Brendan Burgess
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I have an article in today's Indo. Predicted "tsunami of repossessions" has not happened For space reasons, I had to cut it in half. Here is a full report on the proceedings in Meath Circuit Court on Monday.
Since the mortgage arrears crisis began 8 years ago, a total of 1,471 family homes have been actually repossessed by the banks by court order. When you consider that in excess of 120,000 people have been in arrears at some stage over that period, 1,471 is a very low figure. When you further consider that 30,000 borrowers are currently in arrears of over 2 years, it’s an astonishingly low figure.
Of course, we don’t have the figures for the number of homes sold by borrowers under pressure from the banks, so more than 1,471 people have actually lost their homes.
I have attended the Circuit Courts in Dublin, Donegal, Wicklow and Meath in recent months to see for myself what is happening in practice. Séamus Coffey and Karl Deeter have attended the Circuit Courts in Cork and Dublin.
Our experience is very clear: if a borrower wants to keep their family home and pays something, the lender hasn’t a hope of getting an order for possession.
I attended 198 cases in Donegal. Despite the efforts of the banks and despite the fact that some of the houses had actually been abandoned, the court didn’t grant a single order for possession. In the last 100 or so which I have attended in Dublin, I have seen no repossessions granted either.
The hearings are heard by the County Registrar, a Circuit Court official. I had heard that the County Registrar in Meath, Mairéad Ahern, was tough on borrowers so I went down to the court in Trim on Monday last to see if she lived up to her reputation. She kicked off the proceedings with the following statement:
“If this is your first time in court, you may or may not know how to proceed. Even at this late stage, most cases are resolved. There are two authorised organisations outside – MABS and the Insolvency Service. Ask for an adjournment to consult them.
Repossessions are very rare. There has been only a handful of actual repossessions in Meath and Louth in recent years, despite what you read in the papers. Most are for vacant and abandoned properties. Take advice from the authorised groups. I will give you whatever time it takes”
She didn’t sound too tough to me.
Out of 103 cases, 25 were struck out, 73 were adjourned and the banks succeeded in getting orders in 5 cases. Not quite the tsunami of repossessions we keep hearing about. But 5 cases is 5 more than I have seen in over 300 cases in Dublin and Donegal, so were these 5 repossessions justified? Judge for yourself.
The first repossession was for a “family home” which had been rented out. The owners appeared to have left the country. The arrears were €62,000 on a mortgage of €294,000. The last payment was €400 in June 2015. They last engagement with the lender was in June 2014 and despite 5 attempts by the bank to call them, they have not been able to speak to them. So the borrowers are collecting the rent and not paying their mortgage. The lender, Ulster Bank, began legal proceedings back in early 2013, so it has taken them almost 3 years to get an order for possession.
The second case was a sub-prime lender where no payment had been received by the borrower since November 2012. Not surprising really, as the house had been burnt down. There appeared to be a dispute over the insurance and the solicitor representing the borrower asked the court for yet another adjournment to try to sort out the insurance. But at the last court hearing, 6 months ago, the Registrar had told the borrower that she would give them one last chance but only one. They had not resolved it in that time, so she granted the lender an order for possession. What the lender is going to do are going to do with the burnt out shell of a house is another matter.
The third “family home” was also rented out. The owners appear to have moved to Donegal. The last payment was in 2008 – 7 years ago. Update - On checking my notes, I think that this is incorrect. The mortgage was taken out in 2008. We may not have got a date for last payment. It is very unlike Bank of Ireland to hang around when they are not getting paid. So they have been pocketing the rent and paying nothing to the lender, Bank of Ireland. There was €91,000 in arrears outstanding.
The fourth order was granted to AIB. The last payment was made in June 2010 for €500 on a mortgage of €261,000 with €83,000 arrears. One of the joint owners showed up in court and told the Registrar that as the house was in a remote place in County Meath, she could no longer afford to live in it and had moved out. She consented to the order. She had not seen the other joint owner for 5 or 6 years. She would have voluntarily surrendered the property but the bank had to seek an order for possession as the other joint owner could not be contacted to agree to the surrender.
