What actually happens when people don't pay their mortgage for a few years...

[Brendan Burgess]

I was in the Dublin Registrar's Court on 9th February. In three particular cases, where the lender applied for an order for possession, the Registrar came close to granting the order but gave "one last adjournment to the borrower.". I felt in all three cases, orders should have been given. But the borrowers attended court and got adjournments. These three cases were adjourned to Friday last, 13th April, so I went back in expecting to see three orders granted.

Case 1 UB vs. A & Z
What happened on 9th February.

Z attended court.
Arrears of €72k on a mortgage of €311k.
Paid €1,200 in December and January, but nothing at all for a substantial period before that.
Proceedings issued in 11/2015 when arrears were €44k
Z is working again now, her husband is a taxi driver.
Should be paying €1,395 per week.

What happened on 13th April
Neither borrower appeared as the lender had told them they were applying for an adjournment.
Borrower paying in full and so they have a test arrangement from 29th March to 29th September
Adjourned to 26th October - Peremptory against Ulster Bank.

This means that in October - Ulster Bank is obliged to seek an order for possession or strike out the case.

 

[Brendan Burgess]

Case 2

AIB vs D & F-

What happened on 9th February
Both borrowers in court.
Last payment November 2014 apart from a payment of €921 this year.
proceedings issued in 2016
Arrears of €46k on a mortgage of €97k - the equivalent of 6 years' arrears.
Borrowers had submitted an SFS the previous day.
Original mortgage €140k
Business closed down, so they have been struggling.
Registrar ordered that a meeting take place within 21 days.
Registrar told borrowers that if there was not a dramatic change by the 13th April, the banks would be awarded an order for possession.

What happened on 13th April
Both borrowers attended court.
The SFS was incomplete.
Then they sent in fully completed one with the help of MABS.
(I didn't catch if payments were being made.)
Registrar ordered a meeting to take place within 21 days with someone who can make a decision.
Adjourned to 26th October

 

[Brendan Burgess]

Case 3 AIB vs. A & L

What happened on 9th February
L attended court
€138k arrears on a mortgage of €377k
Proceedings issued in 2017
Last payment made in 2013
Borrower said that they had both left permanent jobs to set up a business which was not a success. She is still running the business, while A has just secured a good job. They have cleared their other loans and their Revenue debt and so can start paying their mortgage now.
We can pay the €1,985 per month. "I am 44 years old so can work until I am 70 to pay it off."

The barrister for the bank argued that the borrowers have been paying other creditors in preference to the bank. They have left it very late to deal with the mortgage.

Registrar to borrower: There is no one else in this court today like you who is paying nothing on their mortgage. One final adjournment.

13th April
Both A & L attended court.
3 full payments have been made since the last hearing.
AIB had arranged a meeting with the borrowers on 13th March. (This may have been as a result of an order from the Registrar the last time, although I had not noted this.) They changed this to the 14th March. Then they cancelled this as they wanted both legal and the Arrears Support Unit to attend. The borrowers submitted an SFS. The bank wrote to the borrowers on 4th April seeking payslips. The borrowers sent them in. Then the bank requested bank statements. The borrower had sent them the day before the court hearing but the bank had not received them.

The Registrar put the case back to second call and told the barrister for AIB to ring AIB and set up an appointment for the borrower.

The barrister came back, having set up an appointment for 25th April.

Registrar adjourned the case to the 12/10 but made it clear to the lender that they were not impressed by their lack of effort in dealing with this case.
She also put the case in for mention on 27th April. She told the borrowers to only come back on 27th April if AIB cancelled the meeting.

 

[Brendan Burgess]

Some other cases

Bank of Ireland vs. H & G
€52k arrears on €180k mortgage
G showed up in court and said she did not know that H was not paying the mortgage.
Nor did she know that there were any legal proceedings under way.
H has now agreed to move out and G is going to let the property and pay the mortgage.
Registrar was not impressed and put the case back to 2nd Call.
Because of the number of other complicated cases, when it was called for the second time, the Registrar said that there was no time to process an order for possession, so adjourned it to 29th June.

Start vs. OF from 2015
Start Mortgages applied to strike out the proceedings as they discovered a serious flaw in their paperwork.

EBS vs. S
€40k arrears on €195k mortgage. Last payments in 8/2015
Asked for an adjournment so that he could consult a PIP.
Registrar: Have you made an appointment?
Borrrower: No.
But got an adjournment to 1 June but was warned that whatever needs to be done must be done by then.

Two other cases from 2015
The borrowers got adjournments so that they can consult with PIPs about their options.

Shoreline vs. McC
€115k arrears on a mortgage of €204k
Paying €800 but should be paying €1,538
Had appointments with MABS and a PIP but missed both of them.
Put back to second call and told borrower to use the time to make an appointment to see a PIP.
MABS helped her get an appointment for this week, so adjourned to 8th June.

UB vs. B
€100k arrears on a €400k mortgage
Significant payments werebeing made but last payment in December.
Unable to contact the borrower.
We are constrained by the CCMA and can't make an unsolicited call to the property.
Now there is a tenant in the property, so we can't proceed as we have to notify the tenant.
Have got the borrower on the phone and he claims he was not aware of the proceedings.

KBC vs. P
€178k arrears on a €516k mortgage.
12 adjournments as it's subject to the tracker review

KBC vs. M
From 2016
Unable to serve papers on the borrower. Refused an extension of time, so no order made. (not sure if this is the same as striking out the proceedings.)

 

[Brendan Burgess]

So what are the lessons?

You can get away with not paying your mortgage for a number of years without any real sanction.

It's ok to clear expensive Credit Union or other unsecured debt ahead of your mortgage.

If you show up in court and start paying, the banks will have to do a deal with you, because they won't be getting an order.

Show up in court. In all of the above cases, I feel sure that the lender would have got orders back in February if the borrowers had not attended.

The bar is very low for the borrower and very high for the bank. In the third case, the borrower had paid nothing since 2013, but did not lose their house. All they had to do was show up in court and promise to start paying. The bank found it difficult to arrange a meeting with them, and the Registrar read the Riot Act to the bank for treating the borrower in such a fashion.