Bank of Ireland attempt to repossess family home despite no arrears on mortgage

An application by Bank of Ireland to repossess a family’s home, despite the mortgage arrears having been paid off, was struck out at the High Court yesterday.

The bank agreed there were no arrears on the Co Limerick home and it was in fact “slightly prepaid”, but argued the mortgage was “unsustainable into the future”.

Counsel for the lender told Mr Justice Brian McGovern the bank was aware the family owed other debts worth €265,000 to someone else. The bank also claimed the property was not a family home, but had been an investment property that the family had now moved into and, by doing so, had “lost rental income from it”. It was entitled to bring the action because the mortgage had been defaulted on.

Family home
But counsel for the family said the property was always their home. They moved into it in 2005 and moved out for a brief period to live with a parent who subsequently went into a nursing home. His property was sold and the family was able to pay off €82,000 to the bank. Counsel also claimed the bank had not complied with the Central Bank code for mortgage arrears resolution "in any shape or form" and had "ridden rough-shod" over it.

Mr Justice McGovern said there might be something in the apprehension of the bank as the husband’s job as an electrician had suffered in the downturn, but he was “not going to start crystal-ball gazing”.

“If they are in default in the future, I’m sure the bank won’t be slow,” he said. He struck out the case, but gave an order for costs against the family on the basis legal proceedings were initiated before the arrears were paid off.

Insolvency arrangement
In a separate case, a mother of two from Dublin said she was desperately trying to hold on to her family home and sought extra time for an application for a personal insolvency arrangement to be processed.

The woman and her husband had borrowed €300,000 from Stepstone Mortgage Funding Ltd to buy their property in the city centre and had topped up their mortgage by €150,000 in 2007 to invest in their business, a year before the economic crash.

The business “completely failed”, the woman told the court. They now owe arrears of €134,000.

She said she had two young children, one with “special requirements” and her husband was ill, requiring hospitalisation once a week.

Mr Justice McGovern agreed to adjourn the case to February on the basis the couple continue paying €500 a month.