The fifth order was the only case where it appeared that the family might still be living in the home. The balance was €611,000 and had arrears of €57,000. The last payment was received back in January 2011. Legal proceedings were initiated by the bank in early 2013. Despite not receiving any payment in almost 5 years, it has taken the bank 3 years of court proceedings to gain the order for possession. And the Registrar in granting the order, put a 9 month stay on the carrying out of the order as “the borrowers might do something in the meantime”.
Most cases were adjourned or struck out. In four other cases the lender tried to get an order for possession but the Registrar refused. One guy was in the court for the 5th time. Although he has a solicitor and a financial advisor, neither was available to attend court. He has a mortgage of €448,000 with €98,000 arrears and is paying €500 a month. In my opinion, this mortgage is clearly unsustainable. If he can afford only €6,000 a year, he can’t afford to live in a house with a mortgage of €448,000. But he has got yet another adjournment.
In another case, the EBS sought an adjournment but the borrower showed up and asked the Registrar to strike out the case. He claimed that the EBS had told him 15 months ago that they would capitalise the arrears but they had not done so and were refusing to meet him. He has been make full repayments. The Registrar didn’t ask for any evidence to support these claims by the borrower, but to be fair, he sounded credible. She just struck out the proceedings.
In a final case, the Registrar had already granted an order to Bank of Ireland back in April of this year with a 9 months stay. When an order is granted, the borrower has 14 days to appeal it. But the borrowers did nothing about it. Their solicitor sought permission to extend the time to appeal it on the grounds that the borrowers did not know about the court hearing although they accepted that notice had been validly served. Since the order was granted they had actually paid €36,500 off the loan. The bank still objected to the granting of an extension of the time to appeal the order. The Registrar gave them another 14 days to lodge an appeal on the grounds that it sounded to her as “if some arrangement can be made”. This seemed to me to be a common sense approach, although firmly on the side of the borrower.
So what have I learnt? Well of the repossessions of “family homes” I have seen most were abandoned or rented out. Most had huge arrears and were paying nothing. If it’s your family home, no matter how bad the situation, no matter how late in the day it is, talk to MABS or to one of the other voluntary groups. If you do so and if you pay something and if you show up in court, you will not lose your home.
Since the mortgage arrears crisis began 8 years ago, a total of 1,471 family homes have been actually repossessed by the banks by court order. When you consider that in excess of 120,000 people have been in arrears at some stage over that period, 1,471 is a very low figure. When you further consider that 30,000 borrowers are currently in arrears of over 2 years, it’s an astonishingly low figure.
Of course, we don’t have the figures for the number of homes sold by borrowers under pressure from the banks, so more than 1,471 people have actually lost their homes.
I have attended the Circuit Courts in Dublin, Donegal, Wicklow and Meath in recent months to see for myself what is happening in practice. Séamus Coffey and Karl Deeter have attended the Circuit Courts in Cork and Dublin.
Our experience is very clear: if a borrower wants to keep their family home and pays something, the lender hasn’t a hope of getting an order for possession.
I attended 198 cases in Donegal. Despite the efforts of the banks and despite the fact that some of the houses had actually been abandoned, the court didn’t grant a single order for possession. In the last 100 or so which I have attended in Dublin, I have seen no repossessions granted either.
The hearings are heard by the County Registrar, a Circuit Court official. I had heard that the County Registrar in Meath, Mairéad Ahern, was tough on borrowers so I went down to the court in Trim on Monday last to see if she lived up to her reputation. She kicked off the proceedings with the following statement:
“If this is your first time in court, you may or may not know how to proceed. Even at this late stage, most cases are resolved. There are two authorised organisations outside – MABS and the Insolvency Service. Ask for an adjournment to consult them.
Repossessions are very rare. There has been only a handful of actual repossessions in Meath and Louth in recent years, despite what you read in the papers. Most are for vacant and abandoned properties. Take advice from the authorised groups. I will give you whatever time it takes”
She didn’t sound too tough to me.
Out of 103 cases, 25 were struck out, 73 were adjourned and the banks succeeded in getting orders in 5 cases. Not quite the tsunami of repossessions we keep hearing about. But 5 cases is 5 more than I have seen in over 300 cases in Dublin and Donegal, so were these 5 repossessions justified? Judge for yourself.
