2019 promises to be the worst year on record for repossession and homelessness

THE STATISTICS are starting to reign down heavily on the Government. As of today, we have almost 4,000 homeless in Ireland
and some 47,000 borrowers in deep financial trouble with their mortgage. Unfortunately, the recent years of bad decision-
making, failed policy and lack of understanding have now landed firmly on the steps of Dáil Éireann. Please note I can assure
the reader that it is not the writer’s intention to be dramatic, but the ship is firmly on course to hit a detrimental iceberg in
2019!
Why?

Many repossession cases are ongoing in the Irish Courts at present. However, I can assure the reader, these cases are only the
tip of the iceberg (excuse the pun). These borrowers are deep in legal proceedings in the Irish Courts and in some cases, the
next time they re-appear, the judge may have little or no choice but to grant the Bank or Vulture Funds (hereinafter referred
to as “VF”) their order for possession of the property. Many courts have issued orders for possession in 2018 but granted a
stay (a time-out) on the order for a period of 12 months and in some cases, the 12-month period is due to expire in early to
mid-2019.
Therefore, current borrowers entrenched in current legal proceedings are facing the loss of their home, resulting in subse-
quent homelessness. Many will seek to move in with an existing family member, but others may have no place else to go. The
latter will then become the State’s problem and unfortunately, the State has no solution to the current >4,000 homeless, let
alone the influx of new homeless persons.
As agreed amongst many legal professionals, many borrowers are anticipated to lose their home in early to mid-2019 but the
writer anticipates the scale of repossession will spiral towards the latter end of 2019.
Why will 2019 be so bad?

Some Banks have sold their bad debts and others are getting ready to follow suit. The Banks cannot be expected to absorb the
bad debts on their current loan books given the new fiscal targets to be imposed on same from Europe. Therefore, they must
either deal aggressively with these bad debts or bundle them together into tranches and sell them onto willing buyers i.e.
Vulture Funds. One way or another, either the Bank will repossess the underlining security i.e. the family home, or the VF will.

“THE BANKS CANNOT BE ALLOWED SELL ALL THOSE MORTGAGES!”

Like it or not, a Bank is a business and like any business, it’s free to sell its product and if it so desires, it can call a summer or
autumn sale on its product and sell any item at a discount. Okay, maybe not the best example but I’m sure the reader
understands the point.
More fundamentally, a Bank needs to be allowed to sell their toxic and/or bad debts. As stated above, a boutique shop is
entitled to run a Summer Sale, but we often hear opposition TD’s & the press advocate that a Bank should not be allowed to
do the same. Of course they should be allowed to do so! All Banks need to clear their books from time to time. The problem
isn’t the Bank, the problem is the Government.
When the captain of the ship doesn’t understand port from starboard, you’ve got a major problem if any issues present at
sea. The Government were secretly hoping this problem would eventually go away. That the public and mass media wouldn’t
rise against the loan sales, or that the Vulture Funds (who bought Irish debt when no other entity would) would somehow
solve the problem, perhaps even restructure the debts and keep families in their homes. That’s not the case, and that’s
certainly not what’s happening up and down the island of Ireland. The Government invited the wolf for dinner and they
cannot now complain that the wolf will not leave their home and is currently stationed outside the bedroom door of the three
little piggy’s (BOI, AIB & PTSB) awaiting their pound of flesh. They are entitled to do so. That is their business model, a model
that in itself, is quite effective and lucrative.
The Government hatched no real plan to deal with the Mortgage Arrears crisis. Alan Kelly’s Mortgage to Rent (hereinafter
referred to as “MTR”) was botched on three occasions. Judges have become increasingly frustrated by its failures. However, it
has been continually advocated by defendant Solicitors, myself included (because other options are limited). David Hall,
through the IMHO has fought aggressively for change and he’s currently working with his team to bring about change.

Joseph Nolan & Co. Solicitors — “Always Practical Advice”

 2019 promises to be the worst year on record for repossession and homelessness
Mr Hall obtained €100m (financed by AIB) to assist in-a-type-of MTR Scheme. €100m is not big money in the present situation.
With over 47,000 mortgages in arrears, not to mention the mortgages currently on temporary ARA agreements at present,
€100m is not even a drop in the ocean.
The Judiciary is keeping the wolf from the door

The Judiciary in Ireland does not get enough credit for their role in preventing wholesale repossessions in this Country. They,
together with Barristers and fellow colleagues have made it extremely difficult for Banks and VF to obtain repossession orders
through the courts. But there is only so much they can do. The Banks and VF’s together with their legal advisors are astute and
very soon, everything will be in order, and the courts will be left with no options, and wholesale repossessions will flow. As set
out above, late-2019 promises to be a very difficult time for distressed borrowers.
The Government has no plan. Like everything, WHEN the crisis hits, some hurried and populist piece of legislation will be
introduced through the Oireachtas. No doubt, that piece of legislation will simply end up compounding the problem. We need
a solution today. We need to be in a position to offer distressed borrowers a second chance! We need to protect those persons
today that needed our protection yesterday. If the Government continue to do nothing, I fear to hazard a guess at the
homeless figures in December 2019!
Finally, please do not be under any illusion that the Government are unaware of the above issues. They receive the quarterly
figures from the Central Bank of Ireland, the same figures that the writer receives. The Government are not asleep at the
wheel. The Government are very much wide awake behind the wheel and they understand fully the cargo they are carrying.
However, for the past 8 years, the Government have continued to drive along the motorway on the presumption their vehicle
has endless fuel. However, the fuel is running out. The fuel gauge is very much in the RED ZONE, and in 2019, the fuel will
simply run out!

Thomas O’Mahoney, Solicitor with Joseph Nolan & Co. Solicitors – “JNS - No experts, just doing our best to keep families in their homes” -
1st September 2018

Joseph Nolan & Co. Solicitors

52 Queen Street, Clonmel,
Co. Tipperary
+353 52 61252 88
info@josephnolan.ie

www.josephnolan.ie

Joseph Nolan & Co. Solicitors — “Always Practical Advice”