House repossessions to increase fivefold due to vulture funds

Oireachtas finance committee told that vulture funds will evict thousands...

House repossessions to increase fivefold due to vulture funds

Picture by: Alexandra Schuler/DPA/PA Images

The Oireachtas finance committee has been warned that the "wholesale eviction" of "many thousands" is on the cards over the next five years, as banks increasingly sell distressed mortgages to vulture funds.

Addressing the committee on Tuesday, Master of the High Court Edmund Honohan forecast a fivefold rise in the number of repossessions.

He said:

"Evicting one occupier costs money. The wholesale eviction of many thousands over the next four or five years is going to cost millions, and it is the taxpayer who will foot the bill.

"I predict that sometime soon, after the banks have sold on their junk mortgages to the private market, county registrars will be presented with court execution orders, to be executed, not a couple of times a month, but 10 or 12 times a week."

According to The Irish Times, the courts granted repossession or sale orders for 278 "principal dwelling houses" during the first quarter of 2017 alone.

Noting how the "flattish level" of 150 repossessions per quarter until the beginning of 2014 "doubled overnight", Honohan opined:

"I can think of no significant factor which might account for this sudden change other than the sudden arrival of vulture funds into our distressed mortgage mess.

"If that is so, you must presume that if the banks are now proposing to finally sell off their huge numbers of deeply indebted loans to the private sector, perhaps increasing the non-bank proportion of non-performing housing loans fivefold from less than 10% to over 50%, we can expect a further significant jump in possession cases."

Honohan believes that the average case list before the High Court could hit 200 per sitting in two years – there were just 41 before it last Thursday.

"On any cost benefit analysis, this is taxpayers’ money down the drain," he continued. "And it is only a first payment of the many additional bills which must be paid for when the homeless are being provided for.

"It is a complete waste of money if there is some way – any way – of keeping these squatters in their homes as tenants."

The finance committee was meeting to discuss the National Housing Co-Op Bill, which would establish a "benevolent entity" to purchase distressed mortgages from banks and let them back to occupiers.