A. In our experience, the first issue facing personal borrowers is what advice should they get on dealing with mortgage arrears on the family home. Your local/family solicitors may not have the expertise or experience to properly navigate around all the.
B. The ideal professional to see is an experienced Personal Insolvency Practitioner (PIP). However, make sure the PIP can negotiate an informal deal as some PIPs are only authorised to do Personal Insolvency Arrangements (PIAs) or Debt Settlement Agreements (DSAs) and are prohibited from doing “informal” deals.
C. Many settlements achieved are done by “informal” deals. “Informal” simply means that there is no court involvement (unlike PIAs DSAs) and are therefore considerably cheaper to achieve with less publicity.
D. The power of PIAs to keep people in their family homes is invaluable. As a result, PIAs are not popular with the funds. There is now extensive case law where the High Court has acknowledged that one of the primary purposes of the Personal Insolvency Act 2012 is to keep people in their family home.
E. Timing is important: A second issue that many borrowers face is that they seek expert advice too late, and before they know it Receivers have been appointed or Re-possession proceedings have commenced. The earlier advice is sought, the more options can be generated.
Issues to consider when dealing with a vulture fund
1. If you are in financial difficulty you should immediately seek professional advice. Advance planning can be very helpful. It is vital that you fully engage with the fund and attempt to stay within the MARP process if applicable. Your advisor should review all of the necessary loan documentation including the Letter of Offer and the mortgage itself. The advisor should carry out property searches and review if the charges have been properly registered.
2. If you have not retained copies of letters of offer etc. you should submit a Data Subject Access Request to the original lender so that your advisor has full access to all relevant documents.
3. One of the challenges facing the funds is that the original lender may have “lost” key documents and thus the lending files are incomplete. There have been some recent notable High Court judgements involving funds who made poor decisions (e.g. invalidly appointing Receivers) based on incomplete documentation and the funds are more likely to proceed cautiously in such cases going forward.
4. You may feel that if your loan was previously restructured that the fund may not be able to appoint a Receiver provided you keep up the current payments under the re-structuring. However, this may not be the case, as the fund may claim that they are entitled to appoint a Receiver “at any time” given that the loan had previously gone into default.
5. Past verbal agreements with your bank can be useless.
6. You will not settle with the fund for the amount that they paid for the loan. The fund will try and recover as much as they can.
7. Explore possible “issues” relating to your property, such as existing leases, rights of way, percolation areas, fire safety certs, planning, easements, rights of residence etc.
8. Obtain a professional valuation of your property at the appropriate time.
9. The interest rates should be reviewed to check if the loan is eligible for the Tracker Redress scheme or that they have been applied correctly.
10. Past bank statements should also be reviewed to check if “surcharge” interest has been applied.
11. If you have any “old” unsecured loans or Personal Guarantees, the funds may be unable to issue proceedings on such debt due to the Statute of Limitations. Seek professional advice if you have such matters.
12. Finally, at the appropriate time, submit a proposal to the fund. The settlement offer should address all issues with the mortgage, property, etc.
13. If it is not possible to reach a deal or do a PIA, then the borrower should consider the Mortgage to Rent schemes (MTR) – i.e. allow the home to be sold and then rent it back. The MTR schemes have restrictions on the property value and family income limits that are relatively low.
14. If it is not possible to do a PIA then the borrower might have to defend any re-possession proceedings in the courts. There is some evidence that, if borrowers can demonstrate to the court that they can meet all interest payments and make a contribution to capital, the courts are slow to issue repossession orders.
15. You can still apply for a PIA after a re-possession order has been granted, provided the family are still living in the home. In such cases, it is possible that the fund would only receive a very modest dividend on its legal costs.
16. You should not be unnecessarily afraid of the fund seeking or obtaining a judgment. Indeed, one advantage of a court judgment is that interest now only accumulates at 2% per annum. Judgments are costly and difficult to enforce.
Your next steps
If you or your friends, colleagues or family members require assistance regarding your family home with vulture funds or banks, please get in touch. Tell us your story and your experience. We believe we can help all debtors in distress on their family home with our wide range of ethically funded solutions. However, before you’re on that “Road to Recovery and Certainty“, you are going to need help. We will listen to your problem, your experience and your hope for your family home; we will then plot a course of action for you which may, more than likely, involve professional advisors. We are not advisors but a provider of solutions. However, we recognise that you might be alone and unsure of where to turn.
Once we are satisfied that we can help, we will need, as a Not For Profit, to ask you for a donation towards our costs of devising a plan for you. This donation contributes to the running of our office and our staff and is €300. Our plan for you will introduce you to the requisite legal and PIP advisors as and when required and there may be additional fees that need to be incurred during the process. Your donation to Homeoptions will be offset against the cost of any solution provided by Homeoptions for you. If you have difficulty making a donation, then please engage with MABS, the State sponsored mortgage advisory body (https://www.mabs.ie/en/).
Contact us at firstname.lastname@example.org in complete confidence with your story now; early planning is essential for the journey and peace of mind!