How long before houses get reposessed?

bmwguy

I asked this question on another thread but thinks it might deserve its own, mods can remove my post on the other thread to avoid duplication if you think its best......

I remember years ago paying the mortgage was the first thing people did with their wages, were repissessions more prevalent then? This whole situation is intruiging to me, I missed a mortgage payment last year when the Ulster Bank debacle in their IT system made funds in my account unavailable. I got calls and letters from AIB immediately. I started reading about it a lot then. What is the longest that anybody knows of someone defaulting and remaining in their house? It seems like respect for the banks is gone. I'm not in arrears anymore, only was for about 2 weeks

Galego

IMO, after June we will start things happing. They will go first for BTL properties which still have enough equity to be a good sale in the market. What it is yet to be seen is how fast these repossessions go through the whole Irish court system. Ireland should be in around 3-4% repossessions over arrears a year. Taking into account that they have a backlog of 3-4 years then there are quite a large amount to be repossessed - around 10-12,000 houses.

Norwesterner

bmwguy wrote: »

I asked this question on another thread but thinks it might deserve its own, mods can remove my post on the other thread to avoid duplication if you think its best......

I remember years ago paying the mortgage was the first thing people did with their wages, were repissessions more prevalent then? This whole situation is intruiging to me, I missed a mortgage payment last year when the Ulster Bank debacle in their IT system made funds in my account unavailable. I got calls and letters from AIB immediately. I started reading about it a lot then. What is the longest that anybody knows of someone defaulting and remaining in their house? It seems like respect for the banks is gone. I'm not in arrears anymore, only was for about 2 weeks

Some people are in arrears over 2 years and continue living at home.
Unheard of in any other country.
Try not paying your landlord rent for 2 years.

No idea when it will happen. Hopefully ASAP.
The mood has changed in the last few weeks, with most people accepting they are inevitable and needed, as opposed to earlier dumb anologies with the Land League and Famine etc.
I've also noticed a lot of people ripping out kitchens and fireplaces etc, prior to repossesion.
Sort of a "scorched earth" policy.
This should be nipped in the bud by the Authorities and people should be arrested and convicted for criminal damage.
I've never heard of ANY case in the Courts for this behaviour.

BTL's, particularly apartments will be dime a dozen in some parts of the country in 2014.
In some areas, like Donegal, Midlands etc, 1 bed apartments will have the stigma that tenements had in the 60's.
On top of that we STILL have NAMA's stock to get shifted as well.
I predict 10 more years of crisis in the housing sector.

ronan45

Norwesterner wrote: »

Some people are in arrears over 2 years and continue living at home.
Unheard of in any other country.
Try not paying your landlord rent for 2 years.

No idea when it will happen. Hopefully ASAP.
The mood has changed in the last few weeks, with most people accepting they are inevitable and needed, as opposed to earlier dumb anologies with the Land League and Famine etc.
I've also noticed a lot of people ripping out kitchens and fireplaces etc, prior to repossesion.
Sort of a "scorched earth" policy.
This should be nipped in the bud by the Authorities and people should be arrested and convicted for criminal damage.
I've never heard of ANY case in the Courts for this behaviour.

BTL's, particularly apartments will be dime a dozen in some parts of the country in 2014.
In some areas, like Donegal, Midlands etc, 1 bed apartments will have the stigma that tenements had in the 60's.
On top of that we STILL have NAMA's stock to get shifted as well.
I predict 10 more years of crisis in the housing sector.

Seriously people that havent paid a dime in 2 years??? Or missed payments over the space of 2 years???
I have noticed a few houses on daft for sale with ripped out kitchens and fireplaces etc... i was thinking the previous owner must of really liked them lol
That explains it so!

NIMAN

Nearly every repossessed house in the NW, esp Derry (I know its a different country but still applies) has every single thing of value ripped out. Kitchen, sanitary items, radiators, wooden floors, heating boilers, oil tanks etc.

