Forecast fivefold increase in home repossessions

July 25, 2017

Master of High Court is anticipating a 5 fold increase in home repossessions as banks increasingly sell off their distressed/non performing loans to "vulture funds". There was recent press speculation that over 40% of KBC Ireland's 12.4Bn Euro mortgage loan book is impaired and they may be set to sell these non performing loans.

All indications are that the increase in repossessions is set to continue and even accelerate. Bank's may often feel, for whatever reason, that they are unable to take repossession actions and therefore there is a huge backlog of non performing loans waiting for something to be done about them. Rather than either repossess or write them off the Banks now look set to simply sell them. Private investors (vulture funds) tend not to have such reservations about taking action and if repossession is required and legal requirements have been met they often proceed quickly with repo actions.

So what should you do if you are facing repossession or struggling to make your mortgage payments?

Do not stick your head in the sand or think the problem will somehow go away.

Pride can be very expensive and may lead to you losing your home when often seeking help can avoid this. I always urge people to speak to their Bank as they have dedicated teams to try and help and they really don’t want to repossess homes (although at this stage it may be too late for that alone). If that doesn't solve your problems or it is too late seek immediate help from a Personal Insolvency Practitioner (“PIP”).

This is a stressful, difficult and horrible time that may have been dragging on for years. But the good news is that a Personal Insolvency Arrangement (a “PIA”) may be the solution. Under Insolvency legislation, dramatically strengthened by a recent High Court decision, a PIP may well be able to get your mortgage restructured and the negative equity almost completely written off with a PIA. Often other debts are contributing to the financial mess, these too may be solved by a PIA. The whole drive of the insolvency legislation and recent court decisions is aimed at allowing people to stay in their homes wherever possible.

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Barry Stewart is authorised by the Insolvency Service of Ireland to carry on practice as a personal insolvency practitioner(authorisation number PB00282). Barry Stewart is also authorised to act as an insolvency practitioner in the UK by the Institute of Chartered Accountants Scotland.