advice greatly appreciated and many thanks in advance......

 

[Gerry Canning]

You got mortgage k350 on salary k40.= madness (by the lender).
You now have a shortfall k200 twix value and mortgage.
You say {utmost importance} to keep home on family land.
....................................................................................
Pepper are getting 1,000 per month ,so their interest costs are covered and the Risk of repossession is hence stalled.
Pepper will live with you paying 1,000 for long nuff, but that is NOT a solution.
.........................................................................
From what you say ,you can never ever own that home.(much as you want to keep it)
...........................................................................
Approach Pepper and ask to have mortgage reduced to k180 on the basis you can afford 1,000 per month and that house is not worth that, so it is the best/worse solution for you both.
......................................
I cannot see an easy solution here but maybe pepper will accept the k180 over circa 20 years.
From their view a forced sale gets them less.

If you go for (insolvency/bankruptcy ) you will get the k200 loss off your back .
I APPRECIATE you want to keep it but ??

Good luck.

.

 

[44brendan]

Above proposed solution will not be accepted. Ie. Pepper will not agree to write down loan to the value of the property (would that it were not so but that will not be done). Gerry is right in that you are unlikely to be re-possessed in the short term if you continue paying 1k pm. However, all you are doing is effectively "renting" the property at the moment. This is not a long term solution and sooner or later Pepper will be forced to increase the pressure to reach a long term solution or to instigate re-possession.
My consistent advice in situations like this is to seek professional help from a good advisor. Jim Stafford on this forum seems to operate in this area. May be no harm to contact him or if you know someone in your locality who operates in this area. Do so sooner rather than later.

 

[Mr peabody]

Above proposed solution will not be accepted. Ie. Pepper will not agree to write down loan to the value of the property (would that it were not so but that will not be done). Gerry is right in that you are unlikely to be re-possessed in the short term if you continue paying 1k pm. However, all you are doing is effectively "renting" the property at the moment. This is not a long term solution and sooner or later Pepper will be forced to increase the pressure to reach a long term solution or to instigate re-possession.
My consistent advice in situations like this is to seek professional help from a good advisor. Jim Stafford on this forum seems to operate in this area. May be no harm to contact him or if you know someone in your locality who operates in this area. Do so sooner rather than later.

Above proposed solution will not be accepted. Ie. Pepper will not agree to write down loan to the value of the property (would that it were not so but that will not be done). Gerry is right in that you are unlikely to be re-possessed in the short term if you continue paying 1k pm. However, all you are doing is effectively "renting" the property at the moment. This is not a long term solution and sooner or later Pepper will be forced to increase the pressure to reach a long term solution or to instigate re-possession.
My consistent advice in situations like this is to seek professional help from a good advisor. Jim Stafford on this forum seems to operate in this area. May be no harm to contact him or if you know someone in your locality who operates in this area. Do so sooner rather than later.

Thanks Brendan

 

[Mr peabody]

You got mortgage k350 on salary k40.= madness (by the lender).
You now have a shortfall k200 twix value and mortgage.
You say {utmost importance} to keep home on family land.
....................................................................................
Pepper are getting 1,000 per month ,so their interest costs are covered and the Risk of repossession is hence stalled.
Pepper will live with you paying 1,000 for long nuff, but that is NOT a solution.
.........................................................................
From what you say ,you can never ever own that home.(much as you want to keep it)
...........................................................................
Approach Pepper and ask to have mortgage reduced to k180 on the basis you can afford 1,000 per month and that house is not worth that, so it is the best/worse solution for you both.
......................................
I cannot see an easy solution here but maybe pepper will accept the k180 over circa 20 years.
From their view a forced sale gets them less.

If you go for (insolvency/bankruptcy ) you will get the k200 loss off your back .
I APPRECIATE you want to keep it but ??

Good luck.

.

Thanks Gerry

You got mortgage k350 on salary k40.= madness (by the lender).
You now have a shortfall k200 twix value and mortgage.
You say {utmost importance} to keep home on family land.
....................................................................................
Pepper are getting 1,000 per month ,so their interest costs are covered and the Risk of repossession is hence stalled.
Pepper will live with you paying 1,000 for long nuff, but that is NOT a solution.
.........................................................................
From what you say ,you can never ever own that home.(much as you want to keep it)
...........................................................................
Approach Pepper and ask to have mortgage reduced to k180 on the basis you can afford 1,000 per month and that house is not worth that, so it is the best/worse solution for you both.
......................................
I cannot see an easy solution here but maybe pepper will accept the k180 over circa 20 years.
From their view a forced sale gets them less.

If you go for (insolvency/bankruptcy ) you will get the k200 loss off your back .
I APPRECIATE you want to keep it but ??

Good luck.

.

Thanks Gerry for you inputs and on my previous non template post.

Another option I hav wondered about is if we did get a 3/4/5 year reduced payment from Pepper and kept our noses clean regarding any other credit commitments-is there any possibility that some other "proper" lender
would give us a loan to value mortgage.....

 

[44brendan]

Short answer on this may be a little blunt but NO you have no chance of a re-mortgage in the short/medium term!