The Debt Panel: 'My bank won't give me Covid-19 mortgage relief because I live overseas'

The former UAE resident, who lives in Pakistan after losing his job, cannot find short-term tenants during the crisis

Illustration by Mathew Kurian 

I was a senior executive banker in Dubai for many years until I lost my job two years ago when my role became redundant. I have been living in Pakistan since October 2018 while I am hunting relentlessly for a job anywhere in the GCC.

I have a mortgage with a foreign bank located in the UAE for a property I bought for Dh2.45 million in 2009 with a 15 per cent down payment. The monthly payment on the mortgage is Dh9,700 and I've informed the bank I am now out of the country and desperately trying to find a position back in the UAE or wider region.

The bank keeps saying the regulations state they cannot give assistance as I am a non-resident.

Until recently, the property was rented out so I was able to keep up with my monthly repayments. At first, I received Dh110,000 per year in rent but after rates dropped in Dubai it went down to between Dh65,000 to Dh70,000. I then tried to rent it out on short lets, but with the movement restrictions now in place I am unable to get any tenants at all. It is now sitting empty and my job hunt has also become harder as a result of the pandemic.

I approached the mortgage provider to ask for assistance to help me weather through this very difficult period.

The bank flatly refused stating that as a non-resident they cannot help. It keeps saying that the regulations state they cannot give assistance as I am a non-resident. Why are they isolating me and discriminating against me just because I was unemployed prior to the pandemic?

I am 50, have no other debts and now live in Pakistan with my in-laws in their house. My monthly expenses in Pakistan come to Dh20,000 and include this debt repayment. I am meeting the mortgage payment through my savings and with help from my father-in-law. I can continue to do this for another six months; after that I will need help.

My outstanding mortgage liability is Dh1.6m and the property is now only worth Dh1m to Dh1.1m, therefore selling is not an option.

Regardless of being a resident or not, I have been regular on my mortgage payments for 11 years and I am still seeking employment. Am I also not a human suffering in this crisis? How can the bank be so ruthless and not assist me? QF, Pakistan

Debt panellist 1: Philip King, head of retail banking at Abu Dhabi Islamic Bank

Long periods of unemployment can be very demotivating, but it is important to remain optimistic and continuously work towards your goal of securing a job. It is great to see your debt is contained to only one lender as opposed to several and despite your situation, you are finding ways to repay your debt in a timely manner.

Unfortunately, it could be difficult to leverage from the current Covid-19 financial relief initiatives, such as the UAE Central Bank’s Targeted Economic Support Scheme, given that it excludes outstanding loans of government, government-related entities and non-residents.

However, your lender may be understanding, given the extent of the global situation and its impact on the financial climate. In a real estate slump, many debtors can find themselves in negative equity, in which the market value of their property is less than the original principal they secured on it. That being said, it is of interest to the bank to find a mutually beneficial solution to avoid potential loan defaults. In addition, home financing is considered a secured loan, implying that the bank has the ability to provide you with a viable repayment structure.

Consider approaching your lender again and providing them with the full circumstances of your situation. Aim for a renegotiation on the current terms of your loan and see what options they are willing to provide you with, whether it is a repayment deferment or an extension of the financing tenure. Reassure them that you are consistently looking for a job, committed to continue repaying your debt on time, and that you will be providing them with the full details of your contract once your new employment commences.

We highly encourage you to continue your job hunt and to expand it beyond the GCC to garner more opportunities. Also, make a conscious effort to decrease your expenses by cutting back on unnecessary spending.

Debt panellist 2: Ambareen Musa, founder and chief executive of

The fact you haven't defaulted on your mortgage payments, definitely works in your favour. But bizarrely, this is a double-edged sword. Some banks may only be willing to renegotiate the repayment terms of a loan if a borrower defaults on the loan. Speak to your bank again and explain you are facing genuine financial hardship and cannot afford to pay your instalments anymore.

If your non-resident status still gets in the way and negotiating from overseas is an issue, consider hiring a legal representative who can speak to the bank on your behalf. Another option is to get in touch with the Embassy of Pakistan in the UAE to see if they can get you access to pro-bono legal advice before you pursue that route.

A legal expert can negotiate a restructured mortgage repayment plan and look into how the UAE's new Insolvency Law can come to your rescue. The provisions under this law also cover ex-residents like yourself, who are struggling to meet their debt commitments from overseas.

If you do decide to go down the insolvency route, your legal representative can petition the local civil court and commence insolvency proceedings on your behalf. The Insolvency Law can help you clear your debts in two ways: first, by negotiating a settlement plan with the lender under the supervision of a court-appointed mediator. If this doesn't work, then a formal bankruptcy declaration is the second option. The court will facilitate bankruptcy proceedings, where your assets (primarily your property in Dubai) will have to be liquidated to pay off the lender.

Debt panellist 3: Richard Boyd, director at Mortgage Finder

This is a tricky situation, however, there are a number of avenues to explore. The first is to get in touch with the collections department at the bank. Until now, it is likely you will have been dealing with customer service teams who are generally unable to make decisions on repayment negotiations.

The collections department has the authority to make agreements with customers on loan repayments, however you usually only reach them when you default on payments. As you have previously worked in the banking sector, ask former colleagues if they can connect you with the collections department of this lender.
Since selling the property is not ideal, reducing the repayments is the best solution to help your savings last longer. There are a number of ways to approach the bank. First, ask to switch the mortgage to interest only. This will reduce the interest rate and mean the repayments decrease as you will only need to cover the interest on the loan and not the principal amount.
The second option is to ask the bank to increase the loan tenor. Central Bank of the UAE regulations changed recently to remove the age limit cap on mortgages. So, the bank could increase the length of the loan to the maximum of 25 years, which reduces your monthly repayments as they are spread over a longer period of time.
Alternatively, ask the bank for some leniency, given the pandemic, to allow you the three-month payment holiday even though you are an overseas resident.
I strongly recommend investigating long-term rental options. It may mean taking a lower income, but this will help with repayments and there are many real estate agents that can assist remotely.
The last suggestion, if all else fails, would be to put the property on the market to sell. However, negotiate with the bank first to ensure they agree to write off part of the loan once the property is sold. We have seen some lenders agree to this in the past.

The Debt Panel is a weekly column to help readers tackle their debts more effectively. If you have a question for the panel, write to