Case study Success! Got my non-cooperating ex off the deeds and mortgag with ptsb

Brendan Burgess

Brendan Burgess

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This is a very interesting case study, so I am summarising it here to help people who may be affected by it

House value|€204k|
Mortgage|€319k| mainly on SVR of 4.3%
Repayments|€1,600 per month
Rent|€1,000 per month

Unmarried couple bought house together. Have two kids. They split up. She has the kids. She is paying nothing towards the mortgage
He is prepared to make the full repayments, despite the negative equity, but does not want her to claim ownership of the house when the negative equity is paid off.
House is rented - there is a shortfall of €600 a month between the rental income and the mortgage repayment
She is refusing to engage.
The court awarded her low maintenance because he has the burden of the mortgage. The court made no ruling on the ownership of the house or mortgage.
She is on social welfare.
Lender - ptsb- happy as full repayments are being made

Action taken subsequent to initial post
1) Wrote to bank explaining situation and that he was reducing the payments to interest only until the ownership was sorted.
2) Loan went into arrears
3) When the bank started ringing , he gave the contact details for his ex.
4) Bank started ringing ex
5) Ex agreed to come off mortgage
6) Lender agreed to let ex off mortgage as he agreed to pay off the negative equity of €85k. He feels he could have got away with a lower figure had he negotiated a bit harder.
7) The mortgage was in two parts - SVR and tracker. The bank set the capital payment off against the SVR part, so he kept the tracker
 
Ex refusing to contribute to mortgage/refusing to sell/refusing to come off mortgage

Anyone else been in this position and had some success? Ex has realised that if she sits pretty for the next 30 years she'll own half a house that I will have paid off. Currently the house is rented out to a family (long term rental). Ex & kids rent. I rent elsewhere. House in 100k neg eq. Any advice welcome !! Have been in to see ank manager and he has written a letter on my behalf asking the mortgage dept to consider transferring the mortgage into my name if I pay a lump sum, but mortgage dept refusing to even consider the application without both signatures.....and ex won't sign. Help
 
Check out this post which deals with all the options systematically.

http://www.askaboutmoney.com/showpost.php?p=1278996&postcount=5

You must switch to interest only. The bank probably won't agree, but you have to do it anyway. There is no other choice.
The mortgage will go into arrears.
Both her and your credit rating will be damaged.
But you won't be paying off her negative equity.

If you have been paying down capital for some time on your own, you may have to take a mortgage moratorium to balance things out.

The bank may well repossess the property. You will agree to it and when she gets the legal papers she might then begin to talk to you.

However, if you have assets, e.g. savings, they will get a judgment from you for the full amount.

Brendan
 
Thanks for the reply Brendan, really appreciate it. On the link you sent you advise against someone in my position renting out the house in full -which is what I've done.
The ex took the kids and moved out of the house and away from the area over 3 years ago and I did live in the house for 1.5 years, and rented out rooms to help me to pay the mortgage but just over a year ago work took me away from the area so there was no point leaving the house idle.

I realise from reading through many, many posts on this site that this is a very unusual case (few people have the brass neck to take the stance my ex has taken on a house that is worth minus 100k).

I am prepared to take on the 100k of negative equity. This doesn't bother me. I have the money and she doesn't have a bean. I don't mind taking on the negative equity, I just want to own the house. The issue I have with going interest only is that this is completely dead money. This is just putting my money into a black hole - it doesn't reduce my mortgage. In fact if I end up resuming full mortgage payments on my own, the period of time where I was paying interest only will have been a period of handing the bank money for nothing. I'm just wondering what is the reason for going interest only as opposed to just stopping paying the mortgage altogether? For some cases on here I can see that the point of it is to stop the bank repossessing the house because the person posting here is living in the house and doesn't want to lose their home. This does not apply to me, neither my ex nor me is depending on the house as a place to live. What I could do I suppose is just allow the bank to take the rent money coming from the tenants living in the house, and not a penny more.

Yes I agree with you that allowing the bank to begin repossessing the house might be the only way to get the Ex to see sense. Obviously as the person who will be paying off the negative eq, my fear about repossession is that the house will be sold by the bank at lower than market value, therefore increasing the amount owing after the sale.
I was just wondering if there was anyone who had taken the legal route with a hostile ex like mine, who is refusing to sign papers for any kind of change to the situation?
 
Lucuma said:
Ex has realised that if she sits pretty for the next 30 years she'll own half a house that I will have paid off.

Ex & kids rent. I rent elsewhere. House in 100k neg eq.
Click to expand...

Just one little point here, if you pay all the mortgage it does not always mean that your ex will get a share in the propery when it is paid off. It would depend on what a judge decides. Generally if you're the one who has paid all along the way, deposit, mortgage etc then your equity share will be larger.

It's a very tricky area legally. And it gets very complicated where there is an ex (if that wife) and their are children.

You need a good family law solicitor to guide you through this. I think you may have to go to court to get her to sign the house over to you. Is there a reason that she is not doing this? Maintenance issue perhaps?
 