Many will say they paid for these and are entitled to take them, thats a different argument. If I was the bank, I'd say it is damaging my potential to sell that asset.

cmssjone

I wonder how many of those who aren't paying are tactically defaulting. I am amazed that the repossession rate in Ireland is so low compared to other countries; even Greece is around the 5% default level whilst Ireland is at least double that. It seems to me that some people have decided that they are not willing to pay mortgages on their properties because they are now worth massively less then what they were purchased for. A decent percentage of people who bought during or at the height of the boom can still afford their mortgage payments. It may be difficult and it may mean that they are unable to take their twice-yearly holiday or enjoy Sky Sports but if they wanted to then they could pay. They are gambling that there is going to be some sort of debt write off and I, for one, hope that it isn't given to those who can afford to pay but choose not to.

As to the BTLs... I wonder how many bankers, politicians etc, who have invested big into the BTL market. They're probably collecting the rent, not paying their mortgage and sending the money abroad where the Irish authorities will be unable to track it. I could be wrong but I have a feeling that many BTL investors in Ireland will be out of the door once repossessions finally start.

Ray Palmer

cmssjone wrote: »

As to the BTLs... I wonder how many bankers, politicians etc, who have invested big into the BTL market. They're probably collecting the rent, not paying their mortgage and sending the money abroad where the Irish authorities will be unable to track it. I could be wrong but I have a feeling that many BTL investors in Ireland will be out of the door once repossessions finally start.

This is just insane mashing up of far fetched conclusions.
Conspiracy One: People in power are protecting their interests
Conspiracy Two: Everybody defaulting is doing it as a strategy
Conspiracy Three: People are taking the money out of the country and all financial systems are untraceable.

Massive assumption: Every BTL is in trouble

These beliefs requires an absence of knowledge and missing what is actually going on.

My father in-law is convinced that the banking crisis and recession was all done to keep the common man down. So I guess you aren't alone but if you want to be connected to a man who reads the Sun and gathers his information from such sources feel free.

NIMAN

Although many can no longer afford their mortgage due to unemployment, I would guess there is a large number of people strategically refusing to pay, probably in the hope of a debt writedown or forgiveness.

slavetothegrind

that would be a foolish and futile strategy.

Any writedown process will involve a full disclosure on the part of the applicant with the onus on the applicant to prove inability to pay

This would obviously involve bank statements, evidence of job loss, social welfare evidence etc.

Even then any change in circumstances for years to come change things in terms of the writedown

Only idiots would think it's a penstroke of a civil servant and suddenly you have half your mortgage written off.

I accept there are idiots out there but surely not that many?

riclad

The banks are waiting for the law to change,before they go for repossession s.

They,ll probably go first for btl investors, or single people who are in arrears, before taking people with kids ,to court.

I don,t think there,s a stigma ,about 1 bed apartments, depends on what area you live in.

Before the boom house prices ,were low , the banks never needed to go for repossessions in large no,s.

IF THE banks had been careful and rational in lending money we would not be in this situation.

And a lot of people have loans twice the value of their home.

SO its really a unique situation.

NO one really knows what will happen.

Ray Palmer

riclad wrote: »

The banks are waiting for the law to change,before they go for repossession s.

They,ll probably go first for btl investors, or single people who are in arrears, before taking people with kids ,to court.

I don't think that they can be that selective and stay on the right side of discrimination laws. They will have to use a financial gauge. Why is a single person to be targeted? It is discrimination to do so. You have to treat all fairly.

The BTL may be a possible target as it a different product but even at that it may be questioned.

djimi

Ray Palmer wrote: »

I don't think that they can be that selective and stay on the right side of discrimination laws. They will have to use a financial gauge. Why is a single person to be targeted? It is discrimination to do so. You have to treat all fairly.

The BTL may be a possible target as it a different product but even at that it may be questioned.

Isnt it harder to legally force an eviction/repossession where it may involve making children homeless? I seem to remember reading that somewhere. Not impossible, but probably less hassle to go after others first.

Scortho

djimi wrote: »

Isnt it harder to legally force an eviction/repossession where it may involve making children homeless? I seem to remember reading that somewhere. Not impossible, but probably less hassle to go after others first.

Just because you don't own your home doesn't make you homeless. Many families rent. They mightnt own the house, but they aint homeless either.

However If they don't pay their rent, they're not allowed live there indefinitely, just because there's children there. The same rule should and easily could apply.

