Borrowers ‘not co-operating’ with banks in default cases

A court in Tralee has heard how in several cases where financial institutions were applying for possession of property, there had been little or no co-operation from mortgage holders - even on relatively small mortgage repayments.

The County Registrar’s court also heard how financial institutions were finding it difficult to serve legal papers on mortgagees, and some people were deliberately “evading” the bank’s legal agents.

A significant number of defendants made no appearance and were not legally represented.

The court also heard how one family were being asked to pay €1.1 million on a loan of €143,000 on a mortgage on the family home taken out ten years ago by the husband. The lending institution was based in the UK, and was “sub prime”, the court was told.

In the case of a family home in a north Kerry village on the Shannon estuary, nothing was now being paid off a €32,554 debt. The the last payment, for €25, had been made in April 2009.

The original loan was for €28,000 and repayments were set at just over €126 per month over 330 months.

County Registrar Padraig Burke said "no effort" was being made on what was not a big mortgage and he would have granted the possession application today if Ulster Bank, the applicants, had their proofs "in order". However there was no proof of the serving of the papers.

EBS Ltd were granted possession of a house sold in 2006 to a single lady, again in a north Kerry village. The arrears went back to 2009 and amounted to €39,156. Repayments were €767 per month on the €150,000 loan, and the house had been valued at €205,000 originally.

The woman was now unemployed and was “not co-operating at all”, the court was told. There were no personal details available and she was not in court. Mr Burke granted the order with a stay of two months on it, and ordered the council be informed.

The court also granted an order for possession to EBS Ltd in the case of an estranged couple with one child, neither of whom were working. The five-bedroom house which was only partially finished but “watertight” had never been lived in and did not have full planning permission.

The mortgage was €350,000 originally. Costs were awarded against the man after the court was told the financial institution had agreed a year ago to an assisted sale but could not get his consent.

The man was still resisting the repossession, his solicitor Vivian O’Shea outlined, believing he had a job opportunity and could bring the property up to standard. Mr Burke granted the order after hearing the woman was fearful of mounting legal costs and there had been no work done on the house in a number of years.

Significant difficulties were being experienced by banks’ agents in serving papers on some mortgage holders, the court heard.

Ulster Bank had called to the new residence in Co Kildare of one debtor "on seven separate occasions" and had also called to the man's family home in West Kerry in an attempt to serve the civil bill for possession. The agents believed the man was "evading" serving of the documents, their solicitor Marguerite Fitzgerald said. She was granted her application to serve the papers by ordinary post.

At least three other such applications to serve the papers by ordinary post were granted for similar reasons.

In the case of Home Funding Corporation, county registrar Padraig Burke adjourned its two applications. He needed to ascertain the exact legal status of Home Funding Corporation and he also needed to ascertain the legality of the mortgage on a family home which appeared to be solely in the man's name without his wife's written authorisation.

The defendant's representative Michael Grogan, an insolvency practioner, said the body was "sub-prime", UK based and this case would go to the core of sub-prime deceptive practices and lack of regulation of them here.

The original €100,000 granted in 2004 had been topped up by a further €43,000 in 2005, even though the debtor was not making repayments on the first tranche. Home Funding was seeking €1.1 million on this €143,000 mortgage which amounted to interest rates of 28.1 per cent, the county registrar noted.

“The rate of interest was excessively high. Kerry Group wouldn’t do as well as that,” Mr Burke quipped, adjourning the matter.

In all, some 19 of the 35 applications for possession of property were brought by Ulster Bank who were represented by a number of solicitors. The banks sought and was granted adjournments in the majority of its cases by on the grounds that talks were taking place.

However it was also indicated in a number of cases that what was being agreed were “interim” measures.

Other institutions seeking orders included Irish Life & Permanent, Bank of Scotland, and Stepstone Mortgage Funding Ltd.