Legal process re arrears on investment property

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respectableobserver

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Just wondering what the legal process is if a bank sends a letter demanding full repayment of the mortgage amount by a certain date eg a months time; what will happen next?

Assuming the investment property is in serious negative equity, arrears and unoccupied.

In what order / likely timescale will the following happen:
  • receiver sent in?
  • locks changed?
  • property advertised for sale and sold?
  • negotiations with the borrower ( who has already submitted SFS and offer, but no response from bank, as of yet )
  • judgement mortgage on borrowers other asset(s)?
In other words, whats the banks likely next step - to talk to the the borrower and try to come to a deal or sell the asset followed by possible judgement order(s) on other asset(s)? The borrower has always been co-operating with the bank as best she can.
 
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Going by the slow rate of repossessions in Ireland, I wouldn't worry too much about time scales. It could take years.
 
respectableobserver said:
  • negotiations with tenant ( who has already submitted SFS and offer, but no response from bank, as of yet )
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What's this got to do with the owner?

Before the bank repossess they will have to go to court, the first step is calling in the mortgage. Which is the stage you are at. What is it you actually want? Can you give us figures. Also what are your discussions to date with the bank.

Which bank, you know you can go to IMHO for free advice if it's one of their agreed banks (AIB and KBC I think)
 
moneybox said:
Going by the slow rate of repossessions in Ireland, I wouldn't worry too much about time scales. It could take years.
Click to expand...

So far it has taken years, and I see the repossession lists are huge now but they seem to be moving very very slowly.
 
Bronte, I meant to say borrower instead of tenant. Me writing tenant was a typing slip, since corrected - there is no tenant, the mortaged property is unoccupied, in poor condition in a "not great" area of Limerick, so would not be easy to sell. Sorry for the confusion.

Its my sisters problem, not mine. I never heard of IMHO but I'll suggest it to her in case she has not heard of it before. I was just wondering is it normal for a bank to call in the mortgage before reaching a settlement, or is the fact the bank is calling is the mortgage a sign that the bank is taking a hardline stance and taking everything without negotiations?

If it saved my sister legal fees/ court fees / receiver fees, she would be an agreeable and fully co-operating party to sell the property, even though it would only reach a small fraction of its original cost. I wonder could the bank force these extra fees on her even though she was always fully co-operating?

So far the bank has not asked her to voluntarily surrender the keys. She has made a reasonable offer, (offering to give up nearly all her assets) with her SFS - would it be normal for the bank to call in the loan before replying to such an offer, I wonder?

The figures are appoximately as follows.
Arrears/ mortgage amount outstanding: €200K. Value of property: perhaps €30k. Borrowers other assets ( comprising of an un-mortgaged investment property the bank does not hold as security but my sister told the bank about ): €70K. She is on the minimum wage, or close to it, and with health issues for the past number of years so cannot repay the mortgage.
 
The bank will sell the property for 30K, add in legal costs. Costs are a lot less if she cooperates. They will also take the other property. Luckily for her, her salary is low. Where is she living.

Something triggered this, did she stop paying the rent over to the bank?

She absolutely needs to talk to someone. First step Mabs, then IMHO - have a look at their website. Doing nothing is silly, but many people are so stessed that they fail to mitigate their loses. She has a bit of bargaining because of the second property not being mortgaged, she needs to negotaite a 'settlement' of 'full and final' in return for all the assets and nothing less. Settlement in writing.

If you post full details on the money makeover thread you will probably better better responses.
 
Bronte said:
Something triggered this, did she stop paying the rent over to the bank?
Click to expand...
Thanks for the reply. She did not pay the rent to the bank because there was never any rent, the property is so run down its not rentable and never was. I am not sure why she ever bought the property, it was interest only for the first five years and I gather she thought she could flip the property (which she bought in 2006, near the top of the market) after a few years and make a fortune. She has paid interest since but not capital repayments.

Do you think the bank will agree a deal before they sell the mortgaged property or both properties? She has no bargaining power left if she gives up both properties easily ...so after calling in the mortgage, I wonder if the bank will want to talk or will they just take everything. Some other people in her position would just sell the un-mortgaged property quickly and emigrate, but she is an honourable person and wants to do the right thing.

She is living with relations, but very stressed, not in great health and just wants the mess cleaned up. She is wondering what the next step from the bank will be? Should she continue to pay the interest? They do not answer communications.
 
Ok that story makes sense now. Well done her on trying to do the right thing.

What do you mean they don't answer communications, they must have sent her letters, if she's as bad as you say she is go check her drawers for the letters and try and be the middle man for her. Sounds like she is incapable of dealing with the bank. What institution is it?

Warning, trying to do the honourable thing might not always be in your favour. Not if you let the banks back you into a corner. She surely doesn't think they will let her keep the 70K property?
 
Thanks for that. Whats the next thing that happens after the bank has demanded full repayment of the mortgage amount by a certain date, and that date has passed? My sister cannot afford to repay all the loan, but as said previously she has made a reasonable offer, (offering to give up nearly all her assets) with her SFS months ago, without a reply from the bank.
Would it not be normal for a bank to answer a borrowers offer / discuss a way forward...or at least meet the borrower? Or will they send in a receiver to take over the property without any discussions. My sister has sent a registered letter to the bank without reply, they are refusing to engage. Do the banks ask the borrower if they will "voluntarily surrender" or anything?
I can see why some people just skip the country with whatever they can.
 
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