March 7: Repossessions nightmare in our midst

THE full list of the 219 repossession cases due up at Limerick Circuit Court on Friday makes for chilling reading. Here, in black and white, lie so many stories of personal trauma.

THE full list of the 219 repossession cases due up at Limerick Circuit Court on Friday makes for chilling reading. Here, in black and white, lie so many stories of personal trauma.

Many of those facing legal proceedings will have kept their difficulties hidden from the world beyond their front doors, in all likelihood dreading the day when their financial problems would be aired in a court of law.

Losing one’s home is a personal nightmare and before Friday’s hearings there will have been many sleepless nights for most of those on the receiving end of repossession applications. We can be certain that a great many more applications will be sought in the coming months, with more than €12.5 billion in mortgages now in arrears of more than 720 days.

Amid all the self-congratulation over Ireland’s economic recovery from the worst days of the recession, the crisis of personal debt has loomed large for a long time now. The partial recovery in house prices has been one of the triggers for the deluge of repossession orders sought by a myriad of lending institutions, most of whom were throwing money at mortgage clients in the most irresponsible manner for years. Little has been heard from the Government on how it proposes to deal with this escalating crisis, and in the absence of a plan the lending institutions are ramping up their efforts. One local solicitor representing a woman struggling to pay her mortgage and being pursued by her lender tells the Leader this week that his client has suffered a nervous breakdown over it.

The difficulty for the courts now will be dealing with each case in a fair manner, because each is unique. The High Court’s decision to reject an appeal by the family of Limerick-born solicitor Brian O’Donnell, aimed at preventing a bank-appointed receiver from taking possession of the O’Donnells’ palatial home on Gorse Hill, Killiney, was absolutely correct.

Likewise, in Limerick, some of the applications sought by all kinds of different institutions – from EBS to AIB and Start Mortgages to the Pepper Finance Corporation – will have some merit. People who thought the way to riches was to acquire a collection of buy-to-let properties deserve considerably less sympathy than the family who committed to a mortgage at a time when property prices were unrealistically high and then found their ability to repay critically undermined by the disintegrating economy.

One saving grace is that, unlike in the United States, we are not going to witness the spectre of countless people being thrown out of their homes, with a ‘For Sale’ sign erected outside within a matter of hours. In many cases, the lending institutions are seeking to renegotiate repayment schedules with borrowers who have fallen far behind, perhaps after losing their jobs.

It will be a long time before all the cases listed for Friday in Limerick have gone through the court – let alone before the consequences of this deeply worrying situation are fully realised – but in the meantime the increasingly aggressive behaviour of the banks has caused widespread alarm.

The Government must do everything possible to ensure that – with the exception of extreme cases such as the O’Donnell situation in Dublin – no family home is lost to the banks when those being chased for mortgage arrears are making every effort to pay their debts, in difficult circumstances. Such repossessions would be a stain on this country.