Gilroy accuses sub-prime lender of ‘conspiracy to defraud’

Start Mortgages is seeking repossession order for Ben Gilroy’s family home in Navan

Ben Gilroy* has accused sub-prime mortgage lender Start Mortgages of "conspiracy to defraud" him through the miscalculation of interest payments on a €310,000 mortgage he took with the company 12 years ago.

Mr Gilroy was before Trim Circuit Court on Monday in a civil case in which Start Mortgages Ltd, now Start Mortgages DAC, is seeking a repossession order against his family home in Athlumney, Navan, Co Meath.

He told the court statements he had recently received from the company show his arrears, previously calculated at €140,000, in fact only stood at €36,000.

Mr Gilroy said in 2006, when he took out the loan, he was paying €2,800 a month when friends of his with a mortgage of a similar size were paying about half that.


No evidence

He also alleges Start sold on his mortgage within a short time of him taking out the loan. A barrister for the company told the court the documentation in the case showed no evidence for this.

Mr Gilroy told county registrar Brídín Concannon that when he knew he was running into trouble with his mortgage, he had been “very pro-active” and had gone to meet Start Mortgages.

He made a number of proposals, including that he and his wife Sarah Jane would sell the house and move to a smaller house, but “nothing would satisfy them”.

When they had gone through the bank accounts, the company had queried money coming into his wife’s account. “We said ’that’s the children’s allowance’ and they even asked for that to be forwarded to them. At that stage, the meeting ended rather abruptly as you can imagine,” he told the court.

Mr Gilroy said he had asked Start Mortgages on that occasion if the correct interest rate was being applied. Only recently he had received a letter to say the company had miscalculated the interest on his mortgage.

“This has to be a conspiracy to commit fraud because I brought it to their attention years ago and I was told I was wrong.”

Mr Gilroy said he had also asked on numerous occasions and at that meeting if his mortgage had been sold on to a third party and had been told it had not.

However, he claimed to have a letter from the company dated December 2006, a month after he took out the mortgage, stating it had been sold and that there was a mortgage sale agreement in place.

He claimed he had been “lied to from the start” and that he had now written to Smart Mortgages to ask when the miscalculations had started and whether he had been put in default at the start, when he was paying €2,800.

Ms Concannon adjourned the case for eight weeks to give Mr Gilroy an opportunity to prepare an affidavit responding to the substantive matter.

Miscalculating arrears

In November, Start, which was bought by US-based vulture fund Lone Star, was forced to temporarily stop repossession proceedings after it emerged it had been miscalculating arrears on accounts. It was in some cases forced to reduce the level of arrears or put people on lower interest rates. The issue is understood to affect thousands of borrowers.

Ninety repossession cases were before county registrar Bridin Concannon yesterday, with orders sought by lenders including Permanent TSB, EBS, Bank of Ireland Mortgage Bank, Haven Mortgages Ltd, Ulster Bank Ireland, Tanager, Pepper Finance Corporation, AIB Mortgage Bank and Springboard Mortgages Ltd.

Representatives from the Money Advice and Budgeting Service (Mabs) were present in court and many of the defendants were urged to engage with them in relation to their mortgage difficulties.

A number of cases involving Tanager were adjourned, pending a decision by the Court of Appeal on significant legal issues of public importance.

*This story was edited on Thursday, March 15th, 2018