Actions over Mortgages must take account of EU rules.

Squiggle

How can possession orders be granted in the light of this judgement by Judge Max Barrett? If it's the case that:

"The EU rule imposes an obligation on courts in such cases, regardless of whether they are asked to do so or not, to examine the mortgage contract and decide if any of its terms are unfair."

how can cases proceed? I also see that, just before Christmas, the Waterford county registrar suspended all repossession cases pending clarification form the High court. See here.

CIARAN_BOYLE

Well the court must now consider if the mortgage is unfair before granting a possession order. It is an extra thing to examine in the courts. Not a total roadblock. 
Are you arguing that possession orders can't be granted because Mortgages are unfair in general?

Robbo

Worst case scenario for the banks, they'll need some new blue pencils. This isn't going to result in the Free Gaff Bonanza that it's being promoted at in some quarters.

It's also worth noting that the mortgage terms in the Spanish cases there quite onerous by any standard. Default interest rates of 18% and the very little opportunity to raise objections at first instance.

Squiggle

CIARAN_BOYLE wrote: »

Well the court must now consider if the mortgage is unfair before granting a possession order. It is an extra thing to examine in the courts. Not a total roadblock. 
Are you arguing that possession orders can't be granted because Mortgages are unfair in general?

No not at all - I meant how can a possession order be granted without taking account of EU law. I'm wondering is it actually the case that the courts are considering EU law before making an order, since , from the link above:

" The EU rule imposes an obligation on courts in such cases, regardless of whether they are asked to do so or not, to examine the mortgage contract and decide if any of its terms are unfair. "

Peregrinus

Well, if neither party raises the issue, and the court doesn't examine it of it's own volition, then it might be possible on appeal to get the possession order set aside and have the case remitted to the lower court to consider it properly.

The thing is, if neither party has raised the issue at the trial, how likely are they to make the issue the basis of an appeal? Sure, there'll be a transitional period where possession orders have already been granted with nobody having raised the issue and the time for appeal has not yet expired, but what will happen in any new application for a possession order that comes before the courts?

What will happen is that the mortgagee's lawyers will raise the issue of fairness, making submissions that the mortgage terms are indeed fair. The mortgagor will have an opportunity to respond to those submissions, and/or to make submissions of its own. Why will mortgagees do this? Because, really, they don't want to get a possession order that is liable to be overturned on appeal. Therefore, they'll want it on the record that fairness of terms was addressed by the court.

Mortgage documents are pretty standard. If any court does refuse a possession order on the grounds that a standard term is unfair, the banks will appeal that all the way, for obvious reasons. They'll hope to get a ruling that the term is not unfair. Either way, though, we'll pretty soon have an authoritative ruling on the fairness of the term, and therefore it won't be a source of uncertainty in future possession actions.

Squiggle

Either way, though, we'll pretty soon have an authoritative ruling on the fairness of the term, and therefore it won't be a source of uncertainty in future possession actions.

When is that ruling likely to be made and where would one find that official ruling ie can be viewed by the public?

Claw Hammer

Peregrinus wrote: »

Well, if neither party raises the issue, and the court doesn't examine it of it's own volition, then it might be possible on appeal to get the possession order set aside and have the case remitted to the lower court to consider it properly.

It would only go back to the lower court on appeal from a judicial Review. Max Barrett has been frequently overturned and it would be a novel approach to say that in an inter partes hearing the Court can't assume that a matter not raised by either of the parties as being in dispute that it should examine the issue of its own motion.

Peregrinus

Squiggle wrote: »

When is that ruling likely to be made and where would one find that official ruling ie can be viewed by the public?

Who knows when it will be made? What you're looking for is the following sequence of events: (a) in an action for possession by a mortgagee, the court considers the terms of the mortgage, finds one of them to be unfair, and refuses a possession order; (b) the mortgagee appeals; (c) the appeal court delivers a reasoned judgment holding that the term in question either is, or is not, unfair.

Or it could work the other way; the court at first instance finds the term to be fair, the mortgagor appeals, the appeal court delivers a ruling, one way or the other.

Either way, the appeal court's judgment (unless further appealed and reversed) will constitute a precedent binding the lower courts. Precedents are signficant here, because so many mortgages are document on standard terms; once the terms has been found to be fair (or unfair) in one mortgage then, in the absence of unusual circumstances, it's likely to be fair in all the other mortgage documents in which it appears.

It'll be available in the usual online and printed resources that carry the judgments of the superior courts, among them this one and this one and this one.

Claw Hammer

Claw Hammer wrote: »

It would only go back to the lower court on appeal from a judicial Review. Max Barrett has been frequently overturned and it would be a novel approach to say that in an inter partes hearing the Court can't assume that a matter not raised by either of the parties as being in dispute that it should examine the issue of its own motion.

Barrett's judgment is either moot or obiter in Counihan.

4ensic15

Deleted User wrote: »

Barrett's judgment is either moot or obiter in Counihan.

Which is it. Moot or obiter?

4ensic15

4ensic15 wrote: »

Which is it. Moot or obiter?

I say obiter.

Forbearance

Claw Hammer wrote: »

It would only go back to the lower court on appeal from a judicial Review. Max Barrett has been frequently overturned and it would be a novel approach to say that in an inter partes hearing the Court can't assume that a matter not raised by either of the parties as being in dispute that it should examine the issue of its own motion.

Claw hammer, look up ECJ case 243/08 and revert. I was wondering how long it would take for the legal eagles in this banana republic, including the Dept of Finance to get caught with their pants around their ankles. Do not forget, this judgment was given way back in 2009, so far from novel. The ramifications regarding State liability to all those poor unfortunates who lost their homes via County Court Registrars granting possession orders to date, is immense.

Here's a cut and paste of the judgment:-


On those grounds, the Court (Fourth Chamber) hereby rules:

1. Article 6(1) of Council Directive 93/13/EEC of 5 April 1993, on unfair terms in consumer contracts, must be interpreted as meaning that an unfair contract term is not binding on the consumer, and it is not necessary, in that regard, for that consumer to have successfully contested the validity of such a term beforehand.

2. The national court is required to examine, of its own motion, the unfairness of a contractual term where it has available to it the legal and factual elements necessary for that task. Where it considers such a term to be unfair, it must not apply it, except if the consumer opposes that non-application. That duty is also incumbent on the national court when it is ascertaining its own territorial jurisdiction.

