Does anyone know how this would work out in Ireland?
Say for e.g I had a house and I threw the keys into the bank.
I told them you have it, no ifs no buts, no remortgage, nothing, knew it does not make sense to stay paying it. Business Decision.
Then I stayed in the Country did not leave.
What would happen next…?
What Costs would I endure?
What effect would it have on me/my family(if married)?
I act as solicitor for one of the lending institutions in re-possessions. I was sent keys in the post by a person against whom proceedings had issued in the second half of last year. Turned out the bank needed a formal reposession order and for the county sheriff to formally take possession on their behalf, so i still have to go through the hoops to get that and the associated costs will be added to the capital and arrears.
If the bank fails to recoup the loan capital, arrears and costs out of the sale they can still go after you for the balance.
As it will probably take a few months for the bank to get the house you might still be better off trying to sell yourself in the interim.
Costs? it varies from lender to lender and depends on the Court the proceeidngs are issued. I act in the Circuit Court so you are looking at about €3k.
If anyone was considering doing this, I would only advise them to seek the professional advice of a solicitor. Sending such a letter would have big ramifications. Only a legal/financial expert should be consulted for the full facts before doing such a thing.
We don’t know yet that he is not going to repay his director’s loans (whatever our suspicions).
His loans are secured on assets, they will be repossed. If he has given a personal guarantee also, he will be pursued for the remainder of the loans*. When you sign a residential mortgage, you are, in effect, giving a personal guarantee that you will repay the bank in full, whatever the value of your asset. They have recourse to you personally, hence the term recourse mortgage.
in an equal world!
Personally, I would like to see a move to non-recourse mortgages. This would ensure that the bank values the asset correctly and would limit speculative credit fueled unsustainable house price increases. It would also increase the cost of loans and the amount of down-payment required or the requirement for mortgage insurance - I don’t believe these to be a bad thing either.
As regards Mr. Fitzpatrick, my suspicion is that his loans are non-recourse, either secured on the assets they bought, or on other over-leveraged assets (i.e. that are declining in value). The result will be that the tax-payer will carry the can. Ben Dover, come on down. The time is right.
Mr. Fitzpatrick and those of his ilk, are one of the “protected classes” here in this country.
He is a member of our “untouchables”.
Because of the massive network of complicity in this country, of those involved with “inproper” practices, throughout the public services, elected government and private industry, there is a massive wall of inaction to be knocked before anything will ever happen properly to deal with what has happening in recent times.
Ireland is such a massive mess of a country.
We’ve been the biggest group of bingers on the credit drug during the last decade.
It’s just fortunate that our population is not so large that we’ve got such a major international impact.
Nevertheless, our disproportionate borrowing is touching nerves abroad.
Something needs to be done but it won’t be.
Nothing has and wil be done to deal with these persons.
That’s how it is, and has been, in this most unfortunate of places.
Those in public service who wish to take action will be threated and coerced by those around them into avoiding action.
That’s how it is here.
I have personal experience of this in both private industry and public service.
Everthing here is on the hush, “the less said the better”, mums the word.
At this stage I’m on the verge of wholistic despair at the gross misconduct present in Irish society.
I am upset for the involvement of this country in the biggest scam of its brief history and the failures of the population as a whole to demand proper practice within the Banking Sector.
I’m reminded of how in this country those with some sense of mission and dignity are often attacked and vilified by those who serve an unjust cause.
In this country, if you fight for something good and proper, then you are likely to be attaked by those who do not understand why you are fighting for it, or who would believe that what they have, even how terrible, is better than any hope that you offer.
Just a few of this countries people are willing to resist.
Thos that do are attacked by their own.
It’s happened in the past, it’s now happening again.
Yup, but that makes it the bank’s problem. The breakdown there happened in the origin and distribute model with the disconnect between the mortgage originator and the eventual purchaser of the securitised loan. It has the advantage of not destroying economic mobility in that huge swathes of the population don’t end up immobile in negative equity, aside from the personal reduction in risk.
non-recourse and non-securitisation would definitely make the banks pay more attention, like in the good old days.
My grandad told me that banks refused to give 1 times your annual salary for a mortgage when he got his first one. He had to go to a UK bank to get it. I think 80% of one years salary was the norm. This would have been in the 30’s I guess, and he worked for the ESB!
One law for the rich, a seperate law for the personally indebted. Fitzpatrick was handling loans in his capacity as a Director, not an individual, and (as far as I have heard in the media) nothing he did was illegal, just grossly unethical. If you want him to answer for it, I suppose it would need a tribunal. Oh, wait …!
Ok. So say there’s an outstanding balance of 200k and debtor is effectively broke. The bank is within its rights to petition for bankruptcy. But what really happens in practice? How often have you seen banks take an Ordinary Joe with a wife and kids to the bankruptcy court?
My sense is Irish banks are pretty reluctant to go down this route, but maybe I’m just woefully misinformed.
It is incredibly rare for a creditor to make a debtor bankrupt in Ireland, it is a costly application through the High Court so immediately several thousands are being added to the debt. What the banks will do is when they have judgment for the balance they will bring the debtor before the district court and obtain an installment order i.e. a monthly or weekly payment.
I make a point right now.
I am not a mortgage broker.
I did find the pin.
I do have a Vested Interest, that being, the ownership of my own home at a price not more than 3 times my single income. I just want it to be detached and have a small garage for me to do some work on things.
Everyone has a vested interest in something, don’t they?
This poster has already mentioned that he/she is not doing this but just wanted to understand what the process would be like…
But what is the point of “understanding the process” of unethical behavior? The contract was signed. Mortgage granted. Risks considered. Now pay it. The excuse of negative equity is a drink for a man with no spine. No child will go without food for you to honor your commitments. This is Ireland. Your social welfare is higher than the minimum wage in most countries.
And I didn’t say “find” the pin, I mean to address the hypocrite who FOUNDED the property pin, a vested interest if ever there was one.
Get real. There is no way that the irish people individually, in a time of falling income and asset collapse, can pay the mortgage debt accrued. They can’t even sell it on.
Although the purchaser must except some responsibility the banks and the government were complicit in selling overpriced asset. All were at fault so why should the poor bunnie with the outsize mortgage bail out the banks and the government.
Ethics… to talk of ethics in referrence to irish real estate is clearly unethical.
Sure some people were greedy…very very greedy… and they will pay for their greed, but should that payment last for a lifetime. I don’t think so.
Many people will struggle with putting food on the table for children. Sated hunger comes well before justification.
The “poor bunnie” with an outsized mortgage had two issues to consider when taking out the mortgage, the economy and the consequences of negative equity in light of their own job prospects. Nobody held a gun to their heads when they signed the dotted line. I’m not discouraging someone from discussing reasonable options with their banks but the encouragement on the pin (founded by a less than forthright interest) to turn in keys is chicken shit. Either we pay our mortgages and teach our kids how to honor a commitment or we walk away from a mess of our own making (we signed our mortgage papers, not the politicians) and mortgage the next two generations instead. Your pick.