What happens if I stop paying my mortgage?

[cremeegg]

I am 15 years in to a 25 year mortgage. Tracker rate ECB plus 0.75%, no arrears.

The monthly payments are nearly €1,000. I would much prefer to spend this money on a holiday. What happens if I stop paying.

As a self employed person with lots of dependent children I could easily produce an SFS showing an inability to pay.

Threatening letters and nasty phone calls wouldn't register with me. I do not expect to ever need to borrow money in the future. I have never had a car loan.

I'm interested to know what the real consequences to me of a decision to stop or greatly reduce my monthly payments might be.

 

[newtothis]

I'm interested to know what the real consequences to me of a decision to stop or greatly reduce my monthly payments might be.

I'm assuming this isn't something you're actually thinking of doing, but a hypothetical to raise a point?

I would say the real consequence is that you’re opening yourself up to some long-term hassle and grief at the very least. One of the main complaints of the “can’t pay” people is that there’s no end in sight, even when they’ve partially or even fully recovered their ability to pay. The thought of willingly opening yourself up to the situation is mind-bending. Easy to say it would be water off a duck’s back, but if you’re faced with court appearances and the like, it’s a different story.

I don’t think there’s any real evidence you’d ultimately get away with it, and you would probably end up paying a lot more in interest than you otherwise would have. It would probably take a very long time to unwind for you, but it almost certainly would.

 

[cremeegg]

Hi Breakonthru. It is my PPR and I have no intention of moving. There is substantial equity, I bought it 15 years ago with a deposit and have been repaying cap & int. since.

I'm assuming this isn't something you're actually thinking of doing, but a hypothetical to raise a point?

Well it started out as a hypothetical but I am open to persuasion. Actually I am wondering what arguments there might be to persuade me not to go this route.

I would say the real consequence is that you’re opening yourself up to some long-term hassle and grief at the very least. One of the main complaints of the “can’t pay” people is that there’s no end in sight, even when they’ve partially or even fully recovered their ability to pay. The thought of willingly opening yourself up to the situation is mind-bending. Easy to say it would be water off a duck’s back, but if you’re faced with court appearances and the like, it’s a different story.

I'm trying to discover what exactly is the nature of this hassle and grief. Letters and phone calls are just so much air. A court appearance or two after a few years, is just a few days work preparing and a day in court. Very little effort really for €1,000 a month every month.

If I were to go into this with my eyes open I could hardly complain that there is "no end in sight". In fact that seems an advantage, I stop paying my mortgage and nothing comes to an end.

I don’t think there’s any real evidence you’d ultimately get away with it, and you would probably end up paying a lot more in interest than you otherwise would have. It would probably take a very long time to unwind for you, but it almost certainly would.

There seems to be very little evidence that I would not "get away with it" as you say. For example would I loose my tracker. If not then the interest costs would not come to very much extra.

In time you say it would unwind, well how? And if it did would I not get the opportunity to recommence paying to further extend.

 

[Brendan Burgess]

Hi cremeegg

If you can pay your mortgage, you should do so.

• You will own your home mortgage-free earlier
  
• Your credit record will not be affected so you will be able to borrow again for normal credit purposes or to trade up
  
• Your mortgage is less likely to be sold to a vulture fund

If you don't pay your mortgage

• While there is a very small risk at present of the lender being able to repossess, this might change. In fact, I am campaigning for it to change so that a lender can fast track repossessions against those who don't pay
• The arrears will build up and the longer you leave it, the more difficult it becomes to solve.
  
• Your mortgage is more likely to be sold to a vulture fun.

But to answer the question you asked...

Very little would happen. It would depend to some extent on what bank you are with and which county you live in.

If you owe €100,000 today, you would owe €100,750 after one year. €101,500 after two years.

The lenders don't charge penalty interest on arrears - even on trackers.

Depending on the lender, you would get a few calls- ignore them. You might even get a letter or two - ignore them.

Eventually they will refer the case to a solicitor. They will write to you. Ignore it.

They will issue proceedings but then comes the tricky bit for them - they have to find you to serve them on you.

You will get a Registered Letter. Refuse it.

A summons server might well call to the door. Make sure not to answer it.

(If there are two names on the mortgage, they have to find both of you.)

The banks and their solicitors are so disorganised that they might well let the proceedings run out of time, and they will have to go back to court to get a New Return Date.

Then they would have to apply to the court for Substitute Service - maybe the Registrar would give the bank permission to pin the summons on your front door.

Some years after you stop paying, your case would come up in the Circuit Court.

You would get what is called a Practice Direction Adjournment on your first visit to give you time to engage with your lender. There is no need to attend. This is granted automatically, whether or not you show up in court, or whether or not you have paid anything for some years.

At the next court appearance, you should probably attend and you could argue that you have done your best to engage, but the bank just won't engage with you.

With any luck, something else might happen to delay it

• A new Companies Act might require them to add or subtract DAC from their name, but they didn't get around to doing it.
• They might have sold your loan to a vulture fund, but forgotten to register it properly

If you do absolutely nothing, don't pay anything at all, and don't show up in court, they will eventually reach a situation where the Registrar will be prepared to grant them an order.

