An avalanche of home repossession cases is expected to come down on the courts this year, a senior High Court official declared today.
But, in a warning to lenders, the High Court said it will not necessarily grant repossession orders on defaulted loans.
Instead, it will look sympathetically on homeowners caught in the grip of an unprecedented recession, said Edmund Honohan, SC.
The Master of the High Court, also insisted the courts will not take kindly to mortgage lenders who are forcing people to travel from all corners of the country to the capital, when local courts can hear their cases.
“It is an uncharitable and brutal affront to the dignity of the borrower who is forced to travel to Dublin in fear and loss,” he said.
The senior lawyer, who deals with pre-trial matters in civil cases, launched his hard-hitting remarks in a judgment on the case of GE Capital Woodchester, which is seeking to repossess the home of a Waterford couple, who fell behind in their mortgage repayments.
The number of home repossessions has been increasing week on week, but few, if any, were due to the recent job losses, according to Mr Honohan.
“There is therefore likely to be an avalanche of new cases over the remainder of this year and next as we work through the recession,” he said.
In the past, the courts tended to frown on defaulters while mortgage lenders had grown accustomed to expecting they will automatically be given repossession, according to Mr Honohan.
“But we are now going through a recession of historic proportions. Many, if not most, borrowers are not to blame for their arrears,” he said.
The High Court official, who is appointed by the Government, also insisted there was no good reason for a house to be immediately vacated in the event that the owner can’t keep up with their payments.
This was particularly the case because houses were not selling any more.
“No-one gains from rows of empty shuttered houses,” he said.
Mr Honohan suggested it would be fairer if borrowers were allowed to stay on in the home to be repossessed until such a time as the bank can sell it.
“Patently, if the house is not going to sell, the order sought will not benefit either party,” he said.
“New market conditions demand new legal solutions.”
The official said the behaviour of the lender would be of key consideration in future cases.
This would include the interest rates of sub-prime lenders, whether the loan was “stress-tested” and if the lender conformed to good general banking codes.