Home Mortgages Resolution

We certainly have been experiencing a turbulent time over this last number of months trying to ascertain both North and South where various lenders are. The approach for each lender is markedly different and this has been demonstrated recently by a number of Building Societies reducing the monthly payments for borrowers to less than the interest monthly payment, subject to individual circumstances. This has obviously been a welcome relief for overstretched borrowers at this time and this pragmatic approach we believe in the short term should be welcomed. However some of the local Banks as opposed to the English lenders are proving more difficult on shortfall sales. This means that when you sell your property and there is a residue owing to the Bank how do the Building Societies deal with same. English Banks are taking a pragmatic approach realising that people have run out of money and our doing full and final settlements. In Northern Ireland it is still the case that the Banks are looking for greater sums than most borrowers can lay their hands on.

What is the solution?

There is no co-ordinator approach across all Banks because their balance sheets are in various degrees of impairment and like most borrowers they do not want to face the financial reality of an ongoing black hole in their finances for the foreseeable future. They are taking the view why should we crystallise our losses now and impair balance sheets further rather than move forward. However with the right approach demonstrating affordability and the value of the asset GDP are making progress with a variety of lenders to address this unfortunate and unsustainable position for both lenders and Banks.

Now is the time to act because as the market moves, rates rise and the asset value increases and it will become increasingly difficult to  deal with your lender in the medium to long term.

It is refreshing to note that the courts are very much on the side of the borrower at present and are keen for people to remain in their properties in the short term but our cognisant of the fact that when rates rise future problems may occur for both borrowers and Banks alike.

There is a lot of talk in the market place about the upturn in the market and the sale of product but this is still at a very low level and property north of a £100,000 is still proving difficult to dispose of given the vast amount of negative equity still ruling to most properties. On a positive note deals are being done and our advice would be that now is the time to act. 

 

JAMES GIBBONS LLB