That's going to be interesting when it is finally decided, some banks they say 1/3 of documentation is not in order.
Key Post "Why borrowers should not fear repossession courts"
- Thread starter Brendan Burgess
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Bank has to prove the mortgage is all in order, ie that legally they have the paperwork to back up the fact that the borrower owes them the money. During the boom the paperwork was secondry to shovelling out the money fast in a lot of cases.
It's also the case that borrowers without legal advice are just about hanging in their in court and do as they are told by the registrar and the registrars are so busy they just want as much dealt with as possible. In addition I don't think there are enough judges to deal with so many cases.
I agree with you that this is another kicking the can down the road, the courts can't cope right now, are judges experts on finance, I think not, and what happens when the arrangements fail in month two or five etc. It's totally unworkable. All this should have been given to the Insolvency service who are twiddeling their thumbs.
I can add two more.
One bank A tells the non customer X to stop paying Bank B X 's loan and instead payBank A's loan which is solely in the name of customer Y. Not in writing of court. Main bank.
Second case, Customer tells bank (subprime) with very high variable that they were experiencing severe difficulties and if they could reduce the rate a bit they could cope, months of discussion, no progress, customer defaults, months go by, bank reduces rate but it's too late
Hi Brendan
I was pretty sure Prof Honohan clarified at a Finance Committee hearing last year that long-term, interest-only arrangements could be considered to represent a sustainable solution in certain circumstances so I did a bit of digging and, sure enough, the Central Bank revised their Sustainable Mortgage Arrears Solutions Paper last June to clarify that:
"The Central Bank is of the view that, where the borrower wishes to remain in his/ her home, long-term payment arrangements with lifetime tenure may be sustainable where the sale of the property provides sufficient surplus funds on death to redeem the outstanding mortgage balance"
In other words, the extract from the Bank of Ireland letter does not tally with the Central Bank's view as to what constitutes a sustainable solution in as much as it requires the loan to be cleared over the (presumably modified) term of the loan.
See Page 11 et seq. of the attached paper:
[broken link removed]
Raging Bull
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I have about 10 points of which 2 are very solid...first one is not following CCMA some major breaches of Distance Marketing Regulations in particular precontract information of the type required by Consumer Protection Code,.,. I have another major one which unfortunately I can onky disclose in court
Brendan Burgess
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Hi Sarenco
Yes, I had briefed the Finance Committee on the issue and have posted about it here
Central Bank Governor agrees that long interest-only is a sustainable solution
However, apparently this applies only in exceptional circumstances. From your document:
"limited context" "limited circumstances"
I believe that it should be widespread.
But thanks for reminding me of it. I will push the lenders further on it.
Brendan
Thanks for link.
Actually in that exchange Ciaran Lynch gave a very good example of a set of circumstances where long-term, interest-only payments could well be a sustainable solution:-
"Let us consider the position of someone in his or her mid- to late 50s whose debt will not be cleared before he or she reaches 65 or 66 years of age, whose property is in positive equity and who has a decent and secure pension for retirement. It would be less costly for that person to make interest-only repayments on that mortgage, with some sort of realisation being arrived at following the disposal of the estate upon his or her passing. The bank would continue to make a profit on the loan because the person would be paying the interest and the latter would have the security of remaining in the home which he or she had furnished, modified, extended or whatever over time. Interest-only repayments are certainly lower than the rents being paid in the private market."
However, I would be inclined to agree with the Central Bank that as a sustainable solution long-term, interest-only payments would only be appropriate in relatively limited circumstances and would not be appropriate where a borrower is in significant negative equity.
I'm not sure what you would consider a widespread application but you certainly wouldn't want a default situation arising whereby interest-only arrangements are put in place at a relatively high interest margin without any realistic possibility of the loan ever being repaid (whether during a borrower's lifetime or out of his/her estate). I'm sure the banks would be happy enough with that scenario but it hardly constitutes a sustainable, long-term solution from a borrower's perspective.
