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Sunday 1 October 2023 Dublin: 17°C
# The Banks
How many mortgage holders have banks taken to court so far this year?
We take a dive into the figures available for the cases brought against homeowners in the courts over the past few years.

THE NUMBER OF High Court cases launched by some of Ireland’s main banks has dropped in the first three months of this year compared to last year, but opposition TDs have said that there is “no room for complacency” on the issue.

Others have said that “after a decade of this crisis”, it is hardly surprising that the number has gone down, but warned about the potential impact that vulture funds will have on mortgage holders.

Fianna Fáil’s finance spokesperson Michael McGrath told that while the vast majority of repossession proceedings take place in the Circuit Court, the figures available from the High Court “point to an overall trend”.

Banks generally apply for repossession orders through the Circuit Court in the first instance, but can routinely escalate matters to the High Court.

Using data compiled with Courtsdesk, compared and contrasted the number of people against whom five of the main Irish banks launched legal proceedings against over the past four years.

The number of High Court cases taken out by AIB and Bank of Ireland have decreased this year, while Permanent TSB has ramped up its activities.

Here’s a breakdown of how many cases have been taken out by the banks against mortgage holders so far this year:

  • Bank of Ireland – 42 cases
  • AIB – 30 cases
  • Ulster Bank – 6 cases
  • Permanent TSB – 58 cases
  • KBC Bank – 27 cases

20180404_Banks_1 Statista Data compiled with courtsdesk Statista

In all that’s at least 163 cases taken out by the banks against mortgage holders in January, February and March of 2018.

Typically, these will be cases that have fallen into arrears where the bank may be seeking a repossession order of the home or property.

Going in a bit further, we can see that the number of cases taken out this year is actually lower compared to previous years.

In 2015, these banks launched over 193 cases in the first three months of the year. In 2016, this figure was at least 256, but dropped back down again to 194 in 2017.

And, as for a bank-by-bank breakdown, we can see that some of them have lessened the number they take to court, others have remained broadly similar, while another has risen sharply.

While AIB’s numbers doubled from 2015 to 2016, it dropped sharply again in 2017 and has halved in 2018.

20180404_Banks_2 Statista Data compiled with courtsdesk Statista

The trend with Bank of Ireland is also downwards with the number almost halving between last year and this year.

For Permanent TSB, however, the number has significantly increased from just seven in the first three months of 2017, but 58 so far this year.

The numbers of Ulster Bank customers taken to court has remained broadly the same in recent years, but KBC’s has also increased from single figures to 27 this year.

McGrath said: “With the overall level of mortgage arrears falling, you would expect enforcement action before the Courts to fall off. For many people, a restructuring arrangement can be entered into between themselves and their lender or some solution found through the insolvency service despite its limitations.

Both of these options are preferable to an adversarial court action being taken to get a forced repossession. We should not ignore the fact that for every house repossessed, probably another two are lost due to so called ‘voluntary sale’ and ‘voluntary surrender’.

Vulture funds

This all comes against the backdrop of the potential sell off of thousands of underperforming mortgages to vulture funds.

In February, PTSB announced that it was looking at selling off 18,000 non-performing loans on its books. Similarly, Ulster Bank also said it was considering the sale of 7,000 mortgages in arrears.

As has highlighted previously, some vulture funds have ramped up their activities in recent months and, with the prospect of more mortgages being sold off to such vehicles, more mortgage holders who are in arrears could face a change in circumstance.

And, as mortgage holders have told us, any deals reached with a bank in terms of repayments are often cast aside when a vulture fund buys the mortgage of a property.

Also in February, Minister for Finance Paschal Donohoe had conceded that homeowners who engaged with PTSB may not have their deals honoured by whoever buys the €3.7 billion worth of loans it’s selling.

Before a hearing of the Oireachtas Finance Committee in March, PTSB executives confirmed that the mortgages of thousands of customers are included in a massive loan sale, despite the fact that they have been meeting the terms of their agreement.

Sinn Féin’s Pearse Doherty had previously told that he expects vulture funds to ramp up their activities in 2018, and that “they’re looking to speed up their activities”.

Speaking on RTÉ’s Morning Ireland when the Ulster Bank sell off was announced, Doherty said “if it gets sold to the vultures, we all know it will end in tears”.

According to figures from the Central Bank, a total of 311 residential properties were taken into possession by lenders during the last three months of 2017. Of these, 138 were repossessed on foot of a court order, while the other 173 were voluntarily surrendered or abandoned.

In terms of properties where the mortgages were owned by what the Central Bank calls “non-bank entities”, which covers vulture funds, 10 homes were repossessed on foot a court order, while another 18 were voluntarily surrendered or abandoned.

These figures of repossessions have remained broadly similar since 2016.

While banks and vulture funds are not evicting large numbers of families from their homes, compared to the total of over 70,000 mortgages in arrears, Sinn Féin’s junior finance spokesperson Jonathan O’Brien told that the numbers of repossession remaining steady meant that the situation was not improving just yet.

He said: “It is welcome that a reduction in the number of legal cases being initiated is occurring, but after almost a decade of this crisis, it is hardly surprising.

It’s important at this point to look at the end point of the legal process. Central Bank figures show that there is no drop off in the number of family homes being repossessed or so called voluntarily surrendered. It is at this end of the process that genuine alternative such as mortgage to rent must be made available before the banks move to repossess.

Michael McGrath added that despite the fall in High Court cases, the looming threat of vulture funds meant that there is “no room for complacency” on the issue.

He said: “The level of long term mortgage arrears remains stubbornly high and a number of lenders are planning loan portfolio sales to vulture funds.

The advice for all borrowers in distress has to be to engage with their lender, pay what they can and obtain independent professional advice in their efforts to reach a deal.

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