3. It is for the national court to determine whether a contractual term, such as that which is the subject-matter of the dispute in the main proceedings, satisfies the criteria to be categorised as unfair within the meaning of Article 3(1) of Directive 93/13. In so doing, the national court must take account of the fact that a term, contained in a contract concluded between a consumer and a seller or supplier, which has been included without being individually negotiated and which confers exclusive jurisdiction on the court in the territorial jurisdiction of which the seller or supplier has his principal place of business may be considered to be unfair.

cobhguy28

Forbearance wrote: »

Claw hammer, look up ECJ case 243/08 and revert. I was wondering how long it would take for the legal eagles in this banana republic, including the Dept of Finance to get caught with their pants around their ankles. Do not forget, this judgment was given way back in 2009, so far from novel. The ramifications regarding State liability to all those poor unfortunates who lost their homes via County Court Registrars granting possession orders to date, is immense.

Here's a cut and paste of the judgment:-


On those grounds, the Court (Fourth Chamber) hereby rules:

1. Article 6(1) of Council Directive 93/13/EEC of 5 April 1993, on unfair terms in consumer contracts, must be interpreted as meaning that an unfair contract term is not binding on the consumer, and it is not necessary, in that regard, for that consumer to have successfully contested the validity of such a term beforehand.

2. The national court is required to examine, of its own motion, the unfairness of a contractual term where it has available to it the legal and factual elements necessary for that task. Where it considers such a term to be unfair, it must not apply it, except if the consumer opposes that non-application. That duty is also incumbent on the national court when it is ascertaining its own territorial jurisdiction.

3. It is for the national court to determine whether a contractual term, such as that which is the subject-matter of the dispute in the main proceedings, satisfies the criteria to be categorised as unfair within the meaning of Article 3(1) of Directive 93/13. In so doing, the national court must take account of the fact that a term, contained in a contract concluded between a consumer and a seller or supplier, which has been included without being individually negotiated and which confers exclusive jurisdiction on the court in the territorial jurisdiction of which the seller or supplier has his principal place of business may be considered to be unfair.

This only becomes relevant if a term is found to go against the unfair terms and only if that term once found unfair would of been able to stop a repossession been giving. the recent case that this discussion is based on aib v counihan, found that it did not offend Europe regulations

"The judge made the comments even though he accepted the position put by Mr Fitzgerald, for the Counihans, that there were no terms in the couple’s AIB contract that offended the EU regulations."

Forbearance

European Directive 93/13/EEC has finally reared it's head in relation to determinations by Irish Courts, my concern is in relation to the possible State's liability in relation to repossession orders already granted by Registrars when such examinations have not occurred on their own motion. The legal action in this type of case would be for unlawful eviction! Breach of Constitutional rights, ECHR etc. if these orders have been executed. The Dept of Justice appeared to be at sea in it's response to Catherine Martin TD question and shows itself not to have a clue about the application of the said directive. See below and in particular the paragraph referring to County Registrars:-


The urgent need to consider a moratorium on family home repossessions in light of the High Court decision in AIB v Counihan of 21st December 2016 so that County Registrars can be fully informed of their obligations under EU Law to apply the terms of the Unfair Contract Terms Directive in repossession proceedings for family homes, and to address the urgent State liability thereto　

REVISED TEXT - Application of the unfair terms directive in repossessions of family homes　

Catherine Martin TD　

Response by Minister of State Dara Murphy TD on behalf of the Tánaiste and Minister for Justice and Equality, Frances Fitzgerald TD　

On behalf of the Tánaiste and Minister for Justice and Equality, I wish to thank the Deputy for raising the matter and the Tánaiste appreciates the Deputy’s interest in the current developments. The Tánaiste is aware of the High Court decision referenced and wishes to reassure the Deputy that this is currently being examined by the Department of Justice & Equality and the matter will be kept under review in terms of any definitive additional obligations which may arise and how they will be dealt with. 　

I would like to start by reiterating the Programme for Government commitment to “keep families in their homes and avoid repossessions insofar as possible”. In October the Government launched the new national mortgage arrears resolution service, Abhaile and further aspects of the handling of repossession cases in the Courts are being considered based on the Programme for Government. 　

As the Deputy will be aware, the courts are, subject only to the constitution and the law, independent in the exercise of their judicial functions and in the management and conduct of cases which come before them and the Tánaiste has no role in the matter.　

County Registrars are officers of the court and are independent in the exercise of their functions and duties under statute and rules of court and, as matter of law, may only make an order for possession of any land in cases where no defence to an action for possession has been delivered by the defendant or no appearance has been entered by the defendant. Therefore, the power of a County Registrar as regards making possession orders is extremely limited and where any defence is raised by the defendant, including any defence in relation to the nature or terms of the mortgage contract between the borrower and lender, the matter must, when it is in order for hearing, be transferred by the County Registrar to the judge’s list at the first opportunity. At that point it would be a matter for the judge to consider any such issues raised, including, if applicable, issues in relation to the EU Directive on Unfair Terms in Consumer Contracts which was given effect to in Ireland by Regulations in 1995 and amending Regulations in 2000 and in 2013. In addition, all orders of a County Registrar are subject to appeal to the Circuit Court. 　

The Directive and Regulations are a matter for the Minister for Jobs, Enterprise and Innovation, and it is understood that the Competition and Consumer Protection Commission has supervisory powers to ensure compliance with the legislation.　

The raising of this issue, in relation to the matters for consideration by the Court in a possession case, underlines the critical importance of people who are in mortgage arrears on their homes and who have been issued with legal proceedings, engaging with their lender and with the court processes and entering a defence for the consideration of the court where they believe that they have a defence. 　

If they engage with the court processes they will be afforded the various forms of statutory and non-statutory protection provided for in the Land and Conveyancing Law Reform Act 2013 and the Personal Insolvency (Amendment) Act 2015. In addition, they will also have the possibility of availing of the free legal and financial advice services provided for under the Government’s Abhaile service launched in October 2016.　

