Ask The Expert: Week 7 Show Notes - Best Bits

Personal Insolvency Practitioner’s and MABS staff cover a variety of topics on week 7 of our Ask the Expert series. Listed below are questions taken from each interview. If you’d like to hear more of a specific interview, scroll to the bottom of the page where the full recordings are listed for playback.

My mortgage has been sold to a ‘vulture fund’, what should I do?

Jeanne Stapleton on GB FM:

“This is something that's becoming more common to everybody, and probably it's a big worry that's out there for people. Some of the people where the loans are being sold to vulture funds possibly to people who haven't been engaging. First thing, you're not alone. Lift the phone, either to somebody in MABS or to a PIP.

Find out what the solutions are but from our point of view the vulture funds, they give you exactly the same protection as you have with the mainstream banks through the personal insolvency process. You are given exactly the same protections. While they are not covered by all of them, they have voluntarily agreed to the majority of the protections that are available. In personal insolvency, we find that they [the funds] engage very actively and very proactively with the process and in restructuring mortgages.”

Want to know more about funds? Watch our ‘Fund Facts’ short video.

If a lender has started repossession proceedings against a borrower and has begun adding legal charges to their account, can anything be done?

Maurice Lenihan on Live 95:

“My understanding is that it's the Court ultimately, who rules whether cost can be applied. Effectively banks must wait before they are entitled to do so. I think one of the obvious problems adding legal costs creates; it aggravates the arrears. Where there are costs included on the loan that creates additional interest charge and so on. I suppose one of the things that the Abhaile scheme, what the Abhaile Accountants can do is quantify the level of cost that is costs that need to be refunded, and maybe the associated interest charges that would also need to be credited back to the account.”

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How much of an effect can mortgage arrears have on family breakup?

James Quinlan on WLR:

“Family breakup, we see is absolutely huge. I would imagine that the number of clients we're seeing is probably about 20% are married couples. The rest are separated for one reason or another because money [finances] is one of the first things that causes issues in a house. Did you pay the mortgage? Did you pay our electricity? We are witnessing separated clients all the time, trying to hold onto the family home. Now it is difficult as a couple to try and pay the bills, look after the family. You can imagine how difficult it is on your own trying to handle that same level of pressure; it can become overwhelming for some people.”

If you are affected by any of the issues raised in this or any of the answers, please get in touch. Advisers working with Abhaile are experienced in dealing with sensitive issues, such as those raised, and can work with you to achieve a positive outcome.

What happens if you’ve got a separated family and one borrower wants to engage with the bank, and the other doesn't want anything to do with it?

Alan McGee on C103:

“This was a big problem for people prior to the insolvency process and the appeal mechanism because banks wouldn't deal with one debtor on their own. They insisted having both borrowers participating. If you had a situation where one borrower emigrated, or the parties no longer talked or one person was putting their head in the sand, the person who wanted to resolve their issues was stuck in limbo. But in a case that was has heard in the High Court, the High Court decided that personal insolvency allows one debtor to participate in respect of the debt as it affects them. Arising from that now we've had a raft of insolvency arrangements that have been approved, where there is only one borrower participating.”

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When a borrower engages with Abhaile, what can they expect?

Claire Kelly on Q102:

“From the first moment that you've missed a month of arrears, however it's happened, it doesn't really matter, pick up the phone. That's the most difficult step for people can be picking up the phone. You can call MABS, or you can look up your local PIP on the backontrack.ie website. There's a list of PIPs there, and you can pick somebody either in your town or in your county, or some people further afield.

The standard approach is we need a little bit of information about you because the first thing is, are you eligible for scheme, very simple criteria. Are you in arrears on your home? Generally, you wouldn't be making a phone call unless you were. Are you at risk of losing your home? Once you’re in arrears, the banks can start making those threatening letters. That usually goes hand in hand.

Are you living in a mansion or a normal size house? In other words, if you're living in a ten-bedroom house, with only two of you, you don't really qualify. It's a little bit too big, and chances are you'd be better off downsizing. In that first phone call, the type of information we look for is details of you. Your family size, is it just one of you, two of you, is there children involved, what ages are they? That impacts how much you need to live. That's the reason we ask for that information.

We ask about your house and your assets. You might have a Buy to Let (BTL), you may not, you may have a car etc. Because of how much your mortgage is, and much you've been able to pay or not pay as the case may be. That starts to give us a picture of you.

Then we'll ask for details about your income, either wages, self-employed, social welfare. How much money is coming into the household to have left pay your day to day bills? That gives an idea of what is left over to try and work with in terms of restructuring the mortgage. That's step one, and that also is how we confirm that you're eligible for the scheme.

Then you move forward into; if it is MABS, it would normally involve a face to face meeting with them. So you'll get an appointment. Now it can take 4 - 6 weeks, you need to be slightly patient. If it's an emergency, you will get in quite quickly either to a PIP or to MABS. If you've got a repossession letter handed in today that says please be in court next week, you'll get in much faster, obviously because that's an emergency situation."

Is mortgage protection worth it?

Eugene McDarby on LM FM:

“One of the conditions of any loan in a family home only is that you have to have life cover. In the event of your death or your spouse's death, that the loan is cleared in full and totality. When you're young, it's not expensive, it's cheaper for mortgage protection, but when people get into financial difficulties, it's one of the first things that gets cancelled and stops being paid.

People don't think they're going to die. But I've had loads of cases where the unfortunate has happened, the policy is cancelled, and then there's no cover to clear the loan. I'm dealing with a very sad case at the moment where the husband committed suicide, and the poor wife and child are still left in the home and now have the full mortgage to pay, unfortunately.

It's crucial that if you get into financial difficulty, talk to MABS or an insolvency practitioner. Get advice on what you should keep, what you shouldn't keep. We'll go through your costs and detail what you can afford, what you can't afford. For the sake of maybe €5 or €10 or a week to keep that in case of the inevitable. It's worth it. Sometimes what tends to happen in separation cases, is that the Court will order the parted spouse to keep maintaining the mortgage protection, just in case anything happens him or her, and the mortgage then is cleared for the rest of the family.”

Information Sources:

Dublin’s Q102 – Mornings with Liam and Venetia Episode 7 (17th July 2019) 2019)

Galway Bay FM - Galway Talks with Keith Finnegan Episode 7 (17th July 2019)

Limerick’s Live 95 FM - Limerick Today with Joe Nash Episode 7 (30th July 2019)

WLR FM - Déise Today with Damien Tiernan Episode 7 (23rd July 2019)

C103 - Cork Today with Patricia Messenger Episode 7 (24th July 2019)

LMFM - The 11 – 1 Show with Sinead Brassil Episode 7 (7th August 2019)

If you or someone you know is affected by some of the topics raised in the above discussion, call the MABS dedicated Helpline on 0761 07 2000, or visit mabs.ie/contact to find your local office and to learn more about how Abhaile may help.