This is a bit of a long story and if the like is covered elsewhere I apologise - I did a search...
My in-laws have got themselves into a terrible mess with a mortgage... I'm putting in all the facts as best I have them. Any advice on what my in-laws can do would be appreciated:
In 2006 my wife's brother was in the process of buying a home for about 300K out in the middle of nowhere in rural Cork, near his wife's family, when the mortgage application ran into a problem. The story was they couldn't get mortgage protection because his wife was in remission from cancer and so the sale was going to fall through.
The brother-in-law went to his father, my wife's father, for help. The father had cleared the mortgage on the family home a year or two earlier, but had no real savings. So the son asked him to remortgage the family home, and use the money to buy the son's house. The plan was supposed to be that the son would make the mortgage repayments and would then buy out the father altogether a few years later when they had built up more savings and mortgage protection would no longer be an issue.
Yeah, I know...
So the father was given a 15-year re-mortgage (because he was 55 at the time) and bought the house the son wanted. They then went interest-only for an initial 3-years. The interest-only repayments came out of the father's account, and the son reimbursed him each month.
As the three years was drawing to a close it was obvious the son was in no position to get his own mortgage - they had often been late with payments as it was. For good measure his wife lost her job, or was fired, in the meantime and hasn't worked since, claiming that she has an unspecified sickness. So the family kept kicking the can down the road and arranged extensions on the interest-only payments right up until last October when the bank (Ulster Bank) finally refused to extend any further.
So this is the mess: My father-in-law now owes the full principle on the son's house to the bank, to be paid over 8 years. He's 62 and still has a well paid job, but his employers want him to retire and the bank are eyeing up his retirement package. He has cancelled the direct debit and is now manually making the equivalent of the interest-only payment. A guy from RBS rang him yesterday to tell him he's now 6K in arrears.
The house has been valued by an Estate Agent at 200K. The son has a combined salary and BIK of about 50K (I think). We have no idea what their financial situation is otherwise - a combination of hoping the issue would go away and relationship breakdowns means getting all parties to have a calm, frank discussion has so-far been impossible. My wife's brother resembles an ostrich, refusing to answer phone calls, hanging up the phone or ringing his parents drunk and in tears late at night. My in-laws are still afraid to push too hard because they're afraid he might do something stupid and they also think there's more went on back in '06 than has ever been admitted.
They have tried to talk to Ulster Bank about some kind of restructure, and have hired a solicitor to help them, but the bank seem to be pretty obtuse (maybe you can't blame them - but the bank employees have even failed to keep the appointments they made themselves and more than once one of my in-laws has been left sitting waiting for someone who hasn't showed up!).
So my in-laws went from being debt free at 55 to all this at 62 to help their son and now they're very frightened. Obviously if they could go back in time...
The ideal would be for the son to somehow still buy the house, even for, say, 260 K and the in-laws would be prepared to suck up the rest to make it all go away. But there appears to be no chance he'd get a mortgage for anything of the sort.
I was thinking maybe Ulster Bank bank would look at the fact he has paid 1100 euro odd a month for 6 years and could be given a 30-year loan, for example, to buy out the parents 8 year loan?... Better than repossession?
Anyway any ideas at all would be great. I'll try and answer any questions as best I can.
My in-laws have got themselves into a terrible mess with a mortgage... I'm putting in all the facts as best I have them. Any advice on what my in-laws can do would be appreciated:
In 2006 my wife's brother was in the process of buying a home for about 300K out in the middle of nowhere in rural Cork, near his wife's family, when the mortgage application ran into a problem. The story was they couldn't get mortgage protection because his wife was in remission from cancer and so the sale was going to fall through.
The brother-in-law went to his father, my wife's father, for help. The father had cleared the mortgage on the family home a year or two earlier, but had no real savings. So the son asked him to remortgage the family home, and use the money to buy the son's house. The plan was supposed to be that the son would make the mortgage repayments and would then buy out the father altogether a few years later when they had built up more savings and mortgage protection would no longer be an issue.
Yeah, I know...
So the father was given a 15-year re-mortgage (because he was 55 at the time) and bought the house the son wanted. They then went interest-only for an initial 3-years. The interest-only repayments came out of the father's account, and the son reimbursed him each month.
As the three years was drawing to a close it was obvious the son was in no position to get his own mortgage - they had often been late with payments as it was. For good measure his wife lost her job, or was fired, in the meantime and hasn't worked since, claiming that she has an unspecified sickness. So the family kept kicking the can down the road and arranged extensions on the interest-only payments right up until last October when the bank (Ulster Bank) finally refused to extend any further.
So this is the mess: My father-in-law now owes the full principle on the son's house to the bank, to be paid over 8 years. He's 62 and still has a well paid job, but his employers want him to retire and the bank are eyeing up his retirement package. He has cancelled the direct debit and is now manually making the equivalent of the interest-only payment. A guy from RBS rang him yesterday to tell him he's now 6K in arrears.
The house has been valued by an Estate Agent at 200K. The son has a combined salary and BIK of about 50K (I think). We have no idea what their financial situation is otherwise - a combination of hoping the issue would go away and relationship breakdowns means getting all parties to have a calm, frank discussion has so-far been impossible. My wife's brother resembles an ostrich, refusing to answer phone calls, hanging up the phone or ringing his parents drunk and in tears late at night. My in-laws are still afraid to push too hard because they're afraid he might do something stupid and they also think there's more went on back in '06 than has ever been admitted.
They have tried to talk to Ulster Bank about some kind of restructure, and have hired a solicitor to help them, but the bank seem to be pretty obtuse (maybe you can't blame them - but the bank employees have even failed to keep the appointments they made themselves and more than once one of my in-laws has been left sitting waiting for someone who hasn't showed up!).
So my in-laws went from being debt free at 55 to all this at 62 to help their son and now they're very frightened. Obviously if they could go back in time...
The ideal would be for the son to somehow still buy the house, even for, say, 260 K and the in-laws would be prepared to suck up the rest to make it all go away. But there appears to be no chance he'd get a mortgage for anything of the sort.
I was thinking maybe Ulster Bank bank would look at the fact he has paid 1100 euro odd a month for 6 years and could be given a 30-year loan, for example, to buy out the parents 8 year loan?... Better than repossession?
Anyway any ideas at all would be great. I'll try and answer any questions as best I can.
