Permanent TSB extortionate rate on SVR

liammur

Kev. wrote: »

Permanent TSB are charging a disgraceful 5.2% on Standard Variable Rate mortgages,

AIB are charging around 3%- These two banks are state owned.

This rate is the highest in Europe as far as I know...

Disgraceful behaviour from PTSB,The Central Bank and the fine Minister Noonan.

I fed figures into http://www.loanclc.com/ and came up with the following...
A person with a E 300.000 mortgage over 25 years will be paying.....
PTSB - E1,788.90
AIB - E1,422.63

---

A difference of around E360 a Month. Just because they are with a different bank.......This isnt the real figure though because a person with an AIB Mortgage pays off more capital each month so all in all it works out at around E500 a month over the lifetime

Over their mortgages a PTSB customer will pay around E110,000 more that an AIB customer for the EXACT same loan.

A person who is with PTSB cannot move mortgage because no banks are accepting switchers...they are stuck

Any opinions/thoughts?

How is our economy meant to recover when people are paying these rates to banks...
20,000 people are on SVR with PTSB and another 20,000 are coming into it when their fixed rate expires...

Nice to see this bank being put under pressure. They scorched shareholders, and treat their customers with contempt.

LostinKildare

liammur wrote: »

Nice to see this bank being put under pressure. They scorched shareholders, and treat their customers with contempt.

It's a step, but it's a weak step. Every month that Noonan, Elderfield et al faff about asking PTSB to pretty please consider cutting their rate, people are struggling -- and perhaps finally failing, thus becoming burdens on the taxpayer -- to meet these mortgages payments that have been jacked up to cover the bank's losses on other people's loans.

For goodness' sake, the state is a 99% shareholder in this bank. Just tell them to do it, and if they don't, replace the whole board with people who will!

This must be nipped in the bud. It's not just about PTSB variable customers -- the other banks are eyeing this up and looking to get in on the game, too. In today's Independent, Bank of Ireland makes noises about their plan to burden their captive SVR customers with their losses from the new insolvency rules introduced by the govt:

THOUSANDS of homeowners face higher mortgage repayments because of new personal insolvency rules, it emerged last night.
The new rules mean some of the most hard-pressed households will get part of their mortgage debt written off.
But other customers face the prospect of higher interest rates on their mortgages, as banks cushion themselves against the risk of these losses.
Any rise in rates would hit those customers on variable mortgages, while people with tracker mortgages would not be affected.
Bank of Ireland boss Richie Boucher yesterday admitted he was looking at raising the interest rates on home loans to compensate for this added "risk".
He said the new insolvency laws, due later this year, could mark a "fundamental" change in the playing field for banks and make mortgage lending more risky.
"We price for risk," he said, implying that the cost could be passed on to customers in the form of higher interest rates.
It would mean that the bank increases its variable interest rate for existing customers, or charges a higher rate to new borrowers -- potentially putting the bailed-out bank on a collision course with the Government.
However, it is highly likely other banks will be thinking along the same lines, and if Bank of Ireland moves to increase its rates then it will set a precedent.
It is understood at least one other bank is considering similar measures.
Bank of Ireland gave out half of Ireland's new mortgages last year.
About a third of Bank of Ireland's mortgage holders are on variable rates, and at a typical rate of between 3.4pc and 3.84pc are already paying almost double the interest of those with tracker mortgages.
People on tracker mortgages will not be hit by any rises instigated by the banks as the European Central Bank controls tracker rates.
The threat of higher interest rates comes a week after international ratings agency Moody's said up to a quarter of the mortgages in Irish banks were vulnerable to being written down under the new insolvency rule, which could trigger "widespread debt forgiveness".
http://www.independent.ie/business/personal-finance/latest-news/mortgage-hike-threat-to-cushion-bank-debt-3025301.html

liammur

LostinKildare wrote: »

It's a step, but it's a weak step. Every month that Noonan, Elderfield et al faff about asking PTSB to pretty please consider cutting their rate, people are struggling -- and perhaps finally failing, thus becoming burdens on the taxpayer -- to meet these mortgages payments that have been jacked up to cover the bank's losses on other people's loans.

For goodness' sake, the state is a 99% shareholder in this bank. Just tell them to do it, and if they don't, replace the whole board with people who will!

