Five Mortgage Arrears Repossession Court FAQs
18th November 2019
Getting a court summons (officially called a “Civil Bill for Possession”) can be a very frightening experience for borrowers in mortgage arrears. What does everything on the letter mean? Will I lose my home?
A court summons does not mean the process is over; it can be the beginning of a positive journey to keeping the family home. It gives someone in mortgage arrears time and focus to get the proper help and support. Listed below are 5 of most commonly asked questions borrowers have when they receive a repossession court summons.
Should I attend my court summons for repossession?
Yes – it is extremely important to a borrower’s case that they attend all possession hearings. The first possession hearing will usually be adjourned. This means it will be postponed until a later date, which can be a few months. During this time, the borrower should be engaging with the lender to try reach an arrangement. The County Registrar, who is the Court Official hearing the case, should be aware of and can point borrowers in the direction of MABS to assist with this process.
When a borrower is referred to MABS, their situation is assessed, and then they work with a dedicated adviser. Depending on their case, this could be a Money Adviser or a Dedicated Mortgage Arrears (DMA) Adviser from within MABS, or if eligible MABS may refer them externally to a Personal Insolvency Practitioner (PIP) or an Abhaile Accountant.
Are there free legal and professional supports at the repossession courts?
Yes – there are two types of supports available at the repossession courts: the Abhaile Duty Solicitor and a Court Mentor from MABS. The Court Mentor is there to explain what’s happening in the court, give advice and answer any questions a borrower may have. The Duty Solicitor can help the borrower prepare what they are going to say to the Country Registrar, or at times they can speak on behalf of the borrower (this is at the discretion of the individual County Registrar).
It helps if the borrower has engaged with Abhaile before they attend the repossession hearing, but the two services are available to everyone in the County Registrar’s court and the Duty Solicitor may still be able to give some limited help at Court, but only if borrowers have already talked to MABS – i.e. the Court Mentor, a Dedicated Adviser or the MABS Helpline.
In addition to the above court supports, the borrower can also access a Consultation Solicitor for free through Abhaile if the case raises legal issues or the borrower has received repossession proceedings. To get free advice from a solicitor under the Scheme, the borrower will need to already be working with a MABS Adviser or with a PIP and have completed a MARP Standard Financial Statement (MARP SFS) with MABS, or a Prescribed Financial Statement (PFS) with a PIP.
Am I liable for legal fees from my lender?
The Central Bank is of the view that the application of legal costs prior to the conclusion of repossession proceedings and prior to the decision by a Court to award the costs associated with the legal process to the lender is not in borrowers’ best interests, and is therefore not in accordance with the Consumer Protection Code 2012. For clarity, lenders must not apply the costs to a mortgage account until:
a. the Court has awarded the costs to the regulated entity;
b. a settlement has been agreed between the parties; or
c. the borrower is in a position to redeem the mortgage and has requested to do so.
Engagement also ensures a borrower is protected by the ‘Land and Conveyancing Law Reform (Amendment) Act 2019. The Act requires lenders to examine a borrower’s circumstances before they can look at issuing a repossession order. However the Act only applies in certain circumstances including if a borrower has engaged with Abhaile or mortgage to rent, or in the personal insolvency process. If a borrower has not been engaging in the Mortgage Arrears Resolution Process (MARP) with their lender, they are at a higher risk of losing their home.
Do Credit Servicing Firms (commonly referred to as vulture funds) operate in the same courts as the banks?
Yes – the Consumer Protection (Regulation of Credit Servicing Firms) Act 2018 provides for the regulation of credit servicing firms by the Central Bank, so they are subject to the same laws and regulations as the domestic banks. This means borrowers have the same protections and rights, regardless of who owns their mortgage account. The Code of Conduct on Mortgage Arrears (CCMA) sets out a framework known as MARP (see above), on how borrowers should be treated, and the structure by which the lender must communicate with them.
The insolvency legislation ensures that no distinctions are made in regards to mortgage loan owners. All cases are to be dealt with in the same manner, whether it is a domestic lender or credit servicing firm. This same protections/supports apply to the profile of a borrower or their case, everyone must be treated the same.
How long does a repossession court order last?
A repossession order remains in full force for a period of twelve years from the date it was granted and an execution order, which is needed in order to bring about the repossession may be issued in the Court Office within this period. However, if the mortgage lender has not executed the repossession order after six years from the date it was granted, the mortgage lender needs to get the permission of the Court to get another execution order. To do so, the mortgage lender needs to attend a hearing in the Court and make an application for the execution order by putting a motion to the Court and giving prior notice of this motion to the borrower.
Even in cases when the sheriff has been involved, the regulated and qualified professionals of the Abhaile scheme have been able to achieve arrangements that have kept borrowers in their homes. The key thing to remember is it’s never too late –but it’s always advisable to engage as soon as possible.
If you have received a court summons, watch our video that has tips from Court Mentors, a Duty Solicitor and a Court Clerk.