ABajaninCork

Ray Palmer wrote: »

I don't think that they can be that selective and stay on the right side of discrimination laws. They will have to use a financial gauge. Why is a single person to be targeted? It is discrimination to do so. You have to treat all fairly.

The BTL may be a possible target as it a different product but even at that it may be questioned.

I would agree with that PoV. Arrears are arrears, however they are accrued. I would imagine that any repos will be assessed on a case-by-case basis. You could have arrears of 000's but still working with the lender. I don't think the banks will re-possess on that principle, but they could. If OTOH you are simply not paying and not engaging with the bank, then of course they'll take a different view - i.e. can pay, won't pay = repossession proceedings.

djimi wrote: »

Isnt it harder to legally force an eviction/repossession where it may involve making children homeless? I seem to remember reading that somewhere. Not impossible, but probably less hassle to go after others first.

I don't know the law here, but I would think it'll be a lot harder to repossess a family home if the children are under 18.

murphaph

djimi wrote: »

Isnt it harder to legally force an eviction/repossession where it may involve making children homeless? I seem to remember reading that somewhere. Not impossible, but probably less hassle to go after others first.

So the next genius move from childless strategic defaulters will be to stop their birth control as well as their mortgage payments ;-)

djimi

Scortho wrote: »

Just because you don't own your home doesn't make you homeless. Many families rent. They mightnt own the house, but they aint homeless either.

However If they don't pay their rent, they're not allowed live there indefinitely, just because there's children there. The same rule should and easily could apply.

Im just relaying what I thought I remembered reading. Im not saying that its impossible, just not as straightforward when children are involved.

Of course, I might have it completely arseways.

djimi

murphaph wrote: »

So the next genius move from childless strategic defaulters will be to stop their birth control as well as their mortgage payments ;-)

I wouldnt put it past a lot of people...

riclad

I Think under the new law, if you are in arrears for x amount of time, ,and you cant afford to pay the whole mortgage ,
the bank can take you to court to repossess the property.
May be the,ll just start of with people who owe the most, or have stopped paying anything ,on the loan.
People who have kids, if they are on a low income, maybe already getting help from social welfare to pay the mortgage .
I,M not saying the banks will ignore or exclude people with kids, from
the foreclosure process.
from listening to the radio, on this subject,
ITS a bit harder to repossess homes, where there s young children living.
Each bank will probably have different prioritys in this matter.

ronan45

Ray Palmer wrote: »

Massive assumption: Every BTL is in trouble

Yes i think there are some people that are happy with their BTL'S a friend of mine bought 4 apartments at the height of the boom between 2005 to 2007.
He pays a "Tracker INTEREST ONLY Mortgage" on all them
Despite the landlord levy and property tax he has them all 4 of them rented by Social Welfare and making a profit every year. :cool:

murphaph

ronan45 wrote: »

Yes i think there are some people that are happy with their BTL'S a friend of mine bought 4 apartments at the height of the boom between 2005 to 2007.
He pays a "Tracker INTEREST ONLY Mortgage" on all them
Despite the landlord levy and property tax he has them all 4 of them rented by Social Welfare and making a profit every year. :cool:

Yeah but at some stage he'll either have to sell the properties (presume all in negative equity given those purchase dates) or start paying back the capital. I very much doubt your friend is happy with his investments unless he hasn't a clue what he is doing.

Wile E. Coyote

djimi wrote: »

Isnt it harder to legally force an eviction/repossession where it may involve making children homeless? I seem to remember reading that somewhere. Not impossible, but probably less hassle to go after others first.

It's not impossible but it is very hard to get a judge to sign a repossesion order for most family homes especially where kids are involved. Even in the good times where most people had money and could afford to pay judges were very lenient when it came to repossesions.

Wile E. Coyote

ronan45 wrote: »

Yes i think there are some people that are happy with their BTL'S a friend of mine bought 4 apartments at the height of the boom between 2005 to 2007.
He pays a "Tracker INTEREST ONLY Mortgage" on all them
Despite the landlord levy and property tax he has them all 4 of them rented by Social Welfare and making a profit every year. :cool:

A few hundred quid profit a year on properties which have more than halved in value isn't going to help your friend when it comes time to clear the mortgages. He'll be hoping for a big turn around in the property market which isn't going to happen any time soon.

riclad

So in 20 years time ,he,ll still owe 100k ,on each property.
And he ,ll be 45 ,with massive debts to pay.

