Thursday 18 December 2014

Dice are loaded in favour of banks, so how can customers beat the house?

Published 01/09/2013 | 12:04

Mortgage-related queries rose by 51 per cent
Mortgage-related queries rose by 51 per cent

THE banker always has the edge. The banker cannot lose. Until today, that is.

Now they have to take your complaints seriously, unless they want to be named and shamed. In the last five years it has been brought home to most of us, in a very painful way, just how powerless we are when faced with the huge financial institutions. And it's not just their very size that is used to frighten and intimidate us, but the dirty tricks and sneaky tactics — like drive-by valuations, the refusal to engage in a meaningful way when we need help, and the whole book-load of Catch-22 clauses that ensure it's always heads they win, tails you lose. Of course, that's only if you are the little guy, struggling to keep paying the bills — but still paying them — just. Or the couple who have fallen behind and face losing their home; or the little business that is a whole family's livelihood. This week, our top team of writers looks at the unethical behaviour of the money men and women who have so much control over our lives and so little apparent gratitude for the massive bank bailout we funded through our taxes. We look at some of the heart-breaking cases.

And we try to figure out — how can you win against the house?

 

CASE STUDIES

FOR Fiachra Daly it was the final straw. Yet another demand arrived from the banks asking that he pay the money he owed on an apartment in which he and his family had not been able to live for the past two years. The former resident of the blighted Priory Hall apartment complex took his own life last July, and Stephanie Meehan, his partner of 17 years, is convinced the pressure from the banks was a factor in his death.

She wrote an open letter to the Taoiseach Enda Kenny outlining her heartfelt conviction that pressure to pay arrears on the apartment was significant in her partner's decision to end his life, leaving behind Stephanie and their two children, Oisin, 7, and Cerys, 2.

Fiachra and Stephanie, their children and 65 other families had to evacuate the Priory Hall complex back in October 2011 when the courts were told of major concerns over fire safety problems and defects in basic construction.

"Fiachra was the happiest man on Earth, he lived for myself, Oisin and Cerys, he never suffered from any form of mental illness or depression, we had been together for 17 years and I never once witnessed any signs," she wrote.

"That is up until the week prior to his death, when we received demands from banks, looking for payment of arrears on a property that we can't live in, asking us to fill out, yet again, forms to request an extension of our moratorium, all for a property we can't live in through no fault of our own.

"The stress, the worry of not being able to provide a safe home for us, his young children, eventually took its toll, as it has on every resident.

"I now have no home, my children have no permanent home, but most importantly, I have no partner and my children have lost their wonderful dad.

"Our future, security and certainty changed the minute we were evacuated and not one thing has changed in two years; every email, phone call, letter seems to have fallen on deaf ears. So I ask you, what will it take now for someone to listen and act on something that should've been dealt with two years ago and saved a lot of taxpayers' money and most of all saved a life?

"I am left with a lifetime of heartache . . . Is there any justice in this country?" she asked.

It's a question being asked by people all around the country who are at the end of their tether dealing with the crushing burden of debt with many at a loss to explain how the banks have dealt with them.

The Sunday Independent has many cases on file of people who have been badly treated or are under pressure in their dealings with the financial institutions.

CASE: Mortgage arrears

THEY are a 50-year-old couple who once ran their own thriving business until the downturn. Now the wife has gone back to work on low wages to try to support a family business, which is down 70 per cent on the good times.

They have their own home but have no pension other than that which will be provided by the State, and no other assets. Their mortgage is in arrears for between two and three years, which amounts to €70,000, because they simply couldn't pay any more, but are struggling to do what they can. They have explained all this to the bank. They promised last Christmas to get on track in 2013. They tried their best and met the January demand, but failed in February, only managing a few hundred euro.

They phoned the bank in March to say they were trying and then phoned again to say sorry when they could not pay what they said.

The bank said "okay", and then came the bombshell – a formal letter from the bank confirming the matter had now been placed in the hands of its solicitor. Now the big fear is that their home, their only real asset, will be repossessed.

CASE: Downsize, demand the banks

THEY are a couple who have their home, valued at €700,000, and they only owe €100,000 on their mortgage. But because of changed circumstances they have been on interest-only mortgage payments for a long time.

One spouse became chronically ill and the other now spends their time as a permanent carer.

The bank wants them to sell and move – to downsize. But the couple have lived there all their married lives. They can't cope with a decision being foisted upon them. In cold, hard terms, a sale could be the right thing, but the couple don't agree. "Where's the humanity?" they ask.

They survive on welfare and are not able to go back to work. Their children have helped pay the interest-only payments until now.

CASE: Retirees in trouble

IF they hadn't moved into property, these retirees would be okay now. Their own home is valued at €700,000 but they bought two investment properties to keep them safe and sound in their old age, just as the crisis began. Now they are on interest-only on one property and a tracker mortgage on the other. The properties are rented to the local authority but are in negative equity by between 40 to 50 per cent. They had to put up a holiday home as collateral. The property in the West was once worth €250,000 but is now valued at less than €100,000.

They do have savings of €100,000 and they'd walk away from all the hassle if they could. At the moment, they are not in default, but the rent doesn't cover full repayments. Capital repayments will begin next year. One of them is retired, the other is on the cusp of retiring. They fear their lump sum of savings is being bled dry. There will be nothing to live on in retirement.

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