# Will 2013 be the year of the repossession?



## Gardener (9 Nov 2012)

So far we have seen very few repossessions - will 2013 be the year?

I was surprised by a post I read on here yesterday about a lady who was written to by her bank, telling her that she had an unsustainable mortgage.

This is the first time I have heard of any bank admitting to unsustainability in any way, shape or form.  The banks are still heavily in denial.  However, I wonder are they getting into stride for the new personal insolvency bill on the 31st March '13.

Another poster on a different thread mentioned how difficult it would be to obtain a PIA.  
If it is difficult to obtain a PIA surely this will result in mass repossessions or have I got this totally wrong?


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## 44brendan (9 Nov 2012)

Yes it is likely that we will see a higher level of re-posessions from 2013. This is due to the requirements of the MARP agreement where the Bank are obliged to delay action on unsustainable mortgages for a period of 12 months. In many instances that period will be passed and the Banks are free to commence reposession proceedings.


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## elcato (9 Nov 2012)

Also it will dawn on people that they are better off with reposession rather than trying to keep tapping away at a brick wall with a spoon.


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## Time (9 Nov 2012)

People will need a letter of unsustainability from the lender in order to get on the council housing list.


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## Leper (9 Nov 2012)

There will be some repossessions, but not many.  The banks want to get paid.  People want to pay the banks.  Personal circumstances dictate that many people cannot pay what they have been paying.  The mortgage companies (the banks) will have to be patient and extend periods of payment.  Otherwise, they can whistle Dixie and people will not put up with their demands.  We are fast approaching the time when people will say they have had enough and they will challenge the banks vigorously.


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## lovelyhorse (9 Nov 2012)

Leper said:


> There will be some repossessions, but not many.  The banks want to get paid.  People want to pay the banks.  Personal circumstances dictate that many people cannot pay what they have been paying.  The mortgage companies (the banks) will have to be patient and extend periods of payment.  Otherwise, they can whistle Dixie and people will not put up with their demands.  We are fast approaching the time when people will say they have had enough and they will challenge the banks vigorously.



I'm not sure where you get the idea that a lending institution "will have to be patient and extend periods of payment", if the terms of the contract are not being upheld by the borrower, then the bank is entitled to sell the asset. That is how contracts and mortgages work.


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## Wishes (9 Nov 2012)

Leper said:


> There will be some repossessions, but not many.  The banks want to get paid.  People want to pay the banks.  Personal circumstances dictate that many people cannot pay what they have been paying.



I wouldn't be so sure that all banks will take this stance.  The banks are so cash starved they may very well repossess and sell off for for small change.  By 2014 they'll have realised what they done was a big mistake and come looking for another TAX payer bailout.  That's just my uneducated guess.


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## Leper (9 Nov 2012)

lovelyhorse said:


> . . . That is how contracts and mortgages work.


 
My point is that current contracts and mortgages are not working.  The banks will have to change the way in which they do business. Otherwise, they will be left with stuff they cant sell


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## Wishes (9 Nov 2012)

But why is it predicted that a Personal Insolvency Agreement will be difficult to obtain if the banks have no intention of repossessing?


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## shigllgetcha (9 Nov 2012)

lovelyhorse said:


> I'm not sure where you get the idea that a lending institution "will have to be patient and extend periods of payment", if the terms of the contract are not being upheld by the borrower, then the bank is entitled to sell the asset. That is how contracts and mortgages work.



alot of people are having problems that will only be temporary, out of work, reduced salary reduced hours etc so the banks would be best trying to get interest only until the economy gets better.

*but some people are hopelessly insolvent and will never be able to pay back what they borrowed and these people would be best with repossessions. I dont think this number is as much as people seem to think

I cant see repossessions being wide scale until the property market gets better, whats the point taking back a house thats in NE when they could wait it out and  see if the market gets better. repossession now is going to be a loss in every case, waiting will mean in some cases the bank wont make a loss.


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## Wishes (9 Nov 2012)

Yes but what about the Personal Insolvency Bill.  Mortgage companies have the first vito.


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## Leper (10 Nov 2012)

Wishes, with respect, what-is-this and what-is-that do not mean a whit today. The banks and their customers have arrived in a place that nobody thought we ever would. If the banks go down the road of repossessions it would be like a finance company repossing cars of 1996 registration i.e. losing more and more value and nearly no chance of reselling.

If I were an advisor to the banks, I would be informing them to be careful and not repossess anything or we will have a load of house keys that nobody wants + the costs that go with them.


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## mark71 (10 Nov 2012)

I had a letter from IRBC about 7 weeks ago telling us our buy to let mortgage was unsustanable . We wrote back telling them we were willing to sell and asked for a debt write off of the outstanding amount owed.Since then we have heard nothing from them, no phone calls or letters, just automated letter's telling us how much is outstanding.