Lantus

Wile E. Coyote wrote: »

It's not impossible but it is very hard to get a judge to sign a repossesion order for most family homes especially where kids are involved. Even in the good times where most people had money and could afford to pay judges were very lenient when it came to repossesions.

So if you have kds you can safely live mortgage free? Interesting.

Anyway, I know of several properties where the mortgage has not been paid in years and I'm sure that many more exist. The banks dont want to own property. Its worth less than the loan they gave out for it and repossessing and selling costs time and money. What they want is for people to come to an arrangement and keep the property and keep paying them money for the next 30-50 years.

That said they will start to take control of the worst of the crop shortly. It will be a slow but steady move though. Its not a fast process and banks are not hurried.

djimi

Lantus wrote: »

Anyway, I know of several properties where the mortgage has not been paid in years and I'm sure that many more exist. The banks dont want to own property. Its worth less than the loan they gave out for it and repossessing and selling costs time and money. What they want is for people to come to an arrangement and keep the property and keep paying them money for the next 30-50 years.

I think this is the key to the lack of repossessions so far. Its one thing the bank taking ownership of a property that they can sell to clear whats owed to them, but why would they want to take ownership of a property that would still leave half the debt outstanding, and the owner no more likely to be able to clear it off? Eventually they will have to start to sort the problem, but I dont think its a stretch to see why they are in no hurry.

Ray Palmer

djimi wrote: »

Isnt it harder to legally force an eviction/repossession where it may involve making children homeless? I seem to remember reading that somewhere. Not impossible, but probably less hassle to go after others first.

You are assuming a the system will stay the same which it obviously won't. There will no longer be the long drawn out process where having children is a mitigating circumstance. There will be less discretion in the hands of judges. That was fine to do when it was a small portion and the banks could afford it. A judge doesn't have the luxury to do that anymore.

You can't target people based on their marital status, age, gender etc...

That is why that will not apply and if attempted will cause more delays.

As for BTL with interest only making a profit that is just a prolonged issue. There are plenty of BTL people well able to afford the mortgages while paying off the principle.

djimi

Ray Palmer wrote: »

You are assuming a the system will stay the same which it obviously won't. There will no longer be the long drawn out process where having children is a mitigating circumstance. There will be less discretion in the hands of judges. That was fine to do when it was a small portion and the banks could afford it. A judge doesn't have the luxury to do that anymore.

You can't target people based on their marital status, age, gender etc...

That is why that will not apply and if attempted will cause more delays.

As for BTL with interest only making a profit that is just a prolonged issue. There are plenty of BTL people well able to afford the mortgages while paying off the principle.

You may well be right about the system changing; I dont know what the story will be there.

However, Im not suggesting that the banks wont target certain groups; Im suggesting that if they have a list of names to be persued, they may well choose to go after the ones that will pose less issues first. Surely they are entitled to tackle the problem however they see fit and in the order of their choosing?

murphaph

They'll probably go after the ones where the occupants have the most equity built up for the bank to take. I'd say they'll leave the real crud till the bitter end.

Ray Palmer

djimi wrote: »

You may well be right about the system changing; I dont know what the story will be there.

However, Im not suggesting that the banks wont target certain groups; Im suggesting that if they have a list of names to be persued, they may well choose to go after the ones that will pose less issues first. Surely they are entitled to tackle the problem however they see fit and in the order of their choosing?

You seem to miss the point they can't do that as it will show a discrimination. You have to apply the same rules to all and will have to use a financial basis. They can choose to hit trackers first but not single people first. There are laws in place that won't change.

AlanG

If banks can’t repossess family homes why would anyone give out a mortgage to a family?
Failure to repossess will eventually destroy the market. Would anyone arguing against repossessions allow their savings or pensions be used to fund loans with no security and a return of around 1-2%

RATM

djimi wrote: »

I think this is the key to the lack of repossessions so far. Its one thing the bank taking ownership of a property that they can sell to clear whats owed to them, but why would they want to take ownership of a property that would still leave half the debt outstanding, and the owner no more likely to be able to clear it off? Eventually they will have to start to sort the problem, but I dont think its a stretch to see why they are in no hurry.

