I have just issued a press release on the data:
Tsunami of repossessions? What tsunami?
The Central Bank has just issued its arrears and repossessions data for Q4 2015.
Since 2009, a total of 5,400 family homes have been either voluntarily surrendered or repossessed.
This is a tiny figure when you compare it to the 30,000 homes which are over 2 years in arrears.
It’s also tiny when you compare it to the 100,000 borrowers who have had their home loans restructured.
Séamus Coffey, Karl Deeter and I have been observing the repossession hearings in the Registrars’ Courts during 2015. It is practically impossible for the lenders to get an order for possession. Orders are being granted only where the borrower is paying little or nothing and where they don’t show up in court. It is very rare for a borrower to lose their home if they show up in court and argue their case.
We estimate that around 15% of repossessions are actually homes which have been abandoned.
On 14th December last, I attended the Wicklow Circuit Court where 9 orders were granted, 2 of which were vacant. None of the borrowers was present in court, although one was represented by a solicitor. In one case, reasonable repayments were being made, but as the borrower did not engage with the lender or show up in court, there was very little that the Registrar could do other than grant the order.
Case no.2 below is more typical. No payment at all had been made in 18 months. The borrower did not show up in court. Despite that, the Registrar put a stay of 10 months on the order.
There is no tsunami of repossessions. Borrowers who are in difficulty should not bury their heads in the sand. If they pay something and if they engage with the lender and if they show up in court, it’s extremely unlikely that they will lose their family home.
Brendan Burgess
Order 1 EBS 10 months stay
Balance €114k of which arrears €45k
Paying €510 per month but should be paying €1,900
Proceedings started early 2014
Borrower not in court and not represented
No SFS submitted
EBS passed the case over to Pepper to see if they could engage with the borrower, but they didn't succeed either.
In July, they were reported as having paid €750 in November and €525 in May. No engagement, but they had shown up in the bank's office in June. The Registrar said: "It's such a pity when the borrower does not appear in court. They are at serious risk of losing their home. They are at the cliff edge"
My comment:
This is the first case I have seen in probably 2,000 cases where an order was granted despite good repayments being made. What else could the bank do? The Central Bank has told them to agree sustainable solutions or take legal action. So the EBS has no choice. What else could the Registrar do? They have never shown up in court and they have not engaged with the lender.
I expect that when the borrowers find that an order was granted against them, that they will engage and that EBS will not enforce the order. But if EBS chooses to enforce the order, this will end in the borrowers losing their home.
This is a tragedy. With a balance of €114,000 @ 3.75%, the monthly interest is €350 per month. So they are paying the full interest and some capital. I don't think that there are any houses in Bray worth less than €200,000 , so this house probably has a LTV of around 50%.
If these guys had spoken to the bank, if they had spoken to MABS, if they had spoken to the Irish Mortgage Holders Organisation, a deal would have been done. In fact, if they contact any of these organisations even now, I would expect that this order will not be enforced.
Order 2 Bank of Ireland 10 months stay
Balance: €342k of which arrears: €51k
Last payment: July 2014
Case initiated early 2015
Borrower not in court
Mortgage originated in 2006
Jointly owned home, but only she is living there.
In April 2014 the bank offered an ARA (Alternative Repayment Arrangement) but the borrowers did not accept it.
In July it was adjourned because the borrowers had agreed a voluntary sale.
Order 3 KBC 6 months stay
Balance: €482k, of which arrears: €111k
Last payment 10/2012
Case initiated early 2015
Borrower not in court
First time in court in July - automatic adjournment
Order 4 Start Mortgages 6 months stay
Balance: €138k, of which arrears €63k
Proceedings issued early 2015
Last payment €300 in November 2010
Adjourned in July as borrower wanted to sell house
Order 5 Start Mortgages 6 months stay
Balance: €621k, of which arrears €149k
Last payment: €38 in July 2014
Proceedings issued early 2015
Borrower not in court
Adjourned from July when it first appeared
Order 6 Bank of Ireland 12 months stay
Balance: €193k, of which arrears: €93k
Since June, they have paid €1,300 in total. Should be paying €738 per month
Proceedings issued mid 2014
Solicitor appeared on behalf of the borrower
Solicitor did an excellent job on behalf of borrower this time and back in July but was clearly trying to defend the indefensible.
Husband an unemployed builder but is hopeful that he might get a job. Wife is on a small pension from the HSE due to ill-health.l
Both are in their mid 50s. Daughter of 18 had hoped to go to college, but has deferred it due to their financial situation.
They are desperate not to lose their family home which they have lived in for 20 years.
Registrar: Last month, I made an order against a couple in their 60s.
Solicitor: They believe that they can clear the arrears
Registrar: "If Santy comes down the chimney and if the tooth fairy appears?"
Bank: Reluctantly, we wish to proceed as they told us the same story in July. We see no point in an adjournment.
[My notes from July: Lodged an SFS in June. Paying €100 per week, hopes to increase this to €150 per week]
Solicitor made a last desperate attempt for a short adjournment saying that they would appeal the order.
Registrar: Don't waste money appealing. Your clients should look at reality. They can apply for social housing.
My comment:
The above makes the Registrar sound cold. But, in fact, she had adjourned this case on at least two occasions, and probably three or four occasions. The Registrar is clearly upset in granting such orders and only does so very reluctantly
I will discuss a social policy issue in relation to this case later.
Order 7 EBS 3 months stay
Balance: €281k, of which arrears: €64k
Last payment: €80 in April 2014
Proceedings issued in early 2015
Borrower not present this time, although he was present in July. Here are my notes from July
Registrar: Who is living there? Just myself
When did you last make a payment: Not sure, about two years ago.
Registrar: What are you plans?
Borrower: I ring them all the time
Registrar: Your plans to make payments? Are you going to surrender it?
How much arrears?
Borrower: I don’t know.
R: It’s simple: pay no money lose your house. Keep your house, pay some money.
Order 8 Tanager Limited unoccupied house - no stay
Balance €358k, of which arrears: €37k
Lsat payment 8/2014
Proceedings issued in early 2015
Adjourned in July because the bank could not find the owner to serve notice on him.
Order 9 Tanager Limited - unoccupied house - no stay
Last time first named borrower appeared in court and said that house was empty for some years. She consented and an order was made against her.Order against him this time.
