Banks quietly getting ready for the upturn
Over the past few months we have met with a number of people who have reported high levels of activity by the banks in relation to ensuring that title deeds are in order across their mortgage portfolios.
Our first insight into this came when meeting with an official from a local planning authority, who told us that his function was overrun with activity. We asked what was driving this activity, and the answer was Retention applications. His opinion was that the banks are working through each and every mortgage on their portfolio to check that the title deeds are in order, and where an issue is found, the banks are demanding that the mortgagee fixes the problem. .
The second insight into this happened during a meeting with a solicitor, who reported a similar surge in business associated with banking institutions pressing for issues on title deeds to be amended. The consensus is that each and every mortgage on the banks’ books is considered to be a liability .. a fair assumption in these challenging times. However, behind the current push to resolve title issues is the real agenda for the banks. The current moratorium on repossessions is a smoke-screen created by the banks and government to give the consumer the illusion that measures have been put in place to protect the consumer from overly-zealous financial institutions. The reality is that no bank wants to take possession of a house that is mired in negative equity in a market where the possibility of recovering debt is negligible. So why are the banks going through this correction at this time? To ensure that the decks are cleared when the market picks up, and that the repossessions process is as free from delays and issues as possible. Secondly, the banks are trawling through every single mortgage, no matter how ‘healthy’. Why? Because the healthier the mortgage, the bigger the upside for the bank if it goes bad! Dont believe for an instant that this is not the case – the banks will close on these mortgagees faster than any others because this is where they will make the most money.
We believe that the current activities being worked by the banks is significantly cynical and underhand in the context that each and every man, woman and child in this country has taken on a debt of over €14,000 to bail these guys out.
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