Northern Ireland man loses bid to stop property repossession

A Northern Ireland man who had not paid his monthly mortgage payments for nearly 3 years has failed in his High Court bid to stop the bank from repossessing his home.

Gerard Herron had taken out a 10-year interest only mortgage with a division of Halifax Plc, and as part of a restructuring of the HBOS banking group his loan was moved to the Bank of Scotland. The last monthly mortgage payment was made by him in August 2014 and arrears had reached £64,970 at the time of the High Court hearing, leaving an outstanding balance of £433,000. The property is now in negative equity as it is valued at £286,000.

Mr Herron represented himself at the hearing, and argued that Bank of Scotland had no legal standing to repossess the property as they were not a party to the mortgage deed. He also argued that there was not enough supporting evidence, and denied any responsibility for the debt, refusing to confirm or deny whether the signature on the mortgage deed was actually his. Madam Justice McBride held that he had signed the mortgage deeds, and that the debt had passed to the Bank of Scotland and they therefore had legal standing to repossess the property. The previous court decision to order possession was affirmed and Mr Herron has suggested that he will launch another appeal.

Negative equity continues to be a widespread problem among home owners in Northern Ireland, many of whom are unable to change their mortgage product or sell their property as a result. In Mr Herron’s case a sale of the property would not give sufficient money to clear the debt registered on it.

If the owner is also in mortgage arrears then the options begin to get very limited, with the first step being to negotiate with the bank. Repossession is a last resort for lenders, who would usually prefer to agree an alternative payment plan, using options such as increasing the term of the mortgage, switching to interest-only and perhaps allowing a payment holiday to allow the mortgage borrower to catch up on missed payments. If the lender has stated that they intend to repossess the property you should take legal advice. It should also be noted that if the sale of the property does not clear the mortgage debt the lender can still pursue you for the shortfall as a non-priority debt for up to 12 years.

If you require legal advice from a repossession solicitor in Northern Ireland contact Wilson Nesbitt in Belfast by clicking here.