Home economics: Answering your property questions
Our property expert on how to tackle an historical credit rating issue and what to do when a bank appears to be reneging on a contract for a sale of a house.
Question: In applying for our first mortgage we provided every document the bank asked for. We were horrified to be told that our credit rating is an issue.
Apparently an old car loan is appearing in arrears, although we paid this off ages ago with another bank. I am very upset over this and can't believe it's holding up the mortgage approval.
I have told the bank and am trying to get bank statements to prove this is the case but is there anything else I can do? We don't owe this money.
Sinead replies: Your credit rating is a historical record of all loans, credit or debts you have had over the last two years (although they can go back further). The Irish Credit Bureau is funded by all banks to maintain records, and it is most likely it is from here that your rating was discerned.
From time to time, admin records in banks are not updated when loans end. This is most likely what has happened in your case. If you had an old loan, paid it off and the closure was not recorded properly, it could look as if the loan is still outstanding. It may even be possible that the loan was cleared, but a small residual amount remained (a few days' interest perhaps), and is still listed as a debt.
Get on to the bank you took out the loan with and get proof you don't owe anything. Contact the ICB (www.icb.ie) or call 01-2600388 and they will amend your details.
Anyone is entitled to apply for their credit rating and it's worth doing so in advance of applying for a mortgage to ensure there is no bad news lurking there. The service costs €6.
Question: When I separated eight years ago, my mortgage fell into arrears. AIB offered us three options; we went for a voluntary sale.
They let me get my own valuation and they got one too, both at €170,000 but the highest bid was €146,000. My sister then offered to buy it for €159,000 and the bank said yes, along with taking our savings of €11,000 with the rest written off. We signed a contract for this.
Last week we got a notification that AIB wants the property revalued as they want to try and resell it. Why would they do this?
Sinead replies: First of all, this seems a confusing and unusual predicament. In your longer email to me you outline other circumstances which lead me to believe that your only option was to sell up and AIB facilitated you doing this yourself in the first instance.
That your sister is the buyer should make no difference to the bank. If a contract was signed agreeing to the deal, writing off debt and handing over of some savings, it should not really be in a position to renege on that now.
I have contacted David Hall of the Irish Mortgage Holders Association on your behalf as the organisation deals with AIB arrears customers, like you. He has suggested you make contact with him and he will take your case up with AIB.
Separately, ask your solicitor (whom I understand has been involved here), what his/her advice is, especially as there is a written agreement. It would be odd for a bank to retract their position, post contract.
Visit www.mortgageholders.ie and fill out the contact form with your name which I have given to David. There is no fee for his services.
The Ryan review
So, yes, construction is on the up. You can't miss the hi-vis jackets and temporary traffic lights holding up your school run in the mornings.
With a shortfall of 25,000 units it's a necessary evil.
However, let's just drill down into the foundations of that number - first of all, just 1,120 new properties were built in, say, July - the latest month we have figures for - but half of them were one-off houses rather than the mixed unit estates so badly needed.
In Dublin, only 348 units have been built in the city so far this year - a minuscule drop in the ocean of need. It's 'back garden' syndrome all over again, especially outside the capital.
Just 7,000 new units have been presented to market as we enter the final quarter of the year according to the ESRI. Meanwhile, the Central Bank's latest stats on repossessions show that while the banks collectively benefited from 1,696 'assets' taken off homeowners at the beginning of Q2, just 291 were "disposed of" since then.
This is despite 517 repo orders being granted by the courts in the same period and 2,533 enforcement actions being taken.
Isn't it conceivable more could ease the housing shortage? What are the lenders waiting for? The CBI carries a big stick but sometimes speaks far too softly.
Governor Patrick Honohan hasn't been short of delivering a clanger every so often - perhaps his successor will have a more strident voice.