Banks behind twice as many home repossessions as vulture funds

Banks are still responsible for the majority of home repossession actions in the State, according to major new research from NUI Galway.

Some 65 per cent of a large sample of cases examined for the study were taken by the Republic’s largest retail banks between April and December 2019.

AIB, Bank of Ireland, Ulster Bank and KBC together accounted for 5,801, or 46 per cent, of all listed cases in the period while Permanent TSB, which is categorised by the European Central Bank as a "less significant institution" was involved in 19 per cent, or 2,366, of all listed cases.

Non-Irish bank entities, often referred to as vulture funds, were involved in 34 per cent of listed cases, with Start Mortgages involved in a "high level of court activity" according to the report. Start had 13 per cent of listed cases, while Promontoria had 6 per cent. Promontoria is the Irish arm of global asset manager Cerberus.

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The NUI Galway study – “A Lost Decade: Study on Mortgage Possession Court Lists in Ireland” – examined 12,650 mortgage possession cases between April and December 2019. It was carried out by Dr Padraic Kenna, director of the Centre for Housing Law, Rights and Policy at the university.

State mediation

Dr Kenna warned that the Covid-19 crisis would result in a new round of mortgage arrears. "It is important not to repeat the mistakes of the past and I would recommended that those facing mortgage-payment problems post Covid-19 should be able to avail of the State mediation, personal insolvency and new legislation in 2019 which obliges courts to carry out proportionality assessments," he said.

Lenders last week said they had made significant provisions to deal with the crisis. Bank of Ireland, AIB and Ulster Bank have booked more than €500 million of loan impairment charges between them for the first quarter, while Permanent TSB forecast it will take a €50 million bad loans charge in the first half of this year.

Prior to the Covid-19 pandemic, there were already 27,000 mortgage accounts related to principal dwellings in arrears of more than two years with more than 85,000 mortgages restructured as a result of payment difficulties.

In the fourth quarter of 2019, a total of 102 private dwelling homes were taken into possession by lenders, up from 80 in the previous quarter, according to data from the Central Bank.

Legal representation

The research shows that only a quarter of borrowers facing the loss of their home had any listed legal representation. In 7 per cent of cases, borrowers were listed as representing themselves. The fact that no representation was listed does not mean that representation was not available on the day, either from a solicitor, the State’s Money Advice and Budgeting Service or another agency.

Dr Kenna's report also details how 10 law firms handled 70 per cent of the possession proceedings on behalf of the financial entities seeking possession of homes. Belgard Solicitors, Eversheds Sutherland and Ivor FitzPatrick were the top three law firms in terms of case numbers listed.

Just 25 per cent of cases were concluded in the nine-month period, with one-third resulting in court orders for possession or sale, and two-thirds concluded but with arrears remaining.

The report also confirms that the numbers of possession orders being granted has been reducing every year since 2015.