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Thousands of homes targeted for seizure by banks


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BANKS have initiated legal action to repossess thousands of houses and apartments, it has emerged.

This is despite a loophole in the law blocking repossessions.

A new report estimates that lenders have issued legal proceedings to take properties off up to 44,000 borrowers.

These are made up of residential and buy-to-let properties, according to calculations contained in a new report by Davy Stockbrokers.

An analysis estimates that what it calls non-cooperative borrowers number between 23,700 and 43,700.

FEARS

Letters threatening legal action have been sent to these borrowers.

And there are fears that large numbers of properties, particularly buy-to-lets, will be repossessed.

Legal action to repossess properties has been taken by both AIB and Bank of Ireland in around one in five of arrears cases, according to the report by Davy‘s Conail Mac Coille.

Ulster Bank said that up to a third of its property owners in arrears were making no payments at all. The bank said it would not hesitate to repossess in these cases.

Strong demand for family-type homes and the presence in the market of large numbers of cash buyers mean that a flood of newly repossessed properties can be absorbed.

A number of banks were also likely to keep repossessed properties on their books, take the rental income and slowly release them on the market, Mr Mac Coille wrote. Changes in the law to restore the right of lenders to repossess properties have been passed by the Houses of the Oireachtas and are expected to become law soon.

Davy reckons that arrears will keep rising this year, with large numbers of homeowners struggling to repay largely due to income decreases rather than job losses.

Two-thirds of those in arrears are in a job, according to comments by Central Bank governor Patrick Honohan.

For large numbers of borrowers in trouble the mortgage repayments are so high they represent more than half of their income, Davy reported, citing unpublished Central Bank studies.

A separate MABS (Money Advice and Budgeting Service) report found that distressed borrowers had just €777 a month left, after paying for utilities, food and childcare. But the mortgage was around €500 a month.

SPLIT

Banks will have to write down up to €11.5bn of mortgage debt. Most of this will be in the form of split mortgages where part of the mortgage owed is put to one side, and in most cases will probably have to be written off at the end of the mortgage term.

But one-third of borrowers are in such a bad financial position that a debt writedown will not work. These are mainly buy-to-let investors.

Half of investor mortgages are paying interest only. Despite this, almost 30,000 out of 150,000 buy-to-let mortgages are in arrears.

Irish Independent

via Thousands of homes targeted for seizure by banks – Independent.ie.

Property tax hunger striker: ‘I’d say I won’t last too long’


Tony Rochford hasn’t taken food for 11 days – but insists he will not end his strike unless the property tax is repealed.

A MAN who today enters the twelfth day of his hunger strike against the property tax has admitted he does not expect to survive for much longer.

Tony Rochford, who turns 45 next week, has been on hunger strike in opposition to the new tax since last Monday.

Rochford has lost nine kilograms (about 19 pounds) since his strike began – surviving only on water and black coffee – and is continuing to lose weight as he refuses to end his protest.

Rochford borrowed €430,000 to pay for his home in Trim, Co Meath, in October 2008. However, within three months his work – installing marble worktops and features in houses – had dried up.

He believes his home is now worth about €280,000, making it liable for an annual property tax of €495.

He has had a negligible income since then, as he is not entitled to State support because he was self-employed, but had managed to keep his mortgage out of arrears until this week.

He claims, however, that his mortgage lender refuses to enter into any negotiations with him, because he and his wife had already been given a moratorium on their repayments – which has since concluded – and because he has not entered into significant arrears.

“They were very good with the mortgage, but not willing to do any deals until you get into distress… the whole thing is bloody crazy,” Rochford told TheJournal.ie last night.

The great thing about this house for the bank is, if they repossess this in the morning, they’ll only lose €50,000.

He said he has paid off €100,000 of his original loan, leaving €330,000 to be repaid – most of which could be recouped by the bank if it was to repossess and sell.

“I’d love to trade down – gimme a bit of land and I’d build a house myself – but the banks are giving me no options,” he said.

“If I do try and trade down I’m still lumbered with the excess… [because we] kept playing the bloody mortgage for fools. We followed what we were told by the government – do the right thing.”

