Banks using private eyes to hunt vanishing homeowners
Published 01/02/2011 | 05:00
BANKS and sub prime lenders are using private investigators to find borrowers who have abandoned their homes, a court heard yesterday.
Homeowners battling against repossession are also facing legal fees of up to €35,000 if lenders pursue them in the courts.
Yesterday, seven homes and premises were repossessed at the High Court in Dublin where it was revealed that private investigators are being hired to locate the owners of abandoned properties.
Correspondence issued by some sub prime as well as mainstream lenders, seen by the Irish Independent, reveals the additional financial strains on families fighting repossesion cases.
Borrowers are being warned that they face legal fees of up to €35,000 if they do not tackle their arrears and their case is fully defended in the High Court.
One mother spoke of the "very stressful" nature of the legal actions and the long delays in accessing free legal aid.
She said that there had been phone calls and letters from the lender suggesting they should hand back the keys.
They were ringing twice a day and saying they would go to court and have the house back within two weeks.
The woman said she was on social welfare and she and her husband, a carpenter who lost his job, had five children.
The youngest was living with her in a separate property, the other children were living with her husband in the house in question, along with two grandchildren.
Last night the Free Legal Advice Centres (FLAC) said that an out-of-court debt settlement process, as recommended by the Law Reform Commission, is urgently required to streamline the home repossession process and reduce excessive legal costs.
"The (repossession) system is outmoded," said Noeline Blackwell, Director General of the FLAC.'' Lenders bring cases to the High Court because they are faster and are centralised in one location, Dublin. But the costs and the burden for borrowers, many of whom live outside of Dublin, are a real concern."
Meanwhile, it has emerged that the number of borrowers with "substantial debts" who are transferring properties to wives and partners is rising.
Yesterday in the High Court Mr Justice Brian McGovern warned of an "unhappy and common pattern" of asset transfers to spouses and partners by once high net worth individuals.
The judge made his remarks during an application by a bankrupt property investor who transferred up to 15 properties to his wife for "health reasons."
Patrick Murphy of Falcons Hill, Lovers Walk, Montenotte in Cork, who owes Bank of Ireland more than €9m, wants his bankruptcy set aside.
The bank succeeded in having him declared bankrupt after it raised concerns about up to 15 properties that he transferred to his wife, Gillian Murphy.
This is the first in a wave of cases whereby banks and the National Management Assets Agency (NAMA) are using a range of enforcement mechanisms, including the bankruptcy courts, to reverse property transfers to spouses and children.
Mr Murphy's property portfolio includes houses, apartments, retail units, factories, pubs -- almost all in County Cork -- as well as a development in Slovakia.
He was granted extra time to file an application to have his bankruptcy set aside.
Judge McGovern previously refused to postpone the publication of Mr Murphy's bankruptcy or the liquidation of his assets ahead of any appeal to the Supreme Court.
The bank asked the High Court to adjudicate Mr Murphy a bankrupt to allow a court appointed official undo the property transfers.
Transfers can be voided if they take place two years in the lead up to a bankruptcy where the transfer is not made in good faith or there has been no consideration (exchange of value) for the transfer.