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## Leper (12 Nov 2012)

If I were a Banker, my big fear would be:- Will the punters (people with mortgages) insist their homes be repossessed? Not an unlikely scenario with homes dropping over 50% in value and perhaps more devaluation to occur?

Come to think of it . . . this is probably the banks greatest fear.


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## Wishes (12 Dec 2012)

This thread is more relevant now than thought.


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## Bronte (13 Dec 2012)

mark71 said:


> I. We wrote back telling them we were willing to sell .


 
Be very careful Mark71  on this.  For social welfare rules etc it is better that the bank repossess due to 'unsustainability' then you voluntarily surrender the property.  

I think we should have a key thread on the differences between giving up a property and the bank taking it back as it pertains to social welfare housing rules.


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## Bronte (13 Dec 2012)

To answer the OP, yes I think 2013 will be the start of the year of respossessions, with a peak in 2014.

1. Marp process is at an end for many people
2. There is a High court judgement (Judge Dunne I think) preventing repossessions
3. Europe has said there has to be repossessions
4. The banks played the waiting game of property going back up in value, maybe they are more realistic now.
5. People will realise that they are better off losing their property
6. There are I would presume a lot of properties vacant where owners have emigrated
7. Banks don't want to be holding onto repossesed properties, the costs can be horrendous
8. Holding onto repossessed properties means they have to be boarded up in some cases and this means devaluing adjoining properties which makes things worse, presumable banks now get this.
9. Banks need to get the debts off their books so they can start to rebuild
10. Banks don't think that we are all going to go back to full employment and people are thinking the same way, there will be many who are now saving their mortgage to emigrate or to go the UK bankruptcy route
11.  It's in nobodies interest to continue with the limbo everyone is currently in.  There is basically no property market and people are in denial.


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## Wishes (13 Dec 2012)

I'll probably be slammed for asking this but should people stop paying interest only and start building a nest egg?  Why continue to pay if you are going to be booted out?

As far as I am aware there is a large waiting list on council housing so people will have to rely on rent allowance.

The vast majority I imagine will emigrate.

Bronte, I agree with most of your points apart from number 4.  If there are thousands of repossessions next year that will mean their is surplus stock on the market hence dragging prices down further.  I know property talk is banned on the forum so I will leave it at that.

Also take into account there are a further two budgets to be implemented.


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## shigllgetcha (13 Dec 2012)

Wishes said:


> I'll probably be slammed for asking this but should people stop paying interest only and start building a nest egg? Why continue to pay if you are going to be booted out?


 
You would want to be almost ready to be kicked out or be resigned to lossing your house to start this though. If you had any hope of keeping your house id imagine itd be a bad idea, if the bank was going to do a deal or help you in some way im sure theyd look into your finances and see a big hole and get suspicious



Wishes said:


> If there are thousands of repossessions next year that will mean their is surplus stock on the market hence dragging prices down further.


 
Not just prices but demand would completely collapse


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## bugler (13 Dec 2012)

If you are paying interest only by agreement with the bank then you are an awful long way from being repossessed. Do you ever read about contested repossession cases? In most cases it's a matter of years since *any* repayment was made, never mind interest. 

Between moratoria, interest only, MARP, "negotiations", "engaging" you can drag out it to a couple of years handily enough. It's an option of last resort for the banks, they have shown they are willing to exhaust any and all other avenues before going for repossession. Our repossession rate is miniscule compared to the UK.


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## Time (13 Dec 2012)

Throw in some legal challenges at the court stage and you can stall for at least a year or so. Also judges will grant a stay of 6 months to a year so a new house can be found.

If an errant person knows the system they can live rent free for up to 7 years imho.


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## Bronte (13 Dec 2012)

Wishes said:


> I'll probably be slammed for asking this but should people stop paying interest only and start building a nest egg?
> .


 
You'd probably be slammed but it doesn't mean we shouldn't talk about it.  In your own case as you're emigrating I cannot see how anyone would be annoyed with you if you needed to build up a nest egg to start a new life in Oz for example or we've had posters on here who need to go to the UK to go bankrupt but to do that they need to have about 6 months savings for living, bankruptcy costs, rent and deposit.  Cannot see anyone giving out about that either. How else are people going to be able to go abroad.


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## Bronte (13 Dec 2012)

Time said:


> If an errant person knows the system they can live rent free for up to 7 years imho.


 
Wonder who eventually will be better off the stategic defaulters or those who try their best.


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## LDhood (13 Dec 2012)

There will be more repossessions now that the law on this is becoming more concise.  However, the dramatic increase will be in BTL properties.  And there are lots...


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