We got a comment on our site from an ex-banker who heard a radio segment where we were talking about banks and repossessions. We got in touch and asked if we could post his comment as a stand alone entry, he agreed, his thoughts are very interesting and in part might help explain why we have repossession orders without repossessions, eye opening reading…
I listened to your piece on Newstalk this morning (19/08/2013) regarding ‘strategic defaulters’ and I just wanted to congratulate you for highlighting the reality of this issue.
I worked for the former *closed bank* for over 17 years and for a two year period I was it’s Mortgage (Residential) Administration Manager. Although I’m out of banking now I still help former clients with negotiations with various banks.
My experience over the past couple of years, and especially this year, in ‘dealing’ with the banks, foreign and domestic, has exposed some incredibly unethical and unfair practices and on the whole I fear there is still great damage being done to peoples lives without there being any correlating improvement to the ‘real’ banking system or indeed the economy.
With specific reference to the above ‘Davenport after Dark’ broadcast relating to the Land Conveyance Law Reform Act 2013, (and also including the subsequent amendment to the Code of Conduct on Mortgage Arrears which came into effect on 1st August) and the prospect of increased Repossessions I have the following observation to make-
The Banks (specifically, AIB, Bank of Ireland and IBRC) intend using the legislation to obtain Orders for Possession but not necessarily to actually repossess houses. The point to be noted is that once an institution obtains an Order for Possession it is valid for twelve years (six years initially with automatic renewal for a second six years on application to the issuing Court) with the ‘holding’ institution never having to revert to Courts or indeed any other authority to exercise it’s Order during that time.
The Banks will then use the Order for Possession (and the threat of Repossession) to target the so called ‘strategic defaulters’. More importantly the Banks at present are also classifying people who choose to pay unsecured loans (Car Loans, Credit Union Loans etc.) ahead of their mortgages as ‘strategic defaulters’. It is their intention to use the threat of Repossession as a means to counter this and is, I believe, a scandal of itself, equal to any other in the Banking Sector.
Bear in mind that (according to Bank of Ireland’s Richie Boucher) 10% of Arrears cases are deemed to be ‘strategic defaulters’ (10% of 14% (accepted arrears level) is 1.4% of mortgage holders). You and I both know that mortgages are not classified into ‘ordinary’ defaulters and ‘strategic’ defaulters (there is no way of telling on a banks IT system) therefore it follows that ALL Banks are applying the same ‘tactics’ and intimidatory practices to ALL mortgage defaulters.
I’m ashamed to say that we used the very same ‘tactics’ during my time in *closed bank* although I will argue that they were different times ‘pre-crash’. Once we had an Order for Possession we’d threaten to Repossess every so often, the Customer would come up with a few bob, we’d postpone the Repossession and then a few months or a year down the line if arrears had built back up we’d repeat the threat and away we’d go again!
I just think that in the current climate, with the enormous pressures being placed on mortgage holders, and the increased risks of ‘finance’ related suicides, this is an abhorrent practice. The Banks have, in my opinion, pulled the wool again over the Regulator and the Government’s eyes.
That’s my rant for the day out of the way! I would just like to compliment you again for highlighting the issue and you might also pass on my compliments too to Newstalk for their coverage which is excellent.
This is something that helps the debate, perhaps it is the intention of the banks to get lots of repossession orders but not actually have to take back properties, we already saw how AIB lost €4m on just 17 properties, if that was applied across larger sections of the loan book imagine what would happen? It also matches what we are hearing from lots of estate agents who say banks are constantly delaying the sales process where receivers are involved, or repossession orders granted, we’d have to wonder about the motivation there as well.
One thing is for sure, much of happening doesn’t make any sense.