Dan White: Making cash from proper ty is a whole new ball game -- and even sport aces lose
GAA hero Colm O'Rourke has been hit with ¤853k debts from a deal that went wrong. One thing is sure -- he won't be the last
EX-Meath Gaelic footballer Colm O'Rourke has been hit for a judgment of €853,000 for unpaid property-related debts. He is the latest sports personality to fall victim to the property bust. He won't be the last.
NIB went to the High Court to chase RTE sports pundit and former Meath inter-county footballer O'Rourke. The debt relates to his share of a €3.5m loan from the bank to cover the costs of an unsuccessful attempt to secure planning permission for a property development on the outskirts of Navan, Co Meath.
And the latest judgment is almost certainly only the beginning of O'Rourke's problems. The four-man syndicate of which he was a member are also known to have paid a total of €16m for the site.
It is not totally clear how the purchase price was funded but there are known to be loans from Irish Nationwide.
It may not come as much consolation to O'Rourke but he is not alone.
In May former Kilkenny hurler DJ Carey and his partner Sarah Newman were on the receiving end of a €9.5m judgment from AIB.
Meanwhile the EBS hit another former Meath inter-county player, Graham Geraghty, for an €857,000 judgment last year (in fairness to Geraghty it should be pointed out that he has since repaid €530,000).
It isn't just former GAA stars who have got into hot water over failed property investments -- anyone with a few bob to spare was at risk.
What these latest judgments illustrate is that as the Irish property bubble gradually morphed into a mania of epic proportions in the middle years of the last decade hundreds, perhaps thousands of ordinary people with no previous experience of the property market were sucked in.
They were lured by the prospect of apparently easy, risk-free gains.
And it wasn't just former sports stars.
Doctors, solicitors, barristers, teachers, civil servants and countless others were unable to resist the siren calls of the property market.
With their colleagues and neighbours boasting of the huge gains which they had made playing the property market caution was thrown to the winds and huge loans, usually secured by either and/or personal guarantees and the family home were taken out.
The Irish banks, flush with cheap cash from mainland European banks and also lulled into a false sense of security by the seemingly never-ending rise in Irish property prices, were only too happy to keep shovelling out the money to these novice property investors.
Then in August 2007 the credit crunch struck and the financial game of musical chairs that had sustained the Irish property came to a halt.
Suddenly the supply of cheap money to the Irish banks dried up and property prices collapsed.
This left the army of rookie property investors horribly exposed.
The collapse in the property market meant that the hoped- for profits had been replaced by massive losses.
This in turn meant that they were unable to repay their loans or, in many cases, even meet the interest costs.
At the same time the banks, terrified that they wouldn't be repaid all of the money which they had lent and with the property crash having wiped out the security on those loans, were busy calling in loans and exercising the personal guarantees which borrowers had so thoughtlessly given during boom years.
It may not come to much consolation to Messrs O'Rourke, Carey and Geraghty but as the property bust continues they will be joined by many, many more.