Money lenders of last resort

A couple of months ago a Munster man, at his wits end, came to The Journal and told us his story in the hope we could educate others.

The man, whom we will call Jimmy, had nearly lost everything: his sanity, his home, his land and his way of life. All because he tried to borrow money to pay off an existing loan and stabilise his financial affairs.

To do this he turned to The Wise Mortgage Company. With an income of just €9,000 Jimmy was advanced a loan of €66,000. This was backed by the value of his property, estimated to be between €115,000 and €132,000. For over two years, Jimmy managed to meet the monthly repayments of €911 but ran into difficulties soon after.

We chart Jimmy’s experiences with the Wise Mortgage Company, his subsequent encounters with the Home Funding Corporation and explain just how Jimmy paid some €155,000 to clear his loan obligations. That €155,000 comprised of the first two years of repayments Jimmy did meet (over €22,000) and a settlement agreed with a solicitor of some €130,000. The original loan was for €66,000.

Jimmy’s story is not unusual – there have been 69 such cases over the past six years involving the Home Funding Corporation.

There are 80 cases in the legal pipeline. The Journal understands that the profile of the borrower is similar. Farmers, labelled as asset rich and cash poor, are being tempted by loans unavailable from the main lending institutions, suddenly being made available to them.

Many of these farmers have struggled to repay loans in the past and would be considered ‘bad risks’ – but not by the Wise Mortgage Company and the Home Funding Corporation. Exorbitant rates of interest are charged and, in a number of cases, farmers are soon in further financial difficulty and foreclosures on property take place.

This is not illegal. The Wise Mortgage Company and The Home Funding Corporation are legal entities. What they are doing is completely legal. They are offering a service that spells out for their customers exactly what will happen if they default on payments. These two companies are merely exploiting a gap in the regulation of financial lending institutions in this country. This gap has turned out to be a most profitable one.

The modus operandi of the companies is simple. The Wise Mortgage Company loans the money. When a customer runs into financial trouble and cannot make repayments the loan, as is perfectly legal, is sold to The Home Funding Corporation. This bunch pursues the debt with tenacity and ruthlessness. Homes are lost, lives are destroyed.

Huge profits are made.

The crossover in personnel between the Wise Mortgage Company and the Home Funding Corporation is revealing. Many of the same names crop up in both companies. Ron Weisz and his wife, Fiona, are but two.

In the first of a two-part series of investigations, The Journal this week looks at how people have been treated by these two companies.

We report on how these situations are occurring throughout Ireland.

Next week we will follow the money trail and put faces to the names of those making the profits. Don’t miss it.