Start Mortgages - Were they properly authorised to lend?

Interesting case being heard in the High Court

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Mr Gunn (represented by anewbeginning.ie) claims that Start Mortgages says it is legally authorised in the State but he says the company relies on a Statutory Instrument from 2004, in which the Consumer Director of the Irish Financial Services Regulatory Authority, Mary O'Dea, prescribed Start Mortgages as a credit institution in the State.

Mr Gunn's legal team says Ms O'Dea has no authority, power or function to make such an order.

They say that the power to prescribe a credit institution is vested exclusively within the Central Bank of Ireland.


So what if the High Court finds in Mr Gunn's favour - will the mortgage then be void ab initio? Will all lending by Start mortgages?

I would think it highly unlikely.

If someone traded without authorisation, then the Financial Regulator would take action against them. Even then, I doubt if their loans would be void, although perhaps something could be done about the interest rates charged.

If Start applied for authorisation and believed that they were properly authorised, then I suspect that they have little case to answer.

The mortgage may well be ruled void ab initio. The courts have done so in the past in other cases.

If that happens the bank will try to sue for it as a civil debt and go through the motions in the civil courts.

December 16th will be one to watch then, I presume there is a chance of the mortgage being voided otherwise the judge wouldn't have given him permission to challenge?

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Exactly. If there was no chance of succeeding it would have been shot down straight away.