This must be nipped in the bud. It's not just about PTSB variable customers -- the other banks are eyeing this up and looking to get in on the game, too. In today's Independent, Bank of Ireland makes noises about their plan to burden their captive SVR customers with their losses from the new insolvency rules introduced by the govt:

Actually, Noonan just wanted to wipe the shareholders so the state would get Ir Life.

It's now in the state's interests that the bank charges higher rates, so pressure needs to be put on them.

LostinKildare

liammur wrote: »

Actually, Noonan just wanted to wipe the shareholders so the state would get Ir Life.

It's now in the state's interests that the bank charges higher rates, so pressure needs to be put on them.

Yep, just as it would be in the interest of a shop owner to charge customers 20 euros for a liter of milk and 50 euros for bread after a disaster when they cannot get those necessities anywhere else.

But there is a tipping point. At some stage you can't buy bread anymore and you starve or you riot.

In the scenario where you're being soaked for mortgage payments, you probably won't riot (though IMO if ever there was a good reason for a targeted mortgage strike, this is it), but you lose your tenuous grip on self-sufficiency and then you become dependent on the rest of the taxpayers to bail you out in one way or another.

The more I think about this ... how is this not a criminal offence? Section 5 of the Competition Act 2002
"prohibits the abuse of a dominant position. It is important to recognise that it does not prohibit a dominant position - only its abuse. Generally a firm is considered to be dominant if it is able to act without taking account of the reaction of its customers or its rivals, e.g. a firm which can increase its prices unilaterally because it knows that its customers have few if any satisfactory alternative sources of supply and therefore little choice but to pay the higher price."
http://www.tca.ie/EN/Enforcing-Competition-Law/Competition-Law.aspx

Any thoughts?

liammur

LostinKildare wrote: »

Yep, just as it would be in the interest of a shop owner to charge customers 20 euros for a liter of milk and 50 euros for bread after a disaster when they cannot get those necessities anywhere else.

But there is a tipping point. At some stage you can't buy bread anymore and you starve or you riot.

In the scenario where you're being soaked for mortgage payments, you probably won't riot (though IMO if ever there was a good reason for a targeted mortgage strike, this is it), but you lose your tenuous grip on self-sufficiency and then you become dependent on the rest of the taxpayers to bail you out in one way or another.

The more I think about this ... how is this not a criminal offence? Section 5 of the Competition Act 2002
"prohibits the abuse of a dominant position. It is important to recognise that it does not prohibit a dominant position - only its abuse. Generally a firm is considered to be dominant if it is able to act without taking account of the reaction of its customers or its rivals, e.g. a firm which can increase its prices unilaterally because it knows that its customers have few if any satisfactory alternative sources of supply and therefore little choice but to pay the higher price."
http://www.tca.ie/EN/Enforcing-Competition-Law/Competition-Law.aspx

Any thoughts?

The problem is the government are too short sighted. They don't give a damn about people struggling. Noonan could tell us it's a lifestyle choice.

ArmaniJeanss

LostinKildare wrote: »

a firm is considered to be dominant if it is able to act without taking account of the reaction of its customers or its rivals, e.g. a firm which can increase its prices unilaterally because it knows that its customers have few if any satisfactory alternative sources of supply and therefore little choice but to pay the higher price."
http://www.tca.ie/EN/Enforcing-Competition-Law/Competition-Law.aspx

Any thoughts?

I don't think 'dominant position' or 'monopoly' rules apply here, as the customer is at liberty to take his mortgage business to any of the other bank/building societies.

LostinKildare

ArmaniJeanss wrote: »

I don't think 'dominant position' or 'monopoly' rules apply here, as the customer is at liberty to take his mortgage business to any of the other bank/building societies.

But that's just it --- no they can't. Negative equity, as well as unemployment, and for those who still have jobs, cuts to wages and/or job instability make it impossible for the vast majority of mortgage holders to move to another bank. If any of these factors affects you, no other bank will look at you.

The competitive market has collapsed. If this were not so, PTSB would not be charging this rate, because everyone would flee it.

ArmaniJeanss

LostinKildare wrote: »

But that's just it --- no they can't. Negative equity, as well as unemployment, and for those who still have jobs, cuts to wages and/or job instability make it impossible for the vast majority of mortgage holders to move to another bank. If any of these factors affects you, no other bank will look at you.

