PTSB - unsustainable mortgage

Personal and income details
Net (i.e. after tax) €2,485 p.m.
Income self: nature of income - public servant
Income history: I am in full-time work, separated, both parties on mortgage, other party was contributing but now is not contributing anything monetary. He is minding the children so I am saving on childcare.
Net income partner/spouse: €814 p.m.
nature of income: jobseekers all.
Income history: In & out of jobs for last 2 years - unemployed since Nov. 2012
number of children: 2
Amount of Mortgage Interest Supplement received: 0

Home loan
Lender: PTSB
Amount outstanding:€275,000
Value of home: €165,000
Interest rate: 5.75% fixed rate to Feb. 2016
Monthly repayment: €1258 Int. Only, €1,833 last full payment
Amount in arrears: 0

Summary of discussions and agreements with the bank:
Had 3 months moratorium in 2011. Then had 2 lots of 6 months interest only. Paid full amount for 3 months and are coming to the end of another 6 months interest only. We have submitted the SFS and were told they could not discuss options available as there are too many and we will be notified in 2 weeks of the ONE option being offered to us.

Other loans and creditors
Credit Card €7,000
Family €11,500
Other party Bank loan e.g. 11,500
Other savings and investments: 0


How important is retaining the family home to you?
Which of the following best describes your situation?

I really want to keep the family home even if it means having a large mortgage and negative equity for years to come.
- but I want to be able to live. I don't think selling is an option with the amount of negative equity. I would like to be in a position to take over the mortgage and finalise the divorce.
Other party is living with parents but stays in the house 2 nights a week with the children.


Any other relevant information

What is your preferred realistic outcome?
An affordable interest rate that I can service by myself and not have to rely on the other party.

I am interested in what PTSB are actually offering people and as we are not in arrears due to borrowing and scraping I wonder if this puts us at a disadvantage. I found the advisor in PTSB very vague and scaremongering with talk of having to sell the house over a difference of €50 on the SFS? Also it does not seem that there is any scope for negotiation with PTSB- the advisor said its take it or leave it!

Any advice welcome. Thanks

Sonjac, welcome to AAM, this is going to be a bit of a bleak reply.

No one can afford a mortgage of 1800 on an income of 2500? How can you live on 700 a month with 2 children ? If you can do that then you would be able to stay in the home. Plus you've other debts of nearly 30K. Would you not be better off letting the bank have it and going to rent somewhere?

If you want to live, sounds to me the only way to do that is by giving up the house.

I am hoping they will reduce the interest rate to something affordable, the 5.75% is a killer. And I am very anxious about being left with the shortfall of €100k. On the other debts, the loan is the x's so nothing to do with me & the family loan is very long term.

I think others are right when they say that your mortgage is unsustainable in its current form however this doesn't mean that you have to give it up.
You are a prime candidate for a PIA under the new insolvency act.

If I was acting as your PIP, I would probably be proposing a PIA in your case. Impossible to say for sure without further exploration.

1) I would be asking for a write down on your mortgage to c.185K. this is still well above the value of your property so the bank will probably go along with it.

2) I would also look at extending the term of your mortgage if your age profile permits that, to achieve lower repayments

3) I would be looking for a reduction in the interest rate to around
3% for the duration of the PIA

4) I would be seeking to have all unsecured debt eliminated over five years.

At the end of the PIA period, all your unsecured debt would be gone and you would be left with a 180K mortgage at a rate of c.4% over a 30 year term with payments of around 1000 per month.

This should be enough to see you solvent at the end of the 5/6 year term
and you get to keep the house. The bank would also be in a better position than if it had repossessed your house.

There are lots of people on this board advising vulnerable people to abandon their homes. I would urge you to seek professional advice before doing anything like that

You say your ex used to contribute but now dont-why is that? Ok-they help out with childcare, but that is a different responsibility to contributing towards paying back a loan. As a named party they are just as responsible and liable to pay this if you cant.