This new initiative ensures that people who are in danger of losing their home have access to free professional advice, including advice from a Personal Insolvency Practitioner. Under this Scheme, home owners who are in arrears on their home mortgage and at risk of losing their homes are provided with access to free independent expert financial and legal advice and assistance, so that a solution can be put in place that will deal with their debt and keep them in their home, where that is a sustainable option.　

The Abhaile service is in addition to the help already available from MABS to homeowners in mortgage arrears. This includes the presence of MABS court mentors at all Circuit Court repossession hearings across the country to provide information and assistance to unrepresented borrowers; and providing in-house dedicated Mortgage Arrears advisers (DMA advisers) in MABS offices across the country, specifically to assist and negotiate on behalf of borrowers in mortgage arrears.　

ReddySteady

Forbearance, I have been following your threads with great interest, you certainly seem to be onto something whether it upsets the status quo or not. I would like to draw your attention to the European Court of Justice case C-49/14 Finanmadrid which totally backs up your argument.

From this judgment, Court Registrars appear to be exceeding their legal authority by granting possession orders in any circumstances.

ReddySteady

For viewers, here is the judgment of the ECJ in Finanmadrid;

On those grounds, the Court (First Chamber) hereby rules:

Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts precludes national legislation, such as that at issue in the main proceedings, which does not permit the court ruling on the enforcement of an order for payment to assess of its own motion whether a term in a contract concluded between a seller or supplier and a consumer is unfair, when the authority hearing the application for an order for payment does not have the power to make such an assessment.

cobhguy28

ReddySteady wrote: »

For viewers, here is the judgment of the ECJ in Finanmadrid;

On those grounds, the Court (First Chamber) hereby rules:

Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts precludes national legislation, such as that at issue in the main proceedings, which does not permit the court ruling on the enforcement of an order for payment to assess of its own motion whether a term in a contract concluded between a seller or supplier and a consumer is unfair, when the authority hearing the application for an order for payment does not have the power to make such an assessment.

If the register thinks or defendant thinks a term is unfair they can say there is a legal defence and send the case to full hearing however in the irish case, the judge said even if there is a term that might be unfair, this could still be resolved on summary submissions without a full hearing

Forbearance

The number of cases in the Irish Court system that have been decided upon following a full plenary hearing, in relation to European Directive 93/13/eec, is nil. We are the only Member State in the European Union where this is the case. Strange that !

Forbearance

cobhguy28 wrote: »

If the register thinks or defendant thinks a term is unfair they can say there is a legal defence and send the case to full hearing however in the irish case, the judge said even if there is a term that might be unfair, this could still be resolved on summary submissions without a full hearing

Is a registrar in this state a competent official to determine whether any mortgage contract has an unfair term in it, whether prompted to do so or not. I think the answer to this question is in the negative. This creates a possible State liability in this regard.

ReddySteady

How can you fight a bank on the unfair terms directive?

chops018

Skimmed through some of the posts in this thread. I read enough to know that this is more, borderline, freemen stuff.

As sad as some of the situations are, why can some people not understand that if you enter an agreement with a bank for a loan of money to buy a house, using that house as security for said loan, and you agree to pay it back then they can exercise their power of sale right under the mortgage terms to repossess the house. Why should someone get off with not paying while the majority of other people have to keep paying?

Anyway, it doesn't work in such a harsh way that if you miss say 3 payments you're then turfed out within weeks. It takes well over a year after starting Court proceedings to get possession orders. Actually, banks cannot even begin possession proceedings on home loans under CCMA legislation before following procedures set out in the legislation, this means they have to contact the customer a lot over the course of several months after the customer goes into arrears, to try and get a resolution i.e. the customer goes in to do a Standard Financial Statement and try to enter into some sort of payment plan that's sustainable to the customer and the bank. This is all before Court proceedings even begin, they then get Solicitors warning letters even before Court proceedings begin, and even when Court proceedings do actually begin the bank will stop same if an arrangement is made with the customer. There is plenty of protection for a customer in place, if they are willing to engage with the bank to try sort it out. Unfortunately, there can be some sad situations where a customer literally is unable to financially make an agreement with the bank. These are the sad cases that we all hate to hear about. But my main point is that there is legislation to protect them being turfed out quickly, and again it would be very, very unfair to the majority who keep up their payments if the banks didn't go after those who continually refused to pay.

Also, the banks don't even want to repossess a house. Once they do it has to be managed, sold etc. and then there is usually shortfall, which the customer is responsible for, but the banks will usually never get this back. They would much prefer to restructure the loan rather than go through all the above.

Finally, I will agree that it is terrible how arrears can stack up very big, this shouldn't be allowed to go past a certain figure. I really am not trying to offend anyone with my above opinions, I am sure anyone on the brink of repossession is going through what could only be described as hell, but all being said, there is no little loop holes denying the bank enforcing their loan, maybe delays at best, but at the end of the day you enter into an agreement to pay something back then this can be enforced, as sad as it is.

ReddySteady

chops018 wrote: »

Skimmed through some of the posts in this thread. I read enough to know that this is more, borderline, freemen stuff.

As sad as some of the situations are, why can some people not understand that if you enter an agreement with a bank for a loan of money to buy a house, using that house as security for said loan, and you agree to pay it back then they can exercise their power of sale right under the mortgage terms to repossess the house. Why should someone get off with not paying while the majority of other people have to keep paying?

Anyway, it doesn't work in such a harsh way that if you miss say 3 payments you're then turfed out within weeks. It takes well over a year after starting Court proceedings to get possession orders. Actually, banks cannot even begin possession proceedings on home loans under CCMA legislation before following procedures set out in the legislation, this means they have to contact the customer a lot over the course of several months after the customer goes into arrears, to try and get a resolution i.e. the customer goes in to do a Standard Financial Statement and try to enter into some sort of payment plan that's sustainable to the customer and the bank. This is all before Court proceedings even begin, they then get Solicitors warning letters even before Court proceedings begin, and even when Court proceedings do actually begin the bank will stop same if an arrangement is made with the customer. There is plenty of protection for a customer in place, if they are willing to engage with the bank to try sort it out. Unfortunately, there can be some sad situations where a customer literally is unable to financially make an agreement with the bank. These are the sad cases that we all hate to hear about. But my main point is that there is legislation to protect them being turfed out quickly, and again it would be very, very unfair to the majority who keep up their payments if the banks didn't go after those who continually refused to pay.

