Financial Difficulties – Negotiating with Banks

Response to a Question asked in the Daíl Thursday, July 17

Minister for Finance (Deputy Michael Noonan): I have received the following information in relation to Rent Receivers:

* AIB have appointed Rent Receivers for over 300 assets to date in 2014, of which c. 220 are BTL. In total, AIB has c.1,300 assets under active Rent Receiver management of which c.1,050 are BTL properties. AIB cannot anticipate the number that will be appointed for the remainder of 2014, as it is dependent on borrower co-operation in reaching sustainable solutions. Rent Receivers are usually appointed over assets where borrowers are in default and where the rent being generated from the asset is not being paid to the Bank in reduction of debt outstanding as contracted. The Rent Receiver collects the rent on behalf of the bank and seeks to maximise the value of the asset.

In relation to impact on tenants, the Receiver may decide to sell the property with the tenant in situ, or alternatively it may be sold with vacant possession. AIB ensures that the Receiver acts in compliance with statutory duties and with all of the relevant laws and Codes as they relate to private residential tenancies.

* PTSB have Rent Receivers appointed on 685 BTL units (353 accounts) and 173 CRE units (74 accounts). Appointments made since 1 January 2014 are 243 BTL units (140 accounts) and 8 CRE units (5 accounts). A Receiver is appointed by the bank and operates as an agent of the borrower, collects rent from the tenant(s), and passes it to the bank, together with attending to any property related issues the tenant may have (in accordance with the Lease Agreement). It is almost always PTSBs desire that the existing tenant(s), provided they are paying rent, remain in the property.

* Bank of Ireland have provided information in relation to Rent Receivers in their Annual Report for the year ended 31 December 2013 which can be found at: http://www.bankofireland.com/fs/doc/wysiwyg/bank-of-ireland-annual-report-for-the-year-ended-31-december-2013.pdf

Standard Financial Statement (SFS)

If you are having difficulty meeting your mortgage repayment, early engagement with your mortgage provider is essential.
A Standard Financial Statement has been agreed among the mortgage providers, to assist you in establishing your financial position. This form needs to be completed in great detail; and it can be a challenge to get the relevant accurate information on the form.

You are expected to complete the form in full, giving full disclosure of your monthly and yearly household expenditure.
The SFS provides the basis for the mortgage provider to agree a repayment schedule with you.
It has been often found that the form is inaccurately completed – human nature is to produce the answers we think the bank want to hear. Consequently in most cases household expenditure is underestimated.
Unfortunately, this gives a false and misleading picture to the mortgage provider, who in turn will seek additional repayments as a result.

A useful guideline on household expenditure can be found on Insolvency Service website, these are minimum guidelines only. Your own circumstances will vary depending on the size of your household.
http://www.isi.gov.ie/en/ISI/Guidelines_under_section%2023_June_13.pdf/Files/Guidelines_under_section%2023_June_13.pdf” target=”_blank”>

Before submitting your SFS form, you should
1) Check the form is as accurate as possible
2) Make sure the figures add up and make sense to you
3) Compare the results with guidelines on the Insolvency website
4) Get the figures checked by a third party a useful website (http://www.keepingyourhome.ie/)

Keep a copy of your SFS form for your own records, as the mortgage provider will!