# "Repossession, Repossession, Repossession"



## CoffeeBrew (14 Sep 2005)

I actually missed  this program on TV the other night. It covered the fundamental shift going on in the UK property market at the moment.

By all accounts, there was a change in the usual property coverage from from "Investment..Healthy Profits..Growth potential" to "Price falls..Negative equity..Repossession"

In a follow-article (link attached) the main reasons that people fall behind in their mortgage repayments were given. Thought it might be worth repeating here:

Reduced income (e.g. loss of overtime or bonuses): 26%
Financial mismanagement: 25%
Redundancy and unemployment: 14%
Accident, sickness or injury: 12%
Relationship breakdown: 7%
Over-indebtedness: 5%
Others: 11%
[broken link removed]


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## soma (14 Sep 2005)

UK Repossesions up 35%

[broken link removed]


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## Duplex (14 Sep 2005)

Move along now folks, no bubble here.


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## bacchus (14 Sep 2005)

Duplex said:
			
		

> Move along now folks, no bubble here.


what makes you so sure it's not on the way?


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## Duplex (14 Sep 2005)

> what makes you so sure it's not on the way?


 
I was attempting to be ironic.


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## shipibo (14 Sep 2005)

Good ta see some humour on these boards !!!


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## Glenbhoy (14 Sep 2005)

I watched the show - it was yet another example of sensationalist TV, UK repossessions have increased to ...... wait for it..... 4000 per annum!!  All this in a country with 60 million people, hardly endemic!


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## Duplex (14 Sep 2005)

Move along folks, no bubble there.


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## RainyDay (14 Sep 2005)

The latest [broken link removed] does show a dramatic increase in reposessions;



> The number of properties taken into possession by mortgage lenders in the first half of 2005 was 4,640, a rise of 51.1% since the second half of 2004, and 46.8% higher than the first half of 2004. The number of possessions is still much lower than the peak seen in the early 1990s.



and an increase in the arrears levels.


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## bacchus (15 Sep 2005)

Duplex said:
			
		

> Move along now folks, no bubble here


 


			
				Bacchus said:
			
		

> what makes you so sure it's not on the way?


 


			
				Duplex said:
			
		

> I was attempting to be ironic.


 
Good man.... 
This bubble is so gigantic (it is not an Irish bubble, but a world-wide one) that some people can not see it and are convinced that it actually does not exist...


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## Glenbhoy (15 Sep 2005)

Yes while the percentages show a massive increase, the actual figures are'nt particularly scarey.  A rise of 51% only equates to approximately 1500 units, as I said previously, that's not a lot in a country the size of the UK and basically equates to media scaremongering.   It isn't surprising that there is an increase, basically as prices have stopped rising, banks tighten their belts a little, the people on the margins get squeezed.  In one of the instances shown on the program, a couple had funded their lifestyle via top up loans which the bank were only to happy to give, unfortunately the couple also repaid their mortgage via the top ups - this was extremely irresponsible by the banks!   I must say I was surprised with the rapidity shown by banks in UK to evict (if we had the whole facts for the persons who were evicted in the show), as my legal friends here tell me that it's virtually impossible to evict a family from their home over here.


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## Marie (15 Sep 2005)

_........my legal friends here tell me that it's virtually impossible to evict a family from their home over here._

This is the third occasion when this kind of casual comment has appeared on AAM in connection with property ownership and is intriguing (the last was "anyway if the property market collapses nobody will lose because the government will step in".

Could you clarify?  What appears to be implied is that serious contractual financial obligations are null and void, and that one party to a financial arrangement (bank/building society) who gives another party (property-buyer) money which they cannot produce themselves to purchase a home _at an agreed cost for this usage _will in the case of a borrower defaulting on the arrangement is _powerless under the law _to seek redress!!

This is a joke, yeah?   

I know of one woman who separated from a physically-abusive husband with whom she had a joint mortgage.  She just wanted to get out and signed over the mortgage to him (i.e. she would make no subsequent claims on the resale value of the house).  Six years later her life had moved on, she was with another partner, had a family.............and the debt-collectors traced her through her parents address;  she owed something like 22K; husband had defaulted on repayments, subsequently sold the house on leaving the bank with a debt, and it arrived on her doorstep with many years interest added.  If anyone thinks these things don't happen they have led an enviably sheltered life!


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## RainyDay (15 Sep 2005)

Marie said:
			
		

> husband had defaulted on repayments, subsequently sold the house on leaving the bank with a debt


I didn't think this was possible - the whole point of the bank taking out a mortgage is so you can't sell the house from under them!


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## d2x2 (16 Sep 2005)

I don't see anything  in those stastics that support the idea that negative equity is the reason for this dramatic increase in repossessions!

Let's recap.... the repossessions are due to...


> Reduced income (e.g. loss of overtime or bonuses): 26%
> Financial mismanagement: 25%
> Redundancy and unemployment: 14%
> Accident, sickness or injury: 12%
> ...



So negative equity could be a portion of the 11% 'Others'. What is your best bet? Negative equity 5%? OK, lets say a whole 10%, that's 400 homes. Hardly a bubble!


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## soy (16 Sep 2005)

Glenbhoy said:
			
		

> as my legal friends here tell me that it's virtually impossible to evict a family from their home over here.




I think this is coming from the banks reluctance to be associated with the negative publicity that would abound if they began throwing 'widows and orphans' onto the streets. The media would have a field day.

Aside from the negative publicity there is also the fact that the courts are most likely to be sympathetic towards the family facing eviction rather than the Big Bank (especially given the profits the banks make). Add to this the Irelands history with landlords/evictions etc over several hundred years and you can see why this is.

That is not to say that this would be a pleasant experience for anyone and while eviction may not occur, there would be very difficult times to live through.