Certainly not!!! This is a myth peddled by those who consider themselves to be in a position where " I know a friend of a friend who.....". I.e. Courts do not dismiss cases where money is owed and paperwork is deficient. Granted it makes the bank cases more difficult and protracted but the bottom line remains the same. I.e. The money was lent to the borrower and it must be repaid. security can be difficult to realize in cases where paperwork is deficient but eventually the properties can be re-possessed and sold to meet the debts. Similarly those who rely on MARP/Other Codes not being properly applied are simply prolonging the agony. These tactics can delay process but will not prevent it ultimately progressing!!
Regarding so called "strategic defaulting" , In my experience and in talking to others, Its out of fear, If they cant afford full mortgage repayments, they really have no idea if any money paid to the bank is just dissapearing into a black hole, they are nervous that the property will be repossessed as the bank states that your home is at risk if you miss payments on most all correspondence.
Brendan Burgess
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Hi Michael
That is a very interesting observation. It seems that a lot of people who can't afford their full repayment, pay nothing. They probably see then that there are no immediate consequences, so they don't bother resuming payment. Then they hear almost every commentator blaming the banks for the arrears and so the borrower, too, blames the bank.
Brendan
I think the likes of David Hall et al have had enough airtime over the past 4 or so years, to allay the fears of anyone out there.
That is an entirely rational reaction in my opinion. There's no point paying anything to the bank if you're going to lose the property anyway - money disappearing into a black hole is a good way of putting it.
If a loan can be restructured so that it becomes sustainable on a long-term basis then that's obviously ideal. But if it can't, wouldn't it be in everybody's interests to bring matters to a conclusion so that people can get on with their lives and start to build up their fortunes again? Why are we so afraid to allow people to fail and start again?
But if he keeps paying what he can, turns up in court each time his case come up, no possession order will be granted against him. Right?
Brendan Burgess
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That's the way it works. It's a terrible waste of time and money and a source of great distress.
Brendan
Brendan
I think your advice here should come with a note of caution. You may well be accurately reflecting the general experience to date, however, we do not know whether or not this reflects the universal experience and we have absolutely no assurance that it will continue to be the case in the future.
My guess is the banks will turn their attention to the "partial defaulters" once they have dealt with the more extreme cases (e.g. where no payments at all have been made over a prolonged period).
Brendan Burgess
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Hi Sarenco
We do know that it reflects the experience of everyone who has reported on the courts e.g. New Beginning. We have had no documented reports of anything to the contrary.
It's not the attention of the banks which might change. It's the decisions of the County Registrars. But you are right, at some stage in the future, they could start granting orders for repossession to lenders against people who are paying something meaningful towards their mortgage.
Brendan
We do know that it reflects the experience of everyone who has reported on the courts e.g. New Beginning. We have had no documented reports of anything to the contrary.
It's not the attention of the banks which might change. It's the decisions of the County Registrars. But you are right, at some stage in the future, they could start granting orders for repossession to lenders against people who are paying something meaningful towards their mortgage.
Brendan
Hi Brendan
I agree that we have not seen any reports to suggest that a repossession order has been granted in respect of any borrower that is making partial repayments but that doesn't necessarily mean that such cases don't exist.
County Registrars are responsible for case management hearings (broadly similar to the role of the Master of the High Court) and their decisions are subject to appeal to the Circuit Court itself. In other words, they don't determine whether or not a lender is entitled to enforce their contractual or statutory rights - their role is largely administrative in nature.
Again, I'm not saying your advice is wrong - I'm simply suggesting that a note of caution is warranted.
I agree that we have not seen any reports to suggest that a repossession order has been granted in respect of any borrower that is making partial repayments but that doesn't necessarily mean that such cases don't exist.
County Registrars are responsible for case management hearings (broadly similar to the role of the Master of the High Court) and their decisions are subject to appeal to the Circuit Court itself. In other words, they don't determine whether or not a lender is entitled to enforce their contractual or statutory rights - their role is largely administrative in nature.
Again, I'm not saying your advice is wrong - I'm simply suggesting that a note of caution is warranted.