What happens when you cannot pay your mortgage?

What happens when you cannot pay your mortgage?

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A banker is a fellow who lends you his umbrella when the sun is shining and wants it back the minute it begins to rain. – Mark Twain

While the rich and increasingly irrelevant oligarchs who have run our country into the ground argue over who should get their nose deeper into the trough, the rest of us are having problems.

Up to 1,000 a month are now seeking help to pay their mortgage, according to the Irish Independent. Most of these people are applying for mortgage interest relief supplement which is seems to be very hard to get as “large numbers of families are being refused the payment because of strict rules on who can qualify.”

However, you should still apply (contact the Community Welfare Officer at your Local Health Centre). But apart from this, what else should a person do?

The good news is that there is now a code of conduct on mortage arrears that all lending institutions have to comply with. This is available on the Financial Regulator website as a PDF.

Briefly, this sets out:

  • There is a gradated escalation process with a series of attempts to manage the arrears situation at various stages.
  • There is a moratorium on repossession being taken within the first six months of arrears (or 12 months in some cases).
  • The bank must keep records of its dealings of each case of mortgage arrears and these records available to the Financial Regulator.

So if you are in trouble, the first thing to do is TAKE A DEEP BREATH!

Don’t panic, nobody is going to be knocking at your door straight away. While there have been stories in the media about banks making persistent phone calls, they have to comply with the above process.

The next thing to do is to seek advice – contact MABS and have a chat if you can.

If you are worried and getting depressed, seek help for this as soon as you can.  You can always find a listening ear at the Samaritans and this can really lighten the burden.

Talk to your bank and tell them your situation. This may help in later negotiations. Be realistic about what you can pay and don’t make false promises. You need to eat and heat your house first. It will also damage your credibility with the bank if you make promises you are not able to keep.

And last but not least, remember that all things pass. The days may seem bleak, but try to get some perspective. You can get through this.

Whatever you do, don’t hide in the sand – as Joseph Conrad said, ““Facing it, always facing it, that’s the way to get through. Face it.”

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