Updated: 21/08/12 : 09:22:59Printable Version
The Troika is pressing the Government to change the law to make it easier for lenders to seize buy-to-let properties where owners are not servicing their debts, it has been reported. The Government is considering changing the law to close a loophole that prevents the banks from foreclosing in most cases, according to a report by Bloomberg based on interviews with unidentified sources. The same report quoted the IMF mission chief for Ireland, Craig Beaumont, as saying that a well-functioning repossession framework was "important to maintain debt service discipline and to underpin the willingness of banks to lend, which is crucial for Ireland's recovery".
Last year, a judgment in the High Court highlighted the fact that a law introduced in 2009 had the unintended effect of restricting a measure available up to then for the repossession of homes to cases where the loans at issue were taken out after December 1st, 2009. A spokeswoman for the Department of Justice and Equality said the "complex and related issues raised in this case" continued to be the subject of discussions within the department and with the Office of the Attorney General.
"Moreover, the judgment has been appealed by the lending institutions to the Supreme Court." A spokesman for the Irish Banking Federation said it and its members remained concerned at "the absence to date of any official remedy arising from the judgment which has created an unintended legal impediment to banks' ability to enforce security on residential property". He said the legal flaw highlighted by the judgment was impeding the progress of necessary measures to repossess and sell property in situations where all remediation measures had failed and the mortgage was deemed unsustainable.