# How are banks able to repossess property so quickly?



## murphaph (12 Feb 2009)

Might be better in the legal forum but anyway....I'm curious as to what legal mechanism allows a bank to seize a property for failure to pay a loan secured on it in a relatively short timeframe when other civil debts in this country are nigh on impossible to settle (from the creditors perspective). In particular, tenants in breach of their lease are able to sit in a property for literally years before an ejectment order is made. I'm not moaning about banks, I'm moaning that it is so difficult for companies and individuals to secure payment for debts due or indeed to regain control of their own property from a defaulting tenant! What legal mechanism do banks use that is different from any other creditor? Could you theoretically lease a property to an individual and secure the rent due on their own private property (I'm thinking no)?


----------



## Brendan Burgess (12 Feb 2009)

Banks cannot repossess properties quickly in Ireland. 

There are huge legal hurdles.

After many postponements of the cases, the judge will grant a repossession but often put a stay of 6 months on it. 

The legal system in Ireland is a bit of a rogue's charter. Most creditors give up rather than go through all the hassle.

Brendan


----------



## murphaph (12 Feb 2009)

Maybe I'm reading too many sensationalist papers but I've been reading figures around the 6 month mark to get a repossession. The law is indeed a rogue's charter and IMO damages our standing. Setting up in business or even just selling anything to someone in this country is too risky. Why can someone be sent to prison for failing to pay for a TV licence but can owe a hundred grand to a small business and walk away? Time for serious changes.


----------



## Optimist (12 Feb 2009)

In the case of a legal mortgage (on unregistered property) the bank actually owns the property (ie, the mortgage has transferred it into their name) and all that needs to happen is for the court to order repossession. Its slightly different in the case of registered property in that the bank only has a legal charge in respect of their ownership but in essence, the legality of their equity is already decided and the court merely orders the transfer of possession.

However, I dont think that enforcement of repossessions is any quicker than ejectment of tenants. Once the proceedings reach the courts, judges are loath to eject people from their primary residences... a bit different for investment properties mind you.

If someone has an outstanding debt of 100k (in your example), very often it is pointless pursuing the person unless they are a "mark", i.e. they have something worth going after. If you are their creditor, the only asset worth chasing might be the debtors house. However, since you dont own it (unlike the bank) you cannot force them to part with it.

In essence, the difference between Joe Bloggs and the bank when it comes to chasing debt is that the bank already owns the only thing worth chasing, unlike poor Joe who has to sit and lick his wounds.....


----------



## Bronte (13 Feb 2009)

murphaph said:


> Might be better in the legal forum but anyway....I'm curious as to what legal mechanism allows a bank to seize a property for failure to pay a loan secured on it in a relatively short timeframe


 
Can you give an example of a bank repossessing in a short timeframe?  Banks actually hate going after debt in this manner, particularly if it's the family home, they hate the publicity.


----------



## j26 (13 Feb 2009)

Optimist said:


> If someone has an outstanding debt of 100k (in your example), very often it is pointless pursuing the person unless they are a "mark", i.e. they have something worth going after. If you are their creditor, the only asset worth chasing might be the debtors house. However, since you dont own it (unlike the bank) you cannot force them to part with it.



Not strictly true.  If a judgment is given in court, and if the person still fails to pay, the creditor can register a judgment mortgage, and subsequently can obtain a Well Charging order which charges the property and gives the creditor similar rights to a mortgagee.  After that the creditor just needs an order for possession and sale.  

So you can put your house at risk with personal debt (although admittedly judges are not keen to throw someone out of their home)

The number of Well Charging orders is increasing at the moment btw.


----------



## murphaph (13 Feb 2009)

j26 said:


> Not strictly true.  If a judgment is given in court, and if the person still fails to pay, the creditor can register a judgment mortgage, and subsequently can obtain a Well Charging order which charges the property and gives the creditor similar rights to a mortgagee.  After that the creditor just needs an order for possession and sale.
> 
> So you can put your house at risk with personal debt (although admittedly judges are not keen to throw someone out of their home)
> 
> The number of Well Charging orders is increasing at the moment btw.


Thanks for all the replies. Very interested to hear that well charging orders are on the increase j26. I would not like to force the sale of a family home either but when someone owes you money and simply refuses to pay, there must be a deterent to this sort of behaviour. What is the difference between a judgement mortgage and a well charging order j26? Which one gets your name on their deeds?


----------



## MorrisDunn (13 Feb 2009)

Bronte said:


> Can you give an example of a bank repossessing in a short timeframe? Banks actually hate going after debt in this manner, particularly if it's the family home, they hate the publicity.


The subprime lenders will literally run to the high court as soon as 1 payment is missed. 

It is in their contracts that they can begin legal proceedings if 1 payment is missed. They have absolutely no compassion.


----------



## bond-007 (13 Feb 2009)

murphaph said:


> Thanks for all the replies. Very interested to hear that well charging orders are on the increase j26. I would not like to force the sale of a family home either but when someone owes you money and simply refuses to pay, there must be a deterent to this sort of behaviour. What is the difference between a judgement mortgage and a well charging order j26? Which one gets your name on their deeds?



You need the judgement mortgage first. Then you can get a well charging order. That then gives you the right to ask the High Court for possession. 

The only deterrent really is to commit a debtor to prison but you can't do that unless he defaults on an instalment order. Many debtors are clever enough to play the system in the District courts. With judges now reluctant to grant orders or where they do the amount of the order can be as low as €10 a month I can see where creditors get frustrated.


----------



## bond-007 (13 Feb 2009)

MorrisDunn said:


> The subprime lenders will literally run to the high court as soon as 1 payment is missed.
> 
> It is in their contracts that they can begin legal proceedings if 1 payment is missed. They have absolutely no compassion.



Also with the government making noises to stop banks from repossessing for 2 years these measures will not apply to the subprime lenders as they will not be recapitalised or are part of any government guarantee scheme. They can basically do what they want and the government will not be able to control them.


----------



## Chocks away (13 Feb 2009)

murphaph said:


> Might be better in the legal forum but anyway....I'm curious as to what legal mechanism allows a bank to seize a property for failure to pay a loan secured on it in a relatively short timeframe when other civil debts in this country are nigh on impossible to settle (from the creditors perspective). In particular, tenants in breach of their lease are able to sit in a property for literally years before an ejectment order is made. I'm not moaning about banks, I'm moaning that it is so difficult for companies and individuals to secure payment for debts due or indeed to regain control of their own property from a defaulting tenant! What legal mechanism do banks use that is different from any other creditor? Could you theoretically lease a property to an individual and secure the rent due on their own private property (I'm thinking no)?


You wouldn't be reading The _IRISH _Daily Mail by any means, now would you?


----------



## shesells (13 Feb 2009)

Gerry Ryan quoted one of the Sheriffs this week (not sure which area) as saying there were 2 reposessions in 2008 and 0 so far in 2009?


----------

