About three quarters of people who face having their home repossessed do not show up in court, a conference has heard.
Angela Black, chief executive of the Citizens’ Information Board, said that according to research by her organisation about 75 per cent of borrowers fail to attend their court hearings themselves and do not send a legal representative.
Mental health, literacy issues, poor financial advice and “a lack of income to support any solution” are factors which prevent people from engaging with banks threatening to take their homes, Ms Black said.
The Citizens’ Information Board funds the Money Advice and Budgeting Service (MABS), which offers advice and support to people through its dedicated mortgage arrears service.
Ms Black said the arrears service has a caseload of more than 3,500 people. She said 15 per cent of cases it dealt with were discharged by MABS because the borrowers refused to engage with the service.
Some of the blame for non-engagement in the court process must lie with financial institutions, Ms Black said.
Draw out the process
She said some institutions will draw out the process to an almost interminable degree or offer a lack of alternative funding sources for refinancing.
Ms Black made the comments at the latest of the Housing Agency’s Spring Lecture Series.
Financial adviser Karl Deeter told the conference his research puts the non-engagement rate at closer to 80 per cent.
Mr Deeter said the courts are “predisposed” towards borrowers, and that people are given many chances before they lose their homes.
“There’s three magic rules if you want to lose your home: pay zero for a long period of time, don’t engage with your lender - and then don’t show up to court,” he said.
“These three inputs were central to virtually every case of possession we saw.”
Mr Deeter said that according to his research, more than 90 per cent of distressed borrowers who engaged with their lender were able to work out some sort of deal to avoid repossession.
