BoI agrees to €152,000 write-down of mortgage debt

There could be private details that were considered.

Let them drown brigade 0 so its a good day for our society
 
I suspect that this practice is more common than people think - doubt the banks are going to be shouting about it from the roof tops !!
 
moneyhoney said:
This "debate" is all very interesting - but does anyone know WHY BOI wrote off this debt??? What makes this case so different to the loads of others who can't get permission to sell their house for less than the mortgage owed?
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My guess is she stopped paying the mortgage and they went for repossession. She agreed to a voluntary surrender to reduce legal fees and shorten the process. They then got a judgement for the balance - or a bit less than the balance as New Beginnings were claiming the short fall would have been less if they had allowed her to sell at an earlier date.
 
moneyhoney said:
This "debate" is all very interesting - but does anyone know WHY BOI wrote off this debt??? What makes this case so different to the loads of others who can't get permission to sell their house for less than the mortgage owed?
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The banks have always said that each case will be dealt with individually - that there will be no blanket formula for 'the ABC guide to getting debt forgiveness'. It's good to see the bank being pragmatic and recognising an unsustainable debt when they saw it. The woman involved was interviewed on RTE1 this morning but it was a very poor interview - no probing of the details which might have helped listeners understand why the bank did what they did. When asked what advice she would give others in similar circumstances/what she had done, she said first and foremost, she prayed and had god to thank for this happening; second she was grateful that the bank were merciful. And that was pretty much it for the advice!
monagt said:
There could be private details that were considered.
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Having listened to her interviewed, there are undoubtedly private details and considerations.
monagt said:
Let them drown brigade 0 so its a good day for our society
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I'm pretty sure whatever the opposite to the 'let them drown brigade' is want people to get debt write-offs AND keep their homes - that didn't happen here. Also, Bank of Ireland is only 15% owned by the state so it's less of an issue what an almost private bank does at a cost to itself - would be more of an issue if AIB/Anglo used taxpayer money to write off debts.

That said, for all banks this will have to happen more and more - surrender the home, have some overhang of debt but not so much that you can't restart your life.
 
This case does appear to be attracting attention because the debt relates to the client's PDH. In terms of standard bank debt collection practise, there is nothing unusual here. The main security was sold, leaving a large element of residual unsecured debt. The Bank negotiated a settlement that both parties could live with and provided the loan repayments are maintained end result is satisfactory. I.e. The Bank gets some of the shortfall back & the client has an incentive to pay the amount due. Normal debt collection procedure & Banks are regularly agrreing to deals such as this, if the alternative is a higher level of loan write off.
 
ClaireM said:
They then got a judgement for the balance - or a bit less than the balance as New Beginnings were claiming the short fall would have been less if they had allowed her to sell at an earlier date.
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Is this the difference? I know loads of people who have gone to their banks & asked to sell their houses (not all in arrears though) & convert the short-fall to a loan & have been given a flat no.
 
moneyhoney said:
Is this the difference? I know loads of people who have gone to their banks & asked to sell their houses (not all in arrears though) & convert the short-fall to a loan & have been given a flat no.
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I suspect she stopped paying and the bank went for repossession. If you are willing to go for this nuclear option the bank will take your house back at a certain stage. Of course they will most likely try to get everything else they can too.
 
She borrowed 245k and presumably paid some back in the beginning and then went in to arrear. So in the end, she possibly owed around 245k or maybe more with interest accrued. Up to 300k?

She thought the house would sell for a price that would cover the outstanding mortgage but there is a shortfall of 170k which I assume is after the house was sold. That would mean that the house sold for anything between 60 and 130k depending on what the outstanding mortgage was?

If the outstanding amount was closer to 300k, it is likely that she has been making no effort to pay anything over the last few years although there is nothing that says that she has been out of work or that her circumstance have substantially changed to allow her to now pay €250 per month?

Too many facts missing in the story but it really gives the impression that she has got a deal that thousands would like - lose the home and mortgage for 18k.
 
It is hard to make any sense of the figures in this case. Nothing about it screams "unsustainable" to me on the available facts.
 
Will all this publicity make it more difficult for a person to come to a settlement as lending bodies will be fearful it will be in the media the following day.
 
Conor Pope in this morning's Irish Times: [broken link removed]
You can hear the interview [broken link removed].

I too sense something fishy about the whole deal.
 
she has done very well for herself. Surely she will never get a bank loan let alone another mortgage as a result of this massive write-off?
 
she has done very well for herself. Surely she will never get a bank loan let alone another mortgage as a result of this massive write-off?
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I would hope not, but i wouldnt be so sure. My real worry is that with all of the talk of "getting the banks lending again" that the state owned banks will be pressurised into lending to people who shouldn't get loans, i.e. as a country we'll be repeating the whole banking mistake again.
 
bugler said:
It isn't different at all, except they agreed in this case, either because she was particularly persuasive, tenacious or it just made sense to them for whatever reason.
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It is different in that it comes after an extensive legal battle and I'd hassard a guess that the bank had concerns about their ability to succeed... It seems that there is some grounds to suggest that the bank failed to act in it's own best interests by selling the house in a timely manner. If the ruling went against them it might open up a whole big can of worms.....
 
bugler said:
It is hard to make any sense of the figures in this case. Nothing about it screams "unsustainable" to me on the available facts.
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Agree.

I am far from the let them drown brigade, but this case just doesn't make sense to me.

Did the borrower just hand back the keys or did she stay in the property until she was evicted?
 
Wishes said:
Agree.

I am far from the let them drown brigade, but this case just doesn't make sense to me.

Did the borrower just hand back the keys or did she stay in the property until she was evicted?
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She surrendered it voluntarily. I presume there must be some sort of consent on the banks side for this to occur(?)

From what I have pieced together from various sources, it seems that she was earning 70k or so when she bought the house; she was never made redundant at any point; she seems to have voluntarily wanted to pursue a role as a prison service nurse (!) which may have resulted in a drop in salaray to 40k or so and relocation; at some stage the house seems to have been let out.

If anyone can give a full and definitive account that would be great. But considering the lack of "hard luck" to this story it seems a strange one to be hawked in public. Or maybe that is the point. No redundancy, no failed business, no children, no one eating cardboard, a good working wage still being earned and by all accounts she seems to have got a deal an awful lot of people in worse circumstances would love to get.
 
Gives up well paying job to pursue a less paid job = Sounds like a strategic default to me.

Borrower continues to hold down job, admittedly less lucrative but still has the luxury of employment; surely she could have made interest only payments.

It's cases like this that give genuine, struggeling mortgage holders a bad name, myself included.
 
What would have been the situation if she just moved to work overseas 2 years ago instead, never to return? Would the banks still have sued her?
 
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