Also, the banks don't even want to repossess a house. Once they do it has to be managed, sold etc. and then there is usually shortfall, which the customer is responsible for, but the banks will usually never get this back. They would much prefer to restructure the loan rather than go through all the above.

Finally, I will agree that it is terrible how arrears can stack up very big, this shouldn't be allowed to go past a certain figure. I really am not trying to offend anyone with my above opinions, I am sure anyone on the brink of repossession is going through what could only be described as hell, but all being said, there is no little loop holes denying the bank enforcing their loan, maybe delays at best, but at the end of the day you enter into an agreement to pay something back then this can be enforced, as sad as it is.

Nice try CHOPS018 to rubbish this thread, but I went from Tanager issuing me with a formal demand due to being in arrears, to Tanager offering me a substantial discount. When I refused the offered discount, they increased same. I am currently in negotiations with them so please do not ask how much of a discount suffice to say, that it exceeds 40%. The discount is now worth well over 200,000 euro of REAL money. Put that in your pipe and smoke it. Freeman stuff my arse.

ohnonotgmail

ReddySteady wrote: »

Nice try CHOPS018 to rubbish this thread, but I went from Tanager issuing me with a formal demand due to being in arrears, to Tanager offering me a substantial discount. When I refused the offered discount, they increased same. I am currently in negotiations with them so please do not ask how much of a discount suffice to say, that it exceeds 40%. The discount is now worth well over 200,000 euro of REAL money. Put that in your pipe and smoke it. Freeman stuff my arse.

How is the discount offered by Tanager related to your OP?

davo10

ReddySteady wrote: »

Nice try CHOPS018 to rubbish this thread, but I went from Tanager issuing me with a formal demand due to being in arrears, to Tanager offering me a substantial discount. When I refused the offered discount, they increased same. I am currently in negotiations with them so please do not ask how much of a discount suffice to say, that it exceeds 40%. The discount is now worth well over 200,000 euro of REAL money. Put that in your pipe and smoke it. Freeman stuff my arse.

You got a 200k discount on a 500k mortgage? I'm surprised you were not in the newspaper, that is some negotiating, and really difficult to believe considering a lender would be able to sell a property in a rising market for more than 60% of the original price in most cases.

chops018

ReddySteady wrote: »

Nice try CHOPS018 to rubbish this thread, but I went from Tanager issuing me with a formal demand due to being in arrears, to Tanager offering me a substantial discount. When I refused the offered discount, they increased same. I am currently in negotiations with them so please do not ask how much of a discount suffice to say, that it exceeds 40%. The discount is now worth well over 200,000 euro of REAL money. Put that in your pipe and smoke it. Freeman stuff my arse.

Why do you think that you should be allowed to not pay back a loan under the terms and conditions that you agreed to, yet so many other people struggle to pay back their loan (mortgage) every month?

As I said, some situations are very sad, and there should be more help for people in significant arrears before they are thrown out. But my point is, if you agree to a loan to buy a property and then consistently can't pay it, why should you get away with it? I'm not talking about people who miss a few months payments when going through a bad patch, I'm talking about people who refuse to pay anything over several years. Why should everyone else bother to pay?

Well done on the use of capitals for my username, it really grabbed my attention. Also, why tell me to "put that in my pipe and smoke it", I disagreed with some posts on this thread but not yours specifically just in general, so I don't know why that warrants the response you just gave, I am not against you personally, I just gave an opinion. Seems like you have some sense of satisfaction in telling me about your "discount". That's fair enough that you're dealing with this, and I truly hope it gets sorted. But you're not in Court, if they really wanted they would proceed to Court, and a Court wouldn't listen to your points on "fighting the bank" with what you said on this thread. Anyway, Tanager seem like a debt collection company, I assume they bought a loan book full of bad loans for pittance compared to what they were originally worth to the original lender, the original lender are more than likely cutting their losses, and now Tanager, despite offering this discount, are still going to make money from you if you agree to a deal and start paying them, I'd say they're delighted that you're "negotiating" with them.

Forbearance

Hello Chop018, maybe the question you should really ask yourself is this, why did the banks in this Country lend so recklessly? and when the **** hit the fan, they went cap in hand to the Government, who bailed them out, with our taxpayers money. Your grandchildren's children will be paying for this bailout whether in USC charges or some other direct income tax, this is fact. If the banks abided by their own criteria in relation to assessing solvency, they would all have been declared commercial basket cases and insolvent. If you own a factory, selling widgets and the price you charged for each widget is too high compared with your competitors, then you go bust, but this is not the case if you are an Irish bank. These banks flouted their own capital requirements as required by the ECB and lent themselves into insolvency, yet the people who made these decisions got golden pensions, running, individually,into many 100,000's of Euro per annum, again bailed out on the back of the ordinary Irish citizen who will pay for these transgressions for many generations to come. Why? Because the rich said so.

jimmycrackcorm

Forbearance wrote:

Hello Chop018, maybe the question you should really ask yourself is this, why did the banks in this Country lend so recklessly? and when the **** hit the fan, they went cap in hand to the Government, who bailed them out, with our taxpayers money. Your grandchildren children will be paying for this bailout whether in USC charges or some other direct income tax, this is fact.

Let's be clear about one thing. Our grandchildren will be paying this debt through taxation because of people who decided to spend 500k on a house that they couldn't afford.

It's like blaming obesity on the fact that shops have sweet counters.

Forbearance

Nonsense, it's more like having drug dealers owning all the chemists in Ireland and then complaining that Ireland has a prescription drug problem! By the way we are going somewhat off thread.

Forbearance

davo10 wrote: »

You got a 200k discount on a 500k mortgage? I'm surprised you were not in the newspaper, that is some negotiating, and really difficult to believe considering a lender would be able to sell a property in a rising market for more than 60% of the original price in most cases.

Why do you think this vulture fund is offering such a generous discount ( it is widely published that they are offering substantial discounts ), maybe this vulture fund is in fact philanthropic or maybe and more likely, they cannot sell the property ( title issues ). In any case we are somewhat off thread, can we please return to the subject matter of the thread.

Robbo

Forbearance wrote: »

Why do you think this vulture fund is offering such a generous discount ( it is widely published that they are offering substantial discounts ), maybe this vulture fund is in fact philanthropic or maybe and more likely, they cannot sell the property ( title issues ). In any case we are somewhat off thread, can we please return to the subject matter of the thread.

