12.01.2011 Äripäev: Andres Sõnajalg beat SEB Bank in court

The judgement of the Tallinn Circuit Court, which terminated the legal dispute of Andres Sõnajalg with SEB Bank, entered into force at the start of January and resolved the case finally in favour of Sõnajalg.

Sõnajalg explained that the dispute was about a private loan taken almost 15 years ago and the bank's attempts to obstruct the repayment of this loan during a certain period. "Ten years ago, the bank found a suitable opportunity to seize Andres Sõnajalg's bank accounts due to an earlier legal dispute, making it impossible for him to transfer his mortgage loan repayments. The bank also refused to accept my loan repayments in cash," said Sõnajalg.

The bank then terminated his mortgage loan agreement and demanded immediate repayment of the entire loan, claiming that Sõnajalg's loan was in arrears. Sõnajalg claims that he did not agree with this and took the matter to court, requesting that the court ascertain the validity of the loan agreement and his right to repay the loan on the basis of the payment schedule set out in the agreement instead of having to repay it as a lump sum.

Sõnajalg says that the court agreed with him and found that the bank itself made the repayment of the loan impossible and that in a situation like this, the bank had no right to decide that Sõnajalg was in breach of agreement and to terminate its agreement with him.

"I am pleased that the Estonian court system has ascertained the truth and justice has been done. Although this ruling does not change much in my life as I repaid the loan to the bank a long time ago, I believe that this is a positive message to many Estonians, who feel that banks have been way too harsh with them," he added.

"I dare to believe that this is also a pretty direct message to the former Ühispank, whose client I used to be, that they should not try to use such seemingly correct schemes in their client communication and should focus on finding fair solutions to every situation instead," added Sõnajalg.

ERR reports that the Circuit Court decided to annul the ruling made by the County Court due to incorrect implementation of the provisions of material and procedural law. The court ordered the defendant to pay 85 per cent of the plaintiff's procedural expenses and the plaintiff to pay 15 per cent of the defendant's procedural expenses.

The fight for justice is not hopeless!

Link to Äripäev article 'Andres Sõnajalg beat SEB Bank in court'  

12.01.2011 E24. The number of enforced sales may be higher than presumed

According to the Land Register, the number of enforced sales in the last year was 1409, which is two and a half times more than in 2009. However, the actual number of people who have lost their property may be even higher.

Namely, the figures in the Land Register only represent the enforced sales where the property changed owners on the basis of a bailiff's application. An amendment to law entered into force last year, which allows people to use bank loans to buy property at auctions – it was not possible before.

In cases like these, the bank who grants the loan sends the papers to the notary, who then sends an application to the Land Register. This means that these enforced sales are not recognised as transactions concluded by bailiffs and they become part of overall property statistics, which makes it difficult to highlight them separately.

Member of the Management Board of the Estonian Chamber of Bailiffs and Trustees in Bankruptcy Mati Kadak said that transactions where a property on enforced sale was purchased with a bank loan comprised one half of his total portfolio last year. "Financing purchases with loans became rather popular last year", he noted.

716 of the 1409 proven enforced sales in the last year concerned property taken from private persons to cover their debts and 693 concerned legal entities. The relevant figures in Tallinn were 197 and 266, respectively.

Link to E24 article 'The number of enforced sales may be higher than presumed'

05.01.2011 E24 Bailiff: Growing debts made me increase my team!

The ever-growing army of debtors has forced bailiffs to increase employment. For instance, Harju County bailiff Elin Vilippus has increased her team by a half.

When I was writing the story 'Hundreds of people broke under the pressure last year', I asked the bailiff whether the income of bailiffs had increased on account of this massive increase in debtors.

"I had to get more staff for my office. I need more employees. This means that income has not increased," she noted.

There are currently 25 paid employees in Vilippus' office, plus a few who do extra work. "They help the bailiff to carry out execution procedures," said the bailiff about their duties. "This year, I also hired two assistant bailiffs, who can carry out execution procedures on my behalf," she added.

Vilippus says that the debts of some people bring fortune to others, as processing the debts gives people work. "This is certainly true. It should be seen as positive that I can offer jobs to people."

Link to the E24 article 'Bailiff: Growing debts made me increase my team'

05.01.2011 E24 The number of enforced sales more than doubled last year!

Last year bailiffs sold 716 properties taken from people in order to cover their debts. The number of enforced sales carried out last year more than doubled in comparison to 2009, and increased more than four times in comparison to 2007.

