Step Low

Pretty much as low as we are likely to find this side of Christmas. A lender repossessed the home of a Waterford couple which they shared with their special needs child. The pair had previously worked for Waterford Crystal but had since lost their jobs when the company folded. In debt and arrears they desperately tried to save their home. The lender, Stepstone Mortgage Funding Ltd, usuriously refused to renegotiate the terms. Phone calls met with no compassion. The couple had earlier written to the company requesting negotiation but were ignored. The excuse later given by the company was a ‘regrettable’ administrative oversight. Waffle.

The monthly payment amounted to the not inconsiderable sum of €2,422. In most households two jobs would need to be held down to sustain that level of repayment. Unable to obtain mortgage interest relief because they were in arrears the couple, in a bid to retain their home, offered the lender a monthly payment of €800. No mean feat for a family on benefits. Stepstone demanded €1000 knowing this to be beyond the family’s means. ‘I offered all my carer’s allowance, they said no’ the tear filled mother explained. Even the judge asked legal counsel representing the lenders to accept the €800, but not an inch were the heartless swine of Stepstone willing to budge. Then the company had the chutzpah to issue the following statement: ‘we do all that we can to assist borrowers when they find themselves in financial difficulty ... repossession will always be a last resort.’ Bollix.

The judge hearing the case offered words of sympathy, protesting that he was powerless to do anything other than help the powerful pursue their quarry. That he did not adjourn and in the interim call for a moratorium on all home repossessions was because he did not want to. Rather he rebuked those who took out loans on the grounds that if they borrowed money they were under obligation to repay. Of course, but under what conditions? Here the judge was confirming his role – to uphold the strong against the weak. Just to rub it in Stepstone asked for their legal costs to be paid for by the family. The ‘sympathetic’ judge awarded that as well.

Green Party senator Dan Boyle promised that the case would be raised at cabinet level and accused the lender of having behaved "appallingly". His party colleague TD Paul Gogarty might shout ‘fuck you too Senator Boyle’ in exasperation at Boyle having spoken out on behalf of the disadvantaged but it is good that he raised it nonetheless. Labour’s Ciarán Lynch told the Dáil, that subprime lenders like Stepstone were ‘screwing people to the wall.’

The victim of Stepstone, a young mother, exclaimed, ‘I’m sorry I ever went to them, they brought me to hell and back and they can have the house.’ But they should not have it. It would be a crime were that to happen.
The recently proposed Home Defence law should not be instituted to afford protection only against the John 'Frog' Wards of the world. But we would be justified in suspecting if Padraig Nally had confronted and dealt with Stepstone in the same fashion as he did with Ward, he would still be in prison struggling through a life sentence. Nally was right when he told RTE that 'the criminal is more active now than ever in this country'; active in their pursuit of the homes of people who don't have the economic power to either pay up or resist.

Any Home Defence law that would seek to defend homes against gangsters would not restrict itself to warding off small fry. It could do much worse than acknowledge that when the aggressor forces a weaker opponent into a retreat, scorched earth is a time honoured tactic designed to render worthless the ground taken.

If some Christmas spirit animated by an anathema for Scrooge was to bulldoze the house to the ground before the greedy lenders got their hands on it few would really care, viewing it as the type of Christmas present Stepstone should get every year and throughout the year to boot.


  1. Do Irish rates near the 14% of U.S. homes in foreclosure? The government's loan modification plan has resulted in hardly any permanent adjustments in debt relief. I hope Ireland can find a better arrangement than America here; we are entangled along with millions in this run-around now as the banks keep changing the rules.

    My sympathies lie with this family; meanwhile Wall Street's banks with their TARP bailouts court executives and live high off the proverbial hogs that they are. The left pushed the bailouts for the rich through after newly elected Obama panicked media & legislators; the right backed their own campaign funders in Big Business; meanwhile the rate of repossessions inexorably increases the year since. Capitalism certainly's working in a recession recovery-- for Scrooge instead of the Cratchits. Ye olde Xmas carol.

  2. Capitalism equals organized crime.

  3. who are stepstoe ops stepstone I mean could someone put a name and face on those bastards and maybe instead of bulldozing the repossesed house someone might bulldoze their homes preferably with the cunts in them Marty F

  4. We witness the 'rule of law' in all its dishonest and hypocritical glory.

  5. If we elect governments that maintain an economic order that makes a home 'an economic commodity', then this sort of thing is absolutely inevitable, and the only people entitled to whinge about it are those who have resolutely opposed it.

    This family would be better abandoning such a high-cost home, and going rental or buying something cheaper. I have friends who have had to do this, well before the economic downturn.

    Are the Irish people prepared to elect a government that will ban the buying and selling of homes for private gain? I wish they would, but I doubt it, and until they do, evictions are inevitable.

  6. Seán Mór, this seems an absolutist either/or position. Implicit in it is that when people elect governments they endorse everything governments do; that there is no strategic space for applying constraints. I think neither of these implications follow from elections. The public outcry over this case suggests that people favour a moratorium on house repossession even if they did vote in the last election for government parties; reform has always been a valuable asset to disadvantaged people. Where the worst effects of anything can be alleviated it should be attempted. Why should the couple rent or buy a cheaper home? Why can't the lender reduce the cost?

