Sub-prime lenders ‘planning to exit Irish market soon’

SUB-PRIME lenders are not interested in restructuring mortgage repayments with customers as they are planning to exit the Irish market, it has been claimed.

The claims come ahead of preparations to launch a campaign to stop evictions and house repossessions.

David Hall of New Beginning — a group set up by lawyers to assist mortgage holders threatened with repossession of their homes — yesterday accused sub-prime lenders of refusing to accept realistic offers.

“They are not interested in helping Irish society. They just want you out of your house,” said Mr Hall.

He claimed sub-prime lenders were actively seeking repossession of the property of customers who had fallen into mortgage arrears as their sole interest was in realising as much money as they could.

Sub-prime lenders know they will soon be leaving the Irish market and they want money to invest elsewhere, said Mr Hall.

He said debt forgiveness was an impractical solution to the problem as it was “inequitable and fraught with controversy.”

The solicitor said a fairer option would be to extend loan durations by up to 25 years even if it meant passing on inter-generational loans to the relatives of existing borrowers.

Another potential solution would be for the Government to abolish all sub-prime lenders and take over their loan books.

Mr Hall said New Beginning was preparing test cases to bring before the courts to see if lending institutions had engaged in reckless lending. He stressed that the solution largely remained a political rather than legal one.

He was speaking at a press conference organised by United Left Alliance to publicise a meeting to be held next Sunday in the Red Cow Hotel, Dublin, on the issue of mortgage arrears. The meeting will also see the launch of a campaign to stop eviction and house repossessions.

Robbie Marsh, whose Dublin home was repossessed by Start Mortgages last January, said the sub-prime lender had been unwilling to accept an offer to restructure repayments after he fell into arrears on his €235,000 mortgage.

“I was offering to pay €1,500 per month but they were looking for €3,000,” said Mr Marsh.

He called on the Government to intervene to prevent any further repossessions taking place until a general, long-term solution was introduced.

People Before Profit TD Joan Collins said more than 50,000 householders were already in mortgage arrears. The Dublin South Central TD said 10% of all mortgage holders were in some difficulty when the numbers who had already restructured repayments were included.

“We plan to discuss options for a Government initiative to deal with the mortgage crisis. These will include debt forgiveness, a revaluation of mortgages so that they reflect the real value of homes and the rescheduling of mortgage repayments.”

Ms Collins also criticised sub-prime lenders whom she accused of being the “most aggressive” of all institutions in dealing with mortgage holders in arrears. “They are charging punitive interest rates of 7.5% to 9.5% and aggressively chasing debts that people can never pay.”

The United Left Alliance has called for the closure of sub-prime lenders with their loan books to be taken over by the state with borrowers charged affordable rates of interest.