Less of the backseat modding please.

ohnonotgmail

Forbearance wrote: »

Why do you think this vulture fund is offering such a generous discount ( it is widely published that they are offering substantial discounts ), maybe this vulture fund is in fact philanthropic or maybe and more likely, they cannot sell the property ( title issues ). In any case we are somewhat off thread, can we please return to the subject matter of the thread.

because they purchased the loans at an even more substantial discount? Its pretty basic economics.

Forbearance

ohnonotgmail wrote: »

because they purchased the loans at an even more substantial discount? Its pretty basic economics.

I don't see any other vulture fund offering such generous discounts, but maybe this article in the independent may provide a hint to you.



Repossesion bid by 'vulture fund' gets thrown out
Ann and Michael Reilly arrive at court where a judge struck out an application by a ‘vulture fund’ for possession of their home. Pic: Collins Courts1
Ann and Michael Reilly arrive at court where a judge struck out an application by a ‘vulture fund’ for possession of their home. Pic: Collins Courts
Ray Managh
October 5 2016 2:30 AM

A judge has thrown out a bid by a so-called "vulture fund" to repossess a couple's home after they discovered an error in Bank of Scotland's sale of their €170,000 mortgage to American-owned Tanager Limited.
Judge Jacqueline Linnane's decision to strike out Tanager's re-possession proceedings in the Circuit Civil Court may have a knock-on effect for attempts to take back other homes in mortgage arrears.Tanager Limited, of Grand Canal Quay, Dublin, is an American-owned private equity fund that snapped up more than 2,000 distressed home loans from Bank of Scotland Ireland in 2010.
When Michael and Ann Reilly, of Kilclare Avenue, Tallaght, Dublin 24, found out Tanager was seeking a court order for possession of their home on the basis of a default in repayments, Mr Reilly started probing the transfer of his mortgage to Tanager. He discovered his loan was with the Governor and Company of the Bank of Scotland which had been dissolved at the time. He had then been asked to sign a form to signify his mortgage was with Bank of Scotland Plc before it sold its distressed loans to Tanager.

Anyway, once again can we get back to the subject matter of this thread.

Robbo

Moderation: Unless people are going to post how a typical Irish mortgage might contain terms that bring it within the Directive or any decided case law on the matter, this thread isn't long for this world.

Forbearance, if you think something's off topic, you can use the "Report Post" function.

Forbearance

Robbo, thanks for that, will do in future.

chops018

I don't know why you posted what I assume is an copy and past job from a news article.

I can only assume that this is the link:

http://www.independent.ie/irish-news/courts/repossesion-bid-by-vulture-fund-gets-thrown-out-35105107.html

Anyway, the "vulture fund" probably just sorted out what needed to be sorted out and restarted proceedings. It's just a delay, and very bad to advise someone in who is in huge financial distress to be telling them to look in to some directive and put their hopes into it.

The OP asked how possession orders can be granted in light of "The EU rule imposes an obligation on courts in such cases, regardless of whether they are asked to do so or not, to examine the mortgage contract and decide if any of its terms are unfair."

In my opinion, the Court can simply rule that there is no unfair contract term in the mortgage. If the defendant(s) want to, then they can appeal all the way to the ECJ.

These days mortgage documents and conditions are drafted by the likes of the IBF and Central Bank would review all this. There's not a special place where bankers all go to decide how they can insert unfair clauses to repossess homes when a person defaults on paying their loan. I said in a previous post that I agree it's unfair that banks are allowed the let arrears rise sharply. This shouldn't be allowed. But I suppose they need some sort of incentive to make people as if there was no arrears then many people would more then likely just say, ah sure I won't bother paying for a few months, and there would be no penalty.

As Robbo said above, and I agree, we would really need to be discussing actual terms of a mortgage contract here and how it might come in the scope of the directive. I can't see any except the fact that they usually allow for sharp arrears to build up. But I doubt this is enough to have repossession orders to be set aside, it actually would support a repossession order further as the bank would be able to prove to the Court that the customer can't pay and a repossession order to sell the property and try to clear the customers outstanding loan would be the better option.

Forbearance

chops018 wrote: »

I don't know why you posted what I assume is an copy and past job from a news article.

I can only assume that this is the link:

http://www.independent.ie/irish-news/courts/repossesion-bid-by-vulture-fund-gets-thrown-out-35105107.html

Anyway, the "vulture fund" probably just sorted out what needed to be sorted out and restarted proceedings. It's just a delay, and very bad to advise someone in who is in huge financial distress to be telling them to look in to some directive and put their hopes into it.

The OP asked how possession orders can be granted in light of "The EU rule imposes an obligation on courts in such cases, regardless of whether they are asked to do so or not, to examine the mortgage contract and decide if any of its terms are unfair."

In my opinion, the Court can simply rule that there is no unfair contract term in the mortgage. If the defendant(s) want to, then they can appeal all the way to the ECJ.

These days mortgage documents and conditions are drafted by the likes of the IBF and Central Bank would review all this. There's not a special place where bankers all go to decide how they can insert unfair clauses to repossess homes when a person defaults on paying their loan. I said in a previous post that I agree it's unfair that banks are allowed the let arrears rise sharply. This shouldn't be allowed. But I suppose they need some sort of incentive to make people as if there was no arrears then many people would more then likely just say, ah sure I won't bother paying for a few months, and there would be no penalty.

As Robbo said above, and I agree, we would really need to be discussing actual terms of a mortgage contract here and how it might come in the scope of the directive. I can't see any except the fact that they usually allow for sharp arrears to build up. But I doubt this is enough to have repossession orders to be set aside, it actually would support a repossession order further as the bank would be able to prove to the Court that the customer can't pay and a repossession order to sell the property and try to clear the customers outstanding loan would be the better option.

Chops018 you do not have to assume anything as I stated in the post that the article was from the independent, the reason I cut and pasted it was so that readers of the thread can clearly see there is a problem with Tanagers security regarding title.