But surely selling the property crystallising the situation is beneficial to both borrower and bank in some situations. i.e. bank lends 200k for BTL apartment, owner can't afford to pay full mortgage on €200k so it is sold off for say €100k and the owner is left with a debt of €100k over 20 odd years rather than the 200k he did owe.

There must be some circumstances where it makes more sense to repossess than allow the status quo to continue.

djimi

Ray Palmer wrote: »

You seem to miss the point they can't do that as it will show a discrimination. You have to apply the same rules to all and will have to use a financial basis. They can choose to hit trackers first but not single people first. There are laws in place that won't change.

Im not going to argue with you because I dont know of the law, but it seems strange to me that if I have a list of say 10 names that I cant choose the order in which to deal with those 10 names. Ultimately they will all get dealt with in the same way in the end anyway.

djimi

RATM wrote: »

But surely selling the property crystallising the situation is beneficial to both borrower and bank in some situations. i.e. bank lends 200k for BTL apartment, owner can't afford to pay full mortgage on €200k so it is sold off for say €100k and the owner is left with a debt of €100k over 20 odd years rather than the 200k he did owe.

There must be some circumstances where it makes more sense to repossess than allow the status quo to continue.

But would the banks prefer to have somewhat secure debt of €200k, or an unsecured debt of €100k? Especially given that the security could, in theory anyway (as unlikely as it may be), go up in value at some point in the future? Would it not make more sense to allow the owners to continue paying a lower rate (say the rate that they would end up paying on the unsecured loan) for periods of say 3 years at a time to be reviewed at the end of the period, knowing that the option to repossess was available to them should it come to that?

Im probably talking nonsense here btw!

Ray Palmer

djimi wrote: »

Im not going to argue with you because I dont know of the law, but it seems strange to me that if I have a list of say 10 names that I cant choose the order in which to deal with those 10 names. Ultimately they will all get dealt with in the same way in the end anyway.

Look it this way you have a list of 100 people and you pursue the black people first would you have an issue with that? As we are talking about a large list the order you pick has to be based on a particular criteria you certainly can't use a non financial reason as the list is based on a financial problem. You can pick from the list any way you like once it isn't discriminatory it's pretty simple.

There are strict rules on how you do things.

djimi

Ray Palmer wrote: »

Look it this way you have a list of 100 people and you pursue the black people first would you have an issue with that? As we are talking about a large list the order you pick has to be based on a particular criteria you certainly can't use a non financial reason as the list is based on a financial problem. You can pick from the list any way you like once it isn't discriminatory it's pretty simple.

There are strict rules on how you do things.

Fair enough; as I said Im not arguing with you as I dont know the law in such matters. All Im saying is that I find it strange that the law can dictate in what order you persue your customers who owe you money, as they will all end up paying you (or at least getting persued) in the end anyway.

Wile E. Coyote

Lantus wrote: »

So if you have kds you can safely live mortgage free? Interesting.

If you have the balls and can live with the stress of it all hanging over you and the constant calls and letters and the chance that someone from the bank will arrive on your doorstep one day then you can happily live mortgage free (or very close to it) for 24+ months with or without the kids. Current rules state that they can't take legal proceedings against you for at least 12 months after you first default. You can ignore them for all that time if you wish.

Once you've gone 9-12 months, ring them with your sob story, tell them you've lost your job, your wife, your dog anything at all to pull at the heart strings and ask them for a payment break while you try get back on your feet. They'll give you 3 months and then review it at the end of that. When thats finished get MABS to contact them as well to plead your case to buy you a little more time. You can then ask for Interest only payments, make one or two and default again. If it eventually gets to court the bank will have to show that they've done everything in their power to assist you so they will more than likely agree to any short terms payment plan you ask them to put in place.

Eventually you will need to make the full payment again so when you've taken it as far as you think you can get away with write to the bank and tell them you are going to maintain the full payment going forward. Ask them to agree to capitalise the arrears on your account after 6-12 monthly payments.*


*I'm not recommending anyone do this but have worked in mortgage collections so know it can take an extremely long time before a reposession order is granted.

