Increase in House Repossessions, are borrowers sufficiently warned about risk?

Renters accept that the landlord may request to repossess their house with relatively short notice. This has and continues to happen to individuals and families all over Ireland.

Involuntarily moving house is a bl**dy awful experience but it's not the end of the world.

Far worse, I think, than a forced move for owners is the financial carnage that has led up to it. This could include negative equity and ever increasing amounts of interest and penalties to pay.

The bank "allowing" a family to stay in the house does not solve these problems for them. In fact the financial problems could get worse by staying in a house they can't afford if the micro or [broken link removed]

In the last housing bust in the UK, it was not unknown for people to enter voluntary repossession just to get away from an ever deepening money pit.
 
Remix said:
In the last housing bust in the UK, it was not unknown for people to enter voluntary repossession just to get away from an ever deepening money pit.
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In the US, the massive increase in "short sales" (i.e. where the seller cannot afford to repay their mortgages, sells the house at a price lower than the outstanding mortgage balance and asks the bank to 'write off' the balance) has attracted the interest of the IRS. Under US tax law, debt write offs can be viewed as a gift from the lending institution to the beneficiary and attract associated gift taxes.

Anyone know if the revenue here take the same view of debt settlements?
 
Vanilla said:
It is, yes. I'd agree with Brendan that judges are reluctant to grant an order for repossession until every avenue has been explored and the mortgagees have been given every opportunity to deal with the matter. I couldn't comment on whether they are more frequent, I simply don't know. I personally haven't seen any increase in repossessions among MY clients, although I have seen a huge increase in remortgaging, top ups and equity releases of varying kinds.
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Is there not specific legislation protecting the family home? I thought it was nigh on impossible for a bank to repossess in these cases...perhaps the repossessions are "investors" who've bitten off more than they can chew?
I agree with other posters view on the article...I bought it to read on a flight, saw that article and thought it'd be interesting. The reality was wooly rubbish with very little to back it up. Surprised Brendan O'Connor didn't write it...he writes pretty much everything else in that "paper".
 
There is no actual protection for a "family home" when the owners can no longer afford to pay for the property.

In very simple terms, if you own a house worth 500K and you have a mortgage of 450K and you begin to go into arrears on your mortgage, financially it makes more sense ( if you can) to sell the house and discharge the mortgage rather than ( if such be the case) continue to incur debt.

I deal with many very emotionally charged debt situations where the blanket phrase " but its my family home" is hurled at me as if in some way that made the debt irrecoverable - that is just not the case. Increasingly, the Courts will simply look at the facts and make the necessary orders if
(a)the debt is due,
(b) the Banks are looking for possession and
(c)there is no possibility of the debt being paid.

It is far kinder in the long run to do this than to allow a debt to accumulate.

In family law cases, it is more and more usual for the house to be sold and the proceeds split to enable both to purchase again - but in many cases people want to stay in the lovely redbrick and the thought of a new build in outer suburbia as a replacement brings us back to "but its my family home"!

Is it starting to happen? I don't see any evidence of it at all but I agree with Vanilla that my clients continue to borrow on built up equity to fund life style expenses which to me only means that they are living beyond their means.

Oh, it will all end in tears.

mf
 
ClubMan said:
For "lifestyle" expenditure such as mf1 alludes to?
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It must be...I reckon people are buying X5's, taking round the world trips, joining golf clubs etc etc etc to a much greater degree than any of us even suspect.
 
On the last 2 top ups I did, the conditions were that the car loans, ( plural), overdraft and Visa card debts( plural) ( total approx: E45-60K) were to be discharged from the loan cheque leaving modest enough balances for holidays and home improvements.

So yes, I think the top ups are funding lifestyle. And that does not compute to me.

mf
 
KalEl said:
Is there not specific legislation protecting the family home? I thought it was nigh on impossible for a bank to repossess in these cases...perhaps the repossessions are "investors" who've bitten off more than they can chew?
I agree with other posters view on the article...I bought it to read on a flight, saw that article and thought it'd be interesting. The reality was wooly rubbish with very little to back it up. Surprised Brendan O'Connor didn't write it...he writes pretty much everything else in that "paper".
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This existed in some States in the US - Texas, and Florida to name two. I think it's known as the 'Ranch law' and stems from way back when a rancher might lose everything in a bad year and rack up some big debts, but he could never have his ranch taken from him.
Not sure if they have changed it now after some executives involved in Enron and Worldcom bankruptcies bought big million dollar properties in Florida then declared chapter 7 (personal bankruptcy in the US) - this meant that could be hit with anything but would emerge from the bankruptcy with a multi million dollar property to soften the pain.
 
mf1 said:
On the last 2 top ups I did, the conditions were that the car loans, ( plural), overdraft and Visa card debts( plural) ( total approx: E45-60K) were to be discharged from the loan cheque leaving modest enough balances for holidays and home improvements.

So yes, I think the top ups are funding lifestyle. And that does not compute to me.

mf
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Do you find many people paying for their cars etc. over the 20-30 years of their mortgage loan and do they realise the cost implications!?
 
ClubMan said:
For "lifestyle" expenditure such as mf1 alludes to?
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Sometimes I don't know why people top up or remortgage. It's not really any of my business. Sometimes I do know because the loan is conditional on certain loans being repaid from the new mortgage by me. If I see that someone is consolidating loans such as car loans into a mortgage I always mention to them that they should try to still treat it like a car loan and increase payments to repay at least that portion over a shorter term, but I'm not a financial adviser and I'm not their mother, so while I try to give a bit of advice I wouldn't be dogmatic about it.

Thankfully I have noticed that some of my clients are simply more financially astute and are remortgaging to avail of better rates. Thanks to AAM, if someone mentions a concern over a rate to me, I can steer them towards better rates. If I see a client coming in with a loan offer where the rate is clearly well above average I do try to offer a bit of guidance on finding a better rate, depending on circumstances. Sadly sometimes I see clients coming in with loan offers from Start Finance or GE Money where the rate is twice the normal rate because they have a poor credit rating and have no other option. In those circumstances I do try to advise them not to remortgage in the first place if there is any other option, or if they don't have an option to try to keep up repayments just until they can switch to a better rate and then switch as quickly as they can.

As I said I'm not a financial adviser but I do 'care' ( in a non- American love everyone sort of way) about my clients.
 
Is there any Irish website that I can look for that advertise repossessed houses / sites / land?

Joejoe
 
joejoe said:
Is there any Irish website that I can look for that advertise repossessed houses / sites / land?

Joejoe
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I was under the impression that up to quite recently repossessions in Ireland totalled less than 50 per annum, so I doubt it.

Maybe it's something you could invest in...
 
I have never seen any houses for sale in Ireland advertised as repossessions.

Has anybody?
 
Why would a lender want to sell as " a rrepossessed house ". The house would be put up for sale in the normal way and eventually when the purchaser has to sign the deed of Transfer or Conveyance he/she may notice that the vendor is a financial institution.
 
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