The competitive market has collapsed. If this were not so, PTSB would not be able to charge this rate, because everyone would flee it.

Its an interesting point alright, there are plenty of alternates but none of them actually want your business. So does that make PTSB a racketeer?

I guess if a pub in Dublin charged €10 a pint this would be ok as every other pub is still charging €5. However if you were barred from every other pub then suddenly it seems extortionate.

I honestly don't know, might be worth posting on the legal board?

Godge

LostinKildare wrote: »

But that's just it --- no they can't. Negative equity, as well as unemployment, and for those who still have jobs, cuts to wages and/or job instability make it impossible for the vast majority of mortgage holders to move to another bank. If any of these factors affects you, no other bank will look at you.

The competitive market has collapsed. If this were not so, PTSB would be charging this rate, because everyone would flee it.

Of course you could switch, you would probably need someone to go guarantor and the new bank would probably charge you a higher rate but you could switch.

Take somebody who has car insurance, crashes the car three times in a year, all his own fault, comes to renewal time, the insurance company has to give him a quote, €4,000, more than the value of his car. No other insurance company will touch him. He can't move except for an exorbitant charge.

LostinKildare

Godge wrote: »

Of course you could switch, you would probably need someone to go guarantor and the new bank would probably charge you a higher rate but you could switch.

Take somebody who has car insurance, crashes the car three times in a year, all his own fault, comes to renewal time, the insurance company has to give him a quote, €4,000, more than the value of his car. No other insurance company will touch him. He can't move except for an exorbitant charge.

What a ridiculous response. We are talking about the ability to switch in order to pay less, not more. FFS, why would a consumer seek a higher rate?

Do you understand competitition at all?

Godge

LostinKildare wrote: »

What a ridiculous response. We are talking about the ability to switch in order to pay less, not more. FFS, why would a consumer seek a higher rate?

Do you understand competitition at all?

But if every other bank would charge you as a new customer a much higher rate and seek guarantees because of the risk you carry because of negative equity, then you are getting a good deal with your existing bank! The requirement to have a cheaper rate available to you elsewhere is not a sign of competition. That is why bad drivers get stuck with the same insurance company and people who can't afford to repay loans get stuck with the same bank. It is a function of the mortgage-holders personal circumstances that prevents them getting a cheap loan, not the banks.

I am quite sure that if I was a permanent civil servant with €60,000 in cash saved and no other debt, I could get a good deal on a mortgage from any of the banks and they would be falling over themselves to loan to me. Unfortunately, I am not but the competition is there, it is just some people have put themselves into the position of not being able to take advantage of it.

To give another example, if you live somewhere up the Wicklow mountains and can only get satellite broadband, is it a breach of competition law that you can't get cable? No, it is not, it is your decision to live there that has caused the problem.

liammur

Godge wrote: »

But if every other bank would charge you as a new customer a much higher rate and seek guarantees because of the risk you carry because of negative equity, then you are getting a good deal with your existing bank! The requirement to have a cheaper rate available to you elsewhere is not a sign of competition. That is why bad drivers get stuck with the same insurance company and people who can't afford to repay loans get stuck with the same bank. It is a function of the mortgage-holders personal circumstances that prevents them getting a cheap loan, not the banks.

I am quite sure that if I was a permanent civil servant with €60,000 in cash saved and no other debt, I could get a good deal on a mortgage from any of the banks and they would be falling over themselves to loan to me. Unfortunately, I am not but the competition is there, it is just some people have put themselves into the position of not being able to take advantage of it.

To give another example, if you live somewhere up the Wicklow mountains and can only get satellite broadband, is it a breach of competition law that you can't get cable? No, it is not, it is your decision to live there that has caused the problem.

It's a little more complicated than that. PTSB has higher rates because they didn't go into NAMA, and therefore to protect shareholder value they increased interest rates over time.

For this reason, they were nationalised, now that the government owns the bank, it wants to take any future profits. So the government wipes out shareholders, and are now reluctant to do what the Troika wanted in the very first place.

LostinKildare

ArmaniJeanss wrote: »

Its an interesting point alright, there are plenty of alternates but none of them actually want your business. So does that make PTSB a racketeer?

