Court orders borrower to pay shortfall on repossessed house

Some people ask about handing back the keys. A borrower claimed in the High Court that the bank's loan to him was "reckless" and its claim "unfair".

Full report in [broken link removed]

Grant had appealed to the High Court, saying that the bank’s loan to him was ‘‘reckless’’ and its claim ‘‘unfair’’.

He asked why he should be asked to repay the full loan when the banks in general were being bailed out by the Irish taxpayer.

...

By 2007, Grant still owed €811,029. In December 2008, the building society repossessed the property, which was sold last September for €355,000. The Master of the High Court granted ICS judgment for €1,007,103, less the sale proceeds.

...

High Court Judge, Peter Charleton said that it wasn’t accurate to claim that a mortgage was effectively a promise that, in the event of default, the bank would simply sell off the property and write off the rest of the debt.

Click to expand...

Is that €200k in court costs ?

No. I found the figures confusing as well

By 2007, Grant still owed €811,029. In December 2008, the building society repossessed the property, which was sold last September for €355,000. The Master of the High Court granted ICS judgment for €1,007,103, less the sale proceeds.

Click to expand...

? 2007 : €811k

Dec 2008: property repossessed

Sept 2009: court judgment for €1,007

Two years' interest @6% a year, could be around €90k.

So there is €100k in costs - which would be the legal costs, the security costs of managing the property, which was a commercial property and the costs of selling the property.

It just goes to show you. You are better off selling the property yourself as repossession is a very expensive business.

Brendan

I don't think wide inferences should be drawn from this case in relation to propertyholders caught up by the banks profligate selling of money.

I presume this is the bould David Grant we're talking about here, unqualified success in Architecture, twice brought to Court by the ARB in England, not some naive punter of teh same name who bought a home he found he then couldn't pay for due to losing one or more of his income streams in the downturn.

Grant borrowed against the property on two occasions.

"Grant paid €372,033 for the property in 2002, intending to build a housing estate. He borrowed €788,000 from the ICS in 2003 and a further €92,000 in 2004. The loans were secured by a mortgage on the property, which ICS valued at €1.1 million."

I found this reference online:
[broken link removed]

The agent's address is given below and I wonder is this the premises?
Company: David Grant & Assoc,
Address: Kilmacullagh House,, Newtownmountkennedy,, Co. Wicklow.

According to this link the site is only 0.8 Hactares, hardly enough for a housing estate unless more land went with it.



All that having been said, I've raised a query with the SBP - if this is the unqualified success the paper shouldn't be describing him as an architect.

FWIW

ONQ.

[broken link removed]

Is €355,000 in the region of €425,000?

It's 15% under the asking price so that's probably about right for Sept 2009. It does have a nice big garden too.

Brendan said:

Some people ask about handing back the keys. A borrower claimed in the High Court that the bank's loan to him was "reckless" and its claim "unfair".

Full report in [broken link removed]

Click to expand...

This isn't a normal borrower. A professional, borrowing vast sums of money ought to know what they are doing even if the bank was reckless in it's lending. They should certainly know that one can fail and be prepared for that.

What did he do with the nearly 900K of extra borrowings to fund the building of a housing estate?

The house was only sold for about 20K (372K versus 355K) less than it's original purchase price?

Good points about his not being a typical borrower. However, the judge was quite clear:

High Court Judge, Peter Charleton said that it wasn’t accurate to claim that a mortgage was effectively a promise that, in the event of default, the bank would simply sell off the property and write off the rest of the debt.

Click to expand...

This is something that people need to realise.

Brendan said:

Some people ask about handing back the keys. A borrower claimed in the High Court that the bank's loan to him was "reckless" and its claim "unfair".

Click to expand...

Funny how he didn't claim it was reckless at the time. Indeed, if his house price had gone up, I bet he would be congratulating himself for how canny and savvy he was, and would be boring people down the pub with "rent is dead money" chants.

There are a couple of points which haven't been made.

Firstly this is an investor, there's no guarantee the courts would show the same attitude to a residential owner.

And secondly the million or so debt consists of approximately 400K borrowed for the property and a further 900K borrowed for the build costs. The article gives no indication that the whole 900K was spent on the building, or in what state of construction the site is in. The shortfall may not be as great as outlined in the headline figures. Other assets may have been purchased with funds which have a tangible value even if they aren't secured against the loan.

canicemcavoy said:

Funny how he didn't claim it was reckless at the time.

Click to expand...

Exactly. An obvious point but worth stating - if it's 'reckless' now it was 'reckless' then too surely? How is it so obviously reckless now but not then?

Folks

Keep the discussion on the issue involved here.

Please do not take the thread off topic to discuss the borrower's background.

Brendan