Giving up a house and stop paying mortgage loan, what will happen ?

[North]

Hi all,

 

My girlfriend owns a small detached house, which she wants to sell. The houses in that street are similar and situated rather close to each other, and that is a problem, since the neighbours to one side are basically acting like swines, their land littered with all sorts of garbage, dog feces (they have 3 dogs on a very small plot of land), empty bottles, well, you name it !

And there is a real bad smell at that side of her house. The neighbours moved in a few months after she bought her house.

 

I estimate, that selling under normal circumstances there is a free value for her at maybe 100,000 to 200,000 Baht,

but I think, it will be very difficult for her to sell the house, and if she can´t, in the end she may need to simply abandon the house.

 

Do you know, what happens in Thailand, if you give up your house as described and leave it to the bank ?

Will the bank come after you ?

 

She owns a car, can the bank for example seize the car, because she don´t pay the loan on the house ?

 

Any opinions appreciated.

 

 

[Gulfsailor]

I dont think it works in Thailand like it works in the US, where one can just abandon the property and walk away.  Here the bank would repossess through court and then auction off the property. One would still be liable for the remaining debt (auction price - mortgage amount - court fees - bank fees). 

[trogers]

She would face a bankruptcy suit with claims against all assets in her name, plus a portion of earned income in the future.

[jerojero]

Check with a reputable lawyer. But I think all assets can be seized and then future wages garnisheed.

[Jeffrey346]

The bank will repossess the house and your GF will still be liable for the balance of the loan. If the bank should sell the house, your GF is still responsible for the original loan amount. 

 

Thai banks will only go after people that they know they can recover money from. If your GF owns a business or works for the Government, they will go after her. If not they won't waste their time but your GF will never get credit again.

[F4UCorsair]

When you say 'free value', do you mean her equity?

If so, and the bank sells it off, there should be a surplus,  so the bank shouldn't be after her for anything, but if it can't be sold, there may be a different outcome.

This is a common sense approach, and the way it would go where I live. The bank can't legally keep any surplus after accounting for their expenses.

If the bank is going to sell it, why not sell it herself.  The price may be better than under a distressed mortgage sale.

Of course,  if I misunderstood the term 'free value', and it's what she would owe the bank above the mortgage, they will come knocking, seize assets with a court's authority,  and possibly bankrupt her.

I'm saying pretty much the same as Jeffrey, post above.

 

Edited April 13, 2017 by F4UCorsair

[TheFishman1]

If I was her I go talk to the people on both sides maybe someone in there family will buy it 

[TGIR]

Has she called in the Police to see if they could do something with the neighbors?  Are there people on the other side of the neighbors?

 

Maybe a few people living nearby who could be enlisted to help get that place cleaned up?  Or maybe they are renters and she can go to their landlord?

 

 

[catman20]

can she rent it out ? maybe better than walking away.

Edited April 13, 2017 by catman20

[scorecard]

2 hours ago, TheFishman1 said:

If I was her I go talk to the people on both sides maybe someone in there family will buy it 

 

Has she put up a sign 'for sale'?

 

My son wanted to sell his house in a village in Chonburi city. Several other houses for sale, all with a small sign on the front gate about 15 cm X 10 cm.

 

Son took lots of pictures of the inside of the house then made a PowerPoint slide showing all the photos, tel # etc., and has this printed at a big size print shop on a plastic banner, about 2 m high by 1 m wide. Actually quite cheap, less than 300Baht.

 

Several time he noted people has stopped, got out of their car and took a good look at the photos on the big sign.

 

Then he made a second big plastic sign saying 'Free fresh coffee and cake, today!', plus he put some cheap plastic Xmas tree flashing lights around the free coffee sign.

 

Within 5 minutes some people stopped and came inside, for the full day about 8 people stopped and came in.

 

Later same evening he got a call asking if the caller could come back next morning to bring his parents to look.

 

By about 11.00 am next morning 'SOLD' .

