Break ups: staying together for the sake of the... house
With banks determined to keep both parties on the hook, separating couples who share a mortgage are left with little choice but to remain living under the same roof
‘Til death do us part.” For separating couples with property to divide, this matrimonial promise has never been truer. In the unhappy circumstance where love has left the building, couples are finding out that, while they have checked out emotionally, as far as the joint mortgage is concerned, they may never be able to leave.
“The only circumstances where a bank is taking a name off a mortgage is if you die,” says David Hall, cofounder of New Beginning and the Irish Mortgage Holders’ Association. “The bank isn’t going to release either party in the couple from a mortgage, even if you are living with Jack the Ripper.”
Family-law solicitor Deirdre Burke agrees. “I have many examples of cases where the banks have refused to release a party from a mortgage, even where the couple have agreed to do so amicably themselves,” says Burke.
During better economic times, an option for separating couples with a joint mortgage was for one party to buy the other out. But nervous banks with an eye to recouping their money at all costs are now determined to keep both parties on the hook. Burke cites a client example of a couple with no children, where the husband has agreed to buy his wife out of the family home, enabling her to move on and purchase another property for herself. “The bureaucratic hoops that the husband had to jump through to put the house in his name only were extensive. The bank caused substantial delays to the extent that the woman almost lost the purchase of the property she wanted to move into.”
She gives another example of a separating couple where a wife in a good permanent job wanted to release her husband, who had been unemployed for some years and was on social welfare, from the mortgage. “The bank won’t allow her, even though she is the one who had been paying the mortgage for the past five years. The couple now has to sell the property rather than keeping the children in the family home.”
The other option for separating couples is to sell up, dividing the equity. “But now you are more often dealing with dividing liability, not equity,” says Burke, “so it comes down to negotiations with the bank to see if you can actually separate the negative equity into two personal loans.”
Often the banks won’t budge.
“To be honest, I think the banks just want to keep both people tied in. They are keeping their options open. That way both parties in the couple remain jointly and severally liable, which means the bank has the option of going after both of them.”
The final option is remaining under the same roof when you’d rather be anywhere else. “That’s the most difficult situation but it’s what most people are being forced to do,” says Burke. “You end up living separate lives under the same roof. It’s especially difficult where children are involved because it increases exposure to conflict. But even where things are amicable, it’s confusing for children. There is no end point.”