Family had €200k written off mortgage

A couple in mortgage arrears, whose bank wrote off €200,000 of their mortgage, say their story will “give hope” to homeowners in similar situations.

The family, from Macroom, Co Cork, and their solicitor struck the deal with an American sub-prime lender. Their solicitor predicts that once the new personal insolvency laws come into place this summer, more banks will cut their losses rather than go down the pricey bankruptcy route.

Greg O’Brien was a project manager with a construction firm until he lost his job in 2009. His wife Caitriona didn’t work outside the home and they had a €360,000 mortgage on a five-bedroomed home they had bought and renovated five years earlier.

When Greg was made redundant, the family contacted their lender, GE Money, and restructured their loan so that they were paying interest only for 12 months.

Greg says that unlike many other banks, GE Money did not harass them over their inability to repay the mortgage and were prepared to allow the family a further 12 months of interest-only payments in case their financial circumstances should improve.

However, the stress wasn’t something Greg and his wife could live with and the couple wanted to sell up.

“The worry became so much that we got to the point that the house didn’t mean anything more than just being bricks and mortar. We were beyond the point of the house meaning anything. We just wanted our family to be happy and safe again and, as long as the house was still hanging around our necks, that wouldn’t happen,” said Greg.

Greg and Caitriona began to comb the internet for solicitors with expertise in negative equity and stumbled upon Dublin-based firm, Anthony Joyce & Co. Unlike many solicitors in this area who help clients stay in their home, Mr Joyce specialises in helping clients get rid of both their debt and their house so they can begin debt-free lives.

Early this month, he negotiated a deal for the Macroom family which — with the help of local auctioneer, Killian Lynch — saw them sell their former home for €160,000. The remaining €200,000 was written off by GE Money.

The O’Briens are now renting a house, have set up a small business locally, and are much happier for it.

“We just hope that our story might give hope to other people out there who have the worries that we had and who can’t yet get their head around the whole thing. So much stress has been taken out of our lives by selling up. My advice to anyone out there would be to contact a professional like Anthony. From the moment he got involved, he took over all correspondence and just dealt with everything. Our auctioneer Killian was also fantastic to deal with,” he said.

Mr Joyce said: “What we did here was really a “short sale”. In the medium term, there will be much more of this. We expect the new insolvency legislation to be enacted by July, which will enable individuals to benefit from a user-friendly, three-year bankruptcy arrangement. The banks will come to realise sooner rather than later that sales of this nature make sense. The debt is simply not recoverable and it makes economic sense to get a lump sum now to mitigate the losses in respect of the property.” &

A spokesman for GE Money said they could not comment on individual cases and would not confirm if similar such deals had been struck in this country.