‘I chose feeding my family over mortgage’

Ken Smollen, Irish Democratic party, and supporters protest against home repossessions at Ennis Court.

As the Government announced new measures to deal with the mortgage arrears crisis, Joe Leogue met one young couple whose family home is under threat, with no solution sight

The repossession cases all have a depressingly familiar ring.

Hundreds come before Cork County Registrar every month. The names differ, but the problems are all too alike. The vast majority bounced down the road as the arrears mount up — with no solution in sight.

One couple spoke with the Irish Examiner, on condition of anonymity, of their struggles to secure a meeting with the subprime lender who is seeking to take their family home.

The married parents of two small children have a third child due in the summer. Their troubles began as he was forging a successful career in financial services; in 2001, the company he worked for “hit a blip”.

“We never had any issues with any loans or the mortgages, we always had new cars and holidays,” he says. “Life was generally good.”

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The downturn in his personal finances coincided with a time when the young couple were forging a new life together. Despite the difficulties, those early debts were reigned in.

“We worked our way through that the best we could,” he says. “It was very difficult. We were getting married, we had bought a car, we were building the house.

“We had fallen into arrears with that mortgage, but we worked our way through it and I went out selling morning, noon, and night. But the credit history followed us through. So when we went to the market then, looking for a mortgage to finish the house off, they were the only option as they were subprime lenders. They’d accept you with bad credit.

“The way it was sold to us was, yes, it would be a very high interest rate at the outset, but if you behave yourselves and pay your bills and so on, then the following year it would reduce and the following year it would reduce, and eventually it would come to normal interest rates. They were complete lies, unfortunately.

“We’re stuck on a mortgage with 9.5%, which is fairly hefty. We paid it right up until three years ago.”

He secured a high-paying job with a multinational firm. Working 18-hour days, he was successfully paying the €2,500-a-month mortgage until the company closed its Irish branch a few years ago.

Undeterred, he started his own business. He is confident the three-year-old venture has a future, but the margins are still tight.

“Like any business in recessionary times, the money’s not there,” he says. “People expect everything for nothing and the margins are tight. We paid them [the mortgage company] a bit, but we literally had to choose between feeding our family or paying the mortgage, and we chose to feed our family.”

Now the subprime lenders are looking to repossess the house, and the couple came before the county registrar with their third child due in a couple of months.

“We haven’t had a holiday in years, we have a car at home that’s falling apart,” he says. “We put some money into the business to get it up and running. I’m driving around in a €1,500 van trying to sell the whole thing. We are getting there. We’ve built up a big client base, we’re getting there. But they just will not engage. They just came back saying ‘unsustainable, unsustainable, unsustainable’.”

Their attempts to engage with someone within the lenders has been frustrated, their case passed on to four different representatives. They claim their attempts to broker a deal have been ignored.

“They wrote to us saying they wanted us to get out of the house, to hand it over,” he says. “We said ‘not on your life, forget about it’. We’ve been asking them to meet over and over.”

The only reply they received to their appeals for a meeting was a single-line letter informing them of the date they were due before the county registrar.

“This is what they mean by engaging,” says the father of the family. “That’s not engaging, we know that already. I just want them to come and sit and talk to us.”

Having requested the data file on their mortgage, the couple learned it had been sold on to various private investment firms. In the meantime, they are being pursued for their debt.

“They’ve sold the mortgage a number of times to private investment firms and enriched themselves by doing so,” he says.

“It’s horrible. It’s an awful situation. Every time a car passes outside the gate, or pulls up inside the gate to let another car pass our narrow little boreen we’re wondering: ‘Jesus, who is that?’ We’ve overcome lot of the fears, fears about getting the post that you’d shit yourself at the thought of getting. On Friday evening, when I’d come home the first thing I’d ask for is the post. If there was nothing in the post, you could actually enjoy the weekend.

“But if you got a letter and there was something in it you didn’t understand you’d be wound up to the nines for the weekend.”

“We got legal advice at the start, but I firmly believe that it’s a clique — solicitors, banks, the legal system — they’re all in on it together and there’s an overall agenda. We’re certainly in a financial war. People are being hit dramatically.

“I don’t believe for a second that any Irish person went out to do anybody over. They got a second or third property, or they might have gotten a property out in Spain, it was all for the good.

“We had our taoiseach at the time going around saying ‘anybody who thinks that this thing is going to collapse should commit suicide’. He said that. So we were led up the garden path.

“We didn’t go out to buy a second property, we didn’t look at investment properties, it is our home. I don’t have credit cards, I have no car loans, no van loans, no credit unions, nothing. Just the mortgage.

“If they’d only come and sit and talk so I can put my side across and say ‘this is where you say we are, this is where I say we should be, lets find some common ground’.”

In solidarity, the couple attended other protests at repossessions. The outcome of one of these other cases saw the homeowners given a 12-month window to turn things around, but he believes such deals “kick the can down the road” and delay the inevitable demands for an unsustainable debt.

They have spoken with The Hub, a support group formed of people who have suffered repossessions. The Hub has also protested outside repossession hearings across the country.

“They mightn’t be able to help you a huge amount, but at least they’re there for you for moral support,” he says. “You can ring them for a bit of advice, or a consoling ear down the phone.

“I just want to sit, trash it out, just like Denis O’Brien did when he bought SiteServ and got however many millions written off for it.

“The fear dissipates, but it’s just a horrible, horrible scenario. I’ve never drawn the dole in my life up until two years ago. I’ve thousands of euro paid in tax, PRSI, and now I’m trying to make a go of it with my own business. We made a profit in the first year, a loss t he second year and I’d say we’ll make a profit this year.

“But I haven’t taken a salary from it, there’s very little from it. But it will grow and in a year or two we’ll be fine because I know my abilities, I can get out there and at but in the meantime this is a massive weight around my neck. You can’t even think straight about the business, or planning or anything. It’s always there.”

The county registrar took note that the couple are expecting their third child, and adjourned their case until October.

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