Bankers’ Self-Interest, 2 Households Homeless & Suicide
The Author will remain anonymous as this case is still in litigation. We share the story to encourage others who were similarly treated or misled by their banks – to come forward.
The “Bank” is now involved in trying to repossess my family home, along with my partner, his wife and children’s family home. And it looks like they will be successful.
We both have been left with no money at all. One of our employees committed suicide and both my business partner, a husband and father of five young children and myself, a single retiree, have had a decade from hell.
We were transparent in all our dealings with our bank manager (we have had at least eight of them). We were careful to give them prior knowledge of our plans, to provide them with expert reports on planning, development, finance, architectural and engineering strategies, and in every way, we were model customers.
The fact is that this bank decided to take over and sell our assets to save their own balance sheets and no court in Ireland seems able to help.
We never stood a chance. As one of our eight assigned managers said, “You have cracking properties”. Another said, “We’re not playing games”.
How could this be?
Most people who fell foul of the Irish banks could not pay their mortgage because they had lost their job in the recession, or for some other reason were prevented from making their monthly repayments.
Since the publication of the independent report on RBS which investigated the treatment of small and medium sized businesses, I have looked around the Irish banking scene, and it has become clear that the Irish banks followed along the lines laid down by RBS’s global restructuring scheme.
We fell into that category of customers severely injured by the banks.
We were the customer who had a good business, a family home, and whose assets were claimed by the bank, sold off either by receivers or the bank itself, and the money used to swell the bank’s own coffers.
Our bank followed exactly this plan.
In 2004 we had a hundred-year-old property rental business, part rent-controlled tenants, part commercial lettings. We had almost no borrowings and the business had €5 million in cash reserves. Today we have nothing.
Our bank, with whom the company had a long and satisfactory relationship until 2008, suggested two things to us.
First, that we should keep our cash on deposit with them, take out a mortgage for our respective homes, and expand our business for which they promised a very substantial loan.
Perhaps I am a fool, perhaps I am just too trusting. Myself and my business partner agreed. I’ve always lived at the same address in Dublin. My grandfather and my father lived there in a unit on the top floor. The rest of the property was let out. When my father died I bought the house over from the rest of my family. I mortgaged the property to our bank and just drew down what I needed to purchase their share. That would have left enough money to repair the property to allow the commercial letting of all but the top three rooms which is and was my home.
My partner and I concentrated on the business, and repaired and renewed various buildings, to make our property business more efficient and effective, and to increase the value of our assets.
We came up with a plan for a major development on one of our sites. We needed to buy some adjoining properties. We had talked about this to the bank over a period of years from 2004-2007. They had agreed to support us.
In fact, the development was their suggestion!
In conversation, they agreed to lend us €8 million to fund the purchases and the renovations and to develop the site so that it would be lettable.
When it came to look for the money, two things happened. The bank made us wait for more than a year and then came back with an alternative proposition; they would not lend us the €8 million, but a considerably lesser amount, about €7 million. Second, by telephone call a senior official of the bank told us that we would have to invest €1 million of our own money if we wanted the loan. We took the money, invested our own million euro with the bank and waited for the €7 million loan approval.
Now, the story gets a bit strange.
The bank transferred us into the specialist property group, which seems to be just like the RBS GRG, i.e. a group of valuable properites and other assets ripe for the banks taking. We were summoned to an important meeting at the bank. One manager told us that the meeting he would work with us, that we had such a good track record with the bank and so on.
But at the end of the meeting another manager said “we’re going to cancel the €7 million loan”. Shortly after which, the bank began to put serious pressure on us.
It told me to let out those parts of my home to commercial tenants. To do that I asked to draw down the balance of the mortgage to bring the lettings up to a current standard. I was and have still been refused.
We could not continue with this. As for developing the business development site, we had spent much of our cash, buying the properties, but the banks failure to provide the development money meant we couldn’t continue.
And it is from this I conclude that the bank deliberately brought about a situation which enabled them to take the company assets (17 properties) by appointing a receiver over the companies. To date this receiver has never notified us. We are the directors and sole shareholders of the results of the receivership.
We don’t know what was sold, when and for how much.
If there is anyone out there who has had the same or a similar experience, please let us know so that we can show a pattern and see what can be done.
Empowering Change here – you are welcome to share your story – or invite one of our colleagues to interview you about your similar circumstance – message your details in the box at your right.