Query: The Charge on a House

I’ve been hearing a lot of talk lately of banks losing the charge on houses. As in, they have lost the actual charge. An example would be where a house with two acres was split up into two, one acre houses and the solicitors never completed/returned the charge documentation to the banks.

What are the implications of this for the family living in the home?

Say they have 500K of a mortgage, but now the charge has been lost. Is it simply a case that they now owe 500K unsecured?

A simpleton question; are the deeds and the charge separate? (They are right; the mortgage is the charge?)

What can the banks do retroactively? And, what should the family do?

I know of one person who is in this situation. My advice thus far has been to sign absolutely nothing with bank and move any deposits to another bank for fear the bank may just take the deposit against the outstanding loan.

From talking to reliable sources, this is not a once of case. Think of all the land that has been subdivided around the country to build additional housing.

Legal/solicitor and mortgage issues are not my strong point having never held a mortgage.

Any advice/direction would be greatly appreciated. (I have searched the 'pin and google to little effect)

This is a whole 'nother can of worms for the bank if these mortgages become unsecured.


I think retrospectively they could get a judgement mortgage. Not sure if they could get one if you were paying according to the loan terms, though, only if you ceased payment?
(You being the hypothetical person in this case).

To broaden this out a bit, I suspect there are many cases from the boom where conveyancing was sloppy so that banks may face problems. The problems will likely only come to light as the files are dusted off within the banks.

I’ve heard of one case recently where a solicitor was struck off, revealing a can of worms. Amongst other things, one purchaser found that their transfer wasn’t executed(!) meaning that they don’t have good title, never mind the bank having good security. Under normal circumstances this mightn’t be a problem - the vendor is apparently happy to cooperate in perfecting the title. In this case, however, the purchaser has decided that the bank should give something in return for getting their security - and (facing substantial neg. eq.) is toying with the idea that the problems with the transaction entitle her to walk away entirely. I don’t see any real basis for this argument - after all, if nothing else the unsecured debt would remain. However, I wouldn’t be surprised if there were quite a few people in this situation who might find this argument attractive.

This is pretty much what has happened in the US with mortgage assignment. When banks traded pools of mortgages, they were supposed to transfer their lien and register it with state authorities (depending on the rules in the state). Some states allowed electronic transfer, some wanted a paper transfer and a stamp fee. The whole thing is an ungodly mess now - part of the reason for the wobbles at Bank of America is that Countrywide was notoriously bad about not either not transferring lien correctly or not registering it at all.

Does anyone know if there are mortgage assignment laws in Ireland? So if you have a mortgage that is part of a covered bond, does the bank have to assign the mortgage to the covered bond entity?

In the case I know of, there are no problems with loan repayment.

The bank are trying to rectify this with new contracts (don’t have specifics). IMHO, this leaves the people with a stronger hand in terms of negotiation of loan repayments. This is not just to be signed away. The real danger with this though is the bank will seize any deposits held with them (very possible) out of fear.

The major dangers for the banks are 1.) with an unsecured loan, the house could be sold and people do a runner 2.) default on an unsecured loan and can’t repossess as it’s “the home”.

Yoga - Appears to be very like the issues in the US. The big issue in Ireland will probably prove to be the lack of legislation on this. I think this is part of the reason the banks have been so hesitant to issue proceedings against default in general. Lending to someone buying in an estate is grand. Mortgages and remortgages pre-boom, and the charges over them are a potential minefied.

Cross-collateralised loans with developers, no guarantees on loans, losing charges on houses. The level of incompetence just keeps on growing.