[catman20]

1 minute ago, scorecard said:

 

Has she put up a sign 'for sale'?

 

My son wanted to sell his house in a village in Chonburi city. Several other houses for sale, all with a small sign on the front gate about 15 cm X 10 cm.

 

Son took lots of pictures of the inside of the house then made a PowerPoint slide showing all the photos, tel # etc., and has this printed at a big size print shop on a plastic banner, about 2 m high by 1 m wide. Actually quite cheap, less than 300Baht.

 

Several time he noted people has stopped, got out of their car and took a good look at the photos on the big sign.

 

Then he made a second big plastic sign saying 'Free fresh coffee and cake, today!', plus he put some cheap plastic Xmas tree flashing lights around the free coffee sign.

 

Within 5 minutes some people stopped and came inside, for the full day about 8 people stopped and came in.

 

Later same evening he got a call asking if the caller could come back next morning to bring his parents to look.

 

By about 11.00 am next morning 'SOLD' .

must of been the coffee and cakes

Edited April 13, 2017 by catman20

[scorecard]

1 minute ago, catman20 said:

must of been the coffee and cakes

Wow, your so observant.

Just to be clear, my son had realized nobody will react to a 15 cm X 10 cm sign.

 

He realized he needed to 1). Get people to stay then  2). Find a way to get them into the house.

 

It worked.

 

(For the case of the OP there is still of course the problem neighbor, but perhaps better to sell at a low price (aiming to at least cover the outstanding mortgage), than to sit and do nothing.)

 

 

20cm X 

[Suradit69]

2 hours ago, Jeffrey346 said:

The bank will repossess the house and your GF will still be liable for the balance of the loan. If the bank should sell the house, your GF is still responsible for the original loan amount. 

And they are unlikely to hold out for the best price since they would prefer to get it off their books and go after her for the short fall.

Quote

Giving up a house and stop paying mortgage loan, what will happen ?

Others looking for loans will find it more difficult and costs for new loans will rise as the number of nonperforming loans increases.

 

3 hours ago, F4UCorsair said:

The bank can't legally keep any surplus after accounting for their expenses.

But they can ensure there won't be any surplus by enforcing punitive penalties. In any event, why would they even try to sell it for an amount that would create a surplus? They have no financial interest in making money for her.

[Khon Kaen Dave]

Back in the Uk, when the % rate made it very hard to keep a property, i had a couple of mates, who just put their keys through the Building society door, with a letter. They went underground for a few years.It seemed that the BS had auctioned off the properties. One guys owing was in the region of 45,000 pounds.Years later the Debt collector that had bought the debt sent a letter to people that the absconders knew. Nothing came of it, because their mates denied they even knew them.

The second situation was, that 5 years ago a guy who was a friend of my friend and was a millionaire, came over here and decided that he wasn't going home. He had 5/6 properties,back in the Uk, and he took out 50,000 pound loans on each of them. Then he simply disappeared back over here. He is now wanted for criminal fraud and can never go home again, as he will be arrested.

I know that here is not the Uk, but i would think that the lenders would be pretty pissed off and would try all avenues to make your gal responsible for the debt. I don't know if there is a sort of statute of limitations regarding this sort of action, but i would think that they may do every thing they could to ensure she pays the debt.They might use people that aren't exactly upright in their way of collecting debts on properties. I wish you luck in your endeavours to escape  your problem.Just tell the girly to remain tight lipped and never repeat what she has done to anybody, also you.

[Jeffrey346]

1 hour ago, Suradit69 said:

And they are unlikely to hold out for the best price since they would prefer to get it off their books and go after her for the short fall.

 

 

 

It doesn't matter.. The bank can get full value + and his GF is still liable for the full balance of the loan. 

[khunPer]

OP mention a "normal" free value around 100,000 to 200,000 baht.

What is the mortgage debt due to a bank and the "normal" sales price..?

[just.a.thought]

Where is the house located? How much does she has left to pay the bank?

