Vulture fund have offered me a discount to settle a buy to let in Negative Equity

J

jonahmurphy

Registered User
Messages
17
Hi

Just reading through posts relating to these Vulture funds, i had a mortgage with one of the main banks which was sold to a vulture in the last 18 months. i have been back and forward with then threatening all sorts of legal action/repossession etc.

In the last few days they have offered a discount to settle the mortgage in full, it equates to about a 30% write off.

Is this happening more readily now?
 
Hi Jonah

Can you give a rough idea
Value of property:
Mortgage balance:
Arrears balance:

Interest rate: SVR or tracker?

Will you have to sell the property to pay the mortgage or can you raise it elsewhere?

Brendan
 
Hi Brendan

Property value is somewhere around 170K
mortgage balance is about 250K
Arrears Balance of 25K

Tracker by .80

Property has not been request to sell, funds can be raised elsewhere.
 
So they will write off about €70k and get €170k

They would get less if they actually got an order for possession and tried to sell it.

With 2 years of arrears, they would eventually get an order, but it would cost a fair bit to enforce and the property probably would not sell for €170k.

Seems like a reasonable deal on both sides.

Brendan
 
Yes, i am happy enough with the deal. just wondering if this is common practice at the moment as i don't seem to be able to find any information on AAM of from a Google search.
 
Hi Jonah

I don't know how common it is but it happens a fair bit.

It is one of the advantages of having your loan sold to a vulture fund. The main banks rarely do deals like that in case it encourages other banks to default.

It was more common in the past. But I have heard of offers of such deals being withdrawn or reduced.

My gut feeling is that you should go for it while it's available.

I recommended this to one person who continued to negotiate for a better deal and it was withdrawn. They were in positive equity and could pay their mortgage so I don't know why they messed around.

Brendan
 
Baby boomer said:
Is it your PPR or a buy to let?
Click to expand...

Good question.

I had assumed that it was a principal residence, right or wrong.

Best of luck to the original poster, nice to see people getting a reasonable compromise, so they can move on with their lives.
 
Prima facie, it seems it good deal, given that the normal "business model" for vulture funds is recover the value of the charged asset and to seek a contribution towards the residual debt. In this case the fund just seems to be settling for the value of the charged assets, Perhaps they realise that they might not have a good charge on the property? Perhaps they realise that you have no other funds?

Given that Covid has changed everything, you do need to obtain legal advice on executing any settlement agreement. You may be unable to raise the necessary funds etc to complete within the deadline stipulated, and that could leave you exposed to a judgment that you could not defend.

Jim Stafford
 
I think now i have the opportunity to get shut of it i will take it, dealing with this over the last few years has been an annoyance.
 
jonahmurphy said:
Just to update on this, deal was done and i received the deeds from my solicitor today. all very straight forward after agreeing the final figures etc.

Again thanks for the advice.
Click to expand...
Hi, glad it worked out, curious did you ask for a deal or did the bank suggest it to you first?
 
Thanks for update, very interesting.

If you got the deeds, that implies you had cash/assets elsewhere to pay off the mortgage?

If you had other cash/assets in surprised they offered such a good deal. I guess from their point of view, they made money on it as they likely paid less than 70p.c. when they bought the mortgage.
 
Well done to the OP
jonahmurphy said:
Property value is somewhere around 170K
mortgage balance is about 250K
Arrears Balance of 25K

Tracker by .80

Property has not been request to sell, funds can be raised elsewhere.
Click to expand...
I have a property almost exactly like this, except that there are no arrears.

Should I stop paying the mortgage and see what happens?
 
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