Recently, banks have been found not to be as astute in making financial decisions as some people believed ( hence their bailout by the Irish taxpayer ). Some may argue that it is non sensical for a bank to pursue a debtor through our courts system for a judgment that the debtor cannot possible repay ( unless they win the lotto ). However, one should consider the said action from the bank's viewpoint.
Mortgage debt in Ireland was sold on by the banks, in some instances, as soon as the ink was dry. The large hedge funds etc., that bought these derivatives ( mortgage debt ) became the true owners of your mortgage. The banks that you lodged your monthly mortgage payment into, merely became loan administrators for these funds. The said bank would get a small percentage for managing the mortgage for these funds.
However some astute banks, had a back up plan in case the said mortgage loans turned bad ( defaulted ). They took out mortgage default insurance. So if the borrower defaulted they would get paid. Some banks got involved in betting against bonds backed by mortgage loans ( credit default swaps ) and did very well out of same. However due to the high overall % of default by both commercial and residential mortgage loans, even these shrewd moves by the banks could not save their balance sheets, the Government stepped in and guaranteed the bank's debts ( The bailout ).
So, what happened next. The bank's got bailed out by taxpayers. ( your USC weekly payment is paying down Government guaranteed bank debt ). However something else happened. The large hedge funds that had originally bought the mortgages from the banks, were notified by the respective bank each time a borrower defaulted on his mortgage. The large hedge fund, who did not wish to waste any time chasing these small individual debts then sold the mortgages back to the originator bank, usually at a substantial discount. So, now the bank has got the mortgage back. What now. Well to cash in on the original mortgage default insurance policy, the bank have to show the insurance company that they have pursued you, the borrower, through the courts and have obtained judgment against you. This is why banks pursue debtor, hopelessly indebted, through our courts system. To get paid trice. Once by the taxpayer in general, then again by purchasing the original mortgage loan off the hedge fund at a substantial discount and then finally by the mortgage insurance company.
So, next time your down the Masters High Court, head in hands, after having been served with summary proceedings seeking judgment against you, spare a tear for the old bank. They are just doing what they are meant to do, make money. It's nothing personal !