The state can’t help you get a write-down (if you need a mortgage)

We had an interesting call today because a prospective client wanted to know about Home Choice Loan which is a state sponsored lender.

Her situation was interesting, she is in the process of negotiating a write-down from Tanager via the servicing agent Lapithus and wanted to know if there was any lender out there that might do the deal.

According to the Home Choice Loan website (and a fair critique is that they have done very little in the way of lending to anybody) they are there for first time buyers but ‘some exceptions may apply’. When queried we were told they wouldn’t consider a case for a refinance away from another lender.

What if that involves a good write-down? Currently no lender is willing to finance a deal like this so only people with access to cash can get the deal done, but in a world of low yields if the state was to consider loans like this and do them at their published rate of 3.25% then the nation could make a return on the money …

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Mortgage writedowns occurring, but how much?

We often hear that banks are writing down mortgage debts, but then the lenders themselves say ‘this isn’t happening’. For such a large rumour there is a surprising lack of evidence on either side of the argument, although we do see scant documentation indicating this in some cases.

If you click on the picture it will give you the larger version of the kind of documents we see from time to time. In this instance the client has said they owe over €200,000 but that they lender will take less than half of this, settling on a figure of c. €90,000 to clear in full or they’ll owe the difference if it goes for less.

The property seems to be at a significant discount to others in the same area, and unless the person in question is not being honest (we have no reason to think they aren’t) then the letter indicates over …

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