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There's eviction,and then,there's EVICTION.
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I think the banks have their eye on any other properties and deposits the defaulters have.
Yes but any with serious debt V Income ratio will not have too much of that. I think banks are trying to get outside equity into equation (parents siblings etc). In reaity this ball has being kicked 4-6 years down the road at this stage. Now banks want to use insolvency to keep door open for another 8 years.
In some cases some would be better off going for bankrupty's although our 3 year recovery term is still quite long compared to other juristrictions. Hence Ivan Yates went to the UK to solve his and those with the means are still going there.0 -
There's a bit of a dispute about how many are strategic defaults though. There was some reports (which I cant find) that a large % are trackers. An inference that many are BTL but this is disputed. Either way isn't the general point that there will not be a flood of evictions that will ease the shortage of properties.0
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Farmer Pudsey wrote: »If they can. If you are not paying your full amount it may well be you are a cannot pay as opposed to won't pay. You cannot get blood from a turnip. If a bank repossesses then the ex owner has to find rented accomdation which leaves less income to chase. On top of this it may become unviable to work as social welfare and rent allowance may leave a better lifstyle. SW is minimum income standard so no money for bank to chase.
Better to do a deal give a 30-40% debt forgivness on a house worth less than that and leave this person pay off what may be a viable loan.
Why? The bank should try and recapitalise by selling the house and getting the rest of the mortgage over time. Banks need capital now.0 -
Farmer Pudsey wrote: »Pre 2002 it was estimated that we need about 35-40K houses a year. Yes we overbuild in Leitrim and on the outer edges of Dublin and of other cities and major townes. However most of this excess has been used up. It is 6 years since any major house building has taken place. IMO Dublin will not get any major housing building for 12-18 months at least this means that there will be a back log. As the economy climbs (although you might disagree) the need for housing will increase. Cork, Galway and Limerick are silghtly on the edge how far off are major towns. We see how fast the change is in Dublin can the rest of the country be far behind.
For about 6-18 months where to then . In reality there is about 40-60K houses in a chance of being repossessed, as I have already asked is 25K of them in Dublin, reality says that this is about one years supply where to then.
This is totally wrong. As usual. First of all the 35-45k a year is plucked from a ducks arse. Or somewhere. It certainly has nothing to do with historical population growth in the Irish Republic although it may have been true in 2000 in one year. If you assume that 45k houses are needed per year you are postulating a growth rate per year of about 120k. That's deaths over births and immigration over emigration. That's not historically true nor has it been true since 2008. It was true only during that credit boom. I personally think the rental market is going up because of the bedsit law, pretty sure that the population difference between 2012 and 2012 wasn't population growth. See the CSO on emigration.
In short boom time figures once again.
As for house prices the sales in Dublin last year were 10k. 5k were cash. If you had added 45k houses to daft then prices would have declined massively.
House prices are not just supply and demand, but also credit as we saw in the boom. Or say it another way, the demand is the available credit. Cash is mostly insignificant. Were the market allowed to correct it would have been unimportant percentage.0 -
Frank Lee Midere wrote: »Why? The bank should try and recapitalise by selling the house and getting the rest of the mortgage over time. Banks need capital now.
The reality is that for banks a structure deal is the best outcome. In the case of repossession the house will be sold at a 20-30% discount to present house prices. The borrower will then have to rent and this income will not be available to the bank (rental costs in cities other than Dublin 7-900/months, midsized towns 350-600/month and in the sticks you will find little for less than 300/month) Therefore most borrowers will have little excess income and exiting or not reentering the workforce may be the most viable option. Prime time had a program last night on this subject and while the couple involved were not an ordinary example neither were they extra ordinary and you wonder if the bank had struck a deal 2 years ago
would they have recovered much more of the loan than they now will. A house that had a 240K mortgage sold for 65K I think.
This idea that you can leave ordinary people saddled with 150K+ of unsecured debt and expect to be able to recover any sizable percentage with them renting is like an either an Alice in Wonderland or Goldilocks and the Three Bears tale. The reality is that present insolvency arrangments actually leave bankrupty as a more vianle option.
IMO I suspect most of those that are now advocating repossessions are those that did not buy in Dublin last years as prices started to rise or want an artificial collapse to pick up a cheap house. The reality is as I posted 8 months in another thread houses prices are below building costs but will not remain so for much longer.Frank Lee Midere wrote: »This is totally wrong. As usual. First of all the 35-45k a year is plucked from a ducks arse. Or somewhere. It certainly has nothing to do with historical population growth in the Irish Republic although it may have been true in 2000 in one year. If you assume that 45k houses are needed per year you are postulating a growth rate per year of about 120k. That's deaths over births and immigration over emigration. That's not historically true nor has it been true since 2008. It was true only during that credit boom. I personally think the rental market is going up because of the bedsit law, pretty sure that the population difference between 2012 and 2012 wasn't population growth. See the CSO on emigration.
In short boom time figures once again.
As for house prices the sales in Dublin last year were 10k. 5k were cash. If you had added 45k houses to daft then prices would have declined massively.
