The Department of Justice has urged anyone facing up to mortgage difficulties to engage fully with the courts process to ensure a fair hearing following claims thousands of home repossession orders may be open to challenge.
Fianna Fáil has called on the government to take “urgent action” after the Master of the High Court said many Circuit Court orders granting home repossessions could be appealed - as the courts are not correctly applying EU law.
The Social Democrats have called for “an immediate moratorium on home repossessions to ensure no person is made homeless as a result of a flawed legal process."
Under the ‘EU Directive on Unfair Terms in Consumer Contracts,’ national courts are required to assess whether the terms of a mortgage contract between a lender and home-buyer are fair.
High Court Master, Edmund Honohan said many property possessions orders in the Circuit Court are granted by county registrars who “should not be dealing with these cases at all” as they do not have the required legal training to assess the fairness of the mortgage contract.
In a statement yesterday Fianna Fáil spokesperson on finance, Michael McGrath called the revelations a "very serious matter."
"The Minister for Justice has a responsibility to ensure that when home repossession cases are being looked at by the courts, that those making the decision have the legal capacity to make such decisions," he said.
A spokesperson for the Department of Justice said a county registrar may only make a possession order in cases where no defence has been raised in court.
As soon as any defence is entered - including in relation to the terms of the mortgage - the case must be transferred to a Circuit Court judge.
The spokesperson confirmed that any order made by a county registrar can be challenged and appealed in the Circuit Court.
He said it is of “critical importance” that anyone facing difficulties with their mortgage engages with the court process and enters a defence where they believe they have one.
In 2015 1,284 orders for possession of property were made in the Circuit Court - a 21% increase on 2014.
In the first quarter, January to March, of 2016 - the most up to date figures available from the court services - the Circuit Court granted a total of 284 possession orders - 219 of which were primary homes.
Of the remaining orders, 16 ‘Buy to Let’ properties were repossessed while 49 were categorised as ‘Unknown.’
The department spokesperson highlighted the statutory protections available to anyone facing up to mortgage difficulties - including free legal and financial service advice through the Money Advice and Budgeting Service (MABS) and the new Abhaile scheme introduced last year.
He said the services aim to find debt solution and keep people in their homes where possible.
“This now ensures that people who are in danger of losing their home have access to free professional advice - including advice from a Personal Insolvency Practitioner (PIP),” he said.
He said the Abhaile scheme provided over 3,000 vouchers for financial or legal advice and assistance between July and December last year - 2,500 of which included consultations with a PIP.
“During 2015, the Insolvency Service of Ireland helped almost 2,000 debtors secure permanent debt solutions that returned them to solvency - up 70% from 2014,” he said.
Mortgages Special Court
Fianna Fáil's Deputy McGrath yesterday called on the government to immediately bring forward a bill establishing a dedicated new court to "sensitively and expeditiously handle mortgage arrears and other personal insolvency cases."
He said the Mortgages Special Court Bill/Courts (Mortgage Arrears) Bill was due to be examined by November 2016, however, it has yet to be published, “let alone reviewed by the Oireachtas Committee.”
The department have confirmed that it has been in consultation with the Attorney General as "significant constitutional issues" have arisen with regard to the idea.
The department is currently working with the court services to introduce special sittings across all Circuit Court areas with the coming months to deal with repossession actions/mortgage arrears using legislation that is already in place.
Anyone facing mortgage difficulties can contact both MABS and Abhaile – the Mortgage Arrears Resolution Service – by calling the MABS Helpline on 0761 07 2000, Monday to Friday 9am to 8pm
