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House repossesion

  • 21-07-2008 10:06pm
    #1
    Our man in Havana
    Closed Accounts Posts: 29,473 ✭✭✭✭


    Purely a hypothetical question for my own curiosity.

    Say a house is repossessed by a bank and the occupants are evicted by the bank. The house is sold at auction for a ridiculously small amount way less than what was owed on it.

    Now would it be legal for the former owners to bid on their old house? Could the bank repossess the house again if that happened?
    Also if a friend of the former owner bought the house at auction and then signed it over to the former owners would the bank take action?


Comments

  • #2
    Rhonda9000
    Closed Accounts Posts: 451 ✭✭Rhonda9000


    I don't think so.

    * There is no law -that I am aware of- keeping away the houses former occupants evicted by the bank from an auction.

    * Title of the house is being sold at the auction. Validity of offers and acceptance are not concerned with the identity of the parties.

    * It is up to the bank to set a sensible reserve price (and presumably while they are trying to get rid of the asset quickly, they still want to get as much as possible for it).


  • #3
    eamon234
    Registered Users, Registered Users 2 Posts: 1,924 ✭✭✭eamon234


    Plus if you've reached the stage where your house has been repossessed you're hardly in a position financially to buy it back:)


  • #4
    Our man in Havana
    Closed Accounts Posts: 29,473 ✭✭✭✭Our man in Havana


    You would be surprised. Houses can go for very silly money at auction particularly in view of the decline in the market.

    I have seen repossessed houses sold for $1 in the USA.


  • #5
    johnnyskeleton
    Moderators, Entertainment Moderators, Politics Moderators Posts: 14,549 Mod ✭✭✭✭johnnyskeleton


    The difference between the USA and Ireland is that in the USA they foreclose on a property, whereas in Ireland they don't. Essentially in the USA they take a house in exchange for the debt, but in Ireland they take the house and sell it, and if there is any excess of funds they are paid back to the punters, but if there is a shortfall of funds the bank can pursue the punters.

    However, a mortgagee who repossesses a property has a fiduciary duty to get a reasonable sale price on the property, so firesales like in the US are less likely here.

    It's perfectly legal for anyone to bid in an auction provided they have the money and a bona fides intention to purchase the property. If the ejected occupants did buy back the property at auction, they could not be evicted by the bank unless the bank had a mortgage over their property, which would be unlikely (unless the bank pursued them for any losses and obtained a judgement mortgage against the property). The friend scenario is really more complicated than is necessary, but if people want to pay twice the solicitors fees I won't stand in their way.


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