Negative Equity Negotiator

[TRS30]

A family member recently asked me for some advice on their negative equity. They have spoken to the local bank manager and during the conversation he admitted that the bank will loss a significant amount if the loan runs it course due to a low tracker.

However when the family member asked about a reduction in the negative equity if it was paid off they said this was not possible.

I would have thought that the bank would take a pragmatic approach on this and it is a case of dealing with the right person/area.

In these type of situations who is the best person/area to deal with and who is the best person to do the negotiations? i.e. solicitor, financial adviser etc. The family member wouldn't be that comfortable handling it themselves.

 

[robert 200]

I would say that New Begining would have a great deal of knowledge in this matter and

they would have seriously experienced negotiators.

 

[Brendan Burgess]

Hi TRS

The banks are not doing deals like this. Even the banks leaving the country are not doing them.

I have covered it in this Key Post: Are lenders giving discounts for the early repayment of tracker mortgages?

It might happen at some time in the future, but it's not happening now.

Brendan

 

[Brendan Burgess]

I would say that New Begining would have a great deal of knowledge in this matter and they would have seriously experienced negotiators.

New Beginning deals with those in mortgage arrears only, and there is no suggestion that TRS's friend is in mortgage arrears.

 

[robert 200]

New Begining are highly experienced negotiators who charge top dollar for their services.

I see no harm whatsoever in TRS30 relation trying to do a deal with their bank in order

to arrive at a mutually acceptable arrangement - This is called " business " .

 

[Brendan Burgess]

New Begining are highly experienced negotiators who charge top dollar for their services.

Here are their [broken link removed]. I understood that they provide a free service to home owners. It's very odd that they make no mention of fees on their website. They do charge fees for those with multiple properties and SME debt " Fees for our work are standardised for those with multiple properties but on those with commercial debt they are assessed according to the complexity of the case."

They are crystal clear in their website that their service is aimed at those in arrears and struggling with debt. I don't think that they are concerned with negative equity as such.

I see no harm whatsoever in TRS30 relation trying to do a deal with their bank in order to arrive at a mutually acceptable arrangement - This is called " business " .

There is no harm in TRS 30 asking as long as they realise that they will be refused. They should not pay fees for someone else to be refused. That is very wasteful.

 

[TRS30]

Thanks for the replies.

No arrears or other debts so don't think New Begining would be suitable.

I know you are probably right Brendan, I just don't see the logic in the bank admitting they will make a loss, been offered an option to reduce that loss and not been interested. Strange way to do business!

 

[Brendan Burgess]

Hi TRS

There are a few reasons.

1) From a business point of view, many people will want to move, so they will sell their homes and pay off their trackers early anyway. Why give discounts to people to whom you don't need to give discounts.

2) Our accounting rules are strange. They treat a performing loan of €100k at 4.5% SVR the same as a performing loan of €100k on tracker of 1%. The cash flows are very different but they are both valued at €100k in the books. If they gave you a discount of €20k, they would have to show an immediate loss of €20k. If they did that for all their loans, they would require more capital.