In the past five years, we have been on the upside of a boom with full employment and a very low number of housing repossession’s. The tide of easy credit is now going out, the fraud’s and lack of due diligence by banks and others associated with the property market are being exposed.
We know at least 30,000 people are going to loose their jobs over the next year in construction alone and we know that tightening credit and competition from other economies means foreign direct investment is going to reduce further. Where is the growth in the Irish economy going to come from?
Agriculture? Energy?
Unthinkable though it sounds around 2009/2010 I reckon the issue of repossession orders is going to skyrocket into a full meltdown just like we are seeing in Florida and Southern California right now.
Yes its possible that repossessions might be a significant feature of the irish housing scene for the first time since the 1890s.
Most of the sub prime mortgages in Ireland are now held by foreign mortgage lenders like GE Money. They will not have the same friendly attitude to unperforming loans that irish banks have traditionally had. They will repossess.
In fact I think many subprime lenders have been planning to make money from repossessions, right from the start. Thats borne out by the mortgage lender who was trying to charge 12k in legal fees to the homeowner who was 8k in arrears.
I’d be very suprised if we’ve got to 30,000 per year. I think it will rise significantly but even 5,000 per year would but massive downward pressure on house prices
Do we even have the capacity to process that number of re-possessions? Will there be a backlog of re-possession orders?