Behind with your mortgage payments?
RTÉ Radio One’s Today with Sean O’Rourke reporter Valerie Cox visited the Phoenix Project a centre for distressed borrowers in Portlaoise this morning.
There she met elderly couple Cheryl and Joe.
Valerie Cox: “Cheryl and Joe’s situation has put them in pure fear. They took out a mortgage 14 years ago of €115,00 but they both lost their jobs and they couldn’t pay it, they now owe €93,000 and they are both on social welfare, but here’s the thing they are still paying €450 a month into their mortgage, they should be paying €680 and this means that they’re left with very little money. This is how they’re living…”
Joe: “We have the social welfare, but that’s going to, that’s been going to it”
Cox: “So how much have you got left to live on?”
Cheryl: “Just €20 or €30 Euros a week, that’s all that’s left.”
Cox: “And do you pay for your food out of that?”
Cheryl: “Yes. That’s it.”
Cox: “So how do you manage, what do you buy?”
Cheryl: “Well, I buy basics, Tea, milk bread I can cook from small cheap food you know I make it stretch because we live in the country, everybody cooks.”
Cox: “What would a particular dinner be?”
Cheryl: “Mince anyway and potatoes. We have our own vegetables, a few vegetables. Valerie, we don’t have a dinner during the week. We have it at the weekend.”
Cox: “What do you survive on?”
Cheryl: “Bread, and fruit, because we have apple trees, we had loads of apples this year, and vegetables.”
Cox: “And what about fixed charges this year like the property tax, how are you going to manage with that?
Joe: “Coming up, we have to cut back on something else, something goes to one side till the property tax is paid, then make it up along again…”
Cox: “But sure there’s no room to cut back there.”
Cheryl: “I honestly don’t know in March how we’ll pay it. I didn’t answer the letter yet, I just don’t know, and the water, I haven’t, I don’t even want to know about the water.”
Cox: “And what about Christmas, now?”
Cheryl: “No. What Christmas? There is no Christmas. No, I don’t care about Christmas any more. It doesn’t feel like… I’m sick of Christmas at this moment in time. You’d think you had just money to hand out for everything, the television never stops, the shops are at it, it’s everywhere, I hate it now at this moment.”
Joe: “Yeah, Christmas now is a thing of the past for us, we don’t have money to enjoy it any more Years ago in the building and everything you had a few pound there to get a few presents here and there but that day is all gone. “
Cheryl: “I’d just like to hold on to the house, to be honest, that would be a present.”
Listen back here
Valerie Cox: ‘This is Bill, he’s got 5 children he’s 54 years old, and he made a major mistake, Sean, during the boom years by investing 100,000 Euro in bank shares, and borrowing the money from the bank to buy them. Now, his mortgage is 480,000, it should be costing him 2800 a month and he’s paying 600, he’s still in a job but at much lower wages, and you’re also going to hear Dave Kavanagh in this piece.”
Bill: “I’m paying as much as I can pay and it just doesn’t seem to be enough.”
Cox: “And what do you do with the rest of your money, the left-overs? What’s your lifestyle like?”
Bill: “Very meagre. I don’t go out drinking, or I don’t know how long it is since I was at a cinema or anything like that, I’m quite happy to live the way I’m living but there’s definitely nothing extra nothing extra at all.”
Cox: “Bill is probably, he’s coming from a new class of people, if you like, who are in danger of losing their homes.”
Dave Kavanagh [Phoenix financial Planner]: “Bill is a professional person and we’re finding it very hard to get traction with the bank, full financial information has been sent in, seeking a meeting with the bank and we haven’t been successful a yet. In one particular call the bank were very, very rude, we sought the transcript of the tape and I’d advise anyone who has a similar experience to seek that part of the meeting, you should seek particular transcript because it can be very useful in defending yourself.
Bill: “I have been affected mentally by this whole scenario and my family has as well. I went to my doctor a month ago and he listened to me and he decided he would write a letter to this particular bank. Within a month of that I got a letter to say they were referring my case to a group of solicitors in Dublin and within a week of that, last Monday, I got a letter to say they wanted vacant possession of my home within 7 days so the letter about me being on the edge obviously had no effect on anybody, they came along and put the boot as far into me as they could, with telling me that I’m to be out of my home, gather up my possessions and they would even allow me do that and go, I don’t know where, I would do that with my family.”
Kavanagh: “The legal process is really to frighten people. They believe it drives behavior and drives performance and when a borrower receives a legal letter and when they see they have seven days to leave their house inevitably first of all when a person picks themselves up from the floor they have to do something about it but when the bank hasn’t followed any due process, when they haven’t followed the code where people are entitled to a fair hearing and that your case is fairly looked at, in Bill’s case here none of that has happened.”
O’Rourke: “Right, so there we have Dave Kavanagh again outlining what can happen and, with him, Bill. You spoke to a barrister, as well, Valerie?
Cox: “Yes. Now, Paul Comiskey-O’Keeffe, he’s a barrister with the Phoenix Project and he’s quite new to Phoenix, he told me he thought he knew what it was all about until he joined Phoenix.
Paul Comiskey-O’Keeffe: “I thought from practice at the bar that I understood how bad the problem was in the country. I have a number of mortgage cases that I’ve done in the past and that I do regularly now but, when I came here, the amount of more people who will never make it to a solicitor’s office to get help became so apparent to me. The other thing that became apparent was, the lack of humanity that was going on, and it sounds dramatic but the first, the other analogy that came to mind was that this place feels like a refugee camp for economic or financial refugees. Every case that comes in here is very simple. It’s about a debt. If people don’t pay it, it is inevitably going to get legal. The sad thing is that if no solution is found somebody will live in the house for the price that many people who coming in here can manage to pay but it will be a different person paying it to a different bank rather than the person who calls it a home.”
Cox: “That seems terribly unfair.”
Comiskey-O’Keeffe: “It is ubiquitous in that every single case has that hallmark and in the real world the house will be sold to someone else who’ll buy it at market value. So many cases here it can be said the present loan to value is 80% You can say loan to value ratio is 80% but Banks are not prepared to finance their current customer, the person who calls it a home at 80%. But someone else will come along after the ‘For Sale’ sign has gone up and done that exact same thing with a different bank.
Cox: “What about people who get all those bank letters and phone calls? Do you think some people are giving up too easily?”
Comiskey-O’Keeffe: “They don’t do anything is the problem. The ostrich approach is as effective as heroin in making you forget your problems and just as addictive because it is the perfect solution to something that doesn’t have a solution. It doesn’t achieve anything though. Unfortunately, you have a lot of people here and when they come in the door you can see the stress etched on their face. Usually it’s a combination of smiling and crying when you’re shaking their hand and seeing them out, because they’ve started to deal with it and they’ve started to understand it’s not necessarily as bleak as they thought.”