PTSB Negotiations

[Esme]

Hi guys,
I own a house in the South East of Ireland. Mortgage €140,000, now worth €60,000. I moved away from there to the Midlands in July, and am renting a house here. It took a long time, but finally got a tenant for my house in South East. They are paying €480 a month, but my mortgage is €535. I am €2,000 in arrears.

Anyway, i have been in touch with PTSB regurlarly, have been in the local office etc. Basically, I can only afford to pay them, what the tenants are paying €480 and they have agreed to this for 6 months (adding €77,000 onto the mortgage bringing my mortgage over its lifetime to over €200,000).

I am a single mum, renting in the midlands and basically this has knocked me for six. After the 6 months, they want €700 a month (which I will not be able to afford).

So, I thought, I am never going to live there again, let them reposses it, so I asked the bank what their procedure was for respossesion.

They sent me a letter with a form, saying they will agree to take the keys back, i have to clear out the house, and hand back the keys then.

Can anyone advise me what to do? Basically i don't know what is the best option. I will never be living there, again. I did try to sell it, and the area is now considered bad and impossible to sell.

Any advise would be appreciated.

Regards
Esme

 

[44brendan]

The form sent to you appears to be a little strange. Rather than agreeing to "take the keys back" it may well be an agreement to a voluntary repossession of the property. However, there appears to be a shortfall of circ 80K on the current value of the property and your loan. Have they addressed this with you? If not you will need to revert to them as you will be liable to pay this shortfall, following a sale of the property.
Best to obtain legal advice before signing anything.

 

[Esme]

Hi Brendan

Thank you for your reply.

yes, they told me I would be liable for the shortfall, should the house sell at a loss (which it would).

Esme

 

[44brendan]

In my view you would be better off selling this house yourself, unless PTSB offer you a better deal. If you hand the property back to them with no deal on the residual balance, you are totally in their hands. I.e. They could sell off the property at a very cheap price and still chase you for the full balance. This property is still your PPR as you don't own another one. They cannot currently take re-posession proceedings. Write in to them and state that you are prepared to co-operate with a voluntary re-posession, but only on the basis that they come to a satisfactory arrangement on the residual balance.
Having said that, there is probably not a whole lot they can do to recover this money. It will be an unsecured debt and if your financial circumstances are such, that you have little left over to meet any loan repayments, legal proceedings will get them nowhere.
There are a lot of people in a similar position to you, and hopefully the new insolvency legislation will give people in that position an exit from these burdens. In the meantime, don't be overly concerned, as there isn't a whole lot the Bank can do beyond selling the property and applying the proceeds towards the loan.

 

[Esme]

HI Brendan,

Thank you. I rang MABS this morning and they said something very similiar. They could go after me for the money but I don't have it, and you can't get blood out of a stone

I'm just afraid to sign this form, hand the keys back and then be in a lot of trouble, because I agreed to pay this money that I don't have.

I have tried to sell the house, but no Estate agent would touch it, a) because its in a bad area (turned into one about 2 years after I bought, gardai were nearly living there at that stage, drugs, fights, stabbings etc), one of the reasons I left as I have a young son, b) because its relatively new and now classed as a "ghost estate" and the builder is gone bust, that the local authority haven't taken it over yet, meaning they would be looking for a cash buyer which is impossible in this day and age.

Hope this makes sense.