In the debate about mortgage arrears over the past few years there have been frequent references to a “tsunami of repossessions” that was about to overwhelm the country.
A lot of things have happened in relation to mortgages but widescale repossessions is not one of them.
It is true that there are a lot of repossession cases before the courts.
An analysis of the 34 civil possession hearings of the Cork County Registrar over the past 12 months shows that in Cork alone 900 mortgage repossession cases have been brought by lenders.
Most of these cases have been listed several times and there were five cases which appeared six times on the registrar’s lists over the year.
With cases appearing multiple times the 900 cases equate to 2,200 separate listings over the past year.
There were around 300 listings which could not be heard because formal notice of the proceedings had not been served on the borrower(s).
For some of these it is because the borrower refuses service or because the borrower cannot be found.
In these cases a substitute service such as pinning a notice to the property will be allowed.
Of those that could be heard 1,400 were adjourned to a later date on request from the banks.
There were 200 cases struck out by the lender which leaves around 300 instances where the banks proceeded with the application for a possession order.
There are thousands of repossession cases before the courts across the country but the evidence from Cork is that in most of them the banks have yet to actually make an application to the court for a possession order.
The courts are being used as a crude stick to get borrowers to engage.
When the banks do make an application for a possession order around two-thirds of them are refused by the County Registrar.
There have been 100 possession orders for dwellings granted by the Cork County Registrar over the past year.
This means that twice as many cases have been struck out compared to cases that concluded with a possession order.
It is not always stated why a case is being struck out and sometimes this can be for legal reasons unrelated to any improvement in the borrower’s position.
But plenty of the cases have been struck out because the arrears have been cleared or a loan restructure has been agreed or the borrower has resumed payments.
Of the 100 possession orders that were granted by the Cork County Registrar over the past year there were only four instances where a borrower was present and made some argument against the order.
In almost all cases where an order is granted the borrower is not present in court to present any objection.
Details are not mentioned in the court in all instances but observations would suggest that of the 100 instances where a possession order was granted 80 are or were primary dwelling houses while 20 are buy-to-let properties.
And across both categories around 40 of the properties were completely vacant when the legal proceedings were initiated.
In the 10 months to October 2015 the Sheriffs of Cork City and Cork County had executed 31 possession orders for dwellings, of which 24 were vacant at the time of repossession.
There are likely many more vacant properties in the system and repossession orders should be granted for these especially if the housing crisis in our urban areas is as acute as we are led to believe.
Obviously there are background stories as to why a mortgaged property is now vacant with no payments being made.
In some instances it is because the borrower has left the country while in others relationship difficulties have resulted in both parties leaving the property.
There is little prospect of these borrowers resuming mortgage payments and these vacant properties should be taken into possession by the lenders and sold so that someone who is willing to pay can avail of them rather than having them lying idle.
Repossession should be avoided where people are making genuine efforts to service their loans.
And the Cork County Registrar gives borrowers ample opportunity to get back “on track”.
Being sued for possession of your home is a harrowing ordeal but the courts in Cork are not open season on borrowers.
If anything the courts are biased in favour of borrowers, something we wouldn’t necessarily object to.
If a borrower wishes to avoid a repossession order there are three things they must do: engage with their lender; make regular payments against their mortgage (even if not the full amount), and turn up in court.
If one or more of these is absent it makes it difficult for the court to continue to refuse an application for an order for possession.
One case illustrates the importance of these three factors.
At a hearing last April the lender was proceeding with the application for a possession order and stated that the last payment made on the account has been in April 2009 — that’s a full six years with zero repayments.
The borrower was in court and, while accepting that payments had not been made, hoped to be in a position to resume payments.
The case was adjourned for three months.
On the next listing the bank again proceeded with their application for a possession order.
The borrower had made monthly payments of €600 since the last hearing (the required monthly payment was just over €1,000) but apart from making the payments had not engaged with the lender at any level.
The Registrar again refused the lender’s application for a possession order and adjourned the case for three months telling the borrower that engagement with the lender was required.
The case came around again in October and this time it was the lender that requested the case be adjourned because the borrower had submitted a Standard Financial Statement which the lender wanted to assess to see if the loan could be restructured.
The borrower was again present in court and outlined they had continued making payments and were now engaging with the lender.
The Registrar granted the lender’s application for an adjournment but for 12 months rather than the requested three.
The case will not be listed again until October of this year at which point it may be struck out if the borrowers are adhering to the restructured payment arrangement.
And this follows a six-year period of zero repayments.
If people are not engaging with their lender, are not making regular payments and do not show up in court then possession orders are inevitable and justified.
Vacant properties should be brought back into circulation while borrowers who are making no repayments should have orders granted against them to facilitate people who are willing to pay for their accommodation.
Seamus Coffey is an economist at UCC and is a member of the Irish Fiscal Advisory Council. He writes here in a personal capacity.
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