Northern Rock bares its fangs

The recently nationalised Northern Rock is in repossession mode according to the press release below. Does anyone know what the level of repossessions are in Ireland? I heard lenders might adopt a sell back and rent scheme so indebted homeowners wouldn't have to leave their homes. However, on Channel 4 news last night they exposed some scamming by companies running such schemes. Basically people are finding that having sold their homes at knock-down prices, they are not guaranteed to be able to stay in them for longer than six months or a year and are ending up in council housing or substandard privately rented accommodation. The media are virtually silent on repossessions in Ireland but there must a sizeable number of defaults:

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Wednesday, October 15, 2008

The Recession Begins to Hit with Repossessions and Unemployment Climbing Rapidly.

I put the following press release out today on hearing the news about the mounting repossessions being carried out by Northern Rock. We called for action at the early stage of the crisis to halt repossessions and to protect people in their homes by converting mortgages to social rents. I listened to assurances from both Gordon Brown and Yvette Cooper that action would be taken. Nothing appears to have happened and repossessions are rapidly rising. There is a real sense of tragic irony that taxpayers have bailed out the banks only to be evicted from their homes by the very banks that they now own!

Given the significant increase in unemployment I am calling on the Government to bring forward urgently a recession proofing programme to protect people's homes, jobs and pensions. Today's unemployment figures are bad but it should be remembered that each recent set of unemployment figures has had to be revised upwards because the staff cuts imposed by the Government on job centres means that there aren't enough staff left to keep up with the number of unemployed claiming.

Press Release

Is the Government's bank the most ruthless repossessor?

It was announced today that Northern Rock - the bank fully nationalised by the Government - has massively increased the number of homes it has repossessed in the last quarter.John McDonnell MP, LEAP Chair, said:"We fully nationalised Northern Rock, yet the Government's bank is becoming the most ruthless repossessor under the cosh of Government pressure to repay the loans. The Government is in danger of being seen as protecting banks while ignoring people."The Government needs to come up fast with a "recession-proof" strategy of halting repossessions and converting mortgages into homes for social rent."With unemployment rising, the Government should be injecting resources to save people's jobs and that means large scale public investment in major housing, rail and renewable energy infrastructure schemes." (Source: The Recession Begins to Hit with Repossessions and Unemployment Climbing Rapidly. (c) 2008, John McDonnell. http://www.johnmcdonnell.org.uk/)

There was a repossession figure in the paper either earlier in the week or last week. I think it was 50 or so applications on that particular day though not all will have been granted. It is certainly increasing. That said, you can have the figures slightly artificially elevated because the way the courts work there is only one or two days a week where you can actually make such an application so it is not as if there are 50 applications every day.

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Edit:

- Here is the link http://www.irishtimes.com/newspaper/ireland/2008/1014/1223921126588.html

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I worked in a solicitors firm which handled alot of debt collection for a few weeks. Not the most pleasant sort of work really and clearly even more unfortunate again for those at the other end.

Northern Rock didn't provide a home loan service in the 26 counties afaik. They just took deposits.

There is a thread on the Pin dedicated to Repossessions
http://www.thepropertypin.com/viewtopic.php?f=4&t=14486

They say there were over 460 last year on one post. They're debating whether or not to keep the smiley that shoots itself in the head - most are in agreement it should go.

Aragon wrote:

I heard lenders might adopt a sell back and rent scheme so indebted homeowners wouldn't have to leave their homes.

That is what happens in most situations because it suits the bank better to have the person paying something and keeping the building going than having vacant possession and having to try and find a buyer. The reason they go to court generally is just to enforce the fact that the person is going to have to pay up or there will be legal consequences

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However, on Channel 4 news last night they exposed some scamming by companies running such schemes. Basically people are finding that having sold their homes at knock-down prices, they are not guaranteed to be able to stay in them for longer than six months or a year and are ending up in council housing or substandard privately rented accommodation.

That is very interesting. I didn't see the programme. But anyway, if anyone ever has their house repossessed and it is sold at a knock down price, just so you know, you can sue the bank. Under law they're under a duty in law to get the best possible price, albeit within prevailing conditions, for the property. There is a raft of caselaw of people who have successfully sued banks on fairly minor technicalities in relation to this and have won. For example, in one case that springs to mind the banks sold a property without advertising that it had planning permission attached to it. This planning permission would have increased the market value if it had been known and consequently the person successfully sued them.

Of course the above paragraph is mostly illusionary to the vast bulk of people who suffer such a fate as it is unlikely that they know their rights or have the means to enforce them.

From Channel 4 again

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REPOSSESSION BY THE ROCK

It's owned by the Government, and it's repossessing hundreds of homes. But Northern Rock has denied it's aggressively taking back homes of people who've fallen into mortgage arrears.

The bank's chairman, Ron Sandler, said it was operating the same policy as it did before it was nationalised. Gordon Brown insisted that Northern Rock was run "at arms length" from the Government. But figures suggest that Northern Rock has more repossessed properties on its books than other banks, perhaps as many as three and a half times as much.

The bank disputes whether these figures show it's behaving more aggressively than other lenders, but has not, as yet, published its own data which could presumably clear up any doubt in people's minds. Katie Razzall investigates.

Watch our noon report: http://tinyurl.com/6ra68s