How can Financial Institutions repossess houses ?

If, as is predicted, there is widespread defaulting on mortgage repayments on homes in the early part of next year, what will be the point in the banks and financial institutions repossessing these properties since they will not be able to sell them as the market will be on the floor ? Wouldn't it make more sense to allow the occupiers to continue in situ with some kind of low rental agreement subject to say six monthly reviews until things get going again when normal payments could be resumed ?

1John said:

what will be the point in the banks and financial institutions repossessing these properties since they will not be able to sell them as the market will be on the floor ?

Click to expand...

Banks tend to sell repossessed houses at the best market price they can achieve, not the amount due to them and then chase up the original owner if there are any outstanding monies due.
From talking with friends and family, there seems to be a good few people with large savings and secure jobs waiting for the right house, in the right area, at the right price...

Wouldn't it make more sense to allow the occupiers to continue in situ with some kind of low rental agreement subject to say six monthly reviews until things get going again when normal payments could be resumed ?

Click to expand...

Banks aren't in the business of being landlords.
To review mortgages every 6 months means an undefined number of months of bad debt sitting on their books.

Its difficult to see what solution can be found for people with mortgage difficulties. Payment breaks can be a helpful but the money still needs to be paid back.

I had heard a rumour that banks were leasing properties back to the owners.

The banks don't have the hassle, expense and publicity of going to court. Family do not become homeless.
Family have reduced repayments. It gives them breathing space to get back on their feet.
Eventually, if they get sorted out, they can begin to buy back their house.

Banks do not want to turf people out and be left with an empty property that cannot be sold in the current climate.

Its not a readily verifiable rumour though.

If you read some of the decisions taken by judges at repossession hearings, repossession is seldom granted to the bank until the family concerned has been given a multitude of other options. Repossession really does seem to be the last resort for the judges to grant it too. But, I am sure it is happening. In estates in our area (N.Dublin), properties are suddenly appearing on the market at prices 20-30% lower (~100 000 to 130 000 euro less) than their immediate neighbours for sale - with wording such as 'must sell before Christmas', 'priced to sell', etc. etc. When you look at the pics that go with some (not all!) of these ads, the houses are vacant....which makes me think that they might be repossession cases.