I guess if a pub in Dublin charged €10 a pint this would be ok as every other pub is still charging €5. However if you were barred from every other pub then suddenly it seems extortionate.

Yeah, and even then, you could refuse to pay the €10 and forgo your pint. A mortgage holder is legally bound to continue paying her mortgage.

Godge wrote: »

But if every other bank would charge you as a new customer a much higher rate and seek guarantees because of the risk you carry because of negative equity, then you are getting a good deal with your existing bank! The requirement to have a cheaper rate available to you elsewhere is not a sign of competition. That is why bad drivers get stuck with the same insurance company and people who can't afford to repay loans get stuck with the same bank. It is a function of the mortgage-holders personal circumstances that prevents them getting a cheap loan, not the banks.

I am quite sure that if I was a permanent civil servant with €60,000 in cash saved and no other debt, I could get a good deal on a mortgage from any of the banks and they would be falling over themselves to loan to me. Unfortunately, I am not but the competition is there, it is just some people have put themselves into the position of not being able to take advantage of it.

To give another example, if you live somewhere up the Wicklow mountains and can only get satellite broadband, is it a breach of competition law that you can't get cable? No, it is not, it is your decision to live there that has caused the problem.

I think you are missing the point. Yes, of course it is the mortgage holders’ personal circumstances – primarily, negative equity and loss of income -- that are preventing them from being able to move their mortgages to a different bank with lower rates.

They are a captive market. Because of their circumstances, they cannot access more favourable rates (or even less favourable rates, per your bizarre suggestion, since there aren’t any less favourable rates!)

Nor can they simply refuse to pay the high prices and forgo the product or delay their purchase til conditions improve, as can your bad driver, your permanent civil servant with €60,000, and your man in Wicklow.

Their lack of options is not in itself the problem, though.

The problem is how the business to which they are captive –-- in this case, a business owned by the state --- takes advantage of the situation to charge much higher prices because they know that customers have no satisfactory options.

Here again is the quote from the Competition Authority:

a firm is considered to be dominant if it is able to act without taking account of the reaction of its customers or its rivals, e.g. a firm which can increase its prices unilaterally because it knows that its customers have few if any satisfactory alternative sources of supply and therefore little choice but to pay the higher price

Godge

LostinKildare wrote: »

Yeah, and even then, you could refuse to pay the €10 and forgo your pint. A mortgage holder is legally bound to continue paying her mortgage.




I think you are missing the point. Yes, of course it is the mortgage holders’ personal circumstances – primarily, negative equity and loss of income -- that are preventing them from being able to move their mortgages to a different bank with lower rates.

They are a captive market. Because of their circumstances, they cannot access more favourable rates (or even less favourable rates, per your bizarre suggestion, since there aren’t any less favourable rates!)

Nor can they simply refuse to pay the high prices and forgo the product or delay their purchase til conditions improve, as can your bad driver, your permanent civil servant with €60,000, and your man in Wicklow.

Their lack of options is not in itself the problem, though.

The problem is how the business to which they are captive –-- in this case, a business owned by the state --- takes advantage of the situation to charge much higher prices because they know that customers have no satisfactory options.

Here again is the quote from the Competition Authority:

No, I am not missing the point. The bit in bold is the important point. If you make yourself a captive market

- have three car crashes and ten penalty points (captive of an insurance company)
- purchase a house that ends up in negative equity and beyond your means (captive of Permanent TSB)
- over-extend your credit card (become a captive of MBNA)
- decide you only want an exclusive architect to design your house (stuck with his quote)
- only follow one sporting team (have to pay their season ticket prices)

then you make yourself a victim of these companies. Nobody is tying a person with €10,000 credit card debt to MBNA, it is just that nobody else will touch him and why should they? If someone follows Man Utd. and they put up their ticket prices by 10%, there is no obligation to create a second cheaper Man Utd. to keep the punter happy.

Competition Law is designed to deal with a situation where a company or supplier behaves in a certain way. In all of the above it is the behaviour of the consumer that has created the situation. An investigation would look at the mortgage market and say there are lots of providers with lots of different rates, if someone can't move because of something they have done (lost their job, bought in the wrong place, over-stretched themselves) it is not a competition issue.

