to consider handing back the keys of my house to the bank?

[LifeContinuesToChallengeMe]

Hi,

So, just when I thought I had sorted out life a new and overwhelming challenge has come along.

I live in Ireland. I bought a house in 2005 as I was just married and expecting a baby. It is a tiny house far away from my family. Because of the crash I was unable to sell the house and buy elsewhere and so I rented it out and now rent a house near to family.

For many years the rent did not cover the mortgage. We fell into arrears. Couldn't sell the house due to negative equity. That is all sorted now. Arrears are cleared and the rental value increased so rent covers the mortgage. House no longer in negative equity. So, we still owe pretty much the full mortgage because of these problems but we could sell it now and walk away free. My plan was to keep hold of the house, with rent paying mortage, until the mortgage is paid, then sell the house and buy a tiny place here so that I don't have to rent in retirement (and rent myself in the meantime).

But......I just found out my estate has pyrite!!! I cannot sell the house without getting pyrite clearance. Banks won't give mortgages without the clearance certificate in my area. The test alone costs 2k. The repairs cost between 30-60k if there is pyrite. My next door neighbour got his house tested. He has pyrite. The houses are terraced so there is a very high likelihood I do too.

Should I just send back the keys to the bank and walk? I can't afford the pyrite remediation. I could wait for years maybe and do it then. But ultimately will it ever be worth it?

Very overwhelmed and would love to hear some perspectives on this! Thank you for your patience in reading

Sorry to hear that, but you need to take professional RL advice - I don't think AIBU can help.

I don't know where to seek advice. And tbh I don't trust any of the professional advice...it is what got us here in the first place.

Maybe other people have experienced this situation

The only thing I can think of is to approach your insurance. Or maybe some local estate agents can advise if this is a known issue in the area?

I think when you hand back the keys the bank just sell it for whatever they can get (to someone who will knock off the clean up price) then continue to bill you for the leftover. Which you'll have to pay, but without the rental money coming in.

It’s not as simple as that unfortunately - if you hand back the keys you will still be liable for any difference between the mortgage value and how much they sell the house for - so bank sell it for £30k mortgage balance is £50k you will still be liable for £20k !
You need to get some professional advice for sure - I hope you work something out x

I'm not sure if the bank would accept that, but having seen a family member go through this, I would absolutely advise you to run like the wind if you can.

I'm so sorry this has happened to you. It's an absolute disgrace, the whole affair, and how it's being handled (or not).

Hi life, I'm Ireland too and used to work in a bank. You cannot just hand back the keys to a property here and have your debt wiped. You need to talk to your bank and explain what is going on. They will continue to pursue you for the debt regardless if they have the keys or not.
Myself and dh are not in a great place either. We bought in 2007 and 2008 two separate properties which have only just come out of negative equity. We have spent approx 30k in taxes renting out one or other of the apartments and are absolutely broke. I feel your despair . I had a panic attack only yesterday at the thoughts of being stuck where we are for life. I absolutely hate it here and would give anything to be able to start over.
I hope you get sorted. I know how stressful it it is. Go to your bank and speak to a mortgage advisor.

Insurance companies won't pay for it according to the news reports that I am coming across. It seems conclusive on that point. The only option is to pay for it yourself.

I did wonder about that yes. It would be awful to have to pay with nothing. hmmm. No idea what to do.

Have you spoken to your local politicians they hold clinics locally and may be able to point you in the direction of state assistance or advice
www.pyriteboard.ie/Pyrite/media/Pyrite/Updated/Fifth-Quarterly-Report.pdf

I was thinking if I handed back the keys that I could go down the bankruptcy route

Yes, but what do the details of your insurance policy say? Not the ones on the news. There may be something in yours that can help.

Won’t your insurance cover the cost of rectifying?

Oh no. I am SO sorry to hear that, after all you have been through too.

I wouldn’t rush into anything.

Get on as many local groups as you can. See if anyone is setting up any joint legal stuff or better checks/repairs etc.

Don’t do anything in a hurry.

What's pyrite?

Bankruptcy may impact your ability to get credit in the future. Look into the Pyrite Board first.

Do financial advisers help with things like this?

Yes, I am concerned about loss in taxes for something that isn't in any way an asset! I don't want to have something cost me monthly but be worth nothing.

I am sorry to hear that badwifey. The whole situation is shit isn't it.

The government assistance scheme is only available for houses when they are nearly falling apart. My neighbour plans to hold on to his house until the cracks get really bad and try to get on the scheme then sell. Already he has cracks in his walls and his hall floor is bulging.

I used to work for AIB in mortgage arrears 😖.

It really isn’t as simple as just handing the keys back. As someone said above, the likelihood is the bank would sell it and then continue to chase you for the shortfall on the loan.

Can you get legal advice before making any decision? Did you have any surveys completed before the purchase either organised by yourselves or the bank where you would have reasonably expected this to be flagged?

Be really careful with this OP. My parents did this, the bank sold the house for much less than it was worth and my parents still had to pay back the mortgage so they ended up in a worse state -paying rent as well as a mortgage. They sold everything-our "sofa" was patio chairs and we slept on air beds for years. Get some independent legal advice and speak to your insurance company

What category was you neighbours deemed to be?

There is a fund in place for pyrite work you may not have to fund it. Helen McEntee did alot work in this area contact her office.

Handing the keys back won't help you just owe the whole debt pretty much.

Try boards and askaboutmoney as well for info.

singlenotsingle It’s basically a mineral that destroys houses. Google and you can see images.

Insurance won't cover damage due to unsuitable materials use. Pyrite is not considered a suitable material for building with

Home insurance will not cover it in Ireland it's a material defect in the building and most insurers have a clause to specifically exclude it.

Have you actually read your policy thoroughly though? I know you say most insurers won't cover it and it's true that yours may not BUT you won't know until you look and there might just be something that could help. It's worth exploring every avenue no matter how unlikely.

Have to go pick up kids. Will read and reply later. Thanks for the messages. This really is a depressing situation. Especially since the house had nearly killed us all these years and we finally thought we were home and dry.

I will take my time. I think bankruptcy seems the best option. I will never be able to get credit in the future anyway with the mortgage arrears I had.