As long as the mortgage is being paid promptly and in full each month, you'll have great difficulty in getting your bank's attention. Terrible but true.

Also, be careful here. You don't want the mortgage in your sole name without having the ownership in your sole name. To get the house ownership in your sole name your Ex has to consent to sign the transfer papers. To get the mortgage in your sole name the bank will need to agree to this. So really there is nothing that the bank can do on its own to resolve your situation. You must get the cooperation of both the bank and your Ex and/or the cooperation of the court.

I think the best way forward for you is to write to the bank and inform them that you will stop payments on the property until the ownership issue of the house is resolved.
You can advise them again that you are happy to take ownership of the house on your own and happy to take on the mortgage and negative equity.

Once you have stopped payments on the mortgage, you will very quickly get the full attention of both the bank and your Ex. If you get a day in court you can tell the judge that you are willing to take over ownership of the house and repayment of the mortgage.Your case would be stronger if the house was still your home but that's not the case here.

For the time that you are not repaying the mortgage, I would open a separate bank account in a different bank and pay the mortgage in there instead, every month . If necessary you can then later demonstrate to the Judge and the bank that this is very much a case about the ownership of the property rather than a case about capacity to repay. I would also write a letter to my Ex by registered post advising her of your intended course of action.

By the way it would be useful to know how much is the monthly mortgage repayment and the monthly rent received as this has an obvious bearing on the outcome
 
It's ex girlfriend not wife, although if my understanding of the Civil Partnership and Cohabiting couples Bill is correct then because we had 2 kids together from a property point of view ex wife and ex girlfriend are almost the same thing, legally?

I work (very hard) fulltime and always have and have a good career. My ex-gf is doing the single mother's allowance/sponge off the state thing, hence has no money.

The reasons for her doing it are very hard to understand. She says it because she wants to 'safeguard the house for the kids for the future'. This is also the reason I want to own the house, so I can pass it onto my kids. Ironically her actions are probably going to lead to both of us losing the house and having nothing to give the kids, which is very sad after all the money that was spent on it. I want a house to pass onto my kids, but not if it means spending the next 30 years paying off a house + negative equity in someone else's name.
 
Bronte said:
Is there a reason that she is not doing this? Maintenance issue perhaps?
Click to expand...

The judge took into consideration that I was left saddled with the mortgage during the hearing re: the Maintenance order and awarded a relatively low amount. As it turns out though, this suits my ex as she subsequently decided to give up her job and go on social welfare. If the maintenance order were to be increased in court, she would lose some of her benefits so she doesn't want the Maintenance order to be increased now (if she did believe me, she would have taken me to court for same long ago). I finance the children separately (directly paying for things for them etc) in ways that don't affect her social welfare entitlements.
 
Dr.Debt said:
For the time that you are not repaying the mortgage, I would open a separate bank account in a different bank and pay the mortgage in there instead, every month . If necessary you can then later demonstrate to the Judge and the bank that this is very much a case about the ownership of the property rather than a case about capacity to repay. I would also write a letter to my Ex by registered post advising her of your intended course of action.

By the way it would be useful to know how much is the monthly mortgage repayment and the monthly rent received as this has an obvious bearing on the outcome
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Hi Dr Debt, thank you for your excellent, clear and consise advice. I had already considered taking this tack (and it may be the one I'll have to take in the end) but I hadn't thought of the idea of putting the mortgage amount into a separate account every month so I can later demonstrate to the court that it was purely an issue of ownership - great idea, thanks.
Due to being on a variable interest rate, the shortfall between rent and mortgage obviously has gone up and down like a yo-yo over the last 3 years (that's how long I've been paying the mortgage in full) but currently the shortfall is about 600 euro. I also have to pay the house insurance, mortgage protection and now the lovely property tax as well. I also have to maintain it obviously for the tenants - buy them a new washing machine when the old one breaks down, new furniture etc.
 
On the link you sent you advise against someone in my position renting out the house in full -which is what I've done
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Thanks for pointing this out. I need to revise the other post on this as my thinking has evolved on this.

The joint owners of a rented house should each pay the same amount off the mortgage so that their equity in the property remains the same.

If one pays, but the other doesn't, the payer is paying down the other person's negative equity.

So if your ex is paying nothing, you should pay nothing other than the rent.

I do not agree with stopping paying altogether. The rent you receive should be paid in full to the bank. If, over time, the rent pays off the negative equity and builds up equity in the property, your ex would be entitled to a half share in it.

I suggest the following, but you need to check with your solicitor on how it fits into the bigger picture.

1) Get your solicitor to write to your ex asking her to sign a deed of assignment, renouncing her interest in the house.
2) If she refuses or ignores it, then you write again.
3) Show the correspondence to the bank and tell them, that you have no choice but to pay only the rent towards the property.
4) They will probably not repossess it.
5) But if they do repossess it, you will have to pay the full shortfall as your ex is unlikely to make a contribution.

