How much do i save the bank for voluntary surrender when forced to sell?

[Adecco]

AS i said on another thread recently, I plan on approaching bank on doing a deal on residual debt in return fod assisting by agreeing to voluntary surrender.

I do plan on getting professional assistance on this.

All properties are very nearly sale completed - its just a case of pulling teh final trigger.(After 12 months since i advertised them it should all be done and dusted in the next 4 weeks)

They are all currently still let out and bank are receiving the rent which pretty much covers the ongoing interest over the last year since this process started.

IF i had to guess, between all the mortgages and re-mortgages i'm paying on average maybe 3.5% on interest.

If the bank refuse to negotiate a deal in return for me doing a voluntary surrender then i would simply hand them back the keys and force them to sell them from scracth instead. Essentially thats my bargaining chip.

They would then presumably face a number of expenses.

• Repossession fees
• Estate agent fees
• conveyancing fees
• Paying interest on outstanding mortgage due to no tenants paying rent for the duration of all the above which could feasibly last a year or more

So - my question is - the total outstanding mortgages are c. 1.2 million
IF the entire process took the bank a year for instance to sell them themselves should i just give them back the keys, how much interest would they pay on the 1.2 million over the year?

Also - are there any other expenses the bank would incur in having to sell them?

Basically - i just want to have an idea i would be saving the bank if i completed on all property sales voluntarily over the next 1-2 months.
I could then use this figure in trying to reach an agreement as part of my negotiation on residual of agreeing to voluntary surrender. (The idea being having the deal struck and then i complete on properties)

I see the ECB base rate is now just 0.25%. IS that all they would be paying on the 1.2 million? These mortgages were taken out around 2006/2007 by teh way.

Essentially - i am wondering how much i am saving teh bank is selling them. The properties in total are worth c. 800k.

As i outlined in the other thread i can easily go bankrupt as i am a single guy living in UK with no dependencies. However a relative is on the hook for 100k guarantee. SO effectively the most bank can get is capped at 100k.

SO my plan would be deduct whatever i am saving the bank by voluntary surrender and deduct from the 100k and offer that as a full and final settlement.

THanks

 

[Bronte]

I don't think banks see the world the same way you do. As far as I know BofI have stated no negotiations, not sure what they do in reality.

Are you talking to your bank? Who is it?

The banks will get the proceeds of the properties and the 100K from your relation. I'd be worried for your relation. And if I were you're relation I'd probably be mad at you for costing the bank more money meaning they were more likely to have to need all the 100K from the relation.

 

[Gerry Canning]

addeco;

A few things seem (wrong) on this.
1. It appears you have organised sale @ k800 without Bank agreement on residual and in particular the status of guarantor?
2. If Bank are getting rent that covers interest on a rising market ,why would they even agree to permit a sale to go through now? and take a possible k400 hit?

Maybe your best course is have a head to head with Bank.Tell them your options as you now see it. Do this in a very very calm practical manner , do not get locked into they will save money etc,if you assist, they may have been stupid but they are very aware of costs v losses, no one appreciates being told the obvious!.
It may well be they will (kill) the guarantee in exchange for your continuing co-operation in sorting things .
If you are not in agreement with their proposals , you can ,as you say take UK Bankruptcy and expect guarantee k100 to be called in.

I think a proper final hard meeting is needed with Mr Bank.

In answer to your question;
I would expect that if you go bankrupt Mr Bank in sorting properties would take more hit than the possible value on guarantor of k100.

Boils down to
1. You may have guarantor on hook for K100.
2. Mr Bank on hook for sorting a Bankruptcy mess.

From my perch , I think Mr Bank will be pragmatic and take the known cost of agreed voluntary sale,and kill off the guarantee as a better financial option to you seeing Bankrupcy as a tidier option..
As Bronte asked , which Bank? some are bullish/some not?

 

[Adecco]

To clarify, the bank have insisted i sell as i was unable to keep up with capital and interest repayments (It went capital and interest last year - prior to this i could afford interest repayments)
SO it is on the instruction of the bank that i am selling.

The bank is AIB by the way.

@GerryCanning - you are correct in that i proceeded to organise voluntary sale at AIBs request without trying to determine an agreement on residual debt in advance. I'm now beginning to realise that was a terrible mistake. However - they have not been sold yet.

So basically as i discussed on another thread i have 2 choices:
- Sell voluntarily
- Just hand back the keys

Either way, Tthe most the bank get is 100k as i can go bankrupt if needs be.

SO - before i complete on voluntary sale i plan on going to bank and ask them deduct the savings they have made in return me selling voluntarily. It doesn't make any financial sense for the bank to take back teh keys and start from scratch. They dont gain financially.

So my query is - how much do the bank save in me selling the properties for them ?

I want to deduct this much from 100k as a negotiation in return for selling voluntarily.
I'm just looking for a ballpark figure as an idea.

@Bronte: The bank will be going after the 100k anyway as teh debts are near 400k. SO that's unavoidable regardless of what action is taken. My aim now is to reduce that amount if possible - hence agreeing to sell voluntarily to use as a negotiation tactic

@GerryCanning - I'm not sure what you mean by 'kill off the guarantee'?

 

[Adecco]

addeco;



In answer to your question;
I would expect that if you go bankrupt Mr Bank in sorting properties would take more hit than the possible value on guarantor of 100k.

i only saw this line now.

So it could cost more than 100k to the bank for them to sell themselves ? (including presumably interest charges they have to pay during sale period).

SO i presume your final line in your post means you think it would make financial sense for them to take voluntary sale as a write off of teh lot including guarantor?

I must say i didn't think it would cost the bank 100k to sell the properties. That is assuming i am understanding your post correctly?