Home repossession timebomb awaiting TDs on doorsteps
An explosion in the number of repossessions is primed to go off at the same time as Election 2016. It means the next crisis in the banks could be political – not financial.
There were a lot of numbers thrown around at the Finance Committee in Leinster House this week where the heads of the four main banks provided TDs and senators with an update on their progress tackling the mortgage crisis.
Of all the figures thrown around though the cannier politicians will have zoned in on the numbers that really matter – for them.
The number of family homes repossessed by the main banks could be in the region of 5,000 to 6,000, and it takes two years for a bank to gain control of a property through the courts.
And based on the figures they told the Finance Committee this week, the banks now have in the region of 30,000 legal proceedings launched or ready to go against borrowers behind on their mortgage.
Almost all of the cases have been initiated since September last year, after legislation had been introduced by the Government that strengthened the banks' hand in the courts.
It takes around two years for a bank to repossess a home through the courts, Ulster Bank's Jim Brown complained to the Committee on Tuesday.
The high number of new cases that have been thrown into the already creaking court system means that timeframe could slow down even further – but probably not by much.
If even 20pc of the around 30,000 proceedings or threatened proceedings now under way ends with a repossession order, it could mean 6,000 evictions – that's a conservative number, less than the numbers the banks themselves told TDs to expect.
You don't have to be an anxious backbench TD to figure out that the court timetable means many of the cases now under way will be coming to a head at pretty much exactly the same time as the next general election is expected – Easter 2016.
Common sense says the individuals and families affected will run the gamut from the most outrageous "strategic defaulter" chancers to the hardest of hardship cases too.
Those cases will be hitting the streets at the same time TDs hit the canvas trail.
The mortgage arrears resolution targets introduced last year may finally have forced the banks to face up to their problem mortgages.
However, combined with the timing of loosening up of the repossession rules, it has primed a political time bomb set to explode at the worst time possible for the Coalition.