Vulture fund pauses house repossession bid amid claims it breached Central Bank rules

In legal proceedings, Rodney and Viktoria Cadden, of Malahide, Co Dublin, are seeking a declaration that the appointment of receiver Mark Degnan over a house they own in Portmarnock, Co Dublin, is null and void.

They are also seeking an injunction stopping Mars or the receiver from repossessing and selling the house.

At a brief hearing, the couple’s counsel, Tom Hogan SC, informed the court Mars and Mr Degnan had agreed to give the undertakings pending the outcome of the couple’s application.

This was confirmed by Rudi Neuman, counsel for Mars and the receiver.

Mr Cadden and his wife Viktoria bought the Portmarnock property in 2006 but as their family grew larger, they needed a bigger home.

Due to negative equity, they were unable to sell and ended up letting it out in 2010 while renting another home for themselves.

Although the Caddens no longer live there, their lawyers maintain the Portmarnock house remains the only property they own, is their principal private residence, and therefore falls within the Central Bank’s Code of Conduct on Mortgage Arrears.

They claim the appointment of a receiver over the property was in breach of the code because this precludes creditors from taking possession of a property which falls within the code except by court order on foot of appropriate Circuit Court proceedings.

In an affidavit, Mr Cadden said the couple fell into arrears in 2015 due to a change in financial circumstances.

Their lender, EBS, issued repossession proceedings in 2020, only to sell the loan to Mars the following year.

He said the couple sought to restructure the debt, completing a standard financial statement and, despite legacy arrears, reduced what was owed on the original loan from €400,000 to €273,000 by the end of 2021.

However, on May 10 last, Mars obtained an order substituting itself as plaintiff in the repossession proceedings, which had been adjourned to this October.

Mr Cadden claims that three days later Mars then made a “wholly unreasonable demand” for the full repayment of the €273,000.

He said the fund wanted full repayment made within three days and that it would treat non-payment as a default.

Mr Cadden said the couple immediately set about clearing all outstanding arrears, paying €18,000 in the following days.

But he alleges these efforts were hampered by conflicting information from Mars as to the amount of arrears and they were later notified of further arrears owed.

These were paid off in June and July.

Mr Degnan was appointed as a receiver over the property in June.

Mars is opposing the application and denies breaching the code of conduct.

The fund maintains the couple defaulted on their obligations under the mortgage and that the appointment of Mr Degnan was lawful.

The case returns to the court in October.

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