It's very likely that the solicitors will have messed this up and wont' get the order.

• They probably forgot to serve notice of something on you
• Or they don't have an up to date statement of account
  
• Or they don't have an affidavit that they adhered to the CCMA
  
• Or they don't have an affidavit that you are not affected by the TRacker Mortgage Scandal (despite the fact that you have a tracker mortgage.)
• (There are probably around 20 more hurdles for them to slip on.)

Or it's even possible that on one of the occasions, the solicitor might not show up and the proceedings are dismissed for want of prosecution.

You probably should start taking some notice of it at that stage. There are a few options

• A few days before the hearing submit a half completed SFS - the bank will apply for an adjournment to consider it.
  
• There is a good chance that they won't have finished considering it by the adjourned date, so they will apply for another adjournment.
  
• At the next adjournment, tell the Registrar that you have just met MABS outside the court and have made an appointment to meet with them. You will get another adjournment. In fact, there is a good chance that the Registrar will ask you if you have consulted MABS and then adjourn it to allow you to do so. If so, pick a very busy MABS which won't be able to give you an appointment until after the adjourned date.
  
• At the adjourned hearing, tell the Registrar that you have made an appointment with a PIP - that will give you another few months
• At the next hearing, tell the Registrar that the PIP has applied for a Protective Order and you will get another adjournment.
  
• Then tell the Registrar that the PIA wasn't appropriate, so you are applying for Mortgage to Rent.
  
• Somewhere along the way, make sure that your spouse, child or parent is sick so request another adjournment

After some years, they might get an order for possession.

You should probably take it seriously at that stage and start paying. The lender will probably agree a restructuring with you.

If you are with Bank of Ireland or a vulture fund, then you should probably be a bit more careful. They are more serious and better organised. They are far more likely to get an order against you and to execute that order. If you are with ptsb or AIB, it's unlikely that they will be able to clear all the hurdles.

Check your local Registrar's Court to see what you can get away with. For example, if you are in Wicklow, the Registrar there will see through this.

An alternative strategy

Pay something from time to time
When they send you an SFS, half fill it in and send it back.
They will ask you for more information
Give it to them in dribs and drabs

If they don't give you an alternative payment arrangement, appeal it.
When they reject that, appeal the process to the Financial Services Ombudsman

Study the CCMA in detail. You should be able to find some breach of it.

Show up in court and tell the Registrar you are doing your best.

Things to avoid if you don't want an order against you

Don't make a legal argument e.g. That the bank's loan to you was irresponsible. The Registrar will send it to the Judge's List and this is the last thing you want. The Judge will probably make a decision.

Don't shout at the Registrar or Judge.

Avoid the anti-repossession advisors. They will make spurious legal arguments which could speed up your case. There is no need for them.

 

[Brendan Burgess]

I am campaigning to stop behaviour like this.

I want a fast track repossession process for people who don't pay anything.

But no politician will agree with me.

Brendan

 

[Sarenco]

Hi Brendan

It's kind of shocking when you see the reality laid out like that - our system really is a charter for strategic default.

Amazing that anybody bothers to make mortgage repayments.

 

[RedOnion]

Excellent summary @Brendan Burgess

 

[newtothis]

Three statements stand out to me:

After some years, they might get an order for possession.

So, it might just happen.

Check your local Registrar's Court to see what you can get away with. For example, if you are in Wicklow, the Registrar there will see through this.

What if the registrar changes to a new one for your next court appearance?

Don't make a legal argument e.g. That the bank's loan to you was irresponsible. The Registrar will send it to the Judge's List and this is the last thing you want. The Judge will probably make a decision

Or they see through what you're up to and do that anyway?

Do you really want to take that kind of risk with your home?

I'm not saying the system isn't in need of reform, but my point is there is a non-trivial risk that you will lose your home. Do you really want to live with that hanging over you? It's mind boggling to me that anyone would take on that kind of stress when they don't need to.
​

 

[Fella]

Is it wise to show people how easy this is ? I’m sure some people are going to read this and decide it’s worthwhile.

 

[Brendan Burgess]

It's mind boggling to me that anyone would take on that kind of stress when they don't need to

Hi newtothis

Agree fully with you and so do 95% of people in arrears, but apparently cremeegg is made of stronger stuff than we are:

Threatening letters and nasty phone calls wouldn't register with me.

 

[Andy836]

I'm not saying the system isn't in need of reform, but my point is there is a non-trivial risk that you will lose your home. Do you really want to live with that hanging over you? It's mind boggling to me that anyone would take on that kind of stress when they don't need to.
​

Seriously? What stress?

The person literally has to do nothing and they get free accommodation for years. Then they've to turn up in court a handful of times to get another few years on the free.

Anyone who gets "stressed" by phone calls or bits of paper in the mail probably shouldn't get a mortgage. They probably shouldn't have a driver's license or operate heavy equipment either.......

 

[noproblem]

To be honest and blunt, this particular thread is nothing more than someone advocating fraud. You get a loan from someone, you pay it back. It's called manning up. The snow is almost gone, hope the flakes do too. There's enough parasites living off the system.