People finally started talking about the crisis possibly ending last year, but for many Estonians the proper crisis has only just arrived.

Bailiffs took 716 properties from people last year in order to sell them and use the proceeds to cover people's debts. Homes as well as other loan collateral, such as summer houses or the flats of parents, were sold to cover the loans people could no longer repay.

Bailiff Elin Vilippus, whose name frequently figures in the official publication Ametlikud Teadaanded, says that there are various reasons why people fall in debt. She says that the claim that banks are always the ones that initiate enforced sales is not true.

Vilippus explains that the reason for the significant increase in the number of enforced sales last year when compared to the year before is that many people could not stay afloat any longer and had to admit defeat.

"Banks use bailiffs as the last resort. They try to cooperate with their clients first of all. 2010 was the year when they tried to keep things going, make new agreements," she says. The bailiff adds that people usually tend to hide when things get bad.

E24.ee 'The number of enforced sales more than doubled last year!'

15.12.2010 E24. Hundreds of people in Estonia have lost their homes in the crisis!!!

Hundreds of people who borrowed from banks have lost their homes since the start of 2008 when recession hit Estonia, as they can no longer afford to repay their mortgages.

Swedbank has sold the collateral of a couple of hundred mortgage debtors at auctions since 2008. "As a rule, people who show no interest in resolving their problems are the ones who have had to give up their property or homes – they don't answer their phones, change their phone numbers and/or ignore letters sent to them by post," said Anne Pärgma, Head of the Residential Mortgage Loan Department of Swedbank. "We've also had cases where people change their places of residence or leave Estonia altogether, and show no interest in their obligations. This means that resorting to extreme measures is the only alternative the bank has left and sometimes it leads to enforced sales."

Head of Business Development in the Area of Private Person Loans of SEB Bank Triin Messimas said last month that the number of cases where the collateral of home loan debtors was sold in the last 2.5 years is less than one hundred. "Enforced sale is something the bank is forced to use when the borrower refuses to cooperate and the loan has been in arrears for a long time," noted Messimas. "Typically, the person's home is not put up for enforced sale, as the first properties sold are summer cottages, flats acquired for rental purposes and other properties," she added.

The Communications Specialist of Sampo Bank Tõnu Talinurm said that the bank sold the collateral of 50 home loan debtors in the first 10 months of this year and the number of similar instances in the last year was 40. The bank did not disclose the number of sales in 2008. Nordea Bank refused to disclose any data about sales of the collateral of home loan debtors in recent years.

Most of the banks remained tight-lipped when asked whether the pinnacle of home losses had finally passed. Only SEB states that the number of clients in payment difficulties decreased this year.

What do you say about this? Believe me, it's only the beginning.

Link to the article 

27.10.2010. E24. Swedbank may become the biggest property company!

Ektornet, which is the company that buys up problem properties from Swedbank, may become one of the largest, if not the largest, property companies in the Baltic States by 2013.

In their last economic report, the managers of Swedbank wrote that they plan to increase Ektornet's portfolio to 8.5–17 billion kroons by 2013.

75 per cent or 6.3–12.7 billion of this should be located in the Baltic States, which means that the company may become the region's biggest property company. For the Swedes, this means that the Baltic States are priority number one, as the impact of the results achieved here on the entire group is vast.

The assets of Ektornet currently total two billion kroons – 590 million in Estonia, 386 in Latvia and 176 in Lithuania. This means that a little more than a half of the purchased property is in the Baltic States and the company must grow at least six times to achieve its goal.

What is Ektornet? It is a company established by Swedbank last year, which purchases the unfinished buildings and land of property developers who are unable to repay their loans to the bank. Property is purchased at auctions as cheaply as possible and put on hold for better times.

SEB Bank, for example, has a similar company called Estectus, but the amount of its assets is currently considerably lower – 126.4 million kroons in Estonia.

Director of Ektornet Meelis Shokman says that the primary goal of the company is to stop the decrease in the value of property or conservation of purchased properties, stopping the deterioration of unfinished buildings and guaranteeing maintenance. Its second goal is to increase the value of property, which can be achieved with the preparation of detailed plans for plots of land.

Link to the article