Saturday 3 December 2016

Woman 'took on 20pc loan rate to pay tax bill and ex-husband'

Dearbhail McDonald Legal Editor

Published 15/03/2011 | 05:00

A WOMAN took out a mortgage with a 20pc interest rate to pay off a tax bill and a loan she took out to honour a separation agreement with her ex-husband.

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Yesterday the High Court, which has been asked to grant an order repossessing her pub and home in Co Clare, heard she was "thrown on the lenders of last resort" because of her personal circumstances.

In the first case of its kind in modern Irish legal history, the High Court has been asked to reduce the interest rate charged by subprime lender Secured Property Loans Limited (SPL) to as little as 5pc.

The woman received independent legal advice before she borrowed €125,000 from SPL in 2008.

The 12-month loan was secured on her rural pub where she also lives.

Barrister Brian Sugrue, representing the woman, told High Court judge Ms Justice Mary Laffoy that the woman took out the loan from "a position of extreme financial security", and said that the rates charged by mainstream lenders fall far below the 20pc charged by SPL.

The woman had only ever intended the loan to be a bridging facility until she could arrange new finance with a much lower interest rate.

Mr Sugrue said that the rate was "unconscionable" and told Judge Laffoy that it was a market reality for borrowers in the woman's position that had determined the interest rate rather than any calculated risk.

SPL said that there was no evidence of the courts intervening to set aside loans where interest rates as high as 60pc were charged.

Benefit

Barrister Alastair Rutherdale, for SPL, said that until the 1980s when dedicated consumer credit laws were introduced, the rate of interest charged by moneylenders was 39pc, almost twice as much as that charged by SPL.

Mr Rutherdale said that the woman had the full benefit of independent legal advice and had not objected to the terms and conditions of the mortgage loan when she took it out three years ago.

The case continues.

Separately, the High Court has granted 16 repossession orders to lenders.

High Court Judge Ms Justice Elizabeth Dunne yesterday placed a stay on a repossession order granted to Start Mortgages Limited after an elderly farmer from Galway asked for five years to sell his family farm, once valued at more than €1m.

The farmer, with a 29-year- old son who has a mental age of 9, is €21,500 in arrears on a €100,000 mortgage he took out on his house in 2007.

"I want to take all I have and leave him (his son) a good home, that's my ambition," he said.

Irish Independent

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