Hi cremeegg
If you can pay your mortgage, you should do so.
- You will own your home mortgage-free earlier
- Your credit record will not be affected so you will be able to borrow again for normal credit purposes or to trade up
- Your mortgage is less likely to be sold to a vulture fund
If you don't pay your mortgage
- While there is a very small risk at present of the lender being able to repossess, this might change. In fact, I am campaigning for it to change so that a lender can fast track repossessions against those who don't pay
- The arrears will build up and the longer you leave it, the more difficult it becomes to solve.
- Your mortgage is more likely to be sold to a vulture fun.
But to answer the question you asked...
Very little would happen. It would depend to some extent on what bank you are with and which county you live in.
If you owe €100,000 today, you would owe €100,750 after one year. €101,500 after two years.
The lenders don't charge penalty interest on arrears - even on trackers.
Depending on the lender, you would get a few calls- ignore them. You might even get a letter or two - ignore them.
Eventually they will refer the case to a solicitor. They will write to you. Ignore it.
They will issue proceedings but then comes the tricky bit for them - they have to find you to serve them on you.
You will get a Registered Letter. Refuse it.
A summons server might well call to the door. Make sure not to answer it.
(If there are two names on the mortgage, they have to find both of you.)
The banks and their solicitors are so disorganised that they might well let the proceedings run out of time, and they will have to go back to court to get a New Return Date.
Then they would have to apply to the court for Substitute Service - maybe the Registrar would give the bank permission to pin the summons on your front door.
Some years after you stop paying, your case would come up in the Circuit Court.
You would get what is called a Practice Direction Adjournment on your first visit to give you time to engage with your lender. There is no need to attend. This is granted automatically, whether or not you show up in court, or whether or not you have paid anything for some years.
At the next court appearance, you should probably attend and you could argue that you have done your best to engage, but the bank just won't engage with you.
With any luck, something else might happen to delay it
- A new Companies Act might require them to add or subtract DAC from their name, but they didn't get around to doing it.
- They might have sold your loan to a vulture fund, but forgotten to register it properly
If you do absolutely nothing, don't pay anything at all, and don't show up in court, they will eventually reach a situation where the Registrar will be prepared to grant them an order.
It's very likely that the solicitors will have messed this up and wont' get the order.
- They probably forgot to serve notice of something on you
- Or they don't have an up to date statement of account
- Or they don't have an affidavit that they adhered to the CCMA
- Or they don't have an affidavit that you are not affected by the TRacker Mortgage Scandal (despite the fact that you have a tracker mortgage.)
- (There are probably around 20 more hurdles for them to slip on.)
Or it's even possible that on one of the occasions, the solicitor might not show up and the proceedings are dismissed for want of prosecution.
You probably should start taking some notice of it at that stage. There are a few options
- A few days before the hearing submit a half completed SFS - the bank will apply for an adjournment to consider it.
- There is a good chance that they won't have finished considering it by the adjourned date, so they will apply for another adjournment.
- At the next adjournment, tell the Registrar that you have just met MABS outside the court and have made an appointment to meet with them. You will get another adjournment. In fact, there is a good chance that the Registrar will ask you if you have consulted MABS and then adjourn it to allow you to do so. If so, pick a very busy MABS which won't be able to give you an appointment until after the adjourned date.
- At the adjourned hearing, tell the Registrar that you have made an appointment with a PIP - that will give you another few months
- At the next hearing, tell the Registrar that the PIP has applied for a Protective Order and you will get another adjournment.
- Then tell the Registrar that the PIA wasn't appropriate, so you are applying for Mortgage to Rent.
- Somewhere along the way, make sure that your spouse, child or parent is sick so request another adjournment
After some years, they
might get an order for possession.
You should probably take it seriously at that stage and start paying. The lender will probably agree a restructuring with you.
If you are with Bank of Ireland or a vulture fund, then you should probably be a bit more careful. They are more serious and better organised. They are far more likely to get an order against you and to execute that order. If you are with ptsb or AIB, it's unlikely that they will be able to clear all the hurdles.
Check your local Registrar's Court to see what you can get away with. For example, if you are in Wicklow, the Registrar there will see through this.
An alternative strategy
Pay something from time to time
When they send you an SFS, half fill it in and send it back.
They will ask you for more information
Give it to them in dribs and drabs
If they don't give you an alternative payment arrangement, appeal it.
When they reject that, appeal the process to the Financial Services Ombudsman
Study the CCMA in detail. You should be able to find some breach of it.
Show up in court and tell the Registrar you are doing your best.
Things to avoid if you don't want an order against you
Don't make a legal argument e.g. That the bank's loan to you was irresponsible. The Registrar will send it to the Judge's List and this is the last thing you want. The Judge will probably make a decision.
Don't shout at the Registrar or Judge.
Avoid the anti-repossession advisors. They will make spurious legal arguments which could speed up your case. There is no need for them.