Don't  abandon it, it will be a problem for her in the future.

[bazza73]

A rather drastic step to be abandoning a property because of anti-social neighbours. First line of enquiry would be to see what can be done about them. Are they renting, or owners?

Sun Tzu's advice in THE ART OF WAR was " know your enemy".

[scorecard]

1 hour ago, Suradit69 said:

And they are unlikely to hold out for the best price since they would prefer to get it off their books and go after her for the short fall.

Others looking for loans will find it more difficult and costs for new loans will rise as the number of nonperforming loans increases.

 

But they can ensure there won't be any surplus by enforcing punitive penalties. In any event, why would they even try to sell it for an amount that would create a surplus? They have no financial interest in making money for her.

 

Plus in some countries the bank's goal is to achieve a price which will pay off the mortgage and all costs and not much more.

 

On the other hand bank in some countries the bank would not be allowed to do this, the law demands they sell at a price say not more than the 15%? below the fully apprased value. 

[scorecard]

10 minutes ago, just.a.thought said:

Where is the house located? How much does she has left to pay the bank?

Don't  abandon it, it will be a problem for her in the future.

 

True, things like compulsory: council rates, rubbish removal, village monthly maintenance charges, keeping the garden in sort of order,  etc etc. 

[Naam]

1 hour ago, Jeffrey346 said:

2 hours ago, Suradit69 said:

And they are unlikely to hold out for the best price since they would prefer to get it off their books and go after her for the short fall.

 

It doesn't matter.. The bank can get full value + and his GF is still liable for the full balance of the loan. 

an extremely unrealistic scenario.

[North]

Thanks for all answers.

 

Well, I think, many of you will know, that thai people don´t want to have disagreements with their neighbours, in fact they try hard not to have disagreements with anyone, it is their culture, I think.

And I have tried to suggest to her: can you talk to the neighbours and politely ask them to clean up around their house ?

But she will not. The neighbour´s wife, which quite openly is in charge (!) is a real gossip bitch with a sharp tongue, and my girlfriend don´t want problems with her.

I think, other neighbours feel the same way !

I think, the bad neighbour owns the house too, bought it a couple of months after my girlfriend bought her house.

My girlfriend has had the house for 3  years and hope to have 2-300,000 Baht, after paying the loan in the bank.

 

Well, I guess there is not much to do other than wait and see, maybe some friends of the neighbour would like to buy.

Edited April 13, 2017 by North
Spelling

[Khon Kaen Dave]

2 minutes ago, North said:

Thanks for all answers.

 

Well, I think, many of you will know, that thai people don´t want to have disagreements with their neighbours, in fact they try hard not to have disagreements with anyone, it is their culture, I think.

And I have tried to suggest to her: can you talk to the neighbours and politely ask them to clean up around their house ?

But she will not. The neighbour´s wife, which quite openly is in charge (!) is a real gossip bitch with a sharp tongue, and my girlfriend don´t want problems with her.

I think, other neighbours feel the same way !

I think, the bad neighbour owns the house too, bought it a couple of months after my girlfriend bought her house.

My girlfriend has had the house for 3  years and hope to have 2-300,000 Baht, after paying the loan in the bank.

 

Well, I guess there is not much to do other than wait and see, maybe some friends af the neighbour would like to buy.

In this situation,in this country, where people are scared to anger their neighbours, and wont engage them in conversation regarding sorting out a problem. Thats the way it is here, and its a pity that a house should be lost simply because of fear or the apathy that is involved. The class system here is very much like the caste system in India.

I hope you don't come off the worse for this, and i truly sympathize.Its just not fair that because the neighbor is capable of terrifying all and sundry, and that she will win this situation.

Good luck.

[Janner1]

Why not just go and see the village headman?  sit him down with half bottle of whisky and tell him he needs to visit the property because he has seen all the mess and smelled the smell.

