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  • Brisk bidding at distressed property auction interrupted by protester

    December 1, 2011 @ 10:14 am | by Edel Morgan

    "She told me not to tell her what it got" - a two bed apartment at The Cubes in Beacon South Quarter sold for €152,000

    Super-smooth auctioneer Gary Murphy barely missed a heartbeat when a man stood up  in front of him at the Allsop Space auction of mostly distressed property  in Dublin’s Shelbourne Hotel  yesterday and asked if he could guarantee that  buyers  wouldn’t  also be getting “ill will with their neighbours and the  people who can no longer afford to keep the property.”  Murphy, who works for UK-based Allsop,  replied  ”don’t bid then” before thanking the protester  for his “kind words”  and continuing on to Lot 28.

    Judging from the packed auction room, which from where I was sitting looked like a sea of  mostly grey-haired men aged 50-plus, there weren’t that many bidders pausing to worry about the implications of buying into a community where they may not  be welcome. Over 1,600 people turned up  and spilled out of the auction room into the corridor and bar and the bidding was brisk. The appetite for distressed property seems to be as keen as ever with 92 per cent of the 108 properties selling under the hammer in lickety-split time. Around half were cash buyers.  There were whoops of delight from the successful bidders after some of the lots were sold and Murphy commented on what a  ”happy crowd” they were. The joviality was interrupted just before Lot 28 when the protester voiced his concerns.

    I later spoke to the protester, Tom McNulty , from a group called  the anti-eviction taskforce, who said he stood up at the auction because he felt while people were getting caught up in the excitement of the auction room they can forget there’s a “human side to many of these sales and there are families suffering”. Around three quarters of the properties at the auction were being sold by the receiver  and were previously owned by investors and business people . With him was a man who was there to watch his  family business being sold  under the hammer.  He said he  appeared in the High Court recently and as he can’t afford a solicitor, had to defend himself . He  felt powerless  and “up against  a massive machine” and felt he had been harshly dealt with in court.

    Robert Hoban director of auctions at Allsop Space said he had no comment to make on the protest. “People are entitled to protest but these properties are going to be sold and what we’re offering is another method of selling this  property.”

    I sat beside a man called Jim Kelly who was keeping an eye on Lot 30 –  a two-bed apartment at Beacon Court in Sandyford which sold for €152,000. His daughter bought a similar “but better positioned” apartment at Beacon Court four years ago for a cool €420,000 . “She told me not to tell her what it got,” he said. And who could blame her…you could really torture yourself  over  the life-long  implications of paying that extra €268,000 .

    Apart from  the overwhelming majority of men over 50   (okay,  I didn’t count them but it seemed like that ) there was a smattering of women at the auction as well as a number  under-40s, and people from the Asian, African and middle-Eastern communities. Robert Hoban said he  noticed  a bigger turn-out  of people from other communities at this auction than previous. “A lot of  them have been watching and now they are taking part.”

    The property that sold for the most  was 174 Pembroke Road in Dublin 4 a mid-terrace building with two restaurants – Indian restaurant Chandni and Japanese restaurant Koshi -  that went for €630,000 and has an annual rent of €92,000. House-wise the most expensive one was 13 Garville Road in Rathgar, Dublin 6 , a long leasehold property divided into eight self contained residential units which sold for €435,000 – €15,000 over the reserve price and has an annual rent of €12,920.   One of the bargains of the auction was a four bed apartment in Northwood Santry which sold for€76,000 –  less than a quarter of its original price.

    A log cabin on the shores of Lough Sillan in Shercock, Co Cavan with access to a private marina went for €131,000, over four times the reserve.

    The success rate of the four Allsop Space distressed auctions has averaged at  92 per cent. The agents themselves expect it will eventually  level out at the UK average of  around 80 per cent. But for now  it appears that despite the current economic meltdown, there are still a lot of people out there with money and a thirst for a bargain.

  • Do banks get jingle mail?

    November 24, 2011 @ 8:09 am | by Edel Morgan

    Lately I’ve been hearing about a rising incidence of  jingle mail –  people posting the keys of their property back to the bank – and wondered if  the people  who abandon property in Ireland actually go to the bother of sending their  keys back or just  run for the hills?

    According to the Central Bank 119 people either  abandoned or voluntarily surrendered property in the last quarter and  the numbers are  steadily increasing. In the same three months last year the figure was 59 and the total for the year to September  was 460.  We don’t know how many were abandoned as opposed to voluntarily surrendered because the Central Bank doesn’t  provide a breakdown.

    A few industry people I spoke to said that property owners that do a moonlight flit prefer a quiet exit. “Some people may not want to alert the bank and may drop the keys back into the letterbox. It probably all depends on the individual future plans of the person as well as their financial situation.”  says Frank Conway of Moneycoach.ie. Carol Tallon of Buyers Broker agrees, “It happens that people drop the keys back to the local branch but most tend not to notify anyone, the bank mightn’t know they are gone for months.”

    Karl Deeter of  Irish Mortgage Brokers  says he has heard reports that a  significant  number of the people who abscond are foreign nationals. “They may have been laid off from their jobs, struggling and in deep negative equity and are not planning on living in Ireland long term.”

    Jingle mail is more of  an American phenomenon where walking away  from a property and posting the keys back to the bank is made easier by the fact that many states have non-recourse mortgages. Borrowers here  are  liable for the remainder of the debt after a property is sold, and while there is anecdotal evidence that debt forgiveness  is being exercised by banks, it is not happening in any structured way.

    For those who decide to leave the debt behind , it is unlikely the bank will pursue them abroad  . “However, on this point, says Conway,  I believe that under EU law, there may be a mechanism where they can attempt some court action in another jurisdiction but I believe this is not being used for  mortgage debt.Certainly for those who relocate to Australia, New Zealand, Canada or the US, lenders here will have little opportunity to pursue.”

    One mortgage broker, who didn’t want to be named, said while the banks  “spin a line” about their ability to pursue, logistically initiating proceedings in another jurisdiction is a costly and time consuming.

    The more immediate problem will be arriving in a country with  no credit record. Some of these countries may require a period of banking with the institution such as having a checking / current account as the lead-in to developing a credit record in that country. In the US, people are sometimes offered a co-signed debit card facility with a maximum limit for a set period of time before progressing to a credit card account and working from there .The time it will take them to build up credit will probably be no shorter than if they come out of bankruptcy under the new regime on its way in Ireland.

    Conway says that many people who have moved abroad continue to pay their loans because they want to maintain a clean ICB as they may return home some day.

    Foreign nationals who leave a property behind face less repercussions.

    “I don’t think banks in their home countries will ask what their credit record was like here, clients could just say that they had no borrowings in Ireland….how could the bank prove or disprove this? Also, if you think about it, some people could be motivated to not pay some bills as a means of accelerated savings before their return.

    My gut feeling, though,  is that many foreign nationals who actually purchased here could be here for the long-run and may actually work that bit harder to keep their homes as they may no alternative accommodation to readily fall back on .”

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