I am not saying that Permanent TSB are not greedy but I am saying that competition law has no application.

LostinKildare

Godge wrote: »

No, I am not missing the point. The bit in bold is the important point. If you make yourself a captive market

- have three car crashes and ten penalty points (captive of an insurance company)
- purchase a house that ends up in negative equity and beyond your means (captive of Permanent TSB)
- over-extend your credit card (become a captive of MBNA)
- decide you only want an exclusive architect to design your house (stuck with his quote)
- only follow one sporting team (have to pay their season ticket prices)

then you make yourself a victim of these companies. Nobody is tying a person with €10,000 credit card debt to MBNA, it is just that nobody else will touch him and why should they? If someone follows Man Utd. and they put up their ticket prices by 10%, there is no obligation to create a second cheaper Man Utd. to keep the punter happy.

Competition Law is designed to deal with a situation where a company or supplier behaves in a certain way. In all of the above it is the behaviour of the consumer that has created the situation. An investigation would look at the mortgage market and say there are lots of providers with lots of different rates, if someone can't move because of something they have done (lost their job, bought in the wrong place, over-stretched themselves) it is not a competition issue.

I am not saying that Permanent TSB are not greedy but I am saying that competition law has no application.

You do not have to have a car.
A ManUtd fan does not have to buy season tickets.
You do not have to use an exclusive architect.

In each of those cases, the seller can say, "this is the price, take it or leave it."

Fair enough. You can leave it. Refuse to pay; do without or go some place else if you can.

But you cannot refuse to pay a mortgage once it's drawn down, you are legally obliged to pay it. In a normal, functioning competitive market, although you cannot refuse to pay, you can satisfy the mortgage by transferring the mortgage to a competing bank if they will have you; in this dysfunctional market, for the vast majority of consumers buffeted by the crash, that is not possible.

Your view that PTSB mortgage holders have only themselves to blame -- that they've "[made themselves] a victim" of the bank's price gouging by having taken up a mortgage at all -- is strange and also kind of offensive.

And also possibly moot. As far as I can see, competition law doesn't address any potential failings of the consumer -- it certainly doesn't seem to make any judgments about whether the consumer "asked for it"; it is interested in the behavior of the company. However, I'm not a lawyer; I started a thread over in the Legal Discussion forum so maybe we'll get a better informed view.

But on the face of it, the quoted example from the Competition Authority's web site is absolutely fitting: PTSB has increased its prices unilaterally because it knows that its customers have few if any satisfactory alternative sources of supply and therefore little choice but to pay the higher price.

Godge

LostinKildare wrote: »

You do not have to have a car.
A ManUtd fan does not have to buy season tickets.
You do not have to use an exclusive architect.

In each of those cases, the seller can say, "this is the price, take it or leave it."

Fair enough. You can leave it. Refuse to pay; do without or go some place else if you can.

But you cannot refuse to pay a mortgage once it's drawn down, you are legally obliged to pay it. In a normal, functioning competitive market, although you cannot refuse to pay, you can satisfy the mortgage by transferring the mortgage to a competing bank if they will have you; in this dysfunctional market, for the vast majority of consumers buffeted by the crash, that is not possible.

Your view that PTSB mortgage holders have only themselves to blame -- that they've "[made themselves] a victim" of the bank's price gouging by having taken up a mortgage at all -- is strange and also kind of offensive.

And also possibly moot. As far as I can see, competition law doesn't address any potential failings of the consumer -- it certainly doesn't seem to make any judgments about whether the consumer "asked for it"; it is interested in the behavior of the company. However, I'm not a lawyer; I started a thread over in the Legal Discussion forum so maybe we'll get a better informed view.

But on the face of it, the quoted example from the Competition Authority's web site is absolutely fitting: PTSB has increased its prices unilaterally because it knows that its customers have few if any satisfactory alternative sources of supply and therefore little choice but to pay the higher price.

You can default, go bankrupt and move into rental accommodation so there are other options. You can sell, pay back most of the mortgage, move into social housing and pay back the smaller amount of debt over 40 years. See it is only no option if you insist on holding onto the house or the car or the credit card purchase or following Man Utd. It is the inability of most Irish people to treat house purchase like the purchase of anything else that is the problem.

