Troika imposes new conditions to fast-track property repossessions

Government to consider new conditions to speed up proceedings against distressed buy-to-lets

The Government has acquiesced to  pressure from the EU-ECB-IMF troika to accelerate property repossessions by agreeing to a raft of new conditions in the latest Memorandum of Understanding including Commercial Court-type fast-track proceedings .

The revised Memorandum includes a new condition whereby the Coalition will be obliged to examine the example set by the Commercial Court in bringing cases to a speedy conclusion.

The new condition states: “Building on the expedited proceedings in the Commercial Court, the authorities will examine the possibility of introducing tight deadlines on plenary proceedings for non-principal private residence by the end of the October.”

The new demand is one of ten new conditions on distressed mortgages which are contained in the updated Memorandum which was published on the Department of Finance website today. It suggests the troika remains impatient with the pace of repossessions of distressed properties, including buy-to-lets.


Earlier this month, the Central Bank published new targets for the resolution of distressed mortgages in arrears for more than 90 days. At least 15 per cent are to be resolved by the end of 2013 and of 25 per cent by the end of March 2014. The Central Bank's statement said the targets had been arrived at in consultation with the troika.

These new conditions also focus on non-principal properties and there is an implied suggestion that at least some loans which have been modified and restructured may have again fallen into arrears. It has demanded comprehensive data to test if such approaches have been effective.

“The [Government] will publish banks’ reported data on mortgage loan modifications, including re-defaults of modified loans, to permit analysis of the effectiveness of alternative resolution approaches in improving debt service performance.”

Another new condition is a requirement to assess whether specialist judges dealing with personal insolvency cases should be given additional functions to deal with repossession cases.

In respect of asset quality, there is a requirement on Government to provide troika staff with its assessment of banks’ performances with the work-out of their non-performing mortgage and SME portfolios. It also calls on more audits of banks performance in resolving mortgage arrears.

“The [Government] will provide an update to [troika] staff by early November on the number and nature of solutions proposed in the third quarter of 2013.”

The emphasis on distressed mortgages reflects the Troika's concerns that authorities in Ireland have not sufficiently tackled the repossession issue following the property collapse. It comes as the Government enters the 13th and final review of the bailout plan, which is set to conclude on December 31st.

Other recurring teams in the Memorandum are its continuing emphasis on labour market reform, water services reform and health over-run.

The Fianna Fail spokesman on finance Michael McGrath said it was clear the troika was intent on ensuring that there is an accelerated pathway for certain residential property repossessions.

“They are clearly not satisfied with the work of the Government and Central Bank in dealing with mortgage arrears. These latest targets seems to come at the initiative of the troika.

“I am concerned of the implications for property owners of fast-track repossession channel that now seems to be on the horizon,” he said.

Harry McGee

Harry McGee

Harry McGee is a Political Correspondent with The Irish Times