Dublin couple lose home after paying nothing for 4 years

An interesting case in the Indo.


Dublin couple who lost €960k home after failing to pay mortgage for almost four years plan to appeal

They had borrowed €960k and now owe €1,380k. So they have not even paid the interest on the loan.

The last payment was made in July 2013.

"Judge Linnane said Mr and Mrs McMahon had raised a number of issues in their defence against the bank’s possession application, all of which the court rejected.

She said the McMahon’s had claimed the bank’s bid to re-possess their home had fallen short because it had failed to note in its evidence what time of day its affidavits had been made and sworn.

The defendants had also accused the bank of reckless lending which, the judge said did not exist in law, and alleged that the terms of their mortgage contract had been unfair. She said there was an onus on anyone signing a document to read it before doing so. Judge Linnane said numerous adjournments had been granted to both sides to facilitate progressing their case."

Mad stuff.

They had their first hearing in court in June 2015. From our notes attending the court, it appears that the bank had some difficulty in serving the papers on them.

So it's taken almost two years to get an order. And they probably will delay it another year or so by going to the High Court.

If nothing has been paid in a year, the Registrar should be guided towards granting an order on the very first appearance unless there are some very good reasons not to do so. And any adjournment should be made contingent on the borrowers paying a specified minimum amount.

Brendan

Amazing. Do they expect to keep the home without paying? Or what is their long term plan?

Their long term plan appears to involve using every legal technicality possible in an attempt to frustrate Bank of Ireland in recovering money, which, by the way, belongs to it's depositors, shareholders, and bond holders.

And they get to stay another four months in the house before the possession order can be executed.

The sooner messes are cleared up the better for all concerned. And this one has gone on way too long. Insolvency legislation has been brought up to date, focus now needs to move to helping lenders recover their security in non-engagement cases similar to this.

John O'Connor of the Govt's Housing Agency solution is to write off the negative equity for people like this!

Who pays for their court appearances? Even if they are representing themselves, there must be other costs?
If they go to the High court they'll have legal costs on their side, never mind the banks- if they don't pay their own legal counsel, is it then shoved on to the Taxpayer or will their legal team be left out of pocket?

Delboy said:

John O'Connor of the Govt's Housing Agency solution is to write off the negative equity for people like this!

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Saw that. Is John O'Connor aware that legislation permitting negative equity write off is already on the statute book? He came across naive asking for something that is already in place. No-veto Personal Insolvency Arrangements that involve the write-off of negative equity on a family home are currently possible. But the borrower has to push for them. They aren't handed out on a plate.

Looks like the more they owe, the less likely they are to pay. This is not the average bog standard mortgage, it's a million plus euro one. I think it beggars belief they were allowed and are still entitled to stay there for years without paying a dime while they fight their way through the court system.

Was there not some BOI documents left in the back of a taxi which indicated default rates were highest on jumbo mortgages?

Andy836 said:

Was there not some BOI documents left in the back of a taxi which indicated default rates were highest on jumbo mortgages?

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Higher interest rates are always charged on jumbo mortgages in the US to reflect the higher risk to the lender.

That's an amazing mortgage they originally got. The judgement doesn't say anything about income. Do they have jobs I wonder. If they do they are going to be hit with an instalment order eventually. Of course if they have nothing they might as well play the court lottery.

Delboy said:

John O'Connor of the Govt's Housing Agency solution is to write off the negative equity for people like this!

Who pays for their court appearances? Even if they are representing themselves, there must be other costs?
If they go to the High court they'll have legal costs on their side, never mind the banks- if they don't pay their own legal counsel, is it then shoved on to the Taxpayer or will their legal team be left out of pocket?

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Delboy - From meeting the couple in the High Court - I would say they are representing themselves. remember there are two sides to every story and the Indo seems to have just mentioned a few of their 'technical' defences - it may not portray the whole story.

Brendan Burgess said:

The defendants had also accused the bank of reckless lending which, the judge said did not exist in law, and alleged that the terms of their mortgage contract had been unfair. She said there was an onus on anyone signing a document to read it before doing so.

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Is she not obliged to consider the mortgage contract for unfair terms in light of the Judge Barrett ruling last December? My understanding is that that the courts, of their own motion, are required to do precisely that.