  7. In your article Mackers it appears that the lender was prepared to reduce the payments to less than 50% of the original agreement. The fact that they decided not to go any further than that has then been used to castigate them. I'm not defending the lender and my sympathy is with anyone who loses their home, but I just think that it's more the system itself. All lenders are forced to think, not of individual cases, but of the cost of opening the floodgates to thousands of other clients, and how they themselves can survive in a market economy.

    I know my position may appear a bit absolutist, but I do believe that the Irish people have opted for a market economy, and will continue to do so, and that we collectively have to accept that this is an evitable result of backing a system that turns homes into economic commodities. Sure, there needs to be flexibility within that (and in actual fact I can see flexibility from the lender, the judge and the homeowners buried in your article), but sometimes the flexibility will not go far enough. That's what has happened in this case, in my view.

    I haven't seen this house, but €2,200 a month seems like a whole lot of money to me.

  8. Have to say I agree with Sean Mor here. I came home from Asia after 5yrs to find huses over four times the asking price that they were when I left. People were tripping over themselves to buy bigger and better at every turn, even gazumping as late as the signing of contracts. It was greed at it's most blatant and disgusting worst.
    A 100,000 loan was estimated at 450e a month over 30 do the maths yourselves about this home. If the lender was prepared to reduce to 1000 a month then fair enough. Personally I have no time for 'high fliers' who escalated the housing market and fed the catastrophic property boom. You make your bed you lie in cannot have your cake and eat it. NO SYMPATHY.

  9. Seán Mór, It strikes me that your sympathy is not with the couple but very much with the lender. There is nothing I can find in your posts that would show you to be critical of the lender and a lot to support the view that you were at least less understanding of the family. You made the obligatory nod to the family but the substance of your argument is very much against them.

    I think the argument you make should very much be out there and given due consideration. The simplictic two legs good four legs bad argument is just that - simplistic. Nevertheless, I fail to see how the borrower can be made to take the lion's share of the culpability when the recession, caused more by lenders than borrowers, kicked in against them.

    You are right to suggest the problem is systemic but why should the family rather than the lender carry the effects of the systemic failure? The lender could much easier do without the 200 than the family could.

  10. Larry, there is no doubt that the housing market has exploded and greed has fuelled it. But the victims of that greed are often the buyer who has to pay exorbitant costs. People want to own their homes for a variety of reasons which cannot simply be reduced to greed or high flying. Most of the home owners I know hardly fit into the high flying model. Many of them went through the jails and have rarely been soaring to the dizzying heights It might be to give their children something at a later date, to live a quiet life, their only way out of a depressing neighbourhood - whatever. In a market economy people should be allowed to own their home as much as they do their car.

  11. I agree with the point that there doesn't seem to be too much sympathy for the family in my post. There already was plenty of that in your article, and I suppose I was just coming at it from another perspective, rather than repeat the article.

    I have spent the 5 years before 2008 listening to the 'working class' (or a particular section of them), gleefully discuss the buying and selling of houses, even buying up houses abroad, and making money, and using their own houses as a money-making commodity, that it has engendered a deep resentment of that whole way of life in me.

    It is hard for me to overly sympathise with homeowners I don't know, and it is hard for me to denounce lenders I don't know either; so I don't want to feign excessive sympathy or hatred for anyone here, but I am honest in saying that ultimately I sympathis with someone losing their current home and maybe having to downgrade (I don't think they'll end up on the streets). What I do know is that I am totally opposed to the buying and selling of houses for individual profit, and the system that promotes that.

    So many people were trying to get as far up the property ladder as possible, lenders, bankers, developers and even different grades of homeowner, that no-one was left holding the bloody ladder at the bottom.

    If this family can be provided with a home that is adequate to their needs, and which they can afford, then that might be a better solution than sitting on a mountain of debt. At €800 a month, they'll most likely have a better abode than mine!

    The opposition parties in the Dáil are involved in a bit of fake concern in relation to this case. They will have to oversee the same thing if/when they are in power.

  12. I've just been taking a look into this case. To the Judge's credit, he put a 6 month stay on the repossession order, which will give them time to make alternative arrangements.

    To the lender's disgrace, and as you pointed out, they applied to have the homeowners pay the costs of the case.

    Interestingly, there were 7 other repossessions in the court that day. I wonder why they didn't get any mention?

    I think in this particular case the arrears of €40,000 made a compromise less likely.

    The state should look at this case because the family added €70,000 to make alterations to the house for the special needs son. If moving him was going to seriously affect his quality of life, then it should be opposed.

    As far as I can ascertain, many of the employees working for this mortgage company also lost their jobs in the economic collapse... although I would need more solid references.

  13. AM, I decry the greed that many in the West have indulged in during the past decade's housing bubble. A lot of crap's been built and a lot languishes half-built as a testament to bad judgments and sordid lies by borrowers and lenders both, surely. Part of the problem in the US: the Bush administration deregulated the banks and, in the name of broadening home ownership under pressure by interest groups, let too many poor people sign up on bad terms that neither they nor the fat cats should have let pass.

