A NEW law allowing banks to repossess homes and investment properties comes into operation today.
Thousands of homeowners and investors are expected to be threatened with having their properties seized.
Justice Minister Alan Shatter signed a statutory instrument which puts the provisions of the Land and Conveyancing Law Reform Act 2013 into operation.
Banks had been unable to threaten repossessions following a ruling in the High Court in 2011. The new legislation overcomes the so-called Dunne judgment that put a block on repossessions.
Now many of the more than 54,000 residential homeowners who are more than a year in arrears face the real threat of repossession.
Banks are likely to try to take ownership of around 30,000 buy-to-lets that are in arrears. Almost half of these mortgages are having only the interest payments made on them.
Davy Stockbrokers has estimated that up to 43,700 letters threatening repossession have been issued by banks, despite their being unable to pursue cases over the past two years.
David Hall, director of the Irish Mortgage Holders' Organisation (IMHO), said he expected a flood of repossession applications.
"There will be chaos," he said. "I expect banks to take advantage of this, which will only add to the nightmare experienced by mortgage holders in the past few years."
He added that the Land and Conveyancing Act allowed for a repossession case to be adjourned so a homeowner and the bank can negotiate a personal insolvency arrangement through a personal insolvency practitioner (Pip).
But he said the new Personal Insolvency Service had yet to approve Pips, and it would be next month before it was in a position to accept applications for debt deals.
Mr Hall called on banks to direct anyone facing repossession to his organisation to see if a deal to keep families in their homes could be reached. IMHO has 1,700 distressed mortgage holders on its books.
The new legislation comes only months after Ulster Bank sent out letters threatening to take back their homes. It has claimed that more than a third of its mortgage-holders are making no payments.
Earlier this month, it told investors in London that it saw much evidence of "strategic defaulting". This is where people can meet their home-loan payments but choose to use the money for something else. The bank said it was going to the courts to seek repossessions.
Report by CHARLIE WESTON - Irish Independent