What's happening to the mortgages of all the repossessed homes?

Engine No.9

Surely the banks can't be writing them off as bad debts???????? With the amount of mortgages in arrears in this country it's sure to fuel another another bank guarantee scheme and more exchequer funds going into the banks hands if they just write off these loans. Is it not going to cripple them further if they allow them to be written off or is that part of the bank guarantee scheme already?

What is happening to the people who have had their homes repossessed? Are they now homeless given that they are liable for a debt which they cannot service, how can they simultaneously afford to pay rent on any new property which they move into?

I know I speak in broad terms, but of all the radio and tv shows I've listened to and watched over the past few years, I don't think I've heard either of these issues being addressed. Not that I can remember anyway.

roro2

You haven't heard anything because it isn't happening.

72,334 mortgage accounts in arrears for 1 year or longer at 31st March.
79 repossessions by Court Order in Q1 (0.11%).

Engine No.9

roro2 wrote: »

72,334 mortgage accounts in arrears for 1 year or longer at 31st March.
79 repossessions by Court Order in Q1 (0.11%).

OK, so in the case of those 79 repossessions, what is happening to their mortgages? Are they being written off or are the customers still liable for the debt? I was having a conversation with my mate about this issue last night and he was of the opinion that the debts are being written off. I'm not sure that's the case. But then, if it's not the case, will the customer face jail time for not paying their bills (in that they now have rent and a mortgage to pay and surely the rent takes precedence over the mortgage of the property which is no longer in their possession)? I have heard of a few cases of that in the recent past, but I think that was for blatant non payment and re-registration of accounts.

roro2

The borrower is still supposed to be on the hook for the shortfall once the property is sold, but they won't face jail either. But given that so few repossessions are happening, whatever is happening with 79 cases is unlikely to be representative of what will happen when repossessions become more widespread. With 30,000+ accounts in arrears of over 2 years, there must be particular features of these 79 cases that singled them out for court action. I'd imagine these are a combination of borrowers who haven't made much (or any repayments) for a number of years, those who have declared they won't pay or won't engage with the lender, those who have the means to make repayments but won't, etc., and cases the banks feel will be easy to secure repossession on from a legal standpoint. As such, the banks are unlikely just to have written off the shortfall in these cases, if any (there may be positive equity), but these aren't cases that are good examples of what will happen generally.

stevedublin

I'd expect some or all of the shortfall to be written off, thats why the insolvency legislation went through recently. I guess the bank (the Irish taxpayer really for the main Irish banks) would have to take the loss. With all the money given to the banks a few years ago, I can't see this being a problem for the banks.