    That fiasco aside, Larry & Seán Mór need to remember that many of their neighbors, and us, suffer. We did not try to speculate, lie, or flip houses, but we simply found a breadwinner suddenly or gradually all but out of work.

    My wife's small business plummeted the past two years up to a 95% loss due to the economy. How much control did she have over this? The writers went on strike in Hollywood and had a union to back them up; the little businesses who relied on the film industry for a living had no safety net. Then, the economy slid down right after the end of a 100-day strike when no bills were paid her, no orders placed. Who's fault is it when then we've struggled for our home?

    How much fault, rather, does the bank bear, or the government that now favors to bail out lenders at the expense of millions of homeowners caught out of work? This is a different group than those who lied to get loans, or fudged statements about being able to pay exorbitant rates. Does our wish for clemency, for breathing room after two years of suffering, make my family greedy, getting what we deserve, when we find we want to negotiate fairer terms for our mortgage so as to stay in our home? (We've been here 18 years.)

  14. Fionnchú, I think your situation sums up the argument for me. The alternative arguments expressed in some comments run parallel to the logic that no one should get social benefits because a few on them are greedy scam merchants. While the comment authors never made that point and would probably resile from it their argument rests in the same bed of assumptions.

  15. Seán Mór, again, I think it would be unwise to ignore the caveats and nuances you raise. Yet it does seem you come down firmly on the side of the lender. Nevertheless, your contribution makes for interesting discussion and probes the parameters of the debate. I think the point about homes being used as commodities is worthy of further discussion. But everything can become a commodity - including the human body. Where to draw the line and how to regulate is the challenge. Even outside the market economy we had are villas, dachas and palaces.

  16. Think it's a matter of choice and personal judgement to a greater rather than lesser extent. I was renting with the option to buy in late 2006 early 2007 and under quite a bit of pressure from the wife to buy the house. At 46yrs of age and lookin down the barrel of a 30yr morgage for a beautifully designed but shodily finished house, I copped myself on..THANKFULLY. I just felt I was allowing myself to be passively mugged. So I walked away from it.The mrs never mentions the place now..except to say thank God we didn't do that!!
    I certainly have sympathy for people living in a family home of 18yrs who's small business falls apart for economic reasons beyond their control. What was going on here in pig at the trough leprechaun fantasy island this last few years was greed. PLAIN+SIMPLE. I would wonder did the family need a half million euro house+ cant help wonder were any benefits allowance for the disabled child added into the calculations when applying for the morgage to beef up the borrowing power. Cynical I know..but be honest..that's how disgusting the entire situation was.
    Mackers, I'm neither a Thatcherite /Reaganite nor anti home ownership. But greed in this country was repulsive. The banks need no defending the government are doing enough of that. I do have sympathy with homeowners in the States who smashed walls, ripped out plumbing and wiring and all fittings before being evicted. That's what I'd be doing.

  17. Sean,

    It is hardly surprising working people get caught up in the housing bubble, as it has been encouraged by both the media and political elite.

    Far to many people came to see a home as a money making machine, not something to keep the cold out and attempt to live a decent life in. Seeing it as such thing, they had little protection from the downside of home ownership, and have failed to understand how the property business actually works.

    There is not a house builder or estate agent on earth who does not understand they're business is cyclical. House prices go up to be sure, but as surely as night follows day, if they rise way above their worth, they also always come crashing down.

    When house prices rise to ridiculous levels and crash to the ground, as always when this occurs it is the little folk who get caught out. OK you can blame them for their stupidity and arrogance if you wish and I am not suggesting they deserve a round of applause. But if we human beings are punished simply for acting stupidly, I am certain at one time or another we would all be in the dog house. (if not worse) What we need is for governments to make people understand the shortcomings of home ownership, so in the future they do not repeat their mistakes and others learn from them. Sadly I will not be holding my breath to await this happening.

    The fact is the banks who stood behind these mortgages were bailed out by us, the tax payers, whilst we may not feel comfortable with this, most people, rightly or wrongly, accept this as a necessity.

    Yet when an individual family have the prospect of finding themselves on the street, we are far to ready to blame them for their human weakness in taking out a mortgage they could not afford.

    I believe this road is not only a mistake, but very dangerous, as what it does is place the blame for sub prime on 'human weakness' when in reality it was no such thing but a fundamental flaw in our economic system.

    To cut a long story short, what I am saying is if we continue to blame individuals without correcting that fault in the system, we will carry on our merry way repeating the same old mistakes until the next economic crises.

    The reason sub prime has hit the US, UK and Irish economies so hard is because unlike Germany, France and some other EU nations, we have come to see our homes as a money making machine.

    As Fionnchu rightly points out this is why our towns and countryside is jotted with second rate dwellings, or as he put it, "A lot of crap's been built."

  18. seasons greetings to all ,excellent comments dont or couldnt agree with all but the points are well put ,I will leave with this little tale if I may, I owe £4,000 and they call me a crim,if Iowed £40,000 they call me a buisnessman,when I owe £400,00000000 they call me a goverment WHEYHEY I,m getting there, nollaig shona daiobh Marty F