Random facts on Repossession 2

Extra

Property auctions in Australia, New Zealand, and Ireland best illustrate the above description of an auction market where expensive and specialized properties that are difficult to value are sold. In Dublin, Ireland for instance, over 60% of properties in the highest value decile during 1997-2004 were sold through auction (Stevenson, Young, and Gurdgiev, 2010). The popularity of auctions are reflected in Exhibit 1, where 85%, 35%, and 19% of the total residential property sales were transacted through the auction markets in Ireland, Australia, and New Zealand, respect

 

Moreover, researchers have shown that auctioned properties in these markets sold at a premium compared to properties sold through negotiated sales [see Lusht (1996), Dotzour, Moorhead, and Winkler (1998), and Stevenson and Young (2014) for evidence from the Australia, New Zealand, and Ireland auction markets, respectively]. [1]

ively.[2]

This is clearly a waste of resources considering the High Court requires three months on average to stage a subsequent auction. The publication of the reserve price also makes the auction process prone to abuse by syndicates by distorting the auction process to their advantage.[3]

 

They note further that a study of the US mortgage market indicates that houses in foreclosure sell for 4 per cent less in states that require judicial procedures than in those states that do not. This has no benefit to both the mortgagee and mortgagor. Longer foreclosure duration as a result of judicial process es often leads to greater deterioration of the subject

“from a total of 20,385 properties auctioned on August 21, 2013 throughout Malaysia, only 50 or 0.02% were private auctions initiated by property owners. The remaining 99.98% are distress sales initiated by banks to recover their mortgage loans.”[4]

by property types for the January 2009 to August 2013 period. There are a total of 234,383 properties auctioned during this period, n  3.5 years .[5] Out of 4 million loans (0.2 times 20,000 adults) then that 16.7!  60,000 a year!

 

Evidence of the 4 -24% less criteria in the US :   (Hardin and Wolverton, 1996; Pennington-Cross, 2006; Clauretie and Daneshvary, 2009)[6]

 

If one has lots of debtors then having secured debt changes the position between creditors and doesn’t affect the debtor as on default both will take possession of your assets. The debtor gets a lower interest from secured creditors and will prefer them.

 

 

Pursuant to the French Consumer Protection Code, borrowers can apply for a ‘repayment holiday’ (deferred payment) of up to 24 months if they are suffering financial hardship. Where the mortgage in arrears is less than 3,800 Euro, a simple Application, rather than a Summons, can be filed with the local Court. This, if applicable, must be done prior to lenders formally issuing a notice of foreclosure, i.e. that the borrower is defaulting on his/her loan repayment.

In an equitable procedure, the debtor is allowed to find a purchaser himself. In an enforcement procedure, the property will be auctioned.

A/ Flexibility allows the debtor to find a purchaser himself. The request for a voluntary sale may be submitted and adjudicated prior to the service of summons to appear at the directions hearing (it then suspends the course of the proceedings), or it may be submitted by the debtor at the directions hearing, as we have already seen on the plan.

In the winter period (from November 1st to March 15th no eviction from private property may take place)

The major novelty of the law of 2006 is that the sale judgment includes an eviction order on the foreclosed party.

DS – just talk to banks in all these countries.

Rules mortgage lenders must follow before repossession

Before a mortgage lender takes you to court to repossess your home, it must follow the rules outlined in the pre-action protocol.

Key advice

  • Make sure your lender gives you details of your arrears
  • Work with your lender to explore all options for paying

Rules your lender must follow

If you have mortgage arrears your lender can take you to court to repossess your home.

But there are rules that mean your lender can only do this as a last resort and after other options have been exhausted.

Your lender must treat you fairly and consider any reasonable requests you have to arrange to pay off your arrears. These rules are called pre-action protocol.

If your lender doesn’t follow the rules it could affect the outcome of a repossession case against you.

Get legal advice about mortgage arrears and repossession as early as you can.

Before a lender can start action against you

Before taking any steps to repossess your home, your lender must try to discuss your finances with you and give you a reasonable chance to pay the arrears.

Your lender must also send you:

Both leaflets offer advice on what steps you can take to keep your home.

Your lender must communicate with you in a way that’s clear and easy to understand. Tell them if you find it difficult to understand any information they send you.

Your lender must also give you details of:

  • your payments over the past two years
  • your monthly instalments
  • the amount of your arrears
  • how much is left to pay on your mortgage
  • the interest or charges that will be added

 

Your lender should also delay court action if:

 

What happens if your lender doesn’t follow the rules

If your lender hasn’t followed pre-action protocol the court could:

  • give you time to negotiate with your lender by delaying the court hearing
  • order the lender to pay your legal costs
  • stop your lender from adding their costs on to what you already owe them

Get legal advice before the court hearing if you think your lender hasn’t followed the rules.

  • Lenders tried to sell repossessed properties quickly. However, they would normally avoid auctions unless the property could not be sold using the normal channels or was of very poor quality.

7 Typically, the lender wants to make a quick sale. Most do not routinely put the properties into auction, they try to market first in the normal way. The average time they expect to sell properties within is 20 weeks. However, for a property that would not sell, they would use auctions as a last resort with a reserve price. One lender said that they had 61 Scottish repossessions and only one had been auctioned. Another lender said they would use auctions in a deprived area, as they would sell the property quicker this way. Another lender said that under 10% of properties went to auction, but that auctions had become more prevalent over the previous four years. There was a common policy that, if a property had been on the market without selling for a long time, then it would go to auction.[7]

One lender said they lost about 75% of the value of shortfall debt, another said they wrote off one-sixth of shortfall debt this year, costing around 6 million, another just described the percentage as very high, another said about 12,000 was lost on each home and they would be lucky to get 3-5% of this back. Another lender said all shortfall debt was written off immediately.[8]

 

 

 

 

 

 

[1] Wong, Chyuan, Lee, Daud, Nasir, Ng, Cha “Strategic Development of Property Auctions Market in Malayasia” Journal of Real Estate Literature 22.2 (2014): 261-278

 

[2] Wong, Chyuan, Lee, Daud, Nasir, Ng, Cha “Strategic Development of Property Auctions Market in Malayasia” Journal of Real Estate Literature 22.2 (2014): 261-278

 

[3] Wong, Chyuan, Lee, Daud, Nasir, Ng, Cha “Strategic Development of Property Auctions Market in Malayasia” Journal of Real Estate Literature 22.2 (2014): 261-278

[4] Wong, Chyuan, Lee, Daud, Nasir, Ng, Cha “Strategic Development of Property Auctions Market in Malayasia” Journal of Real Estate Literature 22.2 (2014): 261-278

 

[5] Wong, Chyuan, Lee, Daud, Nasir, Ng, Cha “Strategic Development of Property Auctions Market in Malayasia” Journal of Real Estate Literature 22.2 (2014): 261-278

 

[6] Wong, Chyuan, Lee, Daud, Nasir, Ng, Cha “Strategic Development of Property Auctions Market in Malayasia” Journal of Real Estate Literature 22.2 (2014): 261-278

 

[7] http://www.gov.scot/Publications/2003/01/16070/16031

[8] http://www.gov.scot/Publications/2003/01/16070/16031