Repossession procedure

If one was in negative equity and while well able to afford mortgage repayments decided to default and handed the keys to the bank, does one have to pay any outstanding debt to the bank?

e.g., owed 400k. property worth 300k.
After default, is the bank still owed 100k or can one simply walk away as in the USA?

bank still owed 100k

Seems somewhat unfair as the banks "independently" (over) valued properties prior to granting mortgages.

Is there any reference/weblink with information on this?

Cheers.

Bank still owed 100k plus legal costs.

Lots of threads on this forum about it - do a search.

Don't forget that you would destroy your credit rating and would have serious trouble getting another mortgage.

Nobody is forced to take out a mortgage, the bank agreed to give you €400K so that is what you would owe them, plus costs, arrears and interest. It is not the fault of the bank that the property dropped in value. If you can pay the mortgage then there should be no problem.

elcaro said:

Seems somewhat unfair as the banks "independently" (over) valued properties prior to granting mortgages.

Is there any reference/weblink with information on this?

Cheers.

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I'd make two points in relation to the above...

a) the 'bank' didn't independently value the property - a professional property valuer would have done so at the time and both the purchaser (you) and the lender (bank) relied on same...

b) the valuer valued the property at a point in time - s/he didn't predict a future value... (which is where we are at now)...

I'd agree with previous posters, if in the event the property was sold and was insufficient to clear your outstanding mortgage, you will still be liable for whatever shortfall exists.

Again I'd agree with previous poster if repayments present no problem to you, then you should continue to make same.

Best of luck.

BM

its ridiculous to think we own the profits and losses should be given to the banks... eod, its a business so profits and losses are our responsibility...

elcaro said:

Seems somewhat unfair as the banks "independently" (over) valued properties prior to granting mortgages.

Is there any reference/weblink with information on this?

Cheers.

Click to expand...

You "independently" overpaid, after entering an agreement and were happy to do so at the time.

If it had gone up 100k since inception, would you expect the bank to come along and force you to pay more?

aetius said:

bank still owed 100k

Click to expand...

.....but not if you emigrate. I have an Indian colleague who did just that. Stuck around for the voluntary redundancy which set him up quite nicely back in India and simply didn't even bother handing back the keys. His house in Enfield still stands empty.

Strathspey said:

.....but not if you emigrate. I have an Indian colleague who did just that. Stuck around for the voluntary redundancy which set him up quite nicely back in India and simply didn't even bother handing back the keys. His house in Enfield still stands empty.

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This is dangerous advise. They might not chase an Indian to India because it costs a great deal but they'll get the house anyway and might take other actions. However, an Irish person could easily be tracked down. Someone always knows where you are gone in your area and will invariably talk to the bank's agent.

One way or another in your absence they will get the house, write off the shortfall and then sell it to a debt recovery co. if they can't find you themselves. So if they don't chase you the recovery co. will.

And then you will never get even a bank account again in this country.

elcaro said:

Seems somewhat unfair as the banks "independently" (over) valued properties prior to granting mortgages.

Is there any reference/weblink with information on this?

Cheers.

Click to expand...

You are being a little disingenous here, after all you must have made an offer to buy the house before the valuer came along and confirmed the valuation. If anybody was guilty of fueling the housing bubble with inflated valuations I think a lot of people might point the finger at auctioneers and estate agents.