Bank sues couple for triple amount of original loan
A BANK is seeking repossession of a couple's home over their alleged failure to repay €246,000, made up mainly of interest on a €87,600 loan they got to buy an investment property in 1991.
Irish Banking Resolution Corporation (IBRC), the state-owned bank formed after Anglo Irish Bank and Irish Nationwide Building Society (INBS) were amalgamated and nationalised, has asked the High Court for an order for possession of Patrick and Patricia Raftery's home at Cloonbrackna Court, Roscommon town.
It arises out of a bridging loan it claims was advanced to them by INBS in December 1991.
The couple have opposed the action, claiming the bank is not entitled to an order for possession and is in breach of duty.
In its proceedings, the IRBC claims the 16pc loan was advanced for three months to help with the purchase of a property known as 'The Hob' in Charlestown, Co Mayo.
'The Hob' contained a coffee shop, post office and licenced premises.
In an Indenture of Mortgage agreement entered into between the parties in November 1992, IBRC claims the couple agreed to repay the IR£69,000 loan and to put up the family home by way of a charge as security.
Arising out of their alleged failure to repay the loan in 1996, the then INBS took possession of the premises and sold it for IR£72,500.
IBRC claims that an outstanding amount on the original loan, including interest, has not been repaid.
The bank claims the couple now owes them more than €246,000, and they are seeking an order from the High Court for possession of the family home.
The Rafterys have opposed the proceedings and in separate defences they both deny the bank's claims that they have failed to repay the loan as alleged.
Colm Smyth, counsel for Mrs Raftery, and Ciaran O'Loughlin, for Mr Raftery, have asked the court to declare the banks application as a non-suit on the basis that the loan agreements relied on by the bank were not valid because it breached the 1976 Family Home Protection Act.
Mr Raftery also alleges the bank sold the premises and its publicans licence for a sum that was a lot less than the market value.
It had been bought in 1991 for £86,000.
Mrs Raftery also claims the bank was negligent when it failed to obtain the best market price for the property.
The property, it was claimed, was disposed of with undue haste, and the bank did not act in good faith when it came to disposing of the investment premises.
It is further alleged by Mrs Raftery that the bank had applied an interest rate applicable to the initial loan for longer than the three months agreed between the parties and that the loan and subsequent mortgage agreement was entered into in breach of the 1976 home Protection Act.
The bank, represented by Ronan Murphy, rejects those claims.
The action before Mr Justice John Hedigan continues.