 

[newtothis]

Anyone who gets "stressed" by phone calls or bits of paper in the mail probably shouldn't get a mortgage.

So, you're saying you wouldn't find it stressful you could loose your home at pretty much anytime? It's not just pieces of paper and phone calls. Pretty much everyone in the legal world will tell you that there is absolutely no certainty of outcome in attending a court. Not much of a problem when the stakes are relatively low such as points on a driving license, but your home? As I said, mind boggling.....

 

[cremeegg]

So, you're saying you wouldn't find it stressful you could loose your home at pretty much anytime? ...

If I believed that I could loose my home at any time I am sure I would find it extremely stressful.

Nothing on this thread or elsewhere indicates that if I stopped paying my mortgage I would be in that situation.

 

[Firefly]

Excellent post Brendan and quite worrying.

I wonder, as is the case with insurance firms who catch out dodgy claimants who post themselves weight lifting on Facebook and the like, in the case of strategic defaulters, will the banks employ similar tactics? Could the also present postings on Facebook and/or photos of people they think are strategically defaulting engaging in expensive activities such as holidays??

 

[newtothis]

If I believed that I could loose my home at any time I am sure I would find it extremely stressful.

Nothing on this thread or elsewhere indicates that if I stopped paying my mortgage I would be in that situation.

Then I think you should re-read it more carefully, especially Brendan's posts and the items in them I highlighted. For sure, it's a long and protracted process, but each and every time you step into a court you are taking a risk, which is what I meant when I said it could happen at any time. There are plenty of cases where messers have been thrown out of their homes who then splutter: "but, but, but...." when it's too late. The risk may be low, especially in the near term, but the stakes are very high. I can live with long odds when it comes to buying a lottery ticket, but not when loosing the roof over my head, especially if those odds shorten with each passing day. If you can't see this and lack the imagination to be stressed by it, good luck to you, but you'll need it. You won't get any sympathy when things go wrong as they almost certainly will in the long term.....

 

[newtothis]

Excellent post Brendan and quite worrying.

I wonder, as is the case with insurance firms who catch out dodgy claimants who post themselves weight lifting on Facebook and the like, in the case of strategic defaulters, will the banks employ similar tactics? Could the also present postings on Facebook and/or photos of people they think are strategically defaulting engaging in expensive activities such as holidays??

Exactly, and even if they don't, you have the stress of wondering "what if they do?". Of course, you can live in a fool's paradise for a while, willfully and blissfully ignoring the axe hanging over you (and your family's) head.......

 

[Fella]

I find this thread deeply upsetting , as a father to 2 young children I wonder what direction this country is going. Where has it all gone wrong? People used to have some pride and would pay what was due now it seems to be a free for all get away with what you can . I'm not blaming individuals it is very difficult to work hard and cut your cloth to measure only to see others been handed stuff for nothing.

I had a chat with a guy a few months ago and it really really annoyed me , basically the gist of it was - He works with me , he is renting an apartment and paying 1800 a month I was saying thats colossal on your wages , he said he is living on his own till his "mot" gets a place shes moving into new 4 bed in Swords , digging deeper it appears they were renting a place supposedly split up she moved back to her ma's with 4 kids , she got a hotel room been homeless for 3 years and has now been given a house in a new development in Swords . This new development is lovely and I would love to live there myself but it would be a tight stretch for me to afford it. He said not only that but fingal county council are going to tile it all and put new furniture in , then he will move in. He says " they are throwing houses at people " just say your homeless get a hotel room "my mot never seen the inside of the hotel room" she stayed in her ma's and the kids with me most nights.

I haven't verified any of the above it sounds plausible , I was just too ****** off to even check the details.

What can be done about all this ?
Why are the government housing people in expensive new builds?
If we make it less appealing to people ie. house them in run down areas , I think we are less likely to see people follow this path.
It seems to be that there are certain people from areas that know how to play the system so well.
I find the whole thing disgusting.

 

[Fella]

• Somewhere along the way, make sure that your spouse, child or parent is sick so request another adjournment

Brendan what has happened your postings on this site , your rules are not consistent I had a post deleted before because I discussed if government brought in some wealth tax I could withdraw my investments and hide my money in Betfair , it was deleted because it didn't meet the posting guidelines , but it seems its ok to give people a guide on the best way to stop paying the mortgage and get away with me. Disappointed in this site.

 

[LS400]

Hold on a moment,

Typical of folk here to sound off at the person highlighting the pathetic state of our legal system with regard to reprocessing a property in this Country. Would you all just prefer to assume this carry-on just doesn't happen and go back to sticking your heads in the sand.

Creamegg imo, would be fairy savvy, and in his op post, is asking a very valid question. "What should I fear in This Country" by not honoring my debts, Its so vaild, that as word spreads how easy it is, there are folk who see themselves as fools for not giving it a go.

Brendan has explained in great detail, that if you want to frustrate the system, its too easy. He is not saying you need to do this, but purely pointing out, the system not only lets you, but encourages you to do so.