Sunday 22 October 2017

Legal cases to repossess homes fall by half in two years

David Hall warned of a ‘tsunami’ of repossessions Pic: Collins Courts
David Hall warned of a ‘tsunami’ of repossessions Pic: Collins Courts
Charlie Weston

Charlie Weston

The number of legal proceedings issued by banks to repossess homes has halved in the past two years.

A total of 3,665 proceedings were issued across the country last year, new figures from the Courts Service show.

Financial experts said the huge drop in the number of proceedings demonstrated that claims of a flood of repossessions had not materialised.

The new figures, seen by the Irish Independent, show that 1,072 orders for possession were granted once the cases were heard.

The vast majority of the cases relate to residential homes. But there are also a small number of buy-to-let properties and some classified as "other unknown" in the figures.

The small numbers of proceedings issued and the low level of repossession orders granted by circuit courts is in contrast to predictions from some commentators of a rash of repossessions.

There was a 20pc fall in the past year in the number of repossession orders granted for family homes compared with the previous year. In contrast, there are around 33,400 residential mortgage accounts in arrears for more than two years.

Warnings

Consumer advocate Brendan Burgess, of the Askaboutmoney.com website, said this meant that last year someone who was more than two years in arrears had only a one-in-20 risk of losing their home.

"The figures show a huge drop in proceedings issued. There was never a tsunami. There was not even a high tide. And the tide is quickly receding," Mr Burgess said.

This was in reference to repeated warnings over the past few years from mortgage debt campaigner David Hall that a 'tsunami' of repossessions are on the way.

Mr Burgess said it was not clear why banks were so reluctant to take proceedings against people who were in long-term arrears.

Banks have blamed the slowness of the courts process, while they are known to fear the bad publicity from repossession cases, which are seen as "politically toxic" by banks.

Some banks are also hoping that rising house prices will persuade more people with unsustainable arrears to agree to hand over homes as higher property prices will mean a better deal can be done on the outstanding debt.

The Courts Service figures show that circuit court judges refused 1,826 orders for possession last year.

Mr Hall, of the Irish Mortgage Holders Organisation, defended his claims that there would be a tsunami of repossessions. He said the Central Bank-mandated tracker mortgage investigation had forced banks to delay issuing proceedings until it was complete.

The largest number of repossession orders were issued in Dublin, which is not surprising given its size relative to the rest of the country. The next largest number was in Co Cork, followed by Co Meath.

In the past few days, ratings agency Standard & Poor's warned the toxic residential mortgage books of the Irish banks continued to pose a threat to the economy.

This is despite a recent surge in house prices.

In a report, Standard & Poor's detailed the obstacles still facing lenders as they attempt to reduce the volume of non-performing loans weighing on the balance sheet.

While the agency predicted banks will accelerate efforts to clean up impaired mortgages on the back of a more restrictive regulatory environment, it argued Ireland's "slow judicial system, which tends to discourage foreclosure", presents an impediment to a speedy resolution.

Irish Independent

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