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Repossessions - help me understand

rowantree18

Today's Indo reporting that Rachael Drumm - sister in law of David Drumm (he of Anglo/eff the country fame) is having her 600k house repossessed after a lengthy legal battle. Apparently her now deceased husband leveraged massive loans on it etc etc....

Fine, but - here's what I don't understand: how do some people get to keep their "family home " and some don't. Frank MacNamara (late late show pianist) owed millions but kept his house. Dj Carey got a huge write down which included keeping the family home. Pamela Flood (ex Rte) lost her home in Clontarf as did many "little people " in the crash. There are loads of other examples of well known people keeping homes and others not. Can anyone explain how it works?

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Iscreamkone

That would be an ecumenical matter

dublin49

you will be told everyone is treated the same ,which holds as much truth as " canvassing will disqualify "in civil service jobs.

Ted222

It depends on a number of factors. It’s extremely difficult to repossess a property in Ireland and the lending institutions typically get a lot of negative coverage. They also incur huge costs in doing so and so, they may strike a deal that avoids a lot of hassle and expense.

From what I can recall, the Pamela flood scenario wasn’t one of the mighty banks kicking the little guy. She and the husband seemed to think the loan didn’t need to be repaid at all. They toughed it out for years in the face of all reason.

Feets

Doesnt look like it was her name on the mortgage so technically she has been squatting for 9 years, her marrieage broke down 13 years ago.

Mrs OBumble

I wonder what other property she owns.

rowantree18

Another 1.3 million debt right off in the paper today and he keeps the "family home". I obviously am stupid - but I just can't figure out how some people keep their houses/get massive write offs and others don't. I know Pamela Flood did not pay the mortgage and I've no interest/skin in the game with her, but how did she lose her home and others kept it? I can't figure it out. We, taxpayers, will be on the hook again for this 1.3 million.

SupaCat95

Not an expert in this but I have done a little reading.

Some people with massive wealth may NOT own their own home but rather it belongs to a company out in a tax haven (Isle of Man Guernesey Channel Island, Caribbean (American/Dutch/British Protectorate) Islands.). This way they have use of the house but dont necessarily own. As long as the company is fine then the rest can go down the swaney and they resurface as something else. if you like that you are going to love Trusts/ Trust funds.

CatLick

Like everything else this is an individual legal battle depending on a judge, legal team, financial institution approach and borrower s co operation or lack of. As repossessions are so difficult banks pass bad mortgage servicing costs to everyone who does pay.

[Deleted User]

https://www.boards.ie/discussion/comment/122386566#Comment_122386566

did you read all or any of the article, sounds like you read the headline and ran to the internet? I highly recommend that you read more than the headline - this is a life tip and goes beyond just this article :)

Smart Morgages who are owed €2.7m are not a tax payer bank
Bank of ireland who are owed €250k are not a tax payer bank
Pepper mortgages who are owed €175k are not a tax payer bank
No tax payer banks involved.
Mortgage of €1m will remain on their home and not written off
House has a market value of €1m so they are not getting a free house
They will continue making mortgage payments until their house is sold to their children who will pay €1m for this.
Vulture fund Smart Mortgages agreed to this so hardly the sweatheart deal you are claiming.
Banks were entitled to kick them out of their house but choose not to as this is how they will recoup the most amount of money
Banks could have kicked them out and made them bankrupt but PIA was deemed the option that will realise them the most amount of money.

Peregrinus

The facts of every case are different, so it's not entirely suprising that different cases have different outcomes.

In some cases a borrower might contest a repossession action by arguing that the lender made certain representations to them which led them to act in a particular way, without which they would not now be in the position they are in. They may argue that the representations made were false, or were negligent, and that the Bank has some liability for this, or that the Bank cannot now be allowed to act in a way that is inconsistent with the representations made.

These arguments may be strong or weak, but you can't advance them at all unless you can point to representations the lender made, either when the loan was first applied for and granted, or during the course of the loan (including when it first got into difficulty). In your ordinary consumer mortgage, where I apply for a regular loan on regular terms to finance the purchase of a regular house, and I have no other relationship with the bank other than keeping my very ordinary current account with them, there is very little scope for special representations to be made, or things to be said to me that are not said to every borrower. So it's wildly unlikely that I'll be able to oppose a repossession action with arguments like these.

But if I am (or was) a signficant businessman, with extensive commercial and financial affairs, and a homeloan is just one of many, many transactions and deals I have with banks, it gets much more complex. The grant of, and terms of, my homeloan may have been negotiated or agreed in the context of a much wider set of financial relationships, and there may have been extensive discussions in which the homeloan, and its relationship to other transactions, was mentioned. So there's much more scope for me to argue that my loan was not granted on standard terms, or was granted following non-standard representations made by the bank.

Oscar_Madison

cooperating with the legal process helps enormously- also being honest and upfront around what assets you own/don’t own- a recent case overturned an approved settlement on the basis that the person was hiding assets.

If you’re a family unit with kids of school going age it certainly helps too.

rowantree18

Thank you for the life tip. Generally I read as much information as is possible.

While the banks you mention may not be "tax payer banks"/companies - the tax payer always ends up on the hook in some way when debts are written off.

My question was rather a general one - I found it hard to understand why certain (often higher profile) people have debt dealt with differently to the "little person". You've explained well regarding this particular case.

Ted222

https://www.boards.ie/discussion/comment/122390272#Comment_122390272

And because repossessions are so difficult to achieve, other international lending institutions are discouraged from entering the market, further diminishing the possibility of a competitive market.

So compliant borrowers pay higher rates and cover the banks losses from those who can’t/wont pay.