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in trouble the mortgage repayments are so high they represent more than half of their income, Davy reported, citing unpublished Central Bank studies.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

Sean Dunne’s Connecticut house, though there’s no-one home.


Sean Dunne’s Connecticut house, though there’s no-one home.

It will be next week when we are set to finally get Sean Dunne’s financial statements which he is required to submit to the US bankruptcy court, and because it is the US, these are public documents and will be reported on here; there is much anticipation, though presumably it will be old hat to NAMA, to which Sean has previously provided a statement of affairs.

Meantime, we can bring you exclusive pictures of Sean’s home as set out in his bankruptcy filing – 526 Indian Field Road, Greenwich, CT 06830. Taken yesterday from the chopper – no, there were no speakers blaring out Wagner – and from a height of more than 800 feet so as to comply with local privacy laws, the pictures show an expansive home set in its own grounds in the enclave of Belle Haven in Greenwich Connecticut.

No-one was home yesterday, and indeed it emerged in the High Court in Dublin this week that Ulster Bank has been experiencing what were described as “difficulties” in serving bankruptcy papers seeking to make Sean bankrupt in Ireland. A red sedan was visible in the front forecourt though the property has three garages on one wing. Sean is understood to be still driving the Lexus SUV and Gayle, what NAMA described as a “luxurious” Cherokee.

The house is presently listed for sale by Sotheby’s International with an asking price of USD 8m (€6.2m).  It sits on 2.5 acres. Sotheby’s says it has “a double-height great room w/fireplace, gourmet kitchen, formal dining room, family/theatre room, double offices. 8 bedrooms including a master suite w/marble bath, 3 dressing rooms, & balcony. First floor staff quarters. Lower level gym, storage space, laundry area, & bonus room. Pool, hot tub, & pool house w/full bath. Association private beach.” It has 24/7 security (no, not an alarm silly but a man in a sentry box). The property is owned by Alex and Irina Knaster who live in Kensington, west London.

via Exclusive! Sean Dunne’s Connecticut house, though there’s no-one home. | NAMA Wine Lake.

via Exclusive! Sean Dunne’s Connecticut house, though there’s no-one home. | NAMA Wine Lake.

Is there about to be a stampede for the door by foreign-owned Irish banks?


During the Christmas 2004 tsunami in Asia, it was remarkable that there were so few mass animal deaths, and there is a long-held belief that animals can sense disaster ahead of human beings.  Likewise, banks with their fingers on the pulses of households’ and businesses’ financial performance and prospects might be expected to have an unusually perceptive grasp on the economy; with a pattern emerging of banks exiting or considering exiting the State, this doesn’t augur well for our medium term economic prospects.

Next week we should get the Q3, 2012 results from Belgian-owned KBC bank which just a few weeks ago was strongly protesting that it didn’t have plans to exit from the Irish market. Industry speculation however is that KBC has had a lousy Q3,2012 in the Irish market and that its residential mortgage book in particular continues to deteriorate at an alarming rate. Insiders thought there was something of the bank “protestething” just a little too much recently, and that a partial or total exit may also be on the cards. The single reference to Ireland in KBC’s presentation to analysts on 8thOctober 2012 was noted with curiosity by some.

Towards the end of last week, there was unverified speculation in Dublin that Ulster Bank, owned by troubled British banking giant, Royal Bank of Scotland was considering an exit from the Irish market. Ulster Bank has already been flogging loan portfolios in an obvious bid to reduce its exposure in the Irish market, but the fear is that a more substantial action is afoot. Nothing came of the speculation, but the bank’s actions will be scrutinised closely in future, to see if a more radical exit is on the cards.

Today however, we actually get a definite announcement. Danske Bank, whose local bank brands are called Northern Bank in Northern Ireland and National Irish Bank in (the Republic of) Ireland, has published its Q3,2012 results which continue to show severe deterioration in its Irish loan book, though the pace of decline has eased. Danske has announced today that “the non-core Ireland portfolio will be divested” Looking through the Danske Irish financial statement for Q3, 2012 it looks as if there’s about €3bn of non-core lending in Ireland plus €2.5bn of core in the Republic and €4.8bn in Northern Ireland. There are €1bn of non-core deposits and €2bn of core deposits in the Republic and €5bn in Northern Ireland. So today’s announcement represents a major disposal though we await details of how and when the disposal will be made.

Bank of Scotland (Ireland) and Halifax are already in the process of running down their Irish loans, partly using the asset manager Certus. This follows the announcement of the exit from the Irish market of the two Lloyds-owned units in 2010.

ACC Bank, the Irish unit of Dutch-owned Rabobank said in June 2012 that it had no plans to exit the Irish market, this despite running up four years of losses, and needing a bailout of €930m from its parent operation in Holland.

We will shortly get mortgage arrears data from the Central Bank for Q3,2012 and for the first time should get detailed information on Buy-To-Let mortgages alongside the traditional data on Owner-Occupier mortgages. BTL is especially expected to show signs of crisis, the picture with Owner-Occupier mortgages is less clear with a slowing-down in the rate of deterioration recorded in Q1 and Q2, 2012. Commercial property continues to decline at an annualised 10% and it may be too early to claim the residential market is stabilising. Unemployment remains elevated at close to 15% and economic forecasts for 2012 and 2013 are trending downwards.

Maybe some banks do have a sixth sense.

via NAMA Wine Lake.

via NAMA Wine Lake.

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.

Banks working on new plan to solve crisis


Top management in both AIB and Bank of Ireland are reading the Old Testament to get them out of the current economic crisis.

Apparently, they have heard it’s where prophets are to be found

If you are looking for a loan please do not walk into the bank with a copy of the New Testament as it is viewed with suspicion

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