negative equity, currently in the States

I

introuble14

Registered User
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Hi there! I'm at a loss trying to deal with my bank. I contacted a few PIPs but I still don't know what my options are. I will appreciate your opinions on this:

House bought at peak of financial boom as family residence by me and wife in Co Westmeath

Had to move out as changed employment. Rented house. Still rented. All taxes and financial implications in order.

Moved out to the States last year. Planning to stay for another two years. May stay longer. Not sure if will ever be coming back to Ireland.

Current property price 90K.
Mortgage current amount 290K.
Currently rented for 600 euro/m.
Been in financial negotiations with the bank and paying 500 euro/m.
Two school age kids

Bank contacted me to sell the house and said I will still have to pay the negative equity.

Learned I can't apply for insolvency as I am not living in Ireland.

I certainly have no interest in the property. What would be my best approach to this? Should I get a lawyer or a financial adviser to talk to them on my behalf to draw the best agreement? Should I be looking for some of the amount to be written off? And how much should I push for? Should I sell now or not? (as in what position am I better of: with a secured/unsecured debt?). And what are the implications if I decided to stay in the States vs coming back.

Thanks in advance for any input.
 
Have you considered bankruptcy in the US? If you and your family live and work in the USA this might be an option.
Also how much shortfall is there between the 600 euro rent and interest only repayments / full mortgage repayments? Are you able to afford repaying that amount?
What interest rates / how many years left on mortgage?
 
Thanks! I may consider bankruptcy in the US but I would like to know if it's a good option. I can see it may impact on future employment.
I don't remember how much exactly the difference between interest only and the rent, but it wasn't significant. It is still a burden for me to pay the current amount when I factor in the taxes and other expenses on the house during the year. I'm not sure if the bank will still accept interest only payments, but does it help when looking at the bigger picture? The shortfall on full mortgage payments is about 600 euro. Again, it will be very hard for me to do it, but how would that be good for the overall picture?

There is still 28 years left on the mortgage. Interest rate is 1.35%.
 
introuble14 said:
. I contacted a few PIPs but I still don't know what my options are.

Bank contacted me to sell the house and said I will still have to pay the negative equity.

.
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What actual advice and options did the PIP's give you?

I would agree to sell, they are never going to put it in writing that they will write off the shortfall, but they will probably do so all the same, particularly as you are in the US. So first step is to get it sold, that makes it unsecured debt, then see what they say after this. I'd agree to whatever they want now to get it sold. Once sold, tell them you cannot afford to pay anything and let them go to law. I cannot see them trying this with someone in the USA.

Don't do US bankrupty unless you have to, and only if it has no implications on job or residency. It's fairly easy to move around the US and 'disappear'.
 
One PIP was very brief: you are in the US, you can't apply for personal insolvency or bankruptcy here. Another one told me I should meet with them and ask them to share the pain. I am not able to decide how much I can ask for, and whether I can have a solicitor/ financial person represent me or be with me during such a communication, as I would imagine I won't be able to argue much with them not knowing what's possible and what's not.

The option of "disappearing" in the States is unlikely given my occupation (healthcare). I am still in training now and for the next few years, but afterwards I should have a good enough career. I thought they'd wait until I finish my training. I prefer to get it off, or most of it, particularly now if possible.

It is more likely I will be staying in the States. However, I do not want to have a legal case behind me in Ireland or a debt that gets compounded with interest.

- How much should I expect them to write off?
- Should I do that now or after selling?
- Can I get a legal/financial adviser to represent me or be with me for these meetings?

From my side, I will check the effect of declaring bankruptcy here on my employment and financial future. Anybody has an idea?
 
Suggest;

Get an Irish Debt practitioner to negotiate for you ,they are used to dealing with Banks. The Bank is not in a good position here and should be amenable to a fair attempt to sort matters.
If the Bank stays (sullen) they would be silly . So far you are showing willingness to sort.And wish to move on without this hanging over you, and maintaining your good name .
If you want a name of good practitioner let me know.
 
introuble14 said:
- How much should I expect them to write off?
- Should I do that now or after selling?
- Can I get a legal/financial adviser to represent me or be with me for these meetings?
Click to expand...

They will write off that which you cannot afford, I'd do it after selling, one step at a time. Yes you can get someone to be with you and to negotiate. It sounds to me like you have money. Could you afford to pay back the NE? What if it was at the same mortgage term and interest rate as now but based on the after sale balance.

(I wonder are banks throwing a whole heap of costs and charges into these types of sales?)
 
Bronte said:
It sounds to me like you have money. Could you afford to pay back the NE? What if it was at the same mortgage term and interest rate as now but based on the after sale balance.
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I don't have money now, but expecting to be able to pay in a few years. Currently I am struggling to pay the fraction of the mortgage I am paying, despite that I am getting the rent regularly. I'm living in a very tight way and cutting out on any luxury to keep up.

Thanks for the input. Who do I expect might be able to represent me/ argue with me to cut down the debt? A solicitor/financial adviser or what? Any recs?
 
€290k @ 1.35% is €4,000 a year in interest

You are getting €7,200 a year in rent.

So this is a profitable investment for you if the expenses are not too high.

You should tell the bank that you will act responsibly and continue to pay them the full rental income after tax and costs. But you will not agree to sell the house unless they agree to write off the shortfall in full.

If they initiate legal proceedings to repossess the house, you will defend them.

If they succeed in repossessing it, you will go bankrupt in the US.

If they agree to write off the shortfall , you will agree to maximise the proceeds through an agreed sale. You will continue to pay over the net rent to them while it is up for sale.

If they seek to repossess it, then you should stop all payments to them to build up a fund to take legal advice.

This is a situation where the bank has to get real. You can't agree to sell it without an agreement on the shortfall.

Which lender is it? Danske or BoSI would be more likely to negotiate.
 
Brendan Burgess said:
€290k @ 1.35% is €4,000 a year in interest
Which lender is it? Danske or BoSI would be more likely to negotiate.
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Thanks Brendan. It's not one of those two. Is it allowed to post this info here? Otherwise I will find out how to 'whisper' the answer to you.
 
Brendan Burgess said:
€290k @ 1.35% is €4,000 a year in interest

You are getting €7,200 a year in rent.

So this is a profitable investment for you if the expenses are not too high.
Click to expand...

I feel dumb not having done any such calculations. And thanks for the very interesting insight into the problem.

The only way I saw it was the house price coming down from above 300K to 300 to 270 to 230 to 200 to 170 to 150 to 120 to 100 to sub 100K every several months. Is this ever ending? I can't feel any "profit" in this house no matter what. Am I too simplistic?

In addition, there is the accountant fee, tax, property tax, county fees, etc. I couldn't trust anybody to look at the house since I left the country and I'm not sure what status it's in now. It's just sad!
 
by the way, thank you all for all your ongoing input. It empowers me and gives me the right perspective as to how things are dealt with. I appreciate your thoughts and advice.
 
Brendan Burgess;1368445. You can't agree to sell it without an agreement on the shortfall. QUOTE said:
How can he get that agreement if the bank refuses?
Click to expand...
 
introuble14 said:
Is it allowed to post this info here? .
Click to expand...

Yes you can post what bank it is, then people on here who have dealt with your bank will be able to tell you how that particular bank treats people in your situation.

Not sure you need an advisor yet, you can do the negotiations yourself.

What is 'county' fee, and what do you mean by saying you have nobody to look at the house? Have you no relations that could do this for you. I live abroad with rented property in Ireland and I know this, if a house is not looked at regularly you're looking at trouble down the line.
 
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