NIMAN

Do we think we will see a flood of people starting to repay their mortgage as normal once the repossessions begin happening? After all, its thought that a large number of people are strategic defaulters.

When people see others actually losing their homes, will they feel the pressure and go back on the straight and narrow?

saveygirl

I think what's interesting is that nobody has mentioned NAMA in all of this. NAMA are controlling and managing the property market. They currently are the biggest landlords in the state, they are renting 10,000 properties a year with a rental return of 100 million a year!!! Where is that money going to? Why has nobody questioned why these properties have not been sold into the market? According to Mr. Mcdonagh most of NAMA's properties are in prime areas within reach of urban centres, great, sell me one then!
The latest spin from the Property Guru's/Media is that there is such a shortage of so called decent ''family homes'' in Dublin, WHY? When NAMA have thousands of properties under their control. Of course there ''appears'' to be a lack of supply because NAMA are sitting on them. Don't forget NAMA was very quickly set up under fianna fail to ''mop'' up all the properties and protect the assets of developers whom NAMA now employ to ''manage'' their assets.
We have the lowest rates of reposession despite the worst economic recession and yet surprise surprise we suddenly have an under supply of decent houses. The IMF have again called for these houses to repossessed because they know that the 'cute hoors' are at it again, hiding all the decent stuff for themselves and putting all the crap on the market with the big scary story 'that house prices are rising in Dublin',. Oh and has anybody tried to buy a NAMA propety? Has anyone any idea where you can look at a detailed list of Nama properties for sale? Please let me know, all I can ever find are vague descriptions such as ''certain unit in Rathmines etc.'' Talk about a cover up. :mad::mad:

Wile E. Coyote

NIMAN wrote: »

Do we think we will see a flood of people starting to repay their mortgage as normal once the repossessions begin happening?

No because repossessions on a large scale won't happen. They don't benefit the banks or anyone else when the majority of properties are in serious negative equity.

At the minute if the banks were to repossess all these properties it would be similar to debt forgiveness. Take a property with a mortgage of €300k but a book value today of only €150k. If they were to repossess and lucky enough to be able to sell it on at that price without putting money in to fix it up they're left with a now unsecured bad debt of over €150k. If the court couldn't get the owner to make payments to stop him from losing his home, what chance have they got of getting him to clear this balance when there's nothing at stake? The answer is ZERO, so that balance gets written off. Now if that was to happen on a large scale guess who has the pleasure of picking up the tab so the banks don't lose out?

Galego

Wile E. Coyote wrote: »

No because repossessions on a large scale won't happen. They don't benefit the banks or anyone else when the majority of properties are in serious negative equity.

At the minute if the banks were to repossess all these properties it would be similar to debt forgiveness. Take a property with a mortgage of €300k but a book value today of only €150k. If they were to repossess and lucky enough to be able to sell it on at that price without putting money in to fix it up they're left with a now unsecured bad debt of over €150k. If the court couldn't get the owner to make payments to stop him from losing his home, what chance have they got of getting him to clear this balance when there's nothing at stake? The answer is ZERO, so that balance gets written off. Now if that was to happen on a large scale guess who has the pleasure of picking up the tab so the banks don't lose out?

Unsecured debts are not debts that you just choose whether or not you want to pay. The creditor could take legal actions against the debtor and a judge could freeze any debtor's assets and use them in order to cover the outstanding debts.

The only way to avoid paying unsecured debts is for the debtor to be declared bankrupt. Not every debtor qualifies for bankruptcy.

Lantus

another issue for the banks is that a lot of properties are in managed estates which means management fee's. If the owner has not paid his mortgage then he almost certianly has not been paying his service fee's. Once the bank repossess then they are legally required to pay these fees before they can re-sell the property. In the case of apartments this could be a fee of anywhere between €1000 and upwards of €2000 per year. 5 to 7 years of non payment plus any interest charges could easily see the bank being made to hand over €10,000 in fee's. Not a very entertaining thought.

Whether they could attach this to any restructured loan for the person they repossesed off is unknown? I doubt it though. Most property sales I know the bank pays the service fee bill.

It wont take too many of these before the full impact of lending in a managed estate fully hits home to them if it goes wrong as they will be picking up secondary bills attached to the mortgage lease document.