Yes, competition law is about the behaviour of the company, that is the point, but if the company did nothing wrong and the consumer who is the one who left himself in the stupid position of having only one insurance company who will give him a quote, then tough. Ditto for mortgage debt or credit card debt.

LostinKildare

Godge wrote: »

You can default, go bankrupt and move into rental accommodation so there are other options. You can sell, pay back most of the mortgage, move into social housing and pay back the smaller amount of debt over 40 years. See it is only no option if you insist on holding onto the house or the car or the credit card purchase or following Man Utd. It is the inability of most Irish people to treat house purchase like the purchase of anything else that is the problem.

Yes, competition law is about the behaviour of the company, that is the point, but if the company did nothing wrong and the consumer who is the one who left himself in the stupid position of having only one insurance company who will give him a quote, then tough. Ditto for mortgage debt or credit card debt.

So, it's fine for a bank to force its customers to pay silly rates in order to cover its losses on other loans, because the customers have the option of pauperising themselves and their families and becoming dependent on the state, as well as leaving the bank and the taxpayers with wedge of their debt due to bankruptcy.

Oh, and those customers have only themselves blame for the bank's sharp practice, because of their stupidity in ever undertaking a mortgage.

Yeah, okay.

Anybody else have anything reasonable to say?

Godge

LostinKildare wrote: »

So, it's fine for a bank to force its customers to pay silly rates in order to cover its losses on other loans, because the customers have the option of pauperising themselves and their families and becoming dependent on the state, as well as leaving the bank and the taxpayers with wedge of their debt due to bankruptcy.

Oh, and those customers have only themselves blame for the bank's sharp practice, because of their stupidity in ever undertaking a mortgage.

Yeah, okay.

Anybody else have anything reasonable to say?

Wait a minute here, don't lose the plot. I didn't say it was okay, I didn't say it was fine, I just said that it was not an offence under competition law.

You lose the argument so you throw the toys out of the pram and have a rant about a different issue.

Just because the alternatives are unpalatable doesn't mean they don't exist and that will be the important point in any case taken.

jluv

Went to PTSB for mortgage.Looking for €150,000 in 2007. They were practically insisting I take €200,000. They said "finish the garden,buy a car" etc.Thankfully I was too scared to do it.
Started out on fixed rate of2.5% approx.When fixed finished it would have been 4.5% to fix again. Went to bank and they advised me against this as they said it was too high a rate and variable rate would never reach that. Boy do I regret that. 5.7% now.€200 more to pay.As a single income household it's tough. Interesting that someone says you can't go with another bank as was thinking of refinancing..

Sponge Bob

You can go to another bank but it is difficult to remortgage nowadays compare to how it use to be. If your income and job is stable it is worth a try.

LostinKildare

Godge wrote: »

Wait a minute here, don't lose the plot. I didn't say it was okay, I didn't say it was fine, I just said that it was not an offence under competition law.

Perhaps it was your spirited defence of the banks position and your blaming of the consumer that confused me . . . statements like this

Godge wrote: »

if the company did nothing wrong and the consumer who is the one who left himself in the stupid position of having only one insurance company who will give him a quote, then tough. Ditto for mortgage debt or credit card debt.

---

Godge wrote: »

You lose the argument so you throw the toys out of the pram and have a rant about a different issue.

Just because the alternatives are unpalatable doesn't mean they don't exist and that will be the important point in any case taken.

I don't think I lost the argument, I just think we're on polar opposite sides and can't progress it any further. You seem committed to your view that someone who, for example, undertook a very reasonable mortgage in 2000 on a fairly priced property and has faithfully paid it, but perhaps has had their income drop by a third through no fault of their own, or has been hit by negative equity because of the economic collapse, again through no fault of their own -- that that person has been stupid, and if they find themselves in a position where the bank is gouging them, well that's their own fault. I cannot agree. And I don't think that's at all comparable to a person who has been in multiple car crashes and has racked up a load of penalty points, or a person who went wild with a credit card, knowing full well the precise high rates they would have to pay back. To my mind, those people do bear responsibility for their actions.

I also cannot agree that default and bankruptcy is a reasonable option for a person who would be financially sound enough to be able to continue to pay their mortgage unaided, if it were at one of the non-usurious rates set by any one of the other banks in Ireland. That is, if PTSB weren't charging 400 or 500 euros/month more than any other bank.

