Mortgages: What Happens If I Run Into Trouble?

Sickness, unemployment, divorce/separation ,emotional problems and a host of other circumstances sometimes mean people can no longer pay back at the original rate or at all.

Do not ignore the problem!

If you run into difficulties the first rule is to communicate with your lender and with your solicitor.The worst thing you can do is ignore the problem and pretend it will go away. It won’t and could become a much more expensive problem for you due to accumulation of penalties, interest, legal fees and other charges. Lenders get very worried when a borrower fails to make repayments and goes quiet.

In many cases it is possible to reschedule the loan repayments into something that is more affordable until circumstances improve.

Ultimately, if there is no way to solve the problem the bank will go to court seeking repossession in order to have the property placed in their name so they can sell it on the open market. If this happens it is important that you retain control of the situation and sell the property before the lender has a chance to repossess it. Even though you will lose the property the cost to you will be much lower in legal fees. Consultation with an expert solicitor is vital in these circumstances.

Negative equity

If the property is worth less the amount borrowed it is in negative equity. Because of the disastrous lending policies in the past many property values have fallen below the level of the loans that were made to purchase them. This was bad policy by the banks and bad luck for the rest of us.If your negative equity property is taken off you by the lender and sold you may still owe money and they may still pursue you for this.

Since the Celtic Tiger property values have fallen back significantly, in some cases even lower than before the boom. Loans taken out in confidence that the property value would be maintained, even among the most prudent borrowers, have been undermined and many borrowers find themselves in debt above and beyond the value of their property.

Family Home

If this is your family home you are in deep difficulties. It is extremely important that you get advice as quickly as possible.

Help is available!

The Money Advice and Budgeting Service (MABS) which operates in every town and city in the country provides advice for people who find themselves in financial difficulties. They deals with mortgages as well as with any other kind of debt.

There is now a statutory scheme, where the highly skilled mortgage arrears advisers in (MABS) can help to guide you through negotiations to reschedule your loan and stay in your property or, in some unfortunate cases, arrange an orderly surrender of the property and to make future arrangements for accommodation.

They also provide a solicitors representation service in the circuit court to speak on behalf of the defendants. Is a great relief to have the entire situation explained to you by a qualified solicitor. The courts look with sympathy on anybody who engages with this scheme to achieve and will allow sufficient time for negotiating the best possible outcome.

Loan paid off

If you have paid of your loan you are entitled to have your title deeds returned to you or your solicitor and a deed of discharge, which is a formal receipt for the monies received will also be given to you.

Is up to you, or your solicitor, to register the discharge in the land registry .There is a small fee to the land registry for this.

Generally

There is a huge demand for property the moment and a corresponding lack of supply. We are in an artificial pressure cooker situation and until more credit and more houses are made available the only way for house prices to go is up – whether or not the current central bank rules are kept in place.

Our recent budget has been a complete disappointment and a huge waste of time. It is done nothing to assist the tens of thousands of people you want to achieve the security of owning their own home.

They are rapidly creating a market for speculators and landlords will lock the next generation out of the residential property market.