Gilmore telling the banks!

Bits_n_Bobs

Jut heard Eamon Gilmore quoted that he's going to tell the banks to sort out their **** and get it together. Great to hear fightin' words like these from Eamon, it reminds me of his stirring 'Frankfurt's way or Labour's way' speech....

Cookie_Monster

what exactly is he planning to try and get them to do?

Bits_n_Bobs

Sort out mortgage arrears. Once and for all. He sounded fierce passionate about it in the news. I can picture him standing tall in the Dail, his suit jacket bursting at the seams and his manly head getting redder and redder as he tells it like it is.

donaghs

Bigger waffler than Bertie. More "something must be done", always short on specifics.

Cookie_Monster

Bits_n_Bobs wrote: »

Sort out mortgage arrears. Once and for all. He sounded fierce passionate about it in the news. I can picture him standing tall in the Dail, his suit jacket bursting at the seams and his manly head getting redder and redder as he tells it like it is.

oh good, so actually force people to pay what they owe or take the houses off them? Bout time.

SpaceTime

I think we need a bit more than giving the banks 'a good talking to' at this stage.

They need to be compelled by legislation and enforcement.

Fratton Fred

SpaceTime wrote: »

I think we need a bit more than giving the banks 'a good talking to' at this stage.

They need to be compelled by legislation and enforcement.

To do what?

SpaceTime

Fratton Fred wrote: »

To do what?

Start actually coming up with realistic solutions to run-away mortgage debts. I'd suggest starting on the buy-to-let pure investment sector and then looking at the family home situation.

oscarBravo

SpaceTime wrote: »

Start actually coming up with realistic solutions to run-away mortgage debts. I'd suggest starting on the buy-to-let pure investment sector and then looking at the family home situation.

You can't compel someone by legislation to "start coming up with realistic solutions". It's not how legislation works.

super_furry

Words are easy, what's he got to offer aside from bluster?

Godge

No politician, despite what they say wants a solution to this problem because there are only two options:

(1) Banks take a strong line, enforcing judgements in courts, putting people out of their family homes, resulting in voters giving out about the government letting the banks do this and not finding "realistic" solutions.

(2) Banks take a weak line, forgiving mortgage debt, here, there and everywhere meaning that the banks' capital deficiencies arise again. Look at BoI, nearly out of the mire, they would be dragged right back into it. The result would probably need a second bank bailout and a continuation of austerity until well into the 2020s. Imagine how voters would react to this second bank bailout.

Instead, we have the scenario whereby the government scolds the banks to do something, the banks do something on a smaller scale over a longer period, with everyone hoping that an upturn in the economy will mean that those in mortgage debt will get new or better jobs and be able to pay their way out of the problem.

SpaceTime

You could compel them to do quite a lot more than they are being compelled to do right now.

I'm not going to get into an argument about what can and can't be done through Oireachtas legislation, but the reality of the situation at the moment is that enough is not being done and reality is not being recognised. The Government can push that if it wanted to through regulations, legislation, regulatory bodies etc etc. There are heaps of tools available to them if they chose to use them.

Our external lenders, particularly the IMF and ECB won't necessarily just put up with it forever either as what is happening at the moment is causing market stagnation.

The economy could actually benefit enormously from a major/further crash in say commercial rents. What's happening at the moment is property's being kept off the market to keep prices 'stable' at a level that was never sustainable in the first place.

The banks and NAMA would like to ensure that we get all the disadvantages of the bubble with none of the advantages of the low prices that should follow a market crash because they're the vested interest that gets their fingers burnt!

mada999

Bits_n_Bobs wrote: »

Jut heard Eamon Gilmore quoted that he's going to tell the banks to sort out their **** and get it together. Great to hear fightin' words like these from Eamon, it reminds me of his stirring 'Frankfurt's way or Labour's way' speech....

mmm referendum comin up...must, try, get, voters, on-board....

jmayo

Cookie_Monster wrote: »

oh good, so actually force people to pay what they owe or take the houses off them? Bout time.

Jaysus you can't be havin the leader of the Labour party demanding that the "poor" be forced to either start paying their mortgages when they can or be evicted out onto the street like the poor people during the famine.

oscarBravo wrote: »

You can't compel someone by legislation to "start coming up with realistic solutions". It's not how legislation works.

Remember this is Ireland where some politicans think we can have dfiffernet drink drive laws depending where you live and you could have people driving on different sides of the road depending on the county.

And yes both of those ideas have been profered by irish politicans.

Godge wrote: »

No politician, despite what they say wants a solution to this problem because there are only two options:

(1) Banks take a strong line, enforcing judgements in courts, putting people out of their family homes, resulting in voters giving out about the government letting the banks do this and not finding "realistic" solutions.

(2) Banks take a weak line, forgiving mortgage debt, here, there and everywhere meaning that the banks' capital deficiencies arise again. Look at BoI, nearly out of the mire, they would be dragged right back into it. The result would probably need a second bank bailout and a continuation of austerity until well into the 2020s. Imagine how voters would react to this second bank bailout.

You forgot 3.
Banks forgive debts and need to find the money from somewhere the government allow them to raid depositors accounts and up charges, including mortgage interest rates for people who are actually paying their mortgages.

Godge

jmayo wrote: »

You forgot 3.
Banks forgive debts and need to find the money from somewhere thus they allow the raiding of depositors accounts and up charges, including mortgage interest rates for people who are actually paying their mortgages.

Well the first of these, as happened in Cyprus, would be part of solution 2, a bank bailout. In the next bank bailout, those with deposits will pay off some of the debts of those with mortgages.

The other point you make is linked to my account of what is happening at the moment. Politicians are giving out. Banks are muddling through, restricting credit, increasing charges, hoping against hope that they don't have to put people out of their homes or enegage in large-scale debt forgiveness. At the end of the day, this is what the majority vote will accept.

COYW

Cookie_Monster wrote: »

oh good, so actually force people to pay what they owe or take the houses off them? Bout time.

What a wonderfully positive step this would be for the country. People being held accountable for their reckless borrowing and living beyond their means. Hell, this might even have a knock on effect and create a culture of accountability in Irish society as a whole.

However, I suspect that Mr. Gilmore isn't going to pursue this path. He will opt for the, 'you were all conned by the nasty bankers' option, that FF/SF are reaping wonderful rewards from in the polls. Mortgage debt forgiveness will be the order of the day on this front.

*I know that there are some people who are in mortgage difficulties due to circumstances beyond their control. However, there are plenty who are not and my comments above are aimed at those.*

SpaceTime

The big problem is that it's all coming from the same pot now that most of the banks are basically nationalised and the state will be the lender of last resort if there's any kind of crisis even at BOI.

I think there should be some more 'creative' solutions though like attaching mortgages to properties like old-style lease hold where they could still be bought and sold, but with an attached multi-generational mortgage instead of land rent.

So, you'd be able to buy a property with a huge impairment in terms of a mortgage attached, but at least it would eventually get paid down.

Maybe something like that could be funded through special rolling bonds?

I think though with non-family homes i.e. investment properties, it's time to get a lot more realistic about repossession and sale. They're not 'homes' to the owners they're simple investments.

This situation is so abnormal and so screwed up that I don't think normal solutions will fix it. We need to really start thinking up new ways of paying it down, restructuring it and making sure nobody gets squashed under the debt mountain in the process and somehow disconnecting it from the state's national debt.