Mortgage Arrears and Power of Attorney: What to Do?

Questioner

I have a mortgage arrears. Now I have to sign an irrevocable power of attorney from the bank. I hear from various sides that I should not sign this because then I will no longer be entitled to debt restructuring because I will be left with a large residual debt. I do not have NHG. The bank also has full power and can do and let do whatever the bank wants Is this correct and can I refuse to sign it? I hope you can give me an answer. I have now applied for debt settlement.

Lawyer

The answer depends on your financial situation. If the mortgage debt is your only problem, the power of attorney to the mortgage lender can be a solution. They will then not have the house auctioned but will sell it via an estate agent. That can take a long time in the current situation, the arrears in repayments can therefore increase considerably. The proceeds from the property will probably be higher than with a forced sale, but there are also the costs of the sale and the arrears you have in paying off the mortgage. After the sale, you will have a residual debt consisting of the unpaid installments + the sales costs + the difference between the mortgage and the sales price. If you do not give the bank power of attorney, the house will be auctioned. In principle, this will take place in a shorter period of time than the sale via an estate agent. After the auction, you will have a residual debt consisting of the unpaid installments + the difference between the mortgage and the sales price. However, if you have more debts and they are such that there is now a hopeless situation or threatens to arise, then you can appeal to the WSNP. For this you must sell the house or have it auctioned in any case. You cannot do that if you give the bank a power of attorney. You can find a reasonable explanation here: http://www.hypotheek-weetjes.nl/nieuws_712.htm

Questioner

Thank you very much for your response. I just don't quite understand what you mean 'depends on your situation'. That is also not stated on the site you added. Only that if I sign it, I will not be eligible for WSNP. My house will be sold for much less if I sign the revocable power of attorney and I will be left with a large residual debt and will not be able to get rid of it because I will not be able to enter into debt restructuring. Is this correct? Can you tell me more about that? Thanks in advance.

Lawyer

Answer modified.

Questioner

Thank you very much for your response. In addition to my 6-month arrears, I also have other debts and have therefore already registered with the municipality for debt assistance. So if I understand correctly, if I give the bank the power of attorney, I can forget about WSNP and I will be left with a large residual debt that I cannot get rid of. Because I will not get more for my current home than what my mortgage is. Then my decision not to sign the power of attorney is better and to enter into the WSNP in order to sell the house anyway, if I understand correctly.