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Tuesday, 8 February 2011

Repossessions Crisis To Deepen...

Repossessions at all-time high but crisis to deepen...

REPOSSESSION orders granted by the courts have risen almost six-fold since the peak of the property boom.

Figures released by the Courts Service show that the number of orders granted by the High Court and Circuit Courts for the repossession of lands and premises were at their highest last year, a figure that is set to rise as lenders increase their interest rates.

Some 70,000 homeowners are struggling to pay their mortgages, according to Central Bank figures, including up of 40,000 people who have not made a payment for three months or more, and 30,000 who are making interest-only payments.

The 70,000 figure includes around 12,000 homeowners who have not made any payments for a year or more.

The vast majority of repossession orders granted in the courts are for residential properties, with some 263 of the 306 properties seized by the banks in the Circuit Court last year granted on foot of defaults on home loans.

Although subprime lenders such as Start Mortgages have so far dominated High Court repossession actions, taking up some half of all cases, mainstream lenders such as Bank of Ireland, AIB, Irish Nationwide and EBS are now highly active in both the superior courts.

Yesterday at the High Court more repossession orders were granted to prime lenders than to subprime finance companies.

Some 13 lands and properties were possessed and most related to non-residential and buy-to-let investments.

The vast majority of cases are being adjourned by lenders to facilitate negotiations with borrowers, but High Court judge Mr Justice Brian McGovern has also warned that leniency will not be shown towards borrowers who use the court process to avoid their indebtedness.

Warned

Last night Paul Joyce, senior policy researcher on consumer credit law for the Free legal Advice Centres (FLAC), warned that the number of people losing their homes would continue to increase.

This is despite new mortgage arrears measures, introduced last December by the Central Bank, designed to lessen the burden on cash-strapped families under threat of eviction from their homes.

"The rise in possession actions underscores the need for a non-judicial, national debt settlement office" said Mr Joyce, who added that the EU/IMF deal had set a March 2012 deadline for a new law to create an out-of-court system to deal with personal debt.

"We cannot wait that long," said Mr Joyce.

Economist Morgan Kelly has warned that the gathering mortgage crisis puts Ireland "on the cusp of a social conflict on the scale of the Land War".



Report by Dearbhail McDonald - Irish Independent

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