You say you're talking specifically about the Competition Act, yet you refuse to address the definition given by the Competition Authority, although I've asked you to several times.

a firm is considered to be dominant if it is able to act without taking account of the reaction of its customers or its rivals, e.g. a firm which can increase its prices unilaterally because it knows that its customers have few if any satisfactory alternative sources of supply and therefore little choice but to pay the higher price

Default and bankruptcy are not a satisfactory alternative source of supply.

Certainly, the Competition Act may not apply here, but I don't think it's because default would be considered a satisfactory option. And I don't think it's because a judge or investigator would look at a person who cannot move their mortgage because his wages were cut in half and say, "enh, this situation is yer own fault." There's no indication that the behavior of the consumer has any bearing on the law -- which seems to be completely focused on what the company does in terms of pricing -- so if you are truly concerned only about the law, then I don't know why you're going on about the culpability of the consumer.

Anyway, we're not gonna agree. Let's not kill this thread with our useless back-and-forth.

LostinKildare

Sponge Bob wrote: »

You can go to another bank but it is difficult to remortgage nowadays compare to how it use to be. If your income and job is stable it is worth a try.

+1. Yes, definitely try. If you're in positive equity and your employment/wages are stable you might be able to switch.

Noonan is supposed to produce a bank restructuring plan for the Troika by the end of April. Don't know if it will address PTSB, but word on the street is that PTSB is a dead man walking. Possibly the deposits and performing mortgages (SVRs) will go to AIB or BOI; the trackers (because they are all loss-making) will go to Anglo Irish.

In such a case I'd guess the SVR will align with the new owner's SVR, right? So in one way or another, this may be resolved over the next few months.

liammur

LostinKildare wrote: »

+1. Yes, definitely try. If you're in positive equity and your employment/wages are stable you might be able to switch.

Noonan is supposed to produce a bank restructuring plan for the Troika by the end of April. Don't know if it will address PTSB, but word on the street is that PTSB is a dead man walking. Possibly the deposits and performing mortgages (SVRs) will go to AIB or BOI; the trackers (because they are all loss-making) will go to Anglo Irish.

In such a case I'd guess the SVR will align with the new owner's SVR, right? So in one way or another, this may be resolved over the next few months.

The government wanted that group for Irish Life, that's worth more than a billion. They have now got that off the shareholders, wiping them out by 99%. They don't seem too concerned about the plight of people stuck with huge mortgages though.

jased10s

At least Dick Turpin wore a mask when robbing you.

BornToKill

liammur wrote: »

The government wanted that group for Irish Life, that's worth more than a billion. They have now got that off the shareholders, wiping them out by 99%. They don't seem too concerned about the plight of people stuck with huge mortgages though.

The State was obliged to acquire PTSb when it became apparent that it could not meet the prudential capital requirements set by the Central Bank. Subsequent attempts to sell Irish Life proved unsuccessful casting doubt both on your unsupported assertion and your valuation.

Kev.

Sponge Bob wrote: »

You can go to another bank but it is difficult to remortgage nowadays compare to how it use to be. If your income and job is stable it is worth a try.

Its impossible to switch mortgage to another bank now...it cant be done...

Unless you have a LTV of less than 80%

liammur

BornToKill wrote: »

The State was obliged to acquire PTSb when it became apparent that it could not meet the prudential capital requirements set by the Central Bank. Subsequent attempts to sell Irish Life proved unsuccessful casting doubt both on your unsupported assertion and your valuation.

A small bit of knowledge is a dangerous thing, and so it is proven with your comment.

Ir Life failed to sell simply because they put it up for sale when the € was on the verge of collapse. I shouldn't have to point basic points such as this.

BornToKill

In fairness, you asserted that Irish Life is worth over €1bn. In fact it is worth what someone is pay for it. It was put up for sale and it failed to sell. Now you raise the instability of the euro as a new argument but ignore that Bank of Ireland secured an investment of over a billion euro in that environment.

liammur

BornToKill wrote: »

In fairness, you asserted that Irish Life is worth over €1bn. In fact it is worth what someone is pay for it. It was put up for sale and it failed to sell. Now you raise the instability of the euro as a new argument but ignore that Bank of Ireland secured an investment of over a billion euro in that environment.