The vulture fund in question has not sorted out the problem and never will, do a little bit of research and that will be confirmed to you, before offering your eminent opinion on same. From other posts I take it you are in the legal profession ( won't hold that against you, even though their are more productive ways to make a living ) so please be advised that this is a legal discussion forum and giving legal advce is prohibited. What I would say, is that European Law forms a module in the FE1 exams, maybe readers should arm themselves with this law if they are in dispute with their lenders. Why do you think the Central Bank of Ireland added an addendum to the Consumer Protection Code 2012 regarding increased protections to variable rate mortgage holders, to increase consumer protection or to protect the banks to legal challenges to their variable rates (see ECJ case 143/13 Bogdan Matei v Volksbank SA and revert.) I might just cut and paste this determination and let the genie out of the bottle.

ReddySteady

OH My GOD, what a judgment.

chops018

Forbearance wrote: »

Chops018 you do not have to assume anything as I stated in the post that the article was from the independent, the reason I cut and pasted it was so that readers of the thread can clearly see there is a problem with Tanagers security regarding title.

The vulture fund in question has not sorted out the problem and never will, do a little bit of research and that will be confirmed to you, before offering your eminent opinion on same. From other posts I take it you are in the legal profession ( won't hold that against you, even though their are more productive ways to make a living ) so please be advised that this is a legal discussion forum and giving legal advce is prohibited. What I would say, is that European Law forms a module in the FE1 exams, maybe readers should arm themselves with this law if they are in dispute with their lenders. Why do you think the Central Bank of Ireland added an addendum to the Consumer Protection Code 2012 regarding increased protections to variable rate mortgage holders, to increase consumer protection or to protect the banks to legal challenges to their variable rates (see ECJ case 143/13 Bogdan Matei v Volksbank SA and revert.) I might just cut and paste this determination and let the genie out of the bottle.

You seem to have ignored most of my post, apart from assuming what I do or don't do personally/for a living, and then saying you won't hold it against me while qualifying this by stating there are better things to do for a living. Fair enough, you're opinion and all that. But absolutely ludicrous that you touch upon a point like that. I don't think I've assumed anything personal about you, and to be honest, I don't care. You say that EU Law is a module in the FE1 exams, you are correct, why don't you sign up to the FE1's, pass that EU law module with your knowledge of EU legislation and case law, qualify as a lawyer and learn the Rules of the Superior Courts and the EU courts and represent people in distress using your knowledge of this law you seem to keep referring to.

Next you mention the Consumer Protection Code. I suggest you look at the Code of Conduct on Mortgage Arrears, this is the main protection for home owners in distress, and as I said in a previous post, it provides a lot of protection for home owners and if this process is followed then it takes a couple of years before a repossession order is granted, plenty of time to engage with the lender and hopefully sort something out, be that surrender, restructure, sell, whatever the case may be. The Consumer Protection Code is only there or Buy to Let properties, so it's not as if the owner is being chucked out of their own home. So I am quite astonished as to why you're referring to this if it's home owners you want to try and protect. I am also quite astonished that you're paranoid and questioning the Consumer Protection Code by asking if it gives more protection to banks or customers, I think it does both, if you are genuinely trying to sort your situation then the legislation is there to help you, if you are fully non engaging then it is there to help the banks/lenders move the process along and protect their interests. I note people who argue the above points like you refer to how the banks were bailed out. Are they really that clueless that you think a fully functioning economy can allow a bank to collapse.

Again, I ask you to refer the readers of the thread to a direct example of a set of mortgage conditions that you feel are unfair? I tried to argue the fact that sharp arrears that may arise could possibly be unfair. You seem to be just spouting directives and EU case law that don't really have any relevance here. Even if you could try tie in the directive to a mortgage contract, or tie in an ECJ judgement on the matter to case-law here or again a mortgage contract here, then you might have certain arguments.

I actually agree with parts of the ruling in the case you referred me to, specifically this: "do not, in principle, cover the types of terms in the credit agreements concluded between a professional and consumers such as those at issue in the main proceedings, which, on one hand, allow, under certain conditions the lender unilaterally to alter the interest rate and, on the other hand, provide for a ‘risk charge’ applied by the lender." They make a good point, a lender shouldn't be allowed to potentially raise interest rates to whatever they like should markets change. I agree with this. They do go on to qualify their ruling though by saying "However, it is for the referring court to verify that classification of those contractual terms having regard to the nature, general scheme and stipulations of the agreements concerned and the legal and factual context of which they form part." So, realistically it has been left to the national court to decide on what scale that term was unfair. This ruling would not mean that one would have a repossession order set aside, it would just mean that a Court would not allow unfair interest rates to be applied.

Again, please refer the readers of this thread to a specific unfair term in an Irish mortgage? Are you trying to refer to the fact that vulture funds taking ownership of loans is unfair? If so, I actually agree with this funnily enough. But I do not agree that it means a customer should have repossession orders or Judgments set aside if they still owe a lot of money.

ReddySteady

Chop018, if I had you for my legal counsel I would have just handed my house over to Tanager, beware of the enemy within and all that. If you researched what happened to that couple that Forbearance referred to in his previous post, you would have seen that Judge Jacqueline Linnane ( Circuit Court Judge Dublin and not known for her softly softly approach to mortgagors in distress) berated the solicitors and barristers present, stating " I am amazed despite all the lawyers involved it had taken a lay litigant such as Mr O'Reilly to discover the error"

The error:

Mr O'Reilly discovered his loan was with the Governor and Company of the Bank of Scotland which had been dissolved at the time. He had then been asked to sign a form to signify his mortgage was with Bank of Scotland Plc before it sold its distressed loans to Tanager.
Judge Linnane said that in accordance with a Supreme Court decision relating to another case, Bank of Scotland Plc at the time of transfer ought to have been put on the land folio for the Reilly property and this had not been done.


Maybe it was a case of the solicitors and barristers involved turning their pompous heads the other way so as not to bite the hand that feeds them. If this is the case, then shame on them for eternity. Life is a long race but in the end it is only with oneself.

chops018

ReadySteady, yes, the Solicitors and Barristers should have noticed this. But as has been said earlier, the result of that case does not mean a free house for those. The money is still due and owing. It just means that the other sides legal team will have to sort out what needs to be sorted out and they will go again. Or possibly they might reassess and decide it's not worth it, I honestly can't say. But my point is, one little victory there is not some big precedent set meaning anyone who owes money should get a free house, which is what I felt is the theme of this thread.

