repossessions, what happens then?

roozer

I see the banks are going to start repossessing houses in certain cases.

What will happen then, will the banks persue these individuals for the balance between the sale of the house and the money owed?

AltAccount

Depends on the bank and the amount of the shortfall. But generally, yes, it'll become an unsecured loan.

Jose1

IMO this is a sure sign that property prices have bottomed out. Why else would they risk the headache of having real property on their books?

It's no secret that right now the banks are sending out Estate Agents to value these properties. As and when they repossess they will simply subtract house values from monies owed, plus fees of course, and then set about recouping the remaining cash via the courts. It's a win, win for the banks as they balance their books and replenish ailing cash reserves.

Banks don't give a s*** about their customers, good or bad. Proof of this is obvious when you see so many closing down and many of the rest kitted out with machines to do the work of tellers while the Government once again look the other way.

A cunning Plan. Only problem is - You can't get blood from a stone!

AltAccount

Jose1 wrote: »

IMO this is a sure sign that property prices have bottomed out. Why else would they risk the headache of having real property on their books?

a) because the CBI has given them targets to get a percentage of their books in sustainable deals or begin legal proceedings

b) because the Dunne ruling has been lifted and now they have a larger selection of properties that they can move legally on, and so therefore are




Edit: Stats for 2012 say Court Orders for repossession are down since their peak in 2010. Does anyone have stats for 2013 year to date, or is there any source for the supposition that banks are repossessing more homes?
http://www.thejournal.ie/courts-service-repossession-statistics-2012-816520-Mar2013/

From my points above, more homes will be repossessed, some because the banks want to, and some because they're forced to, but does anyone have any facts to discuss here?

cursai

Tis only natural. Whoever thinks banks are cuddly care bears are being silly. those were adverts ye watched not testimonials.

bbsrs

Off topic a bit but was discussing this earlier with friends and a question popped up no one had an answer for , maybe someone here can answer. If the bank sell a repossessed house could somebody buy the house and let the person that lost the house live in it.for instance if a wealthy parent bought the house for a fraction of the mortgage debt and left their son or daughter rent it from them , is that legally possible?
Edit, just to add eventually the house could be willed to the sor or daughter who by the then should be released from bankruptsy. Would that also be legally possible?

AltAccount

bbsrs wrote: »

Off topic a bit but was discussing this earlier with friends and a question popped up no one had an answer for , maybe someone here can answer. If the bank sell a repossessed house could somebody buy the house and let the person that lost the house live in it.for instance if a wealthy parent bought the house for a fraction of the mortgage debt and left their son or daughter rent it from them , is that legally possible?

Of course, why would the bank care who rents or lives in the house, as long as the mortgage is paid?

bbsrs

AltAccount wrote: »

Of course, why would the bank care who rents or lives in the house, as long as the mortgage is paid?

But the bank would have lost say 50% or more by selling the house in the present market so the mortgage wouldn't be paid.

leitrim1

My friend bought a repo house. He bid €150 K and was unsuccessful. The sale fell through and he bought it 3 months later for €78 K

The bank wrote off €222k from what he said. It's mad.

AltAccount

bbsrs wrote: »

But the bank would have lost say 50% or more by selling the house in the present market so the mortgage wouldn't be paid.

Sorry, I presumed the wealthy parents were taking a mortgage on the house.


Bank prepared sell the house for 50% of the outstanding mortgage. The remainder of the outstanding mortgage becomes an unsecured loan owed by the original owners.

New couple (wealthy parents) buy the house for the reduced price by mortgage or with cash - the bank doesn't care, it's sold the house, which was its aim.

House is rented out to the original owners. Bank doesn't care. They'll send threatening letters to whatever address the owners supply them with.

They're completely unrelated transactions in reality.

AltAccount

leitrim1 wrote: »

The bank wrote off €222k from what he said. It's mad.

