Case study Waiting to hear from ptsb on split mortgage

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villie

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I would appreciate any advice. I have outlined my situation below. PTSB has contacted me to say that their head office will contact me in the new two weeks to offer me either a split mortgage or a voluntary sale of my home. I have only dealt with the bank and have never consulted a third party ie MABS. I would ideally not like the option of sale and am now wondering if I should be registered with somebody like MABS who can assist me when negotiating with bank.

Personal and income details
Net (i.e. after tax) Public servant. 2300 per month.
Income history: 13 years in public service.
Net Husband made redundant Feb 13. On reduced hours (3 day week) from Feb 12 to Feb 13. Retraining at the moment. Due to finish Nov 13.
Income history:
number of children 2 - 5yrs and 3yrs
Amount of Mortgage Interest Supplement received: nil

Home loan
Lender: PTSB
Amount outstanding: 306,000
Value of home: At best 200,000
Interest rate: variable
Monthly repayment: paying 1800 a month at the moment. Total due 2200.
Amount in arrears: nil

Summary of discussions and agreements with the bank
Approached bank as soon as we started to struggle. Public servant wage cuts, increased mortgage interest rates and husbands hours reduced to a 3 day week. Total monthly payment is 2200. We paid 1800 a month on this. When my husband was made redundant in February we went interest only for 3 months (1300) until our payment protector kicked in. Our payment protector pays 1300 a month towards the mortgage and I pay an additional 500. Our payment protector is due to expire in Feb 14.

Other loans and creditors

Overdraft - 500
Credit Card - 200
Credit Union - none
Car loan - none
Family - none

Other savings and investments
None

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

I don't care about keeping the family home.
I would like to keep it, but will get rid of it if it means I can get rid of the mortgage associated with it.
I really want to keep the family home even if it means having a large mortgage and negative equity for years to come.

- I would really love to stay in family home. It is a self build and it took us a lot of work to get there. I had hoped that PTSB would let us continue with our reduced payments for at least another six months in the hope that my husband will find work in his new field soon.

Any other relevant information

What is your preferred realistic outcome?
That the bank will see that we are doing our very best and that they will give us some time for my husbands new career to take off. Alternatively I was looking for advice as to whether a slip mortgage would be a good option for us?

I hope I have explained our situation clearly. Panicking waiting for the "call" from head office.
 
Hi Villie

Does your husband not get Jobseekers' Benefit?

Did he not get a redundancy payment? If so, what did he/you do with it?

Brendan
 
He got a small redundancy package of 4000. We used this to replace my car which was a write off.
 
UPDATE: Just got a call from PTSB. They have offered us a further six months restructure while my husband completes his training. They say they will look at long term options at that stage. They have increased the amount they are looking for from 1800 a month to 1960 a month (1300 payment protector, 660 from us). Please god my husband will have got a job in his new career by then.
 
Waiting for long term restructure from PTSB

I would appreciate any advice.

Personal and income details
Net (i.e. after tax) Public servant. 2370 per month.
Income history: 18 years in public service.
Net Husband made redundant Feb 13. On reduced hours (3 day week) from Feb 12 to Feb 13. Retraining at the moment. Due to finish April 14. Was receiving Job Seekers Benefit but has been now told he is not entitled as I am earning too much (12 euro a week too much)
Income history:
number of children 2 - 5yrs and 3yrs
Amount of Mortgage Interest Supplement received: nil

Childcare: 90 euro per week

Home loan
Lender: PTSB
Amount outstanding: 299,000
Value of home: At best 220,000
Interest rate: SVR
Monthly repayment: paying 1690 a month at the moment (1300 of this is from payment protector which is due to expire at the end of April 14). Total mortgage due outside of restructure 2200pm.
Amount in arrears: nil

Summary of discussions and agreements with the bank
Approached bank as soon as we started to struggle. Public servant wage cuts, increased mortgage interest rates and husbands hours reduced to a 3 day week. Total monthly payment is 2200. We paid 1800 a month on this. When my husband was made redundant in February we went interest only for 3 months (1300) until our payment protector kicked in. Our payment protector pays 1300 a month towards the mortgage and I pay an additional 500. Our payment protector is due to expire in April 14. The banks extended our restructure again to allow my husband to finish the course. We

Other loans and creditors

Overdraft - 500
Credit Card - 200
Credit Union - none
Car loan - none
Family - none

Other savings and investments
None

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

- I would really love to stay in family home. It is a self build and it took us a lot of work to get there.

