negative equity, interest only, ex not paying

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Arches1

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Arches has started a new, more systematic thread on this here. - Brendan

I have read through a few posts with the similar troubles but as everyone's case is different I'd be grateful if someone could offer me some advice in my situation.

- Bought property with ex 2009 for 295,000 (drew down 272,000) ex left 3 months later and was paying his way up until 3 months ago - he can no longer afford payments as he is renting and is paying some maintenance towards our child. Payments are 1300 fixed until Feb 2013 @ 4.05%

- I have also gone to a solicitor to ask for his name to be removed and I take on the loan but the bank would not allow this.

- I cannot pay the full amount per month and am paying 1000 for 3 months until the bank come back to me (I hope soon as the 3 months are up)!

- House is currently worth 215,00 (new houses available) and there is 258,000 remaining on the mortgage. I have 2 children which the house is their home, however I would be open to selling the house/renting the house/doing anything with the house just to be in a more favourable position to buy/rent again in my name only.

- Its not likely that I could sell as there are new houses available in the unfinished NAMA estate :) If I rent out the property I would have to rent a new property at 1000 and pay the 300 shortfall on the other property and pay maintenance fees, fees to revenue etc.

As I said I am open to all options, has anyone any ideas for me to suggest to the bank and to move on for myself and the children?
 
I would try to get the bank to take the keys and walk away, above all I would stop paying there is no point your never going to get it paid and even if you do its not yours you cant win.
 
PiedPiper, Thanks for the reply - I would hate to leave my debts, even if my ex cant pay. The bank are supposed to come back to me this month with options under MARP but I have contacted them on numorous occasions and they never reply. I have had the meeting and sent in all my documents etc.

If I hand back the keys we (or I) would still owe negative equity to the tune of 45-60,000 and I presume they would take me to court?? I would still have to rent a house for myself and 2 children and owe the negative equity on a net salary of 1900 per month.
 
Whatever you do don't go down the path of renting out the house and becoming a landlord and then renting another place for you and the kids. Too much hassle besides tax implications.It's long winded but, in short, you can't just rent out a place for a grand a month and think you'll get anywhere near that amount.

The only thing you can do is tell the bank that you can pay 1000 a month for the foreseeable furure. And if that's too much then tell them 700, 800 -whatever you genuinely can afford.

If the bank gets at least the interest amount -and if you are paying no more than what you would pay in rent for that house -then both you and the bank should be happy.There's no way any court would evict you and your two kids if you could show that you are paying the interest. And, really, the bank just does not want to take your house.

Don't take any Bull from the bank. If they don't accept the idea of interest-only then tell them they can take back the keys . Banks threaten, huff and puff and don't respond to reasonable suggestions. Just stand firm.

Please advise what happens when you approach them.

(i'm saying all this on the basis that you and the kids would prefer not to move. If it's a dump and you hate it -then obviously follow Pied Pipers advice )
 
Thanks Oldnick, I think I really just want to either own it on my own or my ex to own it on his own - thats in an ideal world of course and the banks wont let me take it on my own. He has approached me to say he would live there and rent out rooms in order for the full mortgage to be paid, its just a matter of me moving out with the kids and renting a place. I want to move on from the situation but dont want to be foolish either. Not really sure what to do. The bank is still ignoring me, after meeting with them and numorous emails and phone calls to the designated person, think the only way they listen is if you dont pay and then that will affect me getting a mortgage in the future and I can pay some so I wouldnt go down that road.
Agh its so frustrating!
 
Sorry for the position you find yourself in like a lot of others. I agree totally with oldnick. Would the renting a room scheme to one person be an option for you. The likely income would be tax free. If you are able to hold onto the house keep an accurate record of all your outgoings since your partner left such as mortgage payments and repairs just in case your partner reappears when hopefully you get out of your current situation and into positive equity. Best of luck
 
Thanks Dermot, unfortunately I couldnt rent out a room as I have none spare, however ex could move in, I move out with kids and rent separately and he could rent out remaining rooms. I have spoken to the bank about this but I have said I wouldnt move out with the children if my name was still on the mortgage.

The bank are giving little or no solutions whatsoever, they have given me a reduction for 3 months which is now up this month and the lady dealing with the MARP process is going on leave and no-one else is dealing with cases!

I offered to buy/sell the house when there was only a 10,000 negative equity hit and the bank wouldnt allow it, now they are saying we could sell it if we wanted to and then pay back the negative equity to the tune of 80 grand!
 
You have a mortgage of €258,000@ 4%

The interest only on this would be €10,320 or €860 per month.

So it makes sense for you and your children to stay where you are. If you pay the interest only, the mortgage balance will remain at €258,000. Your position will not be getting better and it won't be getting worse.

Tell the bank and your ex this. Your ex will remain on the hook for the shortfall or he will benefit from any increase in the value. If you pay off the capital now, he will benefit from this as it will be reducing his liability.

The bank are giving little or no solutions whatsoever,
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That is because there really is no easy solution. The bank can't magic up a solution out of thin air. You split with your ex. You now have two premises between you. That is not the bank's fault.

You took out a loan jointly and severally with your ex. That means that if you don't pay, he is liable for it and if he doesn't pay, you are liable for it.
This was the contract you agreed. Again, the bank lent the money on the basis of two borrowers and not one borrower.

Did you do an agreement with your ex when you bought the house? Did it cover negative equity and splitting up?

Who put up the deposit for the house? Assuming you put it up equally, your husband should pay you €30,000 to be released from the deeds of the house and the mortgage. This is academic if he does not have the money.

What happens when the fixed rate ends? I presume you don't qualify for a cheap tracker if you bought in 2009. Which bank are you with? What is their Standard Variable Rate?
 
they are saying we could sell it if we wanted to and then pay back the negative equity to the tune of 80 grand!
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You seem happy in the house, so I don't see the point in selling it. It is costing you only €860 in interest per month, which you can afford.

The only way you should agree to sell it is if they agreed to split the negative equity between you and your ex. In other words, you both owe €30k each. I don't think that the lender would agree to this and your ex might not either.
 
I had a reply done up to this and it disapeared! Anyway, thanks Brendan for the advice, we are with ICS, fixed rate ends in February 2013 and I think the svr is around the same 4.05%. The bank have agreed a further 6 month reduced payment which is €1000 so interest and some capital. I put down the deposit from the sale of my apartment. He did put money into the house though. Just to clarify we were never married and have 1 property purchased, ex is renting as far as I know. I was hoping to extend the term of the mortgage or sell and negotiate payment of negative equity or ex to move in and take over the loan but they wont allow him to do that. I'm working which puts me in a way better position than some people and I'm still in the house also so I'll just keep in touch with the bank and hope for the best.
 
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