All,
I am a long time reader, some time contributor to this forum but am I am looking for some guidance / advice as to my own situation. Any help you can provide on my questions below would be much appreciated though! I am reading up on all of it, but I am a big believer of tapping a valuable source of knowledge that is AAM (and this website is on the useful links section of MABS!).
Background:
Before I ask the questions I thought it might be useful to give a brief background on where I am: Emigrated to London almost two years ago with my partner and daughter as job opportunities were drying up in my field. We owned a 2 bed apartment here which we naturally rented out, at the time €400 less than capital + interest payments of c. €1400. I managed to bridge the shortfall for a few months through savings, and a little bit of taking my eye off the ball, and realised this was naturally unsustainable. Come April 2011, negotiated an interest only option which meant that, when you include the management fees etc, it just about broke even. However, this is obviously only a temporary fix and a few items such as the fridge and boiler went pop during the course of 2011, the cost of fixing I couldn’t really afford. As a result of income limitations in London, I realised I could no longer afford the property on two levels...firstly the repayments long-term weren’t affordable, and secondly I did not have sufficient surplus income to fix any other issues with the apartment (i.e. I could no longer afford to actually be a landlord if I could not even provide my tenants with a boiler!).
I wrote a fairly detailed proposal to my mortgage provider (UB) in September 2011 and attached comprehensive appendices such as the SFS, payslips etc. It wasn’t pretty viewing, and I was looking to sell the property and gave several reasons why it was in everyone’s interest to do this (I’m on a tracker etc).
Current Update:
To cut a rather long, and to be honest unspectacular story short (it took several months to get UB to even engage with me....a couple of months in arrears soon got their attention while I was in between tenants) I have finally received a phone call from my case manager that while they are OK with me selling the property, they are not willing to do a deal on the outstanding negative equity balance (c. €200,000). Amazingly, I have asked for this in writing and he seemed hesitant to provide it, completely against MARP process but that’s not the first infringement of the whole saga but that’s neither here nor there at the moment – I will keep pushing him for it as I can’t appeal against a phone call!
Now, I’m not here to discuss the moral hazard etc but what I am trying to do is figure out what is the best course of action to take for my family, unfortunately the implications of these is what I am trying to ascertain:
1) Hand back the keys: Not my ideal solution as basically the bank sells the property for below market value and it maximises the balance outstanding.
2) Sell the property myself: a slightly better version of Option 1, as at least I get market value, and it may enable me to start more negotiations with them if I am waiving a big wad of cash at them.
3) Resident in the UK: I obviously have a couple of options being resident in the UK give me, such as Bankruptcy, IVA’s etc. These aren’t massively appealing though and I feel are only the last ditch resort and not to be taken lightly.
What I am trying to figure out is what the impact selling the property is and failing to agree a deal on the unsecured loan that would be outstanding. Even on my current low tracker rate, this would still amount to c. €750 pm in repayments which, let’s be honest, not too many people could afford. If I decide not to pay, what does the bank actually do? It takes out an injunction against me? What exactly is this, and what does it do? Unfortunately, I have tried searching online but I just ended up confusing myself.
Any guidance anyone has would be much appreciated. If you require any more info please feel free to ask – I have tried to keep it detail free above for an easier read – and it is a very shortened version of what has been a long...long drawn out process by UB.
Cheers,
K
I am a long time reader, some time contributor to this forum but am I am looking for some guidance / advice as to my own situation. Any help you can provide on my questions below would be much appreciated though! I am reading up on all of it, but I am a big believer of tapping a valuable source of knowledge that is AAM (and this website is on the useful links section of MABS!).
Background:
Before I ask the questions I thought it might be useful to give a brief background on where I am: Emigrated to London almost two years ago with my partner and daughter as job opportunities were drying up in my field. We owned a 2 bed apartment here which we naturally rented out, at the time €400 less than capital + interest payments of c. €1400. I managed to bridge the shortfall for a few months through savings, and a little bit of taking my eye off the ball, and realised this was naturally unsustainable. Come April 2011, negotiated an interest only option which meant that, when you include the management fees etc, it just about broke even. However, this is obviously only a temporary fix and a few items such as the fridge and boiler went pop during the course of 2011, the cost of fixing I couldn’t really afford. As a result of income limitations in London, I realised I could no longer afford the property on two levels...firstly the repayments long-term weren’t affordable, and secondly I did not have sufficient surplus income to fix any other issues with the apartment (i.e. I could no longer afford to actually be a landlord if I could not even provide my tenants with a boiler!).
I wrote a fairly detailed proposal to my mortgage provider (UB) in September 2011 and attached comprehensive appendices such as the SFS, payslips etc. It wasn’t pretty viewing, and I was looking to sell the property and gave several reasons why it was in everyone’s interest to do this (I’m on a tracker etc).
Current Update:
To cut a rather long, and to be honest unspectacular story short (it took several months to get UB to even engage with me....a couple of months in arrears soon got their attention while I was in between tenants) I have finally received a phone call from my case manager that while they are OK with me selling the property, they are not willing to do a deal on the outstanding negative equity balance (c. €200,000). Amazingly, I have asked for this in writing and he seemed hesitant to provide it, completely against MARP process but that’s not the first infringement of the whole saga but that’s neither here nor there at the moment – I will keep pushing him for it as I can’t appeal against a phone call!
Now, I’m not here to discuss the moral hazard etc but what I am trying to do is figure out what is the best course of action to take for my family, unfortunately the implications of these is what I am trying to ascertain:
1) Hand back the keys: Not my ideal solution as basically the bank sells the property for below market value and it maximises the balance outstanding.
2) Sell the property myself: a slightly better version of Option 1, as at least I get market value, and it may enable me to start more negotiations with them if I am waiving a big wad of cash at them.
3) Resident in the UK: I obviously have a couple of options being resident in the UK give me, such as Bankruptcy, IVA’s etc. These aren’t massively appealing though and I feel are only the last ditch resort and not to be taken lightly.
What I am trying to figure out is what the impact selling the property is and failing to agree a deal on the unsecured loan that would be outstanding. Even on my current low tracker rate, this would still amount to c. €750 pm in repayments which, let’s be honest, not too many people could afford. If I decide not to pay, what does the bank actually do? It takes out an injunction against me? What exactly is this, and what does it do? Unfortunately, I have tried searching online but I just ended up confusing myself.
Any guidance anyone has would be much appreciated. If you require any more info please feel free to ask – I have tried to keep it detail free above for an easier read – and it is a very shortened version of what has been a long...long drawn out process by UB.
Cheers,
K
