AN ORDER for possession of a house off Vico Road in Killiney, Co Dublin, has been granted at the High Court. The court heard that the value of the home had dropped from an original sale price of €6.6 million to €3.7 million.
In a separate case yesterday, Mr Justice Brian McGovern questioned the stress test applied by some lenders in advance of granting mortgages to customers.
First Active applied to the court for possession of two properties owned by a separated couple, one off Vico Road and one in Terenure. The Killiney property was on the market for sale and had originally been priced at €6.6 million in May 2008. This had been reduced to €4.4 million and was now down to €3.7 million. It was estimated that the Terenure home would bring in €800,000.
The outstanding debt owed to the lender for both properties was €2 million and there had been no payments for two years.
Counsel for the lender said his client was anxious to proceed.
Both defendants were represented separately and the second defendant was living in the Terenure property with the couple’s three children. She was anxious to hold on to her home, her counsel said. Counsel for her ex-partner suggested the Killiney property could be rented out for €10,000 a month, but Mr Justice McGovern questioned the reality of that.
He accepted that even with the drop in prices, there was still sufficient equity in the properties to discharge the debt. However he pointed out that the couple owed the money to the bank and it would have to be paid.
“Everyone, even banks, are entitled to justice,” he said.
The case was adjourned for lunch and when it returned, counsel for First Active told the judge that the parties had agreed to consent to an order for possession of the Killiney property. The bank had agreed to hold off on the application to repossess the Terenure house.
Mr Justice McGovern put a stay of six months on the order to give time for the owners to sell the Killiney house. He granted six orders for possession yesterday.
Start Mortgages was granted two orders and Bank of Scotland (Ireland), Springboard Mortgages, First Active and IIB Finance were granted one order each.
In a case involving Springboard, the court heard a loan of €120,000 was taken out in April 2008 and the borrowers began to default in August 2008. In a case involving Start Mortgages, the borrowers took out a loan of €250,000 in August 2007 and had begun to default on it by January 2008.
Mr Justice McGovern noted that almost immediately after the borrowers had been given the loans, they had gone into arrears, “which makes one wonder what sort of stress test was applied”.
He granted orders for possession in both cases.
