# Start Mortgages & Repossession - recent case in the media



## DB74

Apologies if this is in the wrong forum and/or if these question have been answered elsewhere

Referencing today's story about a couple in Cork (links below) who have so far (with help from various parties, neighbours etc) staved off attempts from Start Mortgages to repossess their property and I had a couple of (general) queries

1. Can a bank repossess a home without a court order? How sympathetic are the courts to the banks and the homeowners in these situations generally?

2. The couple claim that they offered to pay €400 per month of a €900 pm mortgage but Start refused this offer. Is this possible? Can the bank refuse an offer of almost 50% payment and opt for repossession instead (I think it unlikely but I could be wrong)


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## dewdrop

Heard this case discussed on local radio and the parties seemed very reasonable. Main point was they could not afford to go to Dublin for court proceedings and could not understand why a representative of the lending agency could not come down and meet them. Sounded very sad case and i could easily understand why locals would lend support as it brought back memories of stories of evictions in Ireland in the past.


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## orka

DB74 said:


> 2. The couple claim that they offered to pay €400 per month of a €900 pm mortgage but Start refused this offer. Is this possible? Can the bank refuse an offer of almost 50% payment and opt for repossession instead (I think it unlikely but I could be wrong)


I don't think €400 is enough to cover interest only so I think the bank could seek repossession - otherwise the debt will just grow ever-bigger.  They apparently originally offered €100/€150.  I may be hard-hearted but I think if the offer is not at least what it would cost the family to rent elsewhere, they shouldn't really be evoking so much sympathy.  They want their accommodation costs subsidised by someone else.


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## orka

DB74 said:


> 1. Can a bank repossess a home without a court order?


There was apparently a repossession order from the High Court.


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## DB74

dewdrop said:


> Main point was they could not afford to go to Dublin for court proceedings and could not understand why a representative of the lending agency could not come down and meet them.



If they can afford to pay €400 a month to the bank surely they can afford to take a trip to the High Court to try to save the property in the first place


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## ClaireM

They hadn't paid a penny in 2 years. The 10k they saved by living rent free should have covered their trip to Dublin.


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## peteb

And the the article in the Indo didnt imply it was local people supporting them - moreso two "lobby" groups.


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## Delboy

dewdrop said:


> ....Sounded very sad case and i could easily understand why locals would lend support as it brought back memories of stories of evictions in Ireland in the past.



Only took to the 2nd post for the Irish version of Godwin's law to come into play and the famine/evictions gets mentioned!

In this case, a mortgage was taken out with a sub-prime lender...nothing was paid for at least 2 years....an offer of less than half the mortgage is now on the table (after much smaller original offers were mooted) and the residents think this is a great thing! 

So the only 'sad' think I can see about this case is that these folk think they 'own' the house and fail to understand the bank owns it until the mortgage is fully paid. And that they can make an offer of less than 50% and think they're being unfairly treated when the bank rejects this. They basically want the taxpayers to subsidise their home for the rest of their lives or until they sell it in x years time and perhaps make a profit (wonder will that get handed back to the taxpayer!) 

Here us a similar house in Kanturk to rent for €450
http://www.rent.ie/houses-to-let/Highfield-Crescent-Kanturk-Co-Cork/1384594/
There's no shame in renting. I doubt these anti-eviction groups would be out canvassing for this family if they stopped paying rent to some 'local' landlord and were moved on.
So why should mortgage holders be treated as some golden cow while renters have to live under market conditions

I feel the main reason here why they won't walk away is the fact they paid a big deposit and don't want to get burned
http://www.irishtimes.com/news/irel...eal-against-kanturk-family-eviction-1.1539981


> Meanwhile Mr O’Sullivan said he wasn’t sure what was going to happen over the coming days but he was determined that his family would not leave their home after putting down a € 110,000 deposit on the property in 2007.


Lots of people have made bad decisions over the last 10 years in this country with their large deposits...I did'nt see the shareholders of the banks get refunds from the taxpayer when the shares collapsed.