This is messy, but there is really no alternative.
 
The issue I have with going interest only is that this is completely dead money. This is just putting my money into a black hole - it doesn't reduce my mortgage.
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No. No. No. No. No. No. No. No.

Get the pub talk about "dead money" out of your head. It is a meaningless concept.

If you give the following figures, I will be able to explain why

Value of house
Amount of mortgage

Interest rate
Remaining term
Currrent repayments
Rental income
Other costs of renting property
 
Value of house: approx 200k
(this is based on values I saw on the Property Price Index for similar houses in the same estate that sold recently)

Amount of mortgage outstanding: 260k + 59k = 319k

Interest rate:
260k @ SVR (4.3%)
59k @ tracker

Remaining term: 28 years
Currrent repayments: 1600 p/m
Rental income: 1000 p/m

Other costs of renting property:
1. House insurance
2. Property Tax
3. Mortgage protection
4. Upkeep of house for tenants: approx 500 per year
 
Lucuma said:
. She says it because she wants to 'safeguard the house for the kids for the future'. This is also the reason I want to own the house, so I can pass it onto my kids.

.
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Must have missed this, but it actually means you both want the house to ultimately go to the kids, so really there is no problem.
 
Bronte said:
Must have missed this, but it actually means you both want the house to ultimately go to the kids, so really there is no problem.
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No, there is a problem. I don't trust her.
This is a completely self-serving individual, with multiple mental illnesses. She is prone to erratic and unpredictable behaviour.

Even though she says now that she wants the house for the kids, what's to stop her from forcing a sale in 10 or 15 years time after I have paid off the negative equity and the house starts to become worth something again. She could bide her time til then while I pump money into the mortgage like an idiot, and then once it starts to have a net worth value again she could force the sale and take half the profits. The kids won't have a house and I'll be left with egg on my face.
 
Any chance she'd agree to sign her half over to the kids? If it would even be possible to do so in a way that would remove her potential access to the value of the house before they come of age (while also not saddling your kids with the debt in an ideal scenario I suppose).
 
Janet said:
Any chance she'd agree to sign her half over to the kids? If it would even be possible to do so in a way that would remove her potential access to the value of the house before they come of age (while also not saddling your kids with the debt in an ideal scenario I suppose).
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Not worried about saddling my kids with the debt - assuming I live for another 30 years I intend to have it paid off before then, and god forbid if something happens to me - the life assurance will pay it off anyway. So there's absolutely no chance of them being saddled with any debt.

I'd love if there was a way for her to sign over her half of the house to them, but because the house has no net value i.e. its value is minus 100 thousand euro at the moment, the only thing she can sign over is half an outstanding mortgage to the bank. And obviously the bank aren't going to allow half the debt to be signed over to children. So I can't see how that one would work in practice, even though it's a good idea in theory.
 
Lucuma said:
Regarding your point about the maintenance, I have never looked at it this way, and it's an interesting point as it may be looked at that way by a judge in the future but I think it would only be true if the only money I paid her was the maintenance. As I pay alot more money than the maintenance, and I have records of it all, it's a moot point I think.
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I think that it exactly the way the Judge will look at it. There is no way low maintenance would have been agreed if what was presented in Court was you take and own the house 100%. you presented that you will continue to pay down joint debt.
Regarding paying maintenance off book, whilst your ex receives State benefits. That will not be looked on favourably.
 
SarahMc said:
I think that it exactly the way the Judge will look at it. There is no way low maintenance would have been agreed if what was presented in Court was you take and own the house 100%. you presented that you will continue to pay down joint debt.
Regarding paying maintenance off book, whilst your ex receives State benefits. That will not be looked on favourably.
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Thanks for the post Sarah. This is an interesting point. I could potentially mention this to the ex; if she realises that by continuing to refuse to co-operate and letting this get to court, everything could come out in the wash and the maintenance amount might be increased & she would therefore lose her benefits then that in itself might be enough to persuade her to take her name off the mortgage before getting to the court stage.
 
Brendan Burgess said:
You must switch to interest only. The bank probably won't agree, but you have to do it anyway. There is no other choice.
The mortgage will go into arrears.
Both her and your credit rating will be damaged.
But you won't be paying off her negative equity.
Brendan
Click to expand...

I'm getting ready to follow this advice. I just had a question, I currently do all my banking through the same bank I have the mortgage with. if i reduce the amount of the mortgage (e.g. only pay the rent off the mortgage or go interest only) without their consent (which i think i will have to, i am unable to get the signature of the other party on the mortgage for any kind of official interest only application forms etc) can the bank seize funds from e.g. my current account to pay the rest of the mortgage? Can they take my salary out of my account to top up the mortgage to what the repayment should be every month without my consent?
 
I've now joined the rest of the country in arrears. Thanks to a poster on here that PM'd me. Very useful advice i.e. that as long as you play ball with the bank, the bank won't contact your ex to get them to pay their half.
 
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