House barricaded over repossession

irishtimes.com/newspaper/ire … 94753.html

What an appropriate address.

I heard something yesterday, and I have no idea why it came as a surprise, because it makes complete sense.

If your house is reposessed and the bank sells it for more than the outstanding debt.
They keep the profit. You get nothing back.

It makes sense because
a) if you have equity you’d be a complete moron not to sell up if reposession was iminent
b) they lose money most of the time because houses are in negative equity

Still, I wonder how many people realise this.

-Rd

Thats mistaken. The house is merely security for the debt.

In such a situation (which is highly unlikely these days) they will repay any excess of the sale proceeds less the outstanding debt less expenses back to the borrower.

Furthermore, if a bank doesn’t sell a property for the highest achieveable price, they could be sued by the borrower for breach of fiduciary duty.

Ran it by a bank manager and he confirmed that they keep the excess proceeds.

Might be one to check out. It’d be interesting if the bank manager was wrong.

Has anyone any ACTUAL experience of reposession?

-Rd

Bank of Nigeria? They are entitled to the principle sum, arrears and costs of sale and legal costs.

Given that the mortgage holder is entitled (in any mortgage i have seen) to call for the immediate repayment of the principle (even if there are no arrears) what would stop them doing that with houses with loads of equity to make a quick profit?

Irish courts do not look favourably on repossessing the family home so they cannot do it directly. How it will work is like this, Say an Irish bank has a cash shortage and needs funds urgently, say you are in your 50s and have the bulk of your mortgage paid off so there is equity in your house even with the price falls, say you loose your job and have other debts, car, kids university fees whatever. What they will do is cut off your credit line, the other people you owe money to will then move to recover the debts you owe them, so you have to sell, since the banks have first lien on the house they get paid first from the sale, if there is a home equity loan on top of that the bank may have second lien as well.

This scenario will likely develop when house price inflation picks up over the next 20 years, the banks have a lot of cases at the moment where they have made settlements with mortgagees to pay back a reduced amount of the loan rather than repossess in a market that is illiquid and where they cannot recover the principal. When the market picks up they will bring the sword of damocles down and clear the bad loans from their books, that could be in 10 to 20 years time.

He is 100% mistaken.

You borrow the money, the house is security. If they take security it is sold to pay the debt and nothing more. If it’s sold for more, you get that, if it is sold for less, you owe.

I have been involved in the (competed) repossession of at least two family homes this year (That is two with one lender in one county). All the Courts will do is give some extra time. .

It is far far from the truth that the family home is somewhow exempt. In fact, it wouldn’t surprise me if a significant proportion of reposession cases were in respect of family homes.

It was Ulster Bank and It’s a surprise to me too, which is why I mentioned it.

Right now I’ve got Bank Manger on one hand, anonymous web posters on the other.

Can anyone categorically say what the situation is.
(Someone with experience)

-Rd

Anonymous web posters are right.
This from Citizens Information:

The arrangements for the sale are also generally agreed through the Examiner’s Office. The sale is usually by public auction. If the sale price is greater than the amount you owe, then the excess is paid over to you. If it is less, you are still liable to repay the shortfall.

-Rd

But they don’t auction always. Simply sell to one of insiders who is ready to pay asking price.
I saw an apartment at asking 159,000, two bed in west dublin this september while others were selling at 259000ish. I looked at 11.0 night, it wasn’t there. In morning around 10’ o clock it was there and daft showed edited 1 hr ago means apartment was put on daft for an hour only. I called EA he told me it was a repossed (voluntary) apartment and its already sold at asking price.
They can doubly screw you, sell a low price to an insider and you owe rest of that.