Brendan Burgess
Founder
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On researching this Key Post A guide to splitting up while in negative equity, I was struck by the huge number of couples who are stuck in limbo.
The lender will let Ando out of a joint mortgage if he can come up with €40k for his share of the negative equity.
gemma has moved out and wants to sort out matters, but her ex just won't engage.
Sara's ex moved out 4 years ago and she has paid the mortgage ever since. Now he is insisting on moving back in.
I don't think that a simple change in legislation will solve these serious problems, but I wonder if there is anything which can be done to ameliorate them.
How can the bank be encougaged to be more flexible?
Fron the bank's point of view, they lent the amount of money they lent to the couple on the grounds that they would both be responsible for repaying the mortgage. If one lost their job or stopped paying for any reason, the other would be responsible for the full amount. If they did not have joint and several liability, the bank would not have lent the money.
It would not be unreasonable for the bank to take John's name off the mortgage, especially if it's in negative equity or if it's in arrears or if Mary does not have the income with which to service the mortgage.
In Ando's case, the lender and his ex have agreed that if he pays €40,000 off the mortgage, the bank will let him off the mortgage. But he does not have €40,000.
The bank should be prepared to do an accounting split of the mortgage, so that €40,000 would be in his name and the balance in her name. He can then focus on paying off the €40,000 as quickly as possible. When it is paid off, they let him off the mortgage.
While this should be simple enough to do, the bank may be reluctant to do it, in case it weakens their joint resolve to pay off the mortgage.
As noted in Ando's case study, Ando and his ex can reach a binding agreement in writing between themselves, that if she pays the mortgage, he renounces any interest in the house.
The lender will let Ando out of a joint mortgage if he can come up with €40k for his share of the negative equity.
gemma has moved out and wants to sort out matters, but her ex just won't engage.
Sara's ex moved out 4 years ago and she has paid the mortgage ever since. Now he is insisting on moving back in.
I don't think that a simple change in legislation will solve these serious problems, but I wonder if there is anything which can be done to ameliorate them.
How can the bank be encougaged to be more flexible?
Fron the bank's point of view, they lent the amount of money they lent to the couple on the grounds that they would both be responsible for repaying the mortgage. If one lost their job or stopped paying for any reason, the other would be responsible for the full amount. If they did not have joint and several liability, the bank would not have lent the money.
It would not be unreasonable for the bank to take John's name off the mortgage, especially if it's in negative equity or if it's in arrears or if Mary does not have the income with which to service the mortgage.
In Ando's case, the lender and his ex have agreed that if he pays €40,000 off the mortgage, the bank will let him off the mortgage. But he does not have €40,000.
The bank should be prepared to do an accounting split of the mortgage, so that €40,000 would be in his name and the balance in her name. He can then focus on paying off the €40,000 as quickly as possible. When it is paid off, they let him off the mortgage.
While this should be simple enough to do, the bank may be reluctant to do it, in case it weakens their joint resolve to pay off the mortgage.
As noted in Ando's case study, Ando and his ex can reach a binding agreement in writing between themselves, that if she pays the mortgage, he renounces any interest in the house.