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Poverty pit of the Eighties is back, with added guilt

The court report pages in the newspapers don't often reduce you to hysterics. Normally they tell stories of human tragedies as sobering and pathetic as they are tragic. In civil actions they are frequently the culmination of long months, even years of nightmare, as people slip further into mind-numbing pits of rivalry, hatred, resentment or despair. They never end happily: nobody ever wins, as the judges frequently point out.

There was a report during the week of Mr Justice Brian McGovern granting 12 orders of repossession of houses in the course of a single day in the High Court. Another case was adjourned; its details were devastating. A young mother of two who said she was afraid of her mortgage company which had granted her a 40-year loan in 2007, with the payments set at €1,600 a month. She got into difficulties, renegotiated, and was paying €232 a week (€928 per month) until she found herself able to increase this to €300 a week (€1,200 a month). Then she became unemployed, and was now €5,000 in arrears. She was willing, she told the judge, to pay €260 of her weekly €370 social welfare total to the mortgage company, together with a lump sum of €1,600 borrowed from her father.

By the sound of things, she has a supportive father. But what she needs is a job, and they are thin on the ground. And the thought is heartbreaking: her long, lonely days in the house she's likely to lose as she waits for that inevitability, without knowing where she can go, the bright hopes she began with in 2007 as she received the keys of her first home splintered into grimy atoms. Even worse must be the silent nights, the only sound her children's sleep-filled breathing as she stares into the blackness of her future.

And her story is multiplied in its thousands in these dark Irish times. The poverty pit that in the Eighties faced so many people now over the age of 40 is repeating itself, except that it's deeper than before, with the added guilt that in the Eighties nobody had warned us, but today's victims have the bitter reflection that there were countless signs out there that a bubble of 110 per cent mortgages had to burst. But as a nation we wanted to fall for the empty promises of never-ending credit.

And the result is stories like that of the young woman struggling hopelessly to maintain her dignity and her sanity in the face of suffocating fear of the future.

And, thinking about it, I'm reminded of a conversation I had less than a year ago with a member of the board of a financial institution. The financial structure of the country was already imploding, but we were being given assurances that the times of nods and winks, greed and doubtful practices had disappeared forever. People talking about "the culture of the time" was a thing of the past; objective ethics were now, thank goodness, the order of the day. Everyone present nodded sagely, all of them what might be called wheeler-dealers. And I listened as that member of the board of a financial institution agreed with me that of course, 110 per cent mortgages had always been immoral and disgraceful, and preyed on people's vulnerability. But the institution of which this person was a board member had "discussed and discussed" this very issue. But it finally had to "give in" because all other financial institutions were doing it. The pain was dripping in the speaker's voice.

The new objective ethics? One thing is certain: there is no member of the board of a financial institution, from the murky times, or currently, who will lose sleep as that young mother is losing sleep.

But there are other stories, and one of them was told in Judge Brian McGovern's court during the week, a story that quite frankly borders on the farcical it's so bizarre. Judge McGovern wasn't laughing; he criticised "some financial institutions" for granting mortgages without what he called "any proper inquiry" into the applicant's ability to service the loan. Lending agencies had a responsibility, Judge McGovern said, to ensure people's capacity to repay, and it was clear some of them had offered loans to people who "had no capacity ever to repay their debts".

Before him was the case of a couple in Donegal who, it was alleged, were currently spending €1,000 per month on cigarettes. That's 40 cigarettes smoked daily by each of them: maybe they're trying to smoke themselves to death in order to avoid their other financial problems. They're also making brave efforts to fill their minds, probably to avoid having to think about the horrors of their mortgage debt: it was alleged that they are paying €90 per month for television channels. Before signing on the bottom line for that agreement, they may not have heard what so many people frequently say: 120 channels, and damn-all to watch.

But in fairness, the couple had made inroads into their mortgage arrears: last November, they paid their loan company €50. The agreed monthly repayment was €1,015, and the couple's mortgage was now €32,000 in arrears.

The mortgage company had been trying unsuccessfully to contact them since the payment of the €50, possibly to thank them ... or possibly not. But the company was applying to the High Court for repossession of the house in question.

Another sad couple being left tearful on the side of the road? Well again, apparently not. The couple have moved out of the house. It's water-damaged. Well, with all that smoking and TV watching, I suppose it'd be hard to find the time for a bit of DIY. (They're both unemployed, the court was told.)

Most of the time, you feel horribly sorry for people losing their homes. You even see the point of view of financial institutions repossessing houses worth only 40 or 50 per cent of the loans granted on them. But with the skewed thinking behind the granting of loans without what could be called either mental or moral security behind them, and a national culture of couch potatoes "knowing their rights" but never having heard the word "responsibility", you can only laugh helplessly.

Well, it's that or give way to total despair.

Sunday Independent