Other protests were fruitless because while there was broad public opposition to the tax, there were too many fragmented groups against it.

Though Rochford has recently been able to start finding work again, his refusal to pay the property tax means that from next Monday he will be unable to receive a tax clearance certificate – meaning he will be without any income of any kind.

“I’m basically sentenced to death anyway,” he said.

I can’t work to provide for my wife, and I won’t be entitled to any welfare payments anyway.

The government is effectively sentencing me to death.

He added: “I’m not going to keep feeding money into the Irish Exchequer – when I was in trouble here and had no work or no money, they did nothing for us.”

Asked if there was any prospect of becoming so ill that he would give up his wife, he said: “I’m afraid not. No, there’s not. I’m just that type of stubborn person.”

Rochford is to mount a protest against the property tax outside the Four Courts on Monday morning – the day upon which the tax will formally be charged, and when he will lose his tax compliance – and says only the repeal of the tax will encourage him to end his strike.

via Property tax hunger striker: ‘I’d say I won’t last too long’.

Bank sends letter over €5 mortgage arrears


How many of us are busting a gut to keep up with mortgage repayments? And how many are just a missed pay packet away from joining the 169,000 or so  people who are in currently in arrears or  in difficulty with their mortgage?

So when you are actually managing to pay the mortgage every month, it can be disconcerting to receive a letter  from the bank that refers to arrears, credit rating and repossession. I received a MARP (Mortgage Arrears Resolution Process)  booklet in the post from Ulster Bank last week   along with a letter informing me that I’m in arrears to the tune of €5.28.  It goes on to say, “Under the regulation covering MARP, we must tell you that: If you miss your mortgage repayments it will affect your credit rating, which may affect your ability to get a loan in the future. If your home is ever repossessed, that would also affect your credit rating.”

So for the sake of just over €5, they are reminding me that missing a repayment will affect my credit rating and and that losing my home would affect my credit rating. I’m guessing if my  home is repossessed, my credit rating won’t be uppermost on my mind.

It also said the bank had written  previously about the matter .

I didn’t receive the previous letter but it struck me that rather than sending me two letters and a booklet to inform me about this massive debt, they might cast their mind back to their technical meltdown during the summer and deduce that the shortfall might somehow arise from this period.

If  their systems hadn’t been down  for some weeks  and the payment was taken by direct debit as normal, then this mistake would never have happened . Now stick that in your bad credit rating.

When I phoned the bank to find out why I got a letter about such a small amount, the guy I spoke said under  the law that  banks have to send out a letter to customers “even if  they are only 3 cent in debt.”

Is it just me or is that a complete departure from common sense?  Shouldn’t there be at least one  missed mortgage payment or at least an inquiry into why there’s a shortfall  before a bank goes into overdrive, spouting out  letters and booklets? No, according to Karl Deeter of Irish Mortgage Brokers  who says that much of the banking system is automated and for a payment to be €5 short it would normally mean that it was done manually (at a branch) rather than by direct debit, because a direct debit will either clear in full or not .

“An arrear is typically formed when payment due is not cleared in full at the end of the ‘grace period’ which in Ireland is 30 days. This means that if you were short €10 on a €100 loan that after 30 days you would be €10 in arrears, if this happened 10 times in a row you would then be a month behind. This happens in mortgages that you see a loan classed as being 90 days in arrears, but in fact the problem has been ongoing for 2 years not 90 days (it has to do with the way it accrues rather than being a specific zero payment for three months).”

He sees no  problem with the banks sending out letters to people who are behind by tiny amounts. “Prevention is better than cure. It’s better to get in there early if someone needs help than when it’s too late. If they don’t need the help then they can throw the booklet in the bin.”

He has no sympathy for people  who that don’t appreciate being pulled up over a small amount and thinks the bank  take the view they are being pro-active and showing some civic responsibility.  But wouldn’t it be a more sensible approach if they first inquired into the cause of the shortfall before bandying the  “c” word (ie credit rating)  about while  informing you about what will happen if your home is repossessed?

via Home Truths » Bank sends letter over €5 mortgage arrears.

via Home Truths » Bank sends letter over €5 mortgage arrears.

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