 

Tell him to tell the neighbor that he wants her to clean it up because it is impacting on the village.

 

Then you can tell him that if he gets a good result he will get a good reward 10 or 20,000 cash in his hand should do it and it will be a lot cheaper than repossession and bankruptcy  and all that that implies.

 

If you can do it that way there will be no repercussions between your Gf and the neighbor because she did not complain to anyone.

the headman saw and smelled it himself and has taken action. There will be no loss of face for anyone.

 

Thats what I would do anyway, at least I would before I asked her to suck on my 12 gauge shotgun

 

[sead]

Buy neighbours plot? Or pay owner of house/ land to cancel their agreement

[Pinot]

Reason #439 to never buy in Thailand

[steven100]

Not sure what your ' free value ;  100-200,000 means but it doesn't really matter ...

 

The remaining mortgage amount + court costs is what she will owe the bank if she defaults.

The bank will sue her through the courts to recover that money.

The police will come knocking after locating her.

She will never ever be able to borrow from a bank in Thailand again and her credit rating will show a red flag.

 

Is the problem :

The location of the house is not suitable  ?

The neighbours mess and smell are intolerable ? but if they cleaned the block up and addressed the smell .. you would stay there  ?

 

If the neighbours mess and smell is the reason for wanting to sell , then a cheaper option might be to assist in cleaning up the block next door and try to explain and come to a solution on any smell from the neighbours.

 

[MyFriend You]

This is a bit of a confusing statement, but then again, I'm an American:   -  "I estimate, that selling under normal circumstances there is a free value for her at maybe 100,000 to 200,000 Baht",  I assume this means 'profit?' after paying off the loan.   In any event, I wouldn't advise walking away.........even if sold at a loss, she can work out payments with the Bank - my neighbor in Sattahip sold her house at a loss and only had to pay the bank  3,000 baht a month for a few years to pay off the excess.   She actually borrowed more for another house, which she sold at a profit (so I am told)    As for the neighbors???   Moo Ban, and the police are the only answer, ven that pbly won't work.  

Edited April 14, 2017 by TunnelRat69

[scorecard]

18 hours ago, North said:

Thanks for all answers.

 

Well, I think, many of you will know, that thai people don´t want to have disagreements with their neighbours, in fact they try hard not to have disagreements with anyone, it is their culture, I think.

And I have tried to suggest to her: can you talk to the neighbours and politely ask them to clean up around their house ?

But she will not. The neighbour´s wife, which quite openly is in charge (!) is a real gossip bitch with a sharp tongue, and my girlfriend don´t want problems with her.

I think, other neighbours feel the same way !

I think, the bad neighbour owns the house too, bought it a couple of months after my girlfriend bought her house.

My girlfriend has had the house for 3  years and hope to have 2-300,000 Baht, after paying the loan in the bank.

 

Well, I guess there is not much to do other than wait and see, maybe some friends of the neighbour would like to buy.

 

I well understand your gf doesn't want to confront the messy neighbor.

 

On the other hand, Thais rarely sell houses so wait and see could mean 50 years. IMHO this is not an option, but of course everybody has their own thinking on points like this.

 

On the other hand wait until the bank acts could mean they take years or even a decade to sell the house and by that stage quite some deterioration and lowering of any sale price of your gf's house and quite possibly the neighbors's house will get even more messy and the whole location also suffers in value.

 

Also, lots of negative on your gf's credit rating and remember that all Thai banks have immediate access to this information.

 

Not a good scenario at all.

 

Seems to me the best immediate action would be large signs to try an attract a buy at a give away price (or even a direct offer to sell to the messy neighbor) aimed at generating enough cash to pay off the mortgage or perhaps to leave a mortgage balance which your gf / you can finalize within a year / 2 years etc.

 

Good luck.  

Edited April 14, 2017 by scorecard

[Jeffrey346]

20 hours ago, Naam said:

an extremely unrealistic scenario.

What is unrealistic?  It's in every mortgage contract.