Any other relevant information

What is your preferred realistic outcome?
That the bank will see that we are doing our very best and that they will give us some time for my husbands new career to take off. Alternatively I was looking for advice as to whether a slip mortgage would be a good option for us?

I am wondering if someone could offer me some urgent advice. Due to meet with advisor in PTSB tomorrow re a long term agreement. Since I last posted the bank have given us a restructure which is due to expire at the end of March. We are currently paying 1690 a month (1300 of this is from our payment protector policy). Our payment protector is due to expire at the end of April. My husbands course is also finishing at the end of April. My husband received a letter yesterday from the Dept of Social Protection so say that he is no longer entitled to Job Seekers Benefit as I am earning too much (12 euro a week too much apparently). He is going to try and appeal that today on the basis that we have a large mortgage to pay.

What I am wondering is based on the figures above, are we kidding ourselves that the bank will offer us a split? Can we ask for reduced interest rate? What should we be requesting. We are hoping that my husband will get work soon in his new field (IT). He will start on a modest wage of about 25K a year. Should we keep trying to keep our house in the hope that in a few years time my husband will be earning a good wage or should we just face up to the fact that we can no longer afford to keep our home? I would really appreciate any advice/opinions. Finding this all very stressful at the moment. Would really love to keep this house but am beginning to wonder if the stress of it all is worth it.
 
What interest rate are you paying and what's the mortgage term?

I know it's stressful but you are far from being in a non-recoverable position so try not to worry too much. Very early days to be deciding to give up on the house. Meet with the bank and work with them.
 
Hi Sunny, Thanks for your response. Interest rate is 4.34%. Remaining term is 225 months. We had asked about an increased in term as an option but were advised that if we extend the term we cannot extend our existing life policy and will have to apply for a new one. Since we took out this policy my husband suffered damage to his back (another reason for a change in his career from the construction sector) and his dad has been diagnosed with a potentially hereditary condition. Both of these factors would have an impact (or so I am told) on any new policy we would apply for. We have been told by our mortgage advisor that our life policy is a very good one and not to let go of it unless we absolutely have to.

I hope we are in a position to recover from this but some days it is hard to see light at the end of the tunnel. We are working closely with our mortgage advisor who to be fair has been more than obliging and helpful to us since we first got into trouble. Hopefully it will stand to us that we have fully engaged to date, have not got into arrears and have no other unsecured debt.
 
Hi Villie,

Hope things work out for you.
My advice, and it is only advice, is the following;
Go meet with your bank as planned and do not appear cocky, careless etc. Appear confident and if it is a split you want, tell them and let them know that this will save you from going bankrupt/voluntary sale route, where they will lose money on your loan. Tell them that with maybe 100k of the outstanding mortgage parked/warehoused, you will be able to service the remainder of the mortgage and actually have enough to live on for food/other bills etc.

Make sure that you get figures from them on repayment amounts if a split is proposed.

Advise them of the hope of your husband earning a wage in the near future with the option of repaying more if this happens.

DO NOT sign or accept anything on the spot. Chances are you won't have to anyway. It will prob go to their arrears unit for consideration.

A split mortgage is prob the best option for you, rather than the insolvency route as you do not appear to have any other loans/debts apart from your mortgage.
Tell them you want to repay what you owe but cannot as things stand. Ask for the split mortgage option and seek professional advice if you are anyway unsure.
 
Hi daftpunk, I really appreciate you taking the time to respond and for your advice.

I am really hoping they will offer us a split. As things hopefully improve with my husband back earning in the future, we will very happily up our payments to clear any warehoused amount.

Again thanks for your advice and I will post an update when the bank have reached a decision.
 
