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slattcs
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I've heard recently that repossessed houses are sold on by the bank for the value of the outstanding debt. Does anyone know if this is true?
Where did you hear this? I would assume that repossessed houses are sold for their market value although perhaps the bank would go for a quick sale over the best possible price in some cases. In any case how many houses are actually repossessed each year in Ireland? Very few I would imagine.
liteweight
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This happens in England more so than Ireland. The bank has the house valued and puts it to auction. The reserve on the house is set at the amount owed to the bank, so they get their money. If it goes over this the 'owners' are paid that amount.
Auction in England is different. Over there it is usually the houses which don't sell go to auction whereas here its the top end houses that are auctioned. However this is changing.
This was the situation, at any rate, a number of years ago when we lived in England for a while.
Auction in England is different. Over there it is usually the houses which don't sell go to auction whereas here its the top end houses that are auctioned. However this is changing.
This was the situation, at any rate, a number of years ago when we lived in England for a while.
Eurofan said:
In the absence of any regulations then they would have little incentive to hold on for the best price as the excess over the debt will go to the owner. If they are after a quick sale they might let it go for less than it could have got if it had been left on the market for a while. There may be a duty of care however for them to get the best price possible I'm not sure of the legal requirements.
Bank cannot seek less than market value.
The mortgagor can also sue if the Bank does an incompetent job of selling the property. In fact in Ireland, the standard required of the Bank is quite high - see the Supreme Court Decision in Holohan v. Friends Provident and Century Life Office [1966] IR I.
The Legal test is:
The mortgagee (i.e. the Bank) must act as a reasonable man in selling the mortgagor's property.
(that case was regarding whether the Bank had to get rid of tenants in the property before selling - if they did it would make a higher price, and would get extra money for the mortgagor - it was held that they should have got rid of the tenants).
The mortgagor can also sue if the Bank does an incompetent job of selling the property. In fact in Ireland, the standard required of the Bank is quite high - see the Supreme Court Decision in Holohan v. Friends Provident and Century Life Office [1966] IR I.
The Legal test is:
The mortgagee (i.e. the Bank) must act as a reasonable man in selling the mortgagor's property.
(that case was regarding whether the Bank had to get rid of tenants in the property before selling - if they did it would make a higher price, and would get extra money for the mortgagor - it was held that they should have got rid of the tenants).
I believe there were 20 repossesions last year in Ireland. Not much of a market. Stat was in one of the Sunday papers.
This sounds like the kind of question someone would ask after attending one of those property seminars promising the secrets of making your fortune in real estate. "Make money even in a falling market". "Find low low properties in a street JUST AROUND THE CORNER!".
These theories do somewhat work but only in much larger markets, ie: in the USA where they orriginated.
This sounds like the kind of question someone would ask after attending one of those property seminars promising the secrets of making your fortune in real estate. "Make money even in a falling market". "Find low low properties in a street JUST AROUND THE CORNER!".
These theories do somewhat work but only in much larger markets, ie: in the USA where they orriginated.
Myself and hubby were discussing repossession a few weeks ago, and I mentioned that I had heard in the past that due to the constitutional situation of the family home it really is a 'last resort' for banks to repossess.
He raised a good point that could we expect to see any difference in repossession going forward with the arrival of a number of non-Irish lenders?
After all the UK banks are 'used' to going the repossession route, so will they use this faster than we have been used to seeing in the past?
It wouldn't surprise me to start to hear more about rising numbers of repossession in the coming years.
He raised a good point that could we expect to see any difference in repossession going forward with the arrival of a number of non-Irish lenders?
After all the UK banks are 'used' to going the repossession route, so will they use this faster than we have been used to seeing in the past?
It wouldn't surprise me to start to hear more about rising numbers of repossession in the coming years.
I don't think that there are any constitutional rights protecting the family home from repossession in the event that the owner defaults on a loan secured on the property if that's what you mean? Before we hypothesise about whether or not the number of repossessions might rise in future years it would be useful to have a better idea of what the figures are today and in the recent past.
liteweight
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Think it takes the Bank about 2 years to actually re-possess a house. Huge admin. etc. AFAIK they are always open to suggestion on how to handle the problem. One thing is certain....they never lose out!
Another point is that a house is perceived as being worth less if repossessed and i'm sure that some people are forced into a position of selling themselves rather than allowing a repossession which would result in less money to them once the mortgage has been cleared.