Court approves mortgage write-off of 53%

A Limerick couple who received letters from their lender on three successive Christmas Eves telling them they had to leave their property are to hold on to their home after securing a mortgage writedown of 53%.

At the personal insolvency court in Ennis, Judge Michael Meaghan approved a €98,250 writedown for the couple on their €186,000 mortgage with Shoreline Residential Ltd.

Judge Meaghan said the factors involved in the case were “a perfect storm” for the couple concerned.

The court heard that the husband was working as a taxi driver while his wife was also in employment.

However, the pair — who were not in court — plunged into mortgage debt after the man suffered a stroke and his wife had to give up work to become his full-time carer.

Judge Meaghan said that Shoreline “has been fair and realistic in dealing with what looked at the outset to be an intractable situation”.

Shoreline Residential Ltd bought the loan from IBRC. It employs Pepper to administer its IBRC portfolio.

Personal insolvency practitioner Maurice Lenihan told Judge Meghan: “These people have been through a most horrific time over the last five years. I met the husband last Friday and the couple have spent the last two weeks in absolute abject fear that there would be an appeal against the proposed arrangement. So they were very much on tenterhooks.”

He asked Judge Meaghan: “If I could get the court order today and email it to the couple because they said they are going to frame it.” Mr Lenihan told the judge that the case “is the one I am most proud of”.

Judge Meaghan said the mortgage was for €186,000 and Mr Lenihan had put a value of €65,000 on the home — €10,000 more than the debtors and €10,000 less than the value Shoreline placed on the 100-year-old property.

Speaking after court, Mr Lenihan said: “The couple told me that three Christmas Eves in a row, they received letters from their lenders telling them that their mortgage was unsustainable and they had to get out. They wanted them out and to sell the property.”

Mr Lenihan of Moore Stephens Debt Solutions said that “to say that the couple are now over the moon is an understatement — it is a massive relief. This is life changing for them.”

He said the husband also owed €19,300 to AIB, and AIB will receive less than €160 from the arrangement that the bank voted in favour of.

Mr Lenihan said the couple, both in their late 40s and with no children, are to pay off the base mortgage of €74,000 with the remaining €13,750 being parked with no interest accruing.

Mr Lenihan told Judge Meaghan that a voluntary surrender of the home was Shoreline’s preferred option “but I told them that wasn’t going to happen”.

He said: “What has been approved provides the lender with the best option because they will get more out of it than if the property was sold.”

Mr Lenihan said that the couple have been paying €460 per month on the mortgage and will continue to pay that amount over the next 18 years.

He said: “The case ticks all the right boxes in terms of what can achieved. It is a better outcome for the bank and a better outcome for the debtor — and the State in not having to re-house the debtors.”

Mr Lenihan said that the case demonstrates that the personal insolvency system “is very much fit for purpose and we will see a lot more mortgage restructuring”.