I've heard loads of these stories too (including one recently where a developer was let off with millions by the bank). I've yet to hear a verified account of someone being let off the hook for a substantial amount of their borrowings.

leitrim1

AltAccount wrote: »

I've heard loads of these stories too (including one recently where a developer was let off with millions by the bank). I've yet to hear a verified account of someone being let off the hook for a substantial amount of their borrowings]

From what is known locally, the previous owner went in to the bank some 12 months earlier and left in the keys and informed the bank that he and his family were off to Australia. The house was empty for 12 months and seemingly loads of stuff was stolen from around the house and the bank wanted rid of it.

Dublinmackem

Jose1 wrote: »

then set about recouping the remaining cash via the courts. It's a win, win for the banks as they balance their books and replenish ailing cash reserves.


Sure they can't get money off the people when they're living in the house; do you really think they will get it off them after they take the house away? Not a hope man, there will be no replenishing by chasing the balance after chucking someone out, we can say the banks are ruthless but I know people up to their gills in debt and problems in today's situation and they leave the banks in the halfpenny place when it comes to being ruthless now, in terms of telling the lenders where to go; that they're putting food in their kids mouths and after that they might consider paying something if only they have it, right or wrong that's what's happening, the banks cannot deal with the volume, repossesions are a scare tactic to get borrowers to start co-operating but people just don't give a damn about banks

AltAccount

leitrim1 wrote: »

From what is known locally, the previous owner went in to the bank some 12 months earlier and left in the keys and informed the bank that he and his family were off to Australia. The house was empty for 12 months and seemingly loads of stuff was stolen from around the house and the bank wanted rid of it.

But was any money written off? Any debt forgiveness at all?

Or is it just that the borrower has left the country and the bank will go after them if they move home?

Play To Kill

AltAccount wrote: »

But was any money written off? Any debt forgiveness at all?

Or is it just that the borrower has left the country and the bank will go after them if they move home?

Would the bank not go after them anyway even if they were in another country?

AltAccount

Play To Kill wrote: »

Would the bank not go after them anyway even if they were in another country?

I'm not sure what kind of reach they have. You'll hardly be extradited for an unpaid loan.

If they start sharing information internationally on defaulting borrowers, you could see a lot of these "runners" finding it hard to get bank loans wherever they go.

leitrim1

There is another house locally with at least 8 bedrooms that fronts on to a lake. It is said locally that the previous owner refused €1m during the boom. He later got in to financial trouble and was found dead in the lake and the bank recently sold for €135

AltAccount

leitrim1 wrote: »

There is another house locally with at least 8 bedrooms that fronts on to a lake. It is said locally that the previous owner refused €1m during the boom. He later got in to financial trouble and was found dead in the lake and the bank recently sold for €135

Sorry, but what's your point?

golfwallah

roozer wrote: »

I see the banks are going to start repossessing houses in certain cases.

What will happen then, will the banks persue these individuals for the balance between the sale of the house and the money owed?

In the short run these banks will have to wait and see, while they pursue unsecured loans through legal channels.

But in the long run, many of these individuals will inherit assets from their parents or other relatives (or individual finances could improve) and the banks can wait around for a long time to get their money back.

I'm sure people will figure this out and many parents will begin to have another think about their wills.

It will be interesting to see how all this pans out over time.

bbsrs

golfwallah wrote: »

In the short run these banks will have to wait and see, while they pursue unsecured loans through legal channels.

But in the long run, many of these individuals will inherit assets from their parents or other relatives (or individual finances could improve) and the banks can wait around for a long time to get their money back.

I'm sure people will figure this out and many parents will begin to have another think about their wills.

It will be interesting to see how all this pans out over time.

If you declare yourself bankrupt do you not get a clean slate when released from bankruptsy? A bank can't chase you for any money you make or inherit after your period as bankrupt is over, can they?

golfwallah

bbsrs wrote: »

If you declare yourself bankrupt do you not get a clean slate when released from bankruptsy? A bank can't chase you for any money you make or inherit after your period as bankrupt is over, can they?

I doubt if every individual, whose home is repossessed and is left with an unsecured debt, will seek the bankruptcy route.

