HOMEOWNERS IN negative equity may find themselves in a worse-off position unless an order for possession is granted against them, a High Court judge said yesterday.
Granting a possession order for a Co Wicklow property, Ms Justice Elizabeth Dunne said the situation is only getting worse for the defendant, adding “the amount to be realised is over the amount initially borrowed by a significant amount”.
Counsel for the plaintiff said mortgage arrears of €21,500 had accrued, as five of the defendant’s cheques and 11 direct debits had bounced, including a cheque for €10,000 received in November 2008. As a result, the defendant now owed Leeds Building Society more than the original loan, with a total balance of €419,387.59 outstanding. The mortgage drawn down in May 2007 was for €400,000.
Granting an order for possession in a case involving IIB home loans, the judge again said it was of “particular concern” that the “amounts now due are greater that the amounts originally borrowed”.
In the case, the judge also said she found it “a little bit puzzling that funds were made available to the defendants in 2002 and 2003 after they fell into arrears”.
The defendants began defaulting on repayments in 2002, with no repayments made since July 2007, except for a €200 payment in October 2008.
An order for possession was also granted for six acres of farmland in Co Cavan, after proposals to make repayments and meet arrears were put forward but not adhered to.
AIB had granted a loan of €48,605 to the defendant to be repaid by monthly instalments over 10 years. In 2007, nine of the direct debit monthly instalments were returned unpaid.
In a second case, involving Leeds Building Society, the court heard how “no less than 13 direct debits and seven cheques” had bounced, with the default on repayments “starting almost immediately after the loan was drawn down”.
The defendants had taken out a mortgage of €1 million in 2007 but, in the summer of that year, the first named defendant was made redundant. His wife, the second named defendant, ran a hairdressing business, which previously employed nine people. She had since let some people go, and put some employees on a three-day working week, to make the business more profitable.
The case was adjourned for three months, after the defendants made proposals to pay €2,300 per month towards the mortgage and €500 per month to address arrears. However, the judge warned “if any one of the monthly repayments are not made, the plaintiff has liberty to have the matter listed before the court the following month”.
Ms Justice Dunne granted a total of four possession orders at the weekly chancery summonses hearing before the High Court.
A total of 39 applications for possession orders were listed before the court, with all new cases adjourned for a “last chance letter” to be sent to the defendants.