The borrowers: Farmers’ debt fears
It was the day after snow closed roads across the Mdlands.
But they still all travelled for the night-time meeting. None wanted to spend that week worrying about debt. But their farms are at stake. They could think of little else.
Ultimately, these farmers wanted to look ahead into this year with a hope of avoiding repossession.
They wanted to hear how others survived and looked to rally the Irish Farmer’s Association to support legal challenges.
The meeting was chaired by the IFA’s ex-president John Dillon, who is running a consultancy company.
He had invited the IFA’s current chair of farm business, Tom Doyle, to hear what people had to say.
The first on the agenda item was stories from those who drew down short-term loans from Ronald Weisz.
The second firm discussed was Carlisle Mortgages, which had a €17m loan book and leant €1m to Weisz at the peak of demand for his Leitrim-based mortgage business.
A third firm was the Home Funding Corporation.
Weisz set this operation up for an Englishman in the mid-1990s and sold him a mortgage book that remains largely intact to this day.
Dillon said there were too many auctions for distressed farm land.
He said the IFA needed to appreciate the predicaments of farmers. He believed many never had the ability to repay loans at issue.
“It is as if the loans were given out with a view to repossession. They could never have been cleared from the cashflow of the farms,” he said.
Accounts told on the night supported dozens of publicly recorded folio documents that identify properties put up as subprime security.
Sometimes successive loans were given out to borrowers after an initial default.
Larger amounts were released to clear balances and build the interest into a new principal. Debtors then gave security over a larger part of the farm. There are instances where debtors did this until an entire estate was tied up with the loan.
Doyle said he was familiar with the distress of those who spoke in the second half of the meeting and faced banks like Danske and ACC.
But he said farmers’ exposure to subprime lenders surprised him.
In a number of sworn affidavits Weisz has maintained he did not lend recklessly. He said the security offered was always valued higher than the money he advanced.
He was clear about his terms and ensured each customer had legal advice. Nothing was in small print.
He told the Irish Examiner borrowers had applied for loans they now could not repay and were fighting repossessions which were part and parcel of the contract.
Farmers, with stable and obvious security, have been a market for subprime lenders since the 1990s.
Land records show Weisz’s companies, the Wise Finance Company and Secured Property Loans Ltd (SPLL), have charges against at least 800 hectares of land. They filed 50 High Court cases in six years.
Properties already seized are for sale — or the subject of possession orders — in Mayo, Cork, Galway, Wexford, Donegal, Louth, Roscommon, Tipperary, Sligo, Kildare, Dublin, Clare, Wicklow, and Leitrim.
In Mayo, Weisz has or had charges on 15 properties including forestry tracts, a hotel, sites, farms and plots once earmarked for development.
There are often similar traits both in the nature of the borrowers and security.
Through the Land Registry, the courts and by contacting some borrowers the Irish Examiner has been able to carry out a detailed trace of his business. This includes tracking at least €2.5m worth of loans given out in 2008. This is a significant portion as Weisz’s SPLL has valued his entire loan book, of 40 loans, at €2.8m.
The loans that year were secured against 119 hectares of land, three pubs, a service station and five sites.
Of 22 loans involved in 2008, SPLL had possession orders from the High Court on four before the end of 2010. In one case a loan in Limerick at the start of the year had defaulted by April and had possession order before Christmas.
Court records show five orders were granted in 2011. Today, only four of the 2008 batch have not benefited from possession orders.
One is under appeal to the Supreme Court, as it was wrapped up in the 2011 Dunne judgment.
Another is linked to a criminal trial in which a Wicklow solicitor recently pleaded guilty to charges under the theft and fraud act. She will be sentenced next week.
A compensation claim is expected to the lodged with the Law Society insurance fund by SPLL for €1m in loans the company gave out.
In many cases, from this year and others, the borrowers already owed sums to other subprime firms, particularly Start Mortgages and Carlisle Mortgages. One folio, in Co Wicklow, shows a woman already had a judgment against her for a credit card debt since 2004.
She got a mortgage from Start Mortgages on the property in 2006. This was cancelled in Oct 2007 and replaced by a SPLL loan. SPLL brought her to court in 2009. After 20 court dates, the site was sold.
In Galway SPLL provided a mortgage for a house that was subject to a Start Mortgages charge. It was sold in 2012 after a possession order.
Figures show Weisz increased lending as land prices peaked. However, it ebbed in 2009.
“SPL provided only three loans in 2009, one loan in 2010, and one loan in 2011... There were no loans provided by SPL in 2012,” he said.
CONNECT WITH US TODAY
Be the first to know the latest news and updates