My guess is that only a minority will become bankrupt and yes / no answers to the question you pose are not possible, as circumstances can vary from case to case. People thinking of that option should seek professional advice, starting, for example, here: http://www.finance-ireland.com/bankruptcy-in-ireland/

For those who don't go the bankruptcy route, there are other options, of which one is doing nothing and waiting for years in the assumption that the bank will just go away. Not a wise choice IMHO.

gaius c

bbsrs wrote: »

If you declare yourself bankrupt do you not get a clean slate when released from bankruptsy? A bank can't chase you for any money you make or inherit after your period as bankrupt is over, can they?

I expect that banks will be sneaky about this and offer people routes to avoid insolvency/bankruptcy when such a course would actually be in their best interests. It's not nice to be an insolvent but you are free of the debt within a few years. On the other hand, if you go the other route, the bank could have their grappling hooks into you for years after.

AltAccount

gaius c wrote: »

I expect that banks will be sneaky about this and offer people routes to avoid insolvency/bankruptcy when such a course would actually be in their best interests.

Why would a bank promote insolvency? Why is it sneaky if they don't?

serfboard

AltAccount wrote: »

If they start sharing information internationally on defaulting borrowers, you could see a lot of these "runners" finding it hard to get bank loans wherever they go.

That's definitely a prospect. A bank in say, Australia, would presumably ask where you lived before and look for credit-worthiness information from the Irish Credit Bureau. I wonder would they also look for that information when you're opening an account?

The other problem is this - bank has a secured loan on a house "valued" on books at 500K. They get 200K from the sale of the house. They then have an unsecured loan of 300K. Multiply this scenario by the tens of thousands and the result is a massive hole in the banks books ...

... which is filled by who? :rolleyes:

AlexisM

AltAccount wrote: »

Why would a bank promote insolvency? Why is it sneaky if they don't?

Insolvency/bankruptcy would offer the borrower finality to their debts. Repossessing the property without forcing bankruptcy means that the bank can let the debt sit there as long as necessary - until the borrower's circumstances improve, the kids leave home freeing up money, there's an inheritence etc. Even if they eventually write off the debt, they are no worse off than if they write it off now. It is probably not lost on the banks that one consequence of Ireland's high home ownership levels is that many people will ultimately inherit at least a part-share of their parents' home.

AltAccount

I don't getcha...

AlexisM

AltAccount wrote: »

I don't getcha...

Bank repossesses property, sells it but there is, say, a 100K shortfall. The borrower still owes 100K to the bank. But there are two scenarios for what happens to the debt depending on whether the borrower goes bankrupt or not.


If the borrower goes bankrupt, they get a clean slate when they emerge from the bankruptcy process - they owe nothing to the bank.

If the borrower doesn't go bankrupt, they still owe the bank 100K. The bank may write it off (unlikely) or the bank may just let the debt sit there for years, possibly rolling up with interest. If the borrower's circumstances change (eg inheritence from parents), the bank could swoop in to collect the old 100K debt.

AltAccount

Correct, which is why a bank wouldn't promote insolvency, and why IMHO they shouldn't be considered 'sneaky' for not promoting it.

AlexisM

Ah - you were just pretending to be stupid - nice one... I don't mind at all wasting my time trying to explain to those who don't actually need an explanation.

I do agree though - I have no problem with banks parking debts and coming back for repayment years later. The bank is only 'sneaky' to people who think the bank is there to give them best advice - and I really don't think there are many people like that left.

AltAccount

AlexisM wrote: »

Ah - you were just pretending to be stupid - nice one... I don't mind at all wasting my time trying to explain to those who don't actually need an explanation.
.

I'd suggest you misread my post. Less personal insults in future would be nice too b

gaius c

AltAccount wrote: »

Why would a bank promote insolvency? Why is it sneaky if they don't?

Because they would be feeding off a person's emotional attachement to the property they live in to make financial judgements that favour the bank and harm their own circumstances. And that person is unlikely to have independent advice to point out their options.