ReddySteady

Chops018, here is the standard variable interest rate mortgage term in a BOI mortgage.

3.4 The Bank may vary the interest rate on the Loan up or down at
any time or times during the period of the Loan at its discretion.

Now, lets apply the Matei determination to this clause, in para 76 it states

"As regards the contractual terms at issue in the main proceedings and, first, those allowing the lender unilaterally to alter the interest rate, the question arises as to the foreseeability for the consumer of increases in that rate which may be made by the lender according to the criterion, which is prima facie not transparent, relating to ’significant changes in the money market’, even if that formulation is in itself grammatically plain and intelligible."


So in the Matei determination it states that the parameter of "signifigant changes in the money market is not tranparent" and therefore can be assessed as been unfair by a national court, then pray tell, how has BOI gotten away with their variable rate term not so assessed ? The answer is that the Court must assess possible unfair clauses of it's own motion whether a defendant has brought it to the courts attention or not, this has not happened. Think of all the repossession cases that BOI and the other Irish Banks have got away with because the Irish Judiciary have not complied with their obligations under the Treaty of Rome. Wow, need to get in touch with Gary Fitzgerald BL urgently and get this show on the road.

Forbearance

Touche

4ensic15

ReddySteady wrote: »

Chops018, here is the standard variable interest rate mortgage term in a BOI mortgage.

3.4 The Bank may vary the interest rate on the Loan up or down at
any time or times during the period of the Loan at its discretion.

Now, lets apply the Matei determination to this clause, in para 76 it states

"As regards the contractual terms at issue in the main proceedings and, first, those allowing the lender unilaterally to alter the interest rate, the question arises as to the foreseeability for the consumer of increases in that rate which may be made by the lender according to the criterion, which is prima facie not transparent, relating to ’significant changes in the money market’, even if that formulation is in itself grammatically plain and intelligible."


So in the Matei determination it states that the parameter of "signifigant changes in the money market is not tranparent" and therefore can be assessed as been unfair by a national court, then pray tell, how has BOI gotten away with their variable rate term not so assessed ? The answer is that the Court must assess possible unfair clauses of it's own motion whether a defendant has brought it to the courts attention or not, this has not happened. Think of all the repossession cases that BOI and the other Irish Banks have got away with because the Irish Judiciary have not complied with their obligations under the Treaty of Rome. Wow, need to get in touch with Gary Fitzgerald BL urgently and get this show on the road.

A case was taken on that point and lost in the Court of Appeal.

4ensic15

ReddySteady wrote: »

Chops018, here is the standard variable interest rate mortgage term in a BOI mortgage.

3.4 The Bank may vary the interest rate on the Loan up or down at
any time or times during the period of the Loan at its discretion.

Now, lets apply the Matei determination to this clause, in para 76 it states

"As regards the contractual terms at issue in the main proceedings and, first, those allowing the lender unilaterally to alter the interest rate, the question arises as to the foreseeability for the consumer of increases in that rate which may be made by the lender according to the criterion, which is prima facie not transparent, relating to ’significant changes in the money market’, even if that formulation is in itself grammatically plain and intelligible."


So in the Matei determination it states that the parameter of "signifigant changes in the money market is not tranparent" and therefore can be assessed as been unfair by a national court, then pray tell, how has BOI gotten away with their variable rate term not so assessed ? The answer is that the Court must assess possible unfair clauses of it's own motion whether a defendant has brought it to the courts attention or not, this has not happened. Think of all the repossession cases that BOI and the other Irish Banks have got away with because the Irish Judiciary have not complied with their obligations under the Treaty of Rome. Wow, need to get in touch with Gary Fitzgerald BL urgently and get this show on the road.

johnnyskeleton is that you?

blueythebear

The level of hype surrounding this area is crazy. The practical effect of the application of the Directive on Unfair Terms means that there will be numerous defences open to defendants. Any term found to be unfair (and this will be determined by the national court alone) will be excised from the contract and the contract will proceed in its' absence. The consequences will be very much dependant on the content of the contract...

For example, there is a variable interest rate clause referred to above that essentially permits the Bank to change the interest rate at will. This would be likely to be found to be unfair and would result in this clause being ineffective. However, this only means that the Bank could not change the interest rate on the mortgage. The Bank would be permitted to charge the original interest rate as set out on the loan which, given current interest rates would actually be likely to be higher than at present.

If I was a borrower in distress, I would be waiting with interest to see what the outcome is in the courts on this subject, but it is no silver bullet.

The references to Tanager above to my mind arise out of a totally different issue.

Forbearance

4ensic15 wrote: »

A case was taken on that point and lost in the Court of Appeal.

The case you refer to is the Millars v F.S.O co joined by Danske Bank A/S and it was most certainly NOT taken on that point. It was an appeal by the F.S.O. of a High Court decision in the Millars favour. Justice Peter Kelly and Justice Finlay Geoghegan delivered their " judgements " on same that raised quite a few eyebrows within legal circles. ( Putting a square peg through a round hole springs to mind ) Having reviewed the judgments I do not believe either Judges complied with their duty to assess the said contractual term at issue as being potentially unfair. The judges in question only made a determination in relation to the complaint that the Millars sent to the F.S.O., that is all. They did not assess Danske bank's mortgage contract as a whole in terms of it's possible unfairness. The Matei judgment states that such a similar term in nature should be assessed by a national court in terms of it's possible unfairness. This I am afraid did not happen. This reinforces what I have been saying, that the Irish judiciary has failed to carry out it's duties as required by European Law. How else is it that we are the only Member State in Europe that has no case precedent regarding unfair terms in mortgage contracts and yet as we speak, we have a Central Bank investigation into what can only be described as a sectoral wide deliberate misinterpretation of contractual terms within contracts by 15 individual lenders that has led to substantial overcharging of borrowers and indeed to some poor unfortunates losing their homes. As a character in the film, the outlaw Josie Wales famously said " Don't piss on my back and tell me it's raining."

