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.”
Some couples are secretly making their own arrangements, says Burke. “They are leaving the property and the mortgage in both names so the bank doesn’t know any different, but one of them is moving out.” Having decided how the mortgage will be paid, either by both of them or by the remaining party, the couple agrees to sell the property at a future date, perhaps when children are reared.
Frank Conway of the Irish Financial Review website, says good legal representation is a must. “If you can’t afford private legal advice, contact the Free Legal Advice Centre.” He advises seeking settlements outside of court where possible and managing personal finances during the process. “The important point is for both parties to seek mediation early on and attempt to keep their finances on track as best they can.”
No matter what the problem is, couples may sometimes make things much worse by airing their dirty laundry at the bank, says Hall. “Don’t think for one minute that rocking up to the bank and spilling your guts is going to make a difference. All you are doing is alerting them to a vulnerability, and the people that pounce most on vulnerabilities are banks.”
Telling the bank of your marital woes may increase chances of repossession, he says. “The bank might just decide: ‘This is too much trouble – we’ve got 100,000 others in trouble. We’re not Accord; we’re a bank. We just want to get on and get our money.’ ”
Michael Culloty of the Money Advice and Budgeting Service says for separating couples either unable to pay the mortgage or in dispute about it, forbearance arrangements may now be at an end. New targets set by the Central Bank and changes to the its code of conduct on mortgage arrears forces more decisive action from banks.
“We are going to see more repossessions now,” says Culloty. “While over the past two to three years the banks didn’t push resolutions and were prepared to wait, now that time is over.”
The Central Bank has also lifted the three-calls-a-month cap on lenders contacting customers. For ex partners in a property dispute, that means double trouble. “It allows both parties to be individually contacted now instead of just one, because both are on the mortgage,” says Hall.
Hall stresses that for separating couples, remaining united in purpose on the property front makes sense. He advises looking to restructure a loan, or leaving a partner and children in the house and making contributions to sustain that on a restructured basis, like a split mortgage.
“As mad and as thick and as angry as people get when they are separating, it’s not in their interest to screw up the relationship with the bank. “You need to work together as best you can to get your own interests protected,” says Hall. “You are better off having a row among yourselves and not allowing the bank to beat the pair of you up.”
LIVING WITH YOUR EX ‘TREAT EACH OTHER WITH RESPECT’
For a couple whose relationship has broken down, mortgage woes can necessitate continued cohabitation. But how can they do it without killing each other?
“In the past four years we’ve seen a massive increase in this sort of situation,” says Tony Moore, a couples counsellor with Relationships Ireland. “There’s no history of it, so couples need help to figure it out. The foundation is they must treat each other with respect.”
He helps warring exes to co-write a “contract” for living together. “We look at what their lifestyles are, are they working or not working, when are they in or out of the house.”
The contract could mean agreeing separate kitchen time or dividing babysitting, picking up the children, cooking and washing.
“I could say, every Tuesday and Sunday evening I’ll be doing my washing and ironing – I’d rather you kept out of the kitchen. I recommend getting a year planner and putting it on the back of the kitchen door so that there is a basic plan.”
There are more emotive matters, too. “If the husband has met someone else, the rule might be that she cannot come to the family home.” And there are the sleeping arrangements. “A couple might have three kids in a three-bed house so that means one person sleeps downstairs.”
Sometimes it can feel like things haven’t changed, so couples need to be clear about boundaries.
“People separating in their mid to late 30s or older still have physical needs so that can be part of the contract – if one person comes home after a few drinks, they must respect the other’s space. If you don’t, it could be the equivalent of some sort of assault. It’s about being mature, knowing the physical relationship is over and you must accept that.”
Moore says the greatest wish of all parents he meets is to protect their children. He recommends parents set aside time weekly or fortnightly to discuss the mortgage, bills or school issues, away from the children. “Parents must be adult enough to be courteous in front of the children.”
Moore has also worked with older couples who are more sanguine. “I’ve worked with couples married for 35 years with grown up children and grandchildren who want to separate. They have lived in the house all their married lives and have an emotional tie to it. They’re saying, ‘Why can’t we just stay in the house and just keep out of each other’s way?”