Finally - as this is the Property Investment forum, it should be noted that none of the negative connotations described above would be associated with a bank repossessing an 'investment property' from a landlord.


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## royrogers (16 Sep 2005)

If a bank or other lending institutes were not getting their money that is owed to them they will not think twice about evicting people to sell the home to recoup what they can get to cover the payments that is owed to them.  People should remember that banks and other lending institutes are machines and borrows are default number therefore they have no feelings regarding what hardships that the put peoples through!


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## Glenbhoy (16 Sep 2005)

As Soy stated 

"Aside from the negative publicity there is also the fact that the courts are most likely to be sympathetic towards the family facing eviction rather than the Big Bank (especially given the profits the banks make). Add to this the Irelands history with landlords/evictions etc over several hundred years and you can see why this is."

Judges in this country tend to be sympathetic to family circumstances and will do all in their power to avoid eviction.
This has no bearing on investment properties where repossessions could occur easily enough.

As for the situation you described Marie, are you sure you have heard the real story, as it does not seem to me like you have gotten all the facts.

"she just wanted to get out and signed over the mortgage to him"

if this were the case how could the banks demand money from her? 

"husband had defaulted on repayments, subsequently sold the house on leaving the bank with a debt, and it arrived on her doorstep with many years interest added. If anyone thinks these things don't happen they have led an enviably sheltered life!"

One could say that anyone who believes this story has had a sheltered life, as far as I am aware, banks tend to retain the deeds for a property until a mortgage has been fully redeemed, not having the deeds of the property would probably make it very difficult to sell


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## CoffeeBrew (16 Sep 2005)

There appears to be a notion that repossessions could not happen in Ireland because of the poor lil' childers.

The faulty premise appears to be that only families with children will face eviction orders.

As soy pointed out, if things did go bad, the banks would have plenty of "paddy-last" investors plus singles and childless couples they could go after without fear of negative publicity. The blame "got into too much debt" would be placed against the unfortunate evictees not the banks.

Also I could imagine "humanitarian" actions by the banks to assist families with children move out of homes they can no longer afford into smaller cheaper properties that have been repossessed from investors/singles. That way they are assisting the family "downsize" and not tossing them onto the street.

Also can the banks transfer bad debt to another business entity that might not be so sensitive to the publicity ?


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## Glenbhoy (16 Sep 2005)

I should never have included that remark!!  However to clarify, banks are businesses and have every right to pursue any defaulted loan, they will do this.  My point was that in this country in the past anyway, judges tend to favour the defaultees when the loan is secured on a family home.  In other situations they will have no problem with awarding judgement in favour of the plaintiff.

Maybe coffebrew is right, maybe they will simply allow the families to move to vacated apartments!  Apparently many of them are empty as we speak (reference to another thread on AAM)


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## royrogers (16 Sep 2005)

A close member of my family in Ireland was in default with a mortgage approximately 10 years ago.  It was a very small amount of money owing on the property, the family member concerned had a very messy break up of her marriage she had 2 children and was expecting a third child.  There was also a lot of equity in the home however even with help with her TD and the media was also involved but this was to no avail as the credit union that had the charge on the property went in and physically evicts her she had to go into temporary accommodation until the council finally housed her. 



Is that what you call compassion?


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## Marie (17 Sep 2005)

No - it's business.  Mortgage-lenders are _not_ charitable organisations in it for the pleasure of providing people (families or others) with 'homes'; they are selling a service.  It is irresponsible to engage in this market if you can't afford it.  That's the bottom line.

The woman I referred to who years after their breakup was traced by her ex-partners mortgage company for an outstanding debt (because her name had been on the original joint mortgage application) was a patient referred to me after a suicide attempt.  In my view she was not lying to me as in the context of our professional relationship such a lie would be inappropriate and unhelpful to her.  Neither I my friend or family have ever had direct experience of being pursued by debt-collection agencies but I understand from investigative journalism, t.v. documentaries and the accounts of people I come into contact with in the course of my work that repossession/eviction is a reality.  

In fact - going back to the 'this is not compassionate' point........one of my psychiatric nurse colleagues bought her lovely house at a knock-down price after it was repossessed and auctioned.

My comments were in response to the attitude that financial commitment of this magnitude was not a serious undertaking with potentially serious repercussions.


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## CCOVICH (17 Sep 2005)

Marie said:
			
		

> It is irresponsible to engage in this market if you can't afford it.  That's the bottom line.



Sure.  Tell that to someone in Donegal who has just been made redundant after 5/10/15/20 years service to their local factory.  What they could afford 10 years ago was vastly different to what they can afford now.

I am fairly confident that both myself and my partner are in secure employment and will remain so for far into the future, but there are no guarantees in this life. Was it irresponsible of us to buy a place of our own with a mortgage?

I'm not suggesting that lenders have no right to enforce their right to reposses.  But anecdotal evidence suggests that it rarely happens in Ireland.

Also, from working in financial services, I know first hand that lenders are loathe to engage in repossessions (of assets of any kind) as they are costly and troublesome exercises.


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## Marie (18 Sep 2005)

That might lead to a very interesting economic configuration in the RoI then, given the current American-style culture of short-term employment contracts.  How - in your view - will the defaulted millions be recouped?  Statistics from ESRI, Daft.ie and other sources and commentators is that (a) mortgage lending combined with personal debt is at a level to be of concern and (b) pressure on rental accommodation appears to come principally from immigration (the statistic is that 1 in 27 renters is a non-national) on presumably modest or basic-wage income.  

It would be reassuring to know there was some contingency plan for a 'repossession' eventuality because it is an immensely distressing situation however few or many people are involved.  In the end it probably ultimately depends on how big Merkel's majority is in the German election.


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