moved abroad - lost job. house in NE

Good Afternoon,

Okay, in a situation here that is some what of a mess and in need of some advice, and also some direction of who we can speak to.

I'll try and be brief! Last February I moved over to Spain with the company I had been with for 3 years, they wanted to open and new office here in Barcelona as mainland Europe business was doing well. The company is and was small, so there was no relocation package and the move for me and my family was financed by myself. It was a good thing to do for us as Ireland had no prospects and my job was going to give me and the family more time and a better life. Everything went well with the move and we got an apartment here for a year and shipped our stuff over. Kids into Catalan school and all looking rosy.

We rented out our house in Ireland with the view of using the rent to pay the mortgage. Sadly we had problems with flooding and renters could not go in for some time. And it was December until we first got any rent. During this time the company I was working for decided that they didn;t want to have an office here and requested me back to Ireland. This was impossible as I had a lease here for a year, no where to live in Ireland and my wife had given up her company shares and there for no job. We would not have been able to survive and we had no savings for the the shipping and moving costs. The saving went on the move over here!

We are now very settled here and rent out our spare room in our apartment which (With the rent money from Ireland) gives us jus enough to get by on. Of course, the problem is the mortgage and mortage company in Ireland!

So, we have a house in Ireland we do not want, can not afford to pay anything on and that has tenants in there.

Oh, and about 100K in negative equity!

We are hoping that a small business plan I am working on will be able to get us by with out the rental from Ireland. But this will tae a few months to get up an running.

ANy advise on what to do would be greatly appreciated as the nose that is the house in Ireland is hurting.

Thank you in advance,

I changed the title to reflect the question. What is the repayments v the rental income on the house in Ireland ? Are you relying on the rental income as your current income or are you paying the mortgage with it ?

Hi thanks for changing the title.

The repayments are €1700, the rental income is €1050, so a shortfall there to start with.

But the €1050 (Less insurance and maintenance) is our only income and being used to pay our rent here.

Not the best situation we know and desperate to find a way though.

Even if we were in a situation to provide for ourselves here without the rental income, there is still the shortfall and don;t think we'll ever be in a situation to make that up.

Oh, to note, wife is Irish and Im English. Maybe an angle there, but we are very settled here in Spain.

So you are not paying the Irish mortgage and therefore presumable the bank is writing to you asking for payment? Have they started legal proceedings against you. How long have you not been making payments for? Which bank is it.

The repayments are €1700, the rental income is €1050, so a shortfall there to start with. But the €1050 (Less insurance and maintenance) is our only income and being used to pay our rent here

Click to expand...

.
You must accept that this position is untenable. The bank are bound to commence re-posession proceedings in the short term. In the interim you are using the RI to supplement your income, but the Bank will cop on to this reasonably soon and put in a fixed asset receiver to collect the rent (unles they are incompetent!).
The ultimate outcome for youis that the Bank will re-posess and sell the property and try to locate you to collect the shortfall. If you intend remaining in Spain they may well fail here, but there could be consequences if you return to Ireland in the short term.

44brendan said:

.
but the Bank will cop on to this reasonably soon and put in a fixed asset receiver to collect the rent (unles they are incompetent!).


.

Click to expand...

How does that work and how quicky have you seen banks do this, and which banks.

What exactly is a fixed asset receiver. (sorry - lots of questions but you work in this field I think and it's for the benefit of others on here)

Ability to appont a "FAA" is now a standard clause in mortgage documentation. It is broadly similar to a company receivership where the Bank can appoint an agent to collect the income from an asset (in this case the house). There are a number of incompetent banks still out there, who are unable to address the arrears problem due to the extent of same and the staff shortgages in the debt collection area. However banks are now staffing up their arrears management positions (even AIB is taking on new permanent debt collection staff) so the examples of lack of action, that we are seeing to date should decrease.
I would expect to see a more professional approach to issues like this from the Banks as time progresses & hopefully that will incorporate a more pragmatic solution focussed type of action than we have seen to date.

Hi Brendadn. To install a FAA would we need to have a judgement against us, or perhaps a warning letter or 3 from the bank in advance to warn us, or can they do it whenever/ however they please. I was hoping the extra rent could bring up my bank account so that it peeks over into the black again as I have insurance premiums coming off that same account which is heavily in overdraft at the moment.

44brendan said:

Ability to appont a "FAA" is now a standard clause in mortgage documentation.

Click to expand...

So this can only happen where this clause is in the mortgage contract? I don't recall this clause myself. How recent is it?

Also how does it work, who would an FAA be, a bank employee, an accountancy firm, an estate agent. The bank would need the rent to be paid directly to them. And would also need someone to register with the PRTB, do tax returns, and handle tenants. All of this costs a lot of money. Surely a bank would much prefer to sell the property.

Thanks all for the replies and information.

44brendan said:

.
You must accept that this position is untenable. The bank are bound to commence re-posession proceedings in the short term. In the interim you are using the RI to supplement your income, but the Bank will cop on to this reasonably soon and put in a fixed asset receiver to collect the rent (unles they are incompetent!).
The ultimate outcome for youis that the Bank will re-posess and sell the property and try to locate you to collect the shortfall. If you intend remaining in Spain they may well fail here, but there could be consequences if you return to Ireland in the short term.

Click to expand...

There is and will be no plans to move back to Ireland. Thats for sure. We had 3 months agreement that nothing would be paid This ended at the end of February, so we are one month in arrears. No way need repossession orders ect..yet

Bronte said:

So you are not paying the Irish mortgage and therefore presumable the bank is writing to you asking for payment? Have they started legal proceedings against you. How long have you not been making payments for? Which bank is it.

Click to expand...

The bank are asking to see bank statements for three months. Which will show the rent going in. Insurance going out and then a transfer to an account called Spain. They do not know at this time that we are not in the house.
And as above, only one month in arrears following a 3 month 'break' agreed with the bank. KBC.

As Breandan points out then, you are on borrowed time regarding the extra income you are getting now. You have the right idea in accepting that the house must go. I guess you just need to see how this pans out. Regarding any debts you are left with I think the bank will eventually just write you off but keep an eye on things just in case. End of the day, they cannot get blood out of a stone so good luck with your life abroad. Regarding your initial question regarding business plan you have, I presume you know that you would have no chance of getting funding from a bank if required.