Wednesday, January 19, 2011

Couple miss mortgage payment

Irish couple owe €800m to banks after property spending spree

"The O'Donnells live in a clifftop home in one of Ireland's most salubrious suburban roads and count the U2 frontman Bono among their neighbours." If ever there was a case of money not buying happiness.

Posted by cyril @ 09:43 AM (2287 views)
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15 thoughts on “Couple miss mortgage payment

  • Thatcherschild says:

    Just desserts

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  • well they must be in a bit of trouble for the case to end up in court….this is typical of people described as rich based on debt

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  • With Bono’s financial track record, they would have done better to buy as far away as possible.

    U2? No thanks!

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  • When you owe 800 to the bank it’s your problem, when you owe 800 million it’s theirs.

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  • sibley's b'stard child says:

    I must admit, i’m feeling the whole gamut of emotions after that article; revulsion, incredulity, grudging admiration and hilarity. Then back to revulsion.

    You know that game, ‘seven steps to Kevin Bacon’? This story reminds me of that; how on earth do a lawyer and doctor go from drawing a presumably nice salary in respectable professions to owing six figure (nay, almost seven figures) sums of money. Can someone fill in the blanks for me? Or is this simply leveraging on an epic scale.

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  • they must have had a VERY good relationship with someone in the bank….which should be investigated but never is

    difficult to understand really

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  • I am amazed by their indignation about legal entitlement. The only legal entitlement they will end up with is the debt and we all know who will pay that. I am also saddened as many good companies who have since gone to the wall could have used part of that 800 million to good effect. However, they were not in the ‘property business’ so they had no entitlement to the money.

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  • 3. taffee said…’they must have had a VERY good relationship with someone in the bank….which should be investigated but never is.’

    ~ That would be akin to Sherlock suspecting Holmes, Jekyll sueing Hyde or Becks shafting Posh. 😉

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  • ontheotherhand says:

    They got there the same way the Wilson couple did who were teachers and the same way the Candy brothers did who were nothing. The second they had any equity from a price rise in an earlier property, they leveraged up again and bought more. All the time they meet the agents who bring them the deals, the lawyers who arrange it all, the bankers who see a track record of ‘smart’ investments and so are confident to lend more. All of those people introduce them to investors who back them for the 10% deposit on the $100m deals.

    In a way, if they lose everything then this shows that they must have been innocent believers that property went up forever and that they would hurt nobody. It’s the Candys who made sure they got millions out along the way who must have known there was a big risk, but as long as they were spending Other People’s Money and keeping some of the upside, they didn’t care if a crash came.

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  • “O’Donnell … is … on a list of 64 potential legal advisers approved by Ireland’s National Asset Management Agency – the new state bank which has been charged with clearing the mountain of bad debt amassed by property developers during the good times.”

    This bit caught my eye.

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  • Sounds like a good example of putting into practice that old business saw – Buy high, sell low.
    Or is it the other way round?

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  • This reminds me of Inside Track where people from almost any background could quickly build a £1.2M property empire whilst remaining conveniently oblivious to the fact that they also had £1.02m of secured borrowing.

    @taffee (Wednesday, January 19, 2011 10:56AM) they must have had a VERY good relationship with someone in the bank….which should be investigated but never is – difficult to understand really

    This might provide a bit of a clue

    Will Barclays senior management be punished over advice failings? – Extract below:-

    The FSA’s £7.7m fine against Barclays for poor investment advice has been a long time coming……….Yesterday’s notice from the FSA reveals widespread failures around client suitability, staff training, customer literature and sales monitoring procedures which caused £60m of client losses. The regulator also says Barclays were aware of the problems in June 2008 but did not take appropriate action.

    Last February, Park Row was censured and chief executive Peter Sprung was personally fined £49,000 and banned for five years after the FSA found advice suitability failings at the firm. No fine was imposed on the company as it was being wound down although Park Row’s parent company Rotal Liver was ordered to pay between £5m and £7.8m in compensation.

    The FSA said Sprung’s behaviour fell short of what was expected of a senior manager at an authorised firm. His failings included not ensuring advisers properly evidenced the suitability of sales, offered suitable advice to customers or had adequate systems and controls.

    Now if the FSA felt it right to personally fine and ban Peter Sprung why has no-one in the senior management at Barclays been named and shamed and given a fine and/or ban for similar supervisory failings?

    One of most interesting conclusions from Which?’s recent banking commission was that the senior management at banks were not being held accountable for the unhealthy sales culture they encourage to blossom beneath them. The Commission urged the FSA to take enforcement action against senior management for any remuneration structures or sales targets that contribute to misselling.

    Will any senior manager at Barclays face a similar punishment to the one handed out to Sprung? If the answer is no the FSA should explain why.

    FULL ARTICLE @ http://www.moneymarketing.co.uk/regulation/will-barclays-senior-management-be-punished-over-advice-failings?/1024746.article

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  • greenshootsandleaves says:

    Possibly a hint of vagueness surrounding the claim that 60% of the flats have been sold. It wouldn’t be 60% of Phase One (or some such developerspeak), would it?

    PS We can now see the interior design skills of some Premiership footballers in an entirely new light.

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  • greenshootsandleaves says:

    Sorry, that was intended for the Hyde Park thread!

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  • tenyearstogetmymoneyback says:

    I wonder if they got an invitation to 1 Hyde Park ?
    I would imagine they fit most of the profile for propective customers
    (the only exception being existing debts which probably isn’t even considered)

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