Repossession process ‘to be cut to 10 weeks’
With a lot of people who have lost their jobs recently relying on mortgage protection insurance we may still have not witnessed the bottom of the property slump in Ireland, the UK or for that matter the world.
Mortgage protection typically lasts for year so even now we will only be seeing the beginning of problems stemming from people who were made redundant at the start of the credit crunch.
It is estimated that there are 14,000 people in Ireland with mortgage arrears and there must be many more currently surviving mortgage protection insurance. But what will happen when this protection runs out? The article below from the Sunday Times highlights that under new government rules banks will be able to reposses properties in as little as ten weeks. This is a terrifying development for anyone who has is struggling with mortgage payments or faces the ending of their mortgage protection insurance.
In other countries, such as the UK and the US there are moves to protect homeowners from repossessions, after all these are seen as the people who were caught by the banks and developers’ spin during the boom, sold over priced property and given mortgages by banks that were clearly too risky for them. Typically in Ireland the government looks to be doing just the opposite and is seeking to protect banks even further.
From The Sunday Times
August 16, 2009
Repossession process ‘to be cut to 10 weeks’
Homeowners who fall into arrears on their mortgage could lose their property within 10 weeks of a bank applying for a repossession order, under new rules approved by Dermot Ahern, the justice minister.
Ahern recently changed the law so repossession orders are heard in the Circuit Court, rather than the High Court, where legal costs are higher. But lawyers say the move could speed up repossessions and add to borrowers’ upfront legal costs.
A legal source said: “Under the old system, over 95% of cases could be sorted out without evictions and typically cases went on for a year or more and were composed of several stages, offering scope for settlement. Under the new process, the final date is set in stone from the start of the action and the whole process could take just 10 weeks.”
The Irish Banking Federation estimates there are 14,000 people with mortgages in arrears. Some 207 repossession cases were taken in the High Court in the first three months of the year.
Under the new process, a bank’s lawyer has to file a Form 2R Civil Bill at the Circuit Court, get a “return date” from a county registrar and file supporting affidavits within 21 days of that date.
A defaulting borrower must enter a court appearance within 10 days of receiving the Civil Bill and file their defending affidavits within four days of the “return date”. If a borrower fails to respond, the registrar can make an immediate order for repossession of the property.
Noeline Blackwell, the director general of the Free Legal Aid Centres, said a county registrar can grant a repossession order without a judge ever hearing a case. “The minister’s intentions are benign but way the process has been set up could do more harm than good.”.
The Department of Justice said: “The initial Form 2R must be accompanied by a grounding affidavit, setting out the entire case, which is far more onerous on the lender than the current system, where a bank needs only to provide brief details of the arrears.”
The department also insists both borrower and lender can request a time extension “at any stage”.
Tags: mortgage repossessions;
Business | Simon Palmer | 
19/08/2009 12:01 am
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By UK Repossession Expert, 01/10/2009 @ 11:12 am
This is a very worrying development. We were led to believe that the government’s efforts to assist home-owners and lenders resolve the situation by allowing time for alternative arrangements to be implemented would help keep down the number of those facing repossession.
Now they seem to be saying that the goal posts will be shifted, drastically cuttingt he time for such alternatives to be explored, such as finding a new job etc.
This is bad news.