I totally agree this:

There are lots of people on this board advising vulnerable people to abandon their homes. I would urge you to seek professional advice before doing anything like that

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With your current income and outlay you cant continue to live like that. Before you do anything, make sure you get good independent advice and ideally this should occur when you get some proposals to consider from the bank.

Dr.Debt said:

There are lots of people on this board advising vulnerable people to abandon their homes. I would urge you to seek professional advice before doing anything like that

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People get lots of advice, then it's up to them to decide what is the best option for them.

Your advice on going for a PIA sound good, as is the advice to get professional advice. How is she going to pay for the professional advice and more importantly how is she going to pay at least 5K for a PIA etc?

It's not June 2013, are there even any PIP's yet?

There is an additional complicating factor in the OP's situation, she is tied to a property with someone who is her ex.

The bank has offered Capital Payment Holiday Plus, so an extra €80 a month off the Capital for a 6 month trial period. I called and asked what the long term implications were and was told no-one had that information. I asked if this trial works how long will this arrangement be for. They couldn't tell me that either. I have calculated if this the "long-term" solution proposed by the bank, at the end of the mortgage I will still owe about €200,000. they are not reducing the interest rate from the 5.75% which is fixed until 2016. So in effect I am just on another version of Interest Only, with a token capital payment and the bank is getting €1250 in interest a month.

I would welcome a referral of someone to act on my behalf- the bank can't even answer my questions and I am certainly not in a negotiating position.

In particuler I like Dr Debt,s thoughts .

This whole PIP/PIA is beginning to look like more jobs for more of a new Golden Circle!!

I have sent people to Ryan/Karen Frost Debt Management 0749364000.
They will advise on phone and YOU decide if you want to work further with them.
I like them because they will put the Building Blocks to enable a proper PIP/PIA if that is necessary.
As I have sent a few to them , please let me know how you get on.

Sonjac said:

. I called and asked what the long term implications were and was told no-one had that information. I asked if this trial works how long will this arrangement be for. They couldn't tell me that either. .

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More banking geniuses, and the solutions they dream up.

Salmon, how is Sonjac going to pay Frost? He charges. Naturally.

Everybody thinkg it's terrible advice to give up the house, but nonone is giving her any other real solution.

Bronte said:

More banking geniuses, and the solutions they dream up.

Salmon, how is Sonjac going to pay Frost? He charges. Naturally.

Everybody thinkg it's terrible advice to give up the house, but nonone is giving her any other real solution.

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I think Sonjac needs a Debt Practitioners advice.
The first call to Frost costs nothing . If Sonjac does NOT like what Frost will do/not do please let me know , as I don,t want to recommend to find people being done !!

The bank's approach to this case is the usual and typical response of short term forebearance and a complete dirth of long term solution. The runaway train wreck continues to gather speed as it races on in the direction of yet another brick wall.

The good news is that The IMF are putting increasing pressure on the Government and the banks to adopt policy that will give rise to permanent and lasting solutions.

In my oppinion the implementation of the new Personal Insolvency Act is the one single hope that we have left to bring about a remedy. Under the new act the banks will be asked to approve very sound and well framed proposals for individual cases. Everything will be open and above board for the 1st time. Any resistance by the banks to co-operate with logical and fair proposals is likely to leave them very exposed.

I recently attended a training course for would-be Personal Insolvency Practitioners and I must say that I was hugely impressed by the depth of knowledge skill and
excellent judgment of the body of Participants. These are the people that will solve this mess. Having spoken to many of them over a space of four days, I can tell you that without exception they were all genuine Professionals of a very high caliber and competence.

There are a lot of "Debt Solution" companies springing up all over the place now but from what I can gather, many of these were Mortgage brokers in the good years. Its very hard for me to accept that the people who who were once the main conduit for leading people into unsustainable debt are now presenting themselves as part of the solution. Selecting the right Advisor is crucial. Personally I would be doing a lot of due diligence before engaging any Professional during these times.

Let's see how it rolls out.......