That's true, the euro argument was the one put forward by Canada Life. But there are others, practically everyone knows the directors and government acted in a most unfair way, companies may not want to get involved now. Whereas R Boucher stood up for the shareholders and got them a great deal. Likewise AIB.
The government are trying to block court action investors are taking...why I wonder ?

Then you have directors trying to block an investor who got elected on the board:
I was elected to the Board of Irish Life & Permanent Group Holdings plc ("ILPGH") on 20 July 2011 by 67.5% majority of votes at the Extraordinary General Meeting (the "EGM").
The Central Bank of Ireland (the "CBI") approved my appointment on 22 December 2011, subject to a training that ILPGH were mandated to organise prior to the commencement of my Board appointment. The CBI referred ILPGH regarding the training in question to the Institute of Directors in Ireland (the "IOD"). ILPGH have been continuously and consistently stalling and procrastinating in respect of organising the training in question.
My ILPGH Board appointment has been taking more than 7 months at this point – by far the longest Director appointment in the history of any Irish public company – almost twice as long as an average appointment of any ILPGH Director.
In this context, I have contacted the IOD myself. The IOD has actually organised the training in question for this coming Saturday, 25 February 2012. The training agenda has been finalised in detail and the training has been confirmed several times in writing.
Today, ILPGH forced the IOD to cancel the training and refused to pay for the training.
16 ILPGH shareholders sue ILPGH in this regard. The matter of the illegal and obstructive oppression of the ILPGH shareholders by ILPGH will be taken up by the High Court in Dublin on Monday, 27 February 2012, at 11 am, at the Chancery Court 5, Four Courts, Dublin.

Kev.

Fianna Fáil has tabled a private member's motion for discussion in the Dáil next Tuesday and Wednesday evening between 7.30 pm and 9 pm with the vote on Wednesday at 9 pm.



That Dáil Éireann:

notes that:

- the level of mortgage repayments, negative equity and mortgage arrears is imposing a significant burden on many thousands of Irish families;

- the latest mortgage arrears statistics from the Central Bank show that the level of arrears is increasing at an accelerating rate;

- the standard variable interest rate for residential mortgages charged by State-owned permanent tsb is substantially out of line with that charged by other mortgage providers in receipt of State support and is placing unacceptable financial pressure on the bank’s variable rate customers;

- normal competitive forces which would allow customers with high mortgage costs to switch to an alternative provider are not currently present in the marketplace effectively trapping customers with high standard variable rate mortgages;

- the Government put AIB under considerable public pressure to reduce its standard variable interest rate in line with the ECB rate reduction in November 2011 but is applying a ‘hands off’ approach in relation to permanent tsb

- the lack of credit for SMEs is having a detrimental impact on economic activity, is impeding the country’s economic recovery and is costing jobs;

- the Governor of the Central Bank has recently commented that credit conditions are tougher in Ireland for SMEs than in any other country in Europe both in terms of costs and availability

- certain financial institutions are attaching unreasonable terms and conditions to offers of new lending to many businesses and are often making unilateral changes to the lending arrangements in place with businesses

- the lending performance of the banks is currently being measured by the amount of new credit sanctioned rather than the amount actually drawn down and put into circulation in the economy

and resolves:

- to call on the Government, as the controlling shareholder in Irish Life and Permanent, to use all means possible to bring about a reduction in the standard variable interest rate being charged by permanent tsb on its residential customers in order to bring it into line with rates being charged by other mortgage lenders in the market and

- to call on the Government to measure the new lending performance of the banks by the amount credit actually drawn down and circulated in the economy rather than by loan approvals or repackaging of existing loan facilities and

- to call on the Government to set out its overall implementation strategy in respect of the Inter-Departmental Mortgage Arrears Working Group, known as the ‘Keane report, and to detail all other steps it plans to take to address the escalating mortgage arrears crisis.



If you are affected by this issue, you should contact your TD and ask him to sign you in for the debate and ask him to speak on the motion. If you can make it on only one of the nights, Wednesday night would be better as the vote will be taken then.

Alternatively you can contact Kevin Barrett at kevin.barrett@oireachtas.ie or by phone at 01 - 6183794. Kevin is the Economic Policy Advisor to Michael McGrath TD.