And you now of course have FF smelling a 'cause'


> Fianna Fáil leader, Micheál Martin called on the Taoiseach to intervene personally in the case as he reminded him that he had said in March that he did wish to see homes being taken from people.


Oh the irony of that shower who collapsed the whole country making pleas in headline grabbing cases


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## Bronte

2007 Purchase price 260,000

Deposit 110,000
Mortgage PTSB 150,000
_______
260,000

2009 Remortgage 
Start (subprime) 30,000
_______
290,000


Mortgage 180,000
Arrears 21,000 (900 X 24 months)
Penalties ?????
--------

Amount outstanding ??????

2013 Value of house ???. Taking the rental on similar property, gives me a value of max 80K, maybe 100K

Repayments for 18 months were 900 Euro a month, but no repayments made after that. 

This issue is about the 110K deposit. Why did they not pay the 400 Euro a month for the last few years. Would they have a very high interest rate with Start as it's subprime. I know from family experiences that it was unbelievable easy to get a mortgage from them. You ask for a figure and you'd get it.

There doesn't appear to be equity in the house. Doesn't look like Start will get even close to 180K back, and that's without the arrears and the legal costs. Apparently it's 50K to go to the High Court for repossession (that figure I'm not sure about). 

If Start wrote down the mortgage to say 100K, and left the family in the house, wouldnt' that be a better solution.

Delboy, you said an offer of 1/2 the mortgage is now on the table,  you mean half of the 180K, so a 90K mortgage?


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## orka

Delboy said:


> They basically want the taxpayers to subsidised their home for the rest of their lives


Happily for the taxpayer, Start is not government backed/funded/bailed-out so if Start does want to indulge in some debt forgiveness, it won't cost the taxpayer anything.


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## Delboy

Bronte said:


> Delboy, you said an offer of 1/2 the mortgage is now on the table,  you mean half of the 180K, so a 90K mortgage?



No, I'm saying they're now only willing to pay less than half their monthly mortgage bill...they want to pay €400 v's the full amount of €900. That's the deal they seem to be putting on the table


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## Bronte

Delboy said:


> No, I'm saying they're now only willing to pay less than half their monthly mortgage bill...they want to pay €400 v's the full amount of €900. That's the deal they seem to be putting on the table


 
Sorry I misunderstood you.  

Aren't people on social welfare entitled to mortgage interest supplement from the goverment.  Even if he had been self employed, does that mean he's not entitled to this, I don't think so.


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## orka

Bronte said:


> If Start wrote down the mortgage to say 100K, and left the family in the house, wouldnt' that be a better solution


For this individual case, yes it might be a better solution in purely financial terms.  But it would set a dangerous precedent for many more of Start's customers to expect the same write-down - regardless of whether they are as 'deserving' or not. Start's business model is to charge higher interest on subprime risks knowing that they will lose on some loans (hence the higher interest to cover that risk).  They can't be seen as a soft touch when it comes to borrowers in difficulty because their whole business would probably collapse around them.


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## Delboy

orka said:


> Happily for the taxpayer, Start is not government backed/funded/bailed-out so if Start does want to indulge in some debt forgiveness, it won't cost the taxpayer anything.



au contraire...if Start do a deal, it only gives more ammo to the various cranks & lobbyists who seek debt forgiveness for the minority of mortgage holders (those in trouble) at a cost to the rest (those paying). And they are shouting loudest and have plenty of friends in the media to push their cause


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## Bronte

orka said:


> . Start's business model is to charge higher interest on subprime risks knowing that they will lose on some loans .


 
And I know of a case with them after the borrower trying to stop arrears happpening that Start only 'listened' after the inevitable arrears did occur, and then agreed to reduce their interest rate, but it was too late. So everybody was a loser. 

There's more to this case I think, the fact the borrowers weren't paying anything. All these cases are smoke and mirrors and it's nearly impossible to unravel what has really happened. Not helped by the fact that banks are so unwieldy to deal with.