The first repossession was for a “family home” which had been rented out. The owners appeared to have left the country. The arrears were €62,000 on a mortgage of €294,000. The last payment was €400 in June 2015. They last engagement with the lender was in June 2014 and despite 5 attempts by the bank to call them, they have not been able to speak to them. So the borrowers are collecting the rent and not paying their mortgage. The lender, Ulster Bank, began legal proceedings back in early 2013, so it has taken them almost 3 years to get an order for possession.
The second case was a sub-prime lender where no payment had been received by the borrower since November 2012. Not surprising really, as the house had been burnt down. There appeared to be a dispute over the insurance and the solicitor representing the borrower asked the court for yet another adjournment to try to sort out the insurance. But at the last court hearing, 6 months ago, the Registrar had told the borrower that she would give them one last chance but only one. They had not resolved it in that time, so she granted the lender an order for possession. What the lender is going to do are going to do with the burnt out shell of a house is another matter.
The third “family home” was also rented out. The owners appear to have moved to Donegal. The last payment was in 2008 – 7 years ago. Update - On checking my notes, I think that this is incorrect. The mortgage was taken out in 2008. We may not have got a date for last payment. It is very unlike Bank of Ireland to hang around when they are not getting paid. So they have been pocketing the rent and paying nothing to the lender, Bank of Ireland. There was €91,000 in arrears outstanding.
The fourth order was granted to AIB. The last payment was made in June 2010 for €500 on a mortgage of €261,000 with €83,000 arrears. One of the joint owners showed up in court and told the Registrar that as the house was in a remote place in County Meath, she could no longer afford to live in it and had moved out. She consented to the order. She had not seen the other joint owner for 5 or 6 years. She would have voluntarily surrendered the property but the bank had to seek an order for possession as the other joint owner could not be contacted to agree to the surrender.
The fifth order was the only case where it appeared that the family might still be living in the home. The balance was €611,000 and had arrears of €57,000. The last payment was received back in January 2011. Legal proceedings were initiated by the bank in early 2013. Despite not receiving any payment in almost 5 years, it has taken the bank 3 years of court proceedings to gain the order for possession. And the Registrar in granting the order, put a 9 month stay on the carrying out of the order as “the borrowers might do something in the meantime”.
Most cases were adjourned or struck out. In four other cases the lender tried to get an order for possession but the Registrar refused. One guy was in the court for the 5th time. Although he has a solicitor and a financial advisor, neither was available to attend court. He has a mortgage of €448,000 with €98,000 arrears and is paying €500 a month. In my opinion, this mortgage is clearly unsustainable. If he can afford only €6,000 a year, he can’t afford to live in a house with a mortgage of €448,000. But he has got yet another adjournment.
In another case, the EBS sought an adjournment but the borrower showed up and asked the Registrar to strike out the case. He claimed that the EBS had told him 15 months ago that they would capitalise the arrears but they had not done so and were refusing to meet him. He has been make full repayments. The Registrar didn’t ask for any evidence to support these claims by the borrower, but to be fair, he sounded credible. She just struck out the proceedings.
In a final case, the Registrar had already granted an order to Bank of Ireland back in April of this year with a 9 months stay. When an order is granted, the borrower has 14 days to appeal it. But the borrowers did nothing about it. Their solicitor sought permission to extend the time to appeal it on the grounds that the borrowers did not know about the court hearing although they accepted that notice had been validly served. Since the order was granted they had actually paid €36,500 off the loan. The bank still objected to the granting of an extension of the time to appeal the order. The Registrar gave them another 14 days to lodge an appeal on the grounds that it sounded to her as “if some arrangement can be made”. This seemed to me to be a common sense approach, although firmly on the side of the borrower.
So what have I learnt? Well of the repossessions of “family homes” I have seen most were abandoned or rented out. Most had huge arrears and were paying nothing. If it’s your family home, no matter how bad the situation, no matter how late in the day it is, talk to MABS or to one of the other voluntary groups. If you do so and if you pay something and if you show up in court, you will not lose your home.
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