A split mortgage proposal is unlikely to be successful at this stage. However, you have managed to keep your repayments on line up to now (albeit with the major assistance of payment protection). You are now looking for a revised repayment agreement on the basis of current income. i.e. MARP protection. You will need to firstly complete a standard financial statement to assess your monthly income/outgoings and ultimate ability to contribute to repayments. Bring all of this information with you to the meeting together with bank statements for the last 6 months. Indications are that your financial position will improve provided that your husband is successful in obtaining employment. What you are looking for now is an affordable repayment agreement pending progression on this. The bank will consider a 12 month proposal based on your current circumstances. be prepared for some questioning of your monthly outlay and the Bank may demand some cutbacks on what would be regarded as excessive or unnecessary expenditure. Probably best to discuss your maximum affordble repayment yourselves before approaching the Bank. Best of luck!
 
Hi 44brendan, Thank you for your reply. That is what I feared to be honest - that a split proposal at this time would be unsuccessful. We have filled out an SFS statement every six months. We have cut back on everything. We dont have holidays, nights out etc. I really dont know where else we can afford to cut back. I will sit down with my husband tonight and complete another SFS form and see what is the maximum we can offer. Fingers crossed they will go with a 12 month prosposal like you suggested. That might just buy us the time we need to get back on track. Again thanks for your help.
 
I fully acknowledge the associated stress of dealing with the Bank on your mortgage. However you will be aware that the bank must abide by the Code of Conduct on Mortgage Arrears. Provided that you are up-front with them in terms of information provided and are prepared to meet an affordable monthly repayment level, they in turn will need to give you a deal that is within your ability to meet. If there is a dispute between yourself and the Bank official you are entitled to appeal the decision. Even in a worst case scenario where they are unwilling to reach a compromise with you, legal action is well down the road and if you can prove that you have done your best to meet an affordable payment level then I don't see the bank taking re=posession proceedings. However first call is to reach an agreement and hopefully you will be successful in doing that!
 
I disagree about the bank offering you a split.
If you are due to repay 2200p/m and only earn 2370p/m, it's a no brainer.
You are insolvent and will have 170p/m to service all utilities, feed your family, dress them, live, travel to work, pay for medical etc.
You will be offered a split or it's a lose situation for the bank. A voluntary sale, minus legal costs, will see them lose a hell of a lot.
Your house value could be lowered to the 200k mark leaving you with 100k of negative equity.
Propose to the bank a split with that amount parked.
You would prob be paying around the 1600p/m mark with the 100k warehoused.
That would leave you with 770p/m to live on. Still well below the Reasonable Living Expenses in a Personal Insolvency agreement.
I'd imagine they will push out the term of the loan too, if possible.
What ages approx are you both? IS this possible? what term is left on the current loan at present?
 
Hi daftpunk, I am 37 and my husband is 39. We were told that if we were to extend the term of the mortgage that we would have to take out a whole new life policy. Since we took out this policy my husband suffered damage to his back (another reason for a change in his career from the construction sector) and his dad has been diagnosed with a potentially hereditary condition. Both of these factors would have an impact (or so I am told) on any new policy we would apply for. We have been told by our mortgage advisor that our life policy is a very good one and not to let go of it unless we absolutely have to. I suppose if it means saving our home, it is probably worth changing policy if necessary.
 
We had to change ours, after my wife had a serious illness. I think it increased by 7 euro per month. Check out potential quotes. Don't assume this will be a deal stopper.
You have, as a civil servant, another 28 years approx to work? If so, then they could push out the term.
Are my assumptions right of only 170 p/m left after full repayments of 2200 to service the loan?
If so, you should probably see a personal Insolvency Practitioner. You are insolvent and they will keep you in your home where possible. You could end up with a debt write down. See www.isi.gov.ie for details and read on this site too.
How do you expect to live and rear a family on that amount?
This service is for families like yours. You had some bad luck like a lot of people and debt forgiveness is an option now.
 
Hi daftpunk, I deferred the appointment with the bank until this coming Friday. I have an appointment with a financial advisor to see what, if any, options we have left. I will update you on Friday after our meeting. Thanks for your interest :)
 
UPDATE: We had our meeting with the bank about a long term mortgage solution. We submitted a proposal requesting a 50:50 split and we got word today that it has been granted. We have cut our living expenses back as much as possible and have offered 900 euro a month mortgage repayment. We are delighted and relieved that it has been accepted. It will give us the time we need to get back on track. It is subject to us sticking to the agreed amount for 6 months which we will obviously do. Feels like a huge burden has been lifted :)
 
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