In relation to deserving or not.  What does that matter.  Surely it should be based on maths.  If they cannot afford a 180K mortgage, but can afford say 100K, and the property is not going to give Start back more than 100K then I don't see why they shouldn't write it down to 100K, or whatever the borrower can afford.


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## orka

Bronte said:


> In relation to deserving or not. What does that matter. Surely it should be based on maths. If they cannot afford a 180K mortgage, but can afford say 100K, and the property is not going to give Start back more than 100K then I don't see why they shouldn't write it down to 100K, or whatever the borrower can afford.


Because next week, Start would have a queue out their door of borrowers saying 'honest, I can only pay on 100K so how's about a bit of that debt write-off I've heard you do?'

Loan repayment is not optional or negotiable after the fact; lending money couldn't work as a business if that were the case (and lending money is a business and a very important part of the economy).  You borrow money and if you can't pay it back, you don't get to lop a bit off because of your circumstances - you pay the penalty prescribed by the loan terms - which is generally that you forfeit the asset provided as collateral.  If Start reduced the outstanding amount to 100K, what penalty would have been suffered by the borrower for causing a big loss to Start (and for having paid ZERO for two years, living rent-free)?  Nothing.  Their negative equity would have been wiped out and their repayments would have been reduced - happy days.  

And while there'll not doubt be the usual 'ooh but banks are evil and they did bad things', the reality is that having loans available is important.  People complain about banks not being open for lending again but is it any wonder they are being ultra-cautious now that there seems to be a growing view that loan terms should be seen as negotiable after the fact.


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## Brendan Burgess

This is a pure case of strategic default.  They have made no effort at all. They paid nothing because they knew that the CCMA meant that Start Mortgages could do nothing. They paid nothing because they thought that the High Court would never let a family home be repossessed. 

Micheál Martin is an absolute disgrace for supporting these people. 

Séamus Coffey has written an excellent 

Anatomy of a Repossession Case.


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## Gerry Canning

Had they paid the 400 until now , I would think Start would not be in High Court.I do think Theser people (overplayed) their hand and were badly advised.

Let it be a warning to people to pay what you can reasonably afford, I would feel that had they made genuine efforts the High Court would not have allowed Repo.  

At this stage I just can,t see Start allowing (new) proposals.

I am NOT a fan of Start .I do NOT wish them well but there has to be some sense of fairness from the customers.
It irritates me BIG-TIME to have Saint Martin on the case !!


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## Bronte

Brendan Burgess said:


> This is a pure case of strategic default. They have made no effort at all. They paid nothing because they knew that the CCMA meant that Start Mortgages could do nothing. They paid nothing because they thought that the High Court would never let a family home be repossessed.
> 
> Micheál Martin is an absolute disgrace for supporting these people.
> 
> Séamus Coffey has written an excellent
> 
> Anatomy of a Repossession Case.


 
That's a great analysis by Coffey (who is he?). Nearly every single case that one reads in the newspapers seems to have grounds for suspecting strategic default. And it's exceedingly difficult to pin down exactly what happened.

Why in this case would you borrow another 34K at such a high interest rate, in 2009 when you knew Ireland was in the middle of a recession. Why would a plumber have such large debts? Because customers hadn't paid him for work? Despite the recession I sometimes find it hard to get a good plumber, plenty of cowboys though.


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## tvman

Bronte said:


> That's a great analysis by Coffey (who is he?). Nearly every single case that one reads in the newspapers seems to have grounds for suspecting strategic default. And it's exceedingly difficult to pin down exactly what happened.
> 
> Why in this case would you borrow another 34K at such a high interest rate, in 2009 when you knew Ireland was in the middle of a recession. Why would a plumber have such large debts? Because customers hadn't paid him for work? Despite the recession I sometimes find it hard to get a good plumber, plenty of cowboys though.



Seamus Coffey is an economist from UCC


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## Bronte

tvman said:


> Seamus Coffey is an economist from UCC


 
He was on BBC radio earlier this morning, on the 'Wake up to money' programme.  About the fact we are nearly out of the bailout and property prices.  But that we still owe an awful lot relative to GDP.


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