Suicide of farmer jailed over debt to sub-prime lender chills rural Ireland
Lobby groups plan peaceful protest at Carlisle Mortgages Ltd in solidarity with the popular Tipperary man
Published 27/03/2016 | 02:30
Two weeks ago, a Tipperary farmer weighed down by debt for more than a decade took his own life. According to friends, he took out an expensive short-term loan from an unregulated lender at high interest rates, to be paid off when a long-term loan from a mainstream lender came through.
Main stream lenders often baulked when sub primes were involved. He was stuck in a sub-prime loan.
The lender took possession of his land, he was ordered to move his cattle and when he didn't, he was committed to prison last month for contempt of court. He was a hard working and dedicated farmer.
According to those who knew him, jail broke him.
The farmer's case was due back in the High Court in April but clearly he could no longer face it. He died on his farm last Tuesday week, leaving behind a haunting note for his family. His debt will now pass to his widow.
The creditor in this tragic case is no foreign vulture fund, but an Irish family business called Carlisle Mortgages Limited, an unregulated lender, founded in the late 1990s by a former motor dealer from Mayo, which specialised in arranging expensive loans for cash-poor clients.
According to other debtors who met the farmer on his many trips in and out of the High Court in recent years, he was a private man who didn't like to discuss his financial problems with others even though they were all in the pretty much the same boat. He "hated" being in court, said one woman who knew him, and couldn't wait to get back home to his farm. "He just wanted to go home and milk the cows," she said.
According to friends, he tried over the years to get a long-term loan to pay back Carlisle and be rid of the mounting interest rates.
He was introduced to a woman called Susan Bourton, who promised to arrange this finance for a fee. But the long-term finance never materialised and she later ended up in jail for bank fraud in her native New Zealand.
The Tipperary farmer's family do not want his name to be published and have asked for space and privacy to grieve. His death has not been reported in the media. Nevertheless, news of his passing has struck a chilling chord in rural communities across the country.
As one farmer who knew the man said last week, his death shocked the farming community because so many others in financial difficulties have found themselves staring into that same abyss.
According to those who attended, hundreds of people stood for hours on a dark cold night waiting to pay their respects at his removal. More than 2,000 people turned out to his funeral the next day, spilling on the road outside the tiny parish church in his village.
His death has prompted two public meetings in Tipperary, one in Cahir last Sunday night, and another to be held in Portlaoise on Saturday.
The purpose is to highlight the number of suicides that are directly linked to financial pressures from banks and financial institutions chasing down their debt.
On Tuesday morning, a peaceful protest with "black crosses" and "prayers" will be held at Carlisle Mortgages' registered offices on Parnell Square, and possibly the homes of its directors, in Dublin on Tuesday. The organisers are the anti eviction campaigner, Jerry Beades, a Senate candidate and members of the Land League.
Carlisle Mortgage Ltd's founder and director, Frank Fahey, 85, replied that he had "no comment" when contacted by the Sunday Independent last week.
He is well known in the motor business. Frank Fahey Commercials is credited with being the first to import Iveco and Fiat Trucks into Ireland in the 1970s. That business ran into difficulty and by the late 1990s, he had moved into finance, Carlisle Mortgages Limited operated in the same unregulated space as sub-prime lenders, offering credit at high interest rates usually to people who could not get it elsewhere. Until legislation was introduced 2007, such entities were not subject to licence or regulation. According to the Central Bank, Carlisle Mortgages Limited "is not" and "never was" a regulated entity.
Its client list included, among others, farmers who were asset-rich and cash poor. Although the company is registered to an address on Parnell Square, Mr Fahey wrote to Carlisle Mortgages clients from his home address - a large €2.5m period house in Dublin 4 - and gave them his personal landline number.
In a letter to one farmer who had defaulted on his payments and was facing a possession order on his lands, he explained the rationale of Carlisle Mortgages Ltd:
"People only come to us after failing to get the money elsewhere. We explain to them that we are expensive and before they sign we tell them to contact their solicitors and act on their advice. We will not loan money just to get a high interest rate. Unless we are satisfied that we are helping a client out of a difficult situation and that they are in a position to repay as per the agreement, we will not give them the loan," he wrote.
"Once again, I want to remind you that you are fast running out of time."
In another he wrote: "In fairness it is far too late to start complaining about the high-interest rate when all along you were fully aware of what it was costing."
One farmer, who spoke to the Sunday Independent last week, said Mr Fahey was "very fair" in his dealings with him. He said he was introduced to Carlisle Mortgages in 2007 by a bank, when he wanted to buy land quickly that came up for auction. He borrowed €800,000 at 27pc interest to be paid back over two months, on the assumption that his long-term bank loan would come through. The long-term loan never materialised, and he was stuck in debt to Carlisle Mortgages Ltd.
After being in and out of court over the years, he said the best thing he did was to "start talking" to Frank Fahey and he now hopes to reach a settlement relating to the outstanding six figure debt he owes Carlisle Mortgages Ltd.
Other farmers report gruelling and bitter court battles with Mr Fahey's company. Almost 40 cases taken by Carlisle Mortgages Ltd are listed in the High Court records since 2006.
One previously publicised case is that of Eugene Costello, a farmer from Ballinasloe, Roscommon, who borrowed €450,000 from Carlisle Mortgages Ltd in 2004. A broker who advertised in the Farmers Journal secured the offer for him - a short-term loan at 26pc until the bank processed his long-term loan.
Like the late Tipperary farmer, the loan never materialised from mainstream banks. He too was introduced to Susan Bourton as someone who could secure him long-term credit to pay off his crippling debt to Carlisle. He paid her €8,000 but the finance never materialised.
His debt to Carlisle Mortgages stood at €1.4m in 2014. The firm installed a receiver to sell his 160- acre farmer - Costello succeeded in having the receiver withdrawn for now but the possession order over his land remains. The case is still before the High Court.
Despite tales of tragedy and hardship, the law and the courts are firmly behind Carlisle Mortgages Ltd, a legitimate lending business that in its day clearly filled a gap in the market for short-term finance. The company is still trying to get its money back on loans dating back more than a decade.
But at what cost?
The organiser of next Saturday's meeting, Ken Smollen, said the death of the Tipperary farmer was the seventh debt-related suicide he has heard of in a fortnight.
A former Garda and failed election candidate who has his own financial troubles, Mr Smollen said: "The vast majority of these deaths go unreported, meaning that the problem remains a very hidden and personal one for thousands of people in Ireland," he said.
"We are almost on the eve of the centenary of the 1916 Rising when brave men and women fought and died for Ireland's freedom from tyranny. Right now, 100 years later, the people of Ireland are once more being terrorised, this time in their own homes, not by foreign forces but by Irish - and foreign-owned banks that have received the full support of two successive Irish governments that have willingly thrown hundreds of thousands of our people to the aptly named vulture funds and banking wolves!"