I am a bit confused so let me clarify the points.
The parents guaranteed a loan of €150,000.
The borrower has no prospect of repaying this loan.
The parents have agreed to sell their home to pay off the guarantee.
You want the parents to be given time to sell their home.
This seems reasonable and I am not sure why the Credit Union is not going along with it. If they feel that the borrower lied to them, then they are probably annoyed and determined not to negotiate any further.
They might also be under severe pressure from the Financial Regulator for such a large loan which is not performing.
The son should continue to pay what he can - €600 per month.
You should state your case in writing to the Credit Union board and ask for a response in writing.
If the parents are acting in good faith, the court will be very slow to grant an order for possession. Or they may grant it with a delay of 12 months on it.
The one defence the parents may have is if they signed the guarantee or the charge without legal advice. If they did this, then they could challenge the guarantee or the charge.
How much is the house worth?
4)Is there any point exploring a complaint about such a ridiculous loan been given without any consideration to whether it would be paid back, to an account holder with a minimal savings history or the ability of the guarantors to back up the guarantee?
(5) What are the actual rules (if there are any) on the criteria for making such a loan?
I don't think so really. What does your solicitor say?
You could get a second opinion from these guys. New Beginning