Pat Mustard

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Forbearance

chops018 wrote: »

You seem to have ignored most of my post, apart from assuming what I do or don't do personally/for a living, and then saying you won't hold it against me while qualifying this by stating there are better things to do for a living. Fair enough, you're opinion and all that. But absolutely ludicrous that you touch upon a point like that. I don't think I've assumed anything personal about you, and to be honest, I don't care. You say that EU Law is a module in the FE1 exams, you are correct, why don't you sign up to the FE1's, pass that EU law module with your knowledge of EU legislation and case law, qualify as a lawyer and learn the Rules of the Superior Courts and the EU courts and represent people in distress using your knowledge of this law you seem to keep referring to.

Next you mention the Consumer Protection Code. I suggest you look at the Code of Conduct on Mortgage Arrears, this is the main protection for home owners in distress, and as I said in a previous post, it provides a lot of protection for home owners and if this process is followed then it takes a couple of years before a repossession order is granted, plenty of time to engage with the lender and hopefully sort something out, be that surrender, restructure, sell, whatever the case may be. The Consumer Protection Code is only there or Buy to Let properties, so it's not as if the owner is being chucked out of their own home. So I am quite astonished as to why you're referring to this if it's home owners you want to try and protect. I am also quite astonished that you're paranoid and questioning the Consumer Protection Code by asking if it gives more protection to banks or customers, I think it does both, if you are genuinely trying to sort your situation then the legislation is there to help you, if you are fully non engaging then it is there to help the banks/lenders move the process along and protect their interests. I note people who argue the above points like you refer to how the banks were bailed out. Are they really that clueless that you think a fully functioning economy can allow a bank to collapse.

Again, I ask you to refer the readers of the thread to a direct example of a set of mortgage conditions that you feel are unfair? I tried to argue the fact that sharp arrears that may arise could possibly be unfair. You seem to be just spouting directives and EU case law that don't really have any relevance here. Even if you could try tie in the directive to a mortgage contract, or tie in an ECJ judgement on the matter to case-law here or again a mortgage contract here, then you might have certain arguments.

I actually agree with parts of the ruling in the case you referred me to, specifically this: "do not, in principle, cover the types of terms in the credit agreements concluded between a professional and consumers such as those at issue in the main proceedings, which, on one hand, allow, under certain conditions the lender unilaterally to alter the interest rate and, on the other hand, provide for a ‘risk charge’ applied by the lender." They make a good point, a lender shouldn't be allowed to potentially raise interest rates to whatever they like should markets change. I agree with this. They do go on to qualify their ruling though by saying "However, it is for the referring court to verify that classification of those contractual terms having regard to the nature, general scheme and stipulations of the agreements concerned and the legal and factual context of which they form part." So, realistically it has been left to the national court to decide on what scale that term was unfair. This ruling would not mean that one would have a repossession order set aside, it would just mean that a Court would not allow unfair interest rates to be applied.

Again, please refer the readers of this thread to a specific unfair term in an Irish mortgage? Are you trying to refer to the fact that vulture funds taking ownership of loans is unfair? If so, I actually agree with this funnily enough. But I do not agree that it means a customer should have repossession orders or Judgments set aside if they still owe a lot of money.

I thought the subject matter of the thread was " Actions over mortgages must take account of EU rules." I don't think, but I am open to correction, that this means only mortgages relating to principal private residences. I am sure mortgages in relation to BTL's would also have to abide by the same EU rules, or is there something you know that I have overlooked!

blueythebear

Forbearance wrote: »

I thought the subject matter of the thread was " Actions over mortgages must take account of EU rules." I don't think, but I am open to correction, that this means only mortgages relating to principal private residences. I am sure mortgages in relation to BTL's would also have to abide by the same EU rules, or is there something you know that I have overlooked!

If the borrower is acting as a consumer, then the CPC applies whether we are talking about mortgages relating to PPR's or Buy to Lets.

I have a question, if the Unfair terms directive applies but there are found to be no unfair terms (or no unfair terms that affect a Bank's right to repossess a property for nonpayment), it seems that the consensus is that there is an argument that EU fundamental rights should also be addressed. It's been a while since I looked at EU law at all, but if it is found that fundamental rights have been breached (and this is a big "if" on the basis of the wording of the rights to property in the Charter), surely the remedy is as against the State for failure to implement appropriate legislation to protect fundamental rights?

Forbearance

blueythebear wrote: »

The level of hype surrounding this area is crazy. The practical effect of the application of the Directive on Unfair Terms means that there will be numerous defences open to defendants. Any term found to be unfair (and this will be determined by the national court alone) will be excised from the contract and the contract will proceed in its' absence. The consequences will be very much dependant on the content of the contract...

For example, there is a variable interest rate clause referred to above that essentially permits the Bank to change the interest rate at will. This would be likely to be found to be unfair and would result in this clause being ineffective. However, this only means that the Bank could not change the interest rate on the mortgage. The Bank would be permitted to charge the original interest rate as set out on the loan which, given current interest rates would actually be likely to be higher than at present.

If I was a borrower in distress, I would be waiting with interest to see what the outcome is in the courts on this subject, but it is no silver bullet.

The references to Tanager above to my mind arise out of a totally different issue.

Blueythebear, if an unfair term is found within a contract, then the said unfair term must be removed, it cannot be amended. So for example, let's say that the said variable interest rate term referred to, is found to be an unfair term, then, the unfair term directive states that it cannot bind the consumer, so in the example you mentioned, the interest rate term would have to be removed. The question that then has to be asked is, can the contract continue to function without the unfair term. In this case, the answer is yes, however the lender can no longer charge interest on the loan.

blueythebear

Forbearance wrote: »

Blueythebear, if an unfair term is found within a contract, then the said unfair term must be removed, it cannot be amended. So for example, let's say that the said variable interest rate term referred to, is found to be an unfair term, then, the unfair term directive states that it cannot bind the consumer, so in the example you mentioned, the interest rate term would have to be removed. The question that then has to be asked is, can the contract continue to function without the unfair term. In this case, the answer is yes, however the lender can no longer charge interest on the loan.

I'm not proposing amending the term. I'm agreeing that the variable interest rate term will have no effect if found to be unfair but there will invariably be other clauses in the loan documentation that will be present that will allow interest be applied.

For example, most facility letters will set out basic information like the amount of the loan, the term and importantly, the interest rate as it applies at the outset of the loan. The result will be that the Bank will be likely able to charge interest as per the rate at the beginning of the loan and not at the punitive rate that is set out in the particular unfair term/clause.