House prices are not just supply and demand, but also credit as we saw in the boom. Or say it another way, the demand is the available credit. Cash is mostly insignificant. Were the market allowed to correct it would have been unimportant percentage.
The adjective you should have used was was instead of is, I was referring to pre 2002 as I stated clearly in the post. If we has stayed buildind 30-40K units we would not have had half the issue that arose. At ther height of the boom we build over 60K units/year if memory served me correct. Most of the issue that banks had were they lend for future unsustainable developments and builders had stoped preselling units planning on maximising sale prices as prices were rising 10+%/year. I did not say we need 45K iunits in Dublin I state in the previous threa that we wiil need as hightlighted below in Dublin for a few years( few in my opinion is 2 maybe 3 IMO it will take at least 12+ months still to get projects going so 30K-35K units in year one, 25K units in Year 2 and then 20K units in Dublin to control prices)Farmer Pudsey wrote: »Yes this thread is about an issue with rents going up in Dublin at higher than rates of inflation. Some consider the reason that foreclosing on maybe 60K houses of which maybe 20-25K are in Dublin will solve an issue with housing in Dublin. Foreclosures may be a part of the solution however the largest issue is that we need about 20-35K houses build in Dublin/year for the next few years. However unless the regulatory costs are reduced building costs seem to be above property prices as Micheal Noonan hinted. This bears grim reading for anyone who thinks that housing costs or rents may get cheaper in Dublin in the short term.0 -
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The property market will NEVER stabilise countrywide and restore confidence until all the people who cannot afford their houses either
a - have debt reconstructed
b - lose their homes
c - debt written off0 -
Frank Lee Midere wrote: »Why? The bank should try and recapitalise by selling the house and getting the rest of the mortgage over time. Banks need capital now.
That assume the mortgage holder doesn't go bankrupt. The bank sells at a price higher than the original mortgage. If they can keep the original mortgage holder will they get closer to the original mortgage. But over a much longer term. But some crystal ball gazing I think is needed.0 -
Farmer Pudsey wrote: »The reality is that for banks a structure deal is the best outcome.
It isn't because they will have have a borrower on their books with bad credit history, thus tainting the rest of their loan book and raising their overall borrowing costs.
Structure deals involving debt writeoff and keeping the asset only suit one person, the debtor receiving the discount. Below is a list of the people it doesn't suit:
The bank
The taxpayer
The neighbours who didn't get into trouble paying more to cover the cost of the one who got into trouble in the deep end
Solvent landlords having to compete with landlords not paying their way
Ordinary mortgage payers having to pay increased interest rates to cover the cost of those who are not paying when the bank cannot repossess the security
Never forget that the number of residential mortgages in arrears is quite small as a proportion of population. It's even smaller than the number of new entrants to the rental market, you know the folks who cannot buy the houses that delinquents are not paying for.0 -
It isn't because they will have have a borrower on their books with bad credit history, thus tainting the rest of their loan book and raising their overall borrowing costs.
Structure deals involving debt writeoff and keeping the asset only suit one person, the debtor receiving the discount. Below is a list of the people it doesn't suit:
The bank
The taxpayer
The neighbours who didn't get into trouble paying more to cover the cost of the one who got into trouble in the deep end
Solvent landlords having to compete with landlords not paying their way
Ordinary mortgage payers having to pay increased interest rates to cover the cost of those who are not paying when the bank cannot repossess the security
Never forget that the number of residential mortgages in arrears is quite small as a proportion of population. It's even smaller than the number of new entrants to the rental market, you know the folks who cannot buy the houses that delinquents are not paying for.
First buy to lets are a different issue to issue completely and very few are involved with ordinsry mortgage book. NAMA has sold the D&D book at a 70% discount. Most mortgage default that we are dealing with hers are single loans, only a small percentage would be buy to lets.
Can you explain how it makes economic sence to repossess a house with maybe a 250K loan, sell it for maybe 80K when in all probability orginal owner may have been willing to manage a 150K loan. Now that they are evicted they will uses ever means possible to get rid os remaining unsecure debt.
In this case the bank loses
The taxpayer on the double by maybe having to give rent subsidy and unemployment benifit to owner
The banks customers as we see at present as those on variable mortgages are used to subsidise trackers
The neighbours as cheap short term discounted property may have finiancial effects on them
Rents and investment costs are what dictate landlord solvency0 -
Farmer Pudsey wrote: »First buy to lets are a different issue to issue completely and very few are involved with ordinsry mortgage book. NAMA has sold the D&D book at a 70% discount. Most mortgage default that we are dealing with hers are single loans, only a small percentage would be buy to lets.
Can you explain how it makes economic sence to repossess a house with maybe a 250K loan, sell it for maybe 80K when in all probability orginal owner may have been willing to manage a 150K loan. Now that they are evicted they will uses ever means possible to get rid os remaining unsecure debt.
In this case the bank loses
The taxpayer on the double by maybe having to give rent subsidy and unemployment benifit to owner
The banks customers as we see at present as those on variable mortgages are used to subsidise trackers
The neighbours as cheap short term discounted property may have finiancial effects on them
Rents and investment costs are what dictate landlord solvency
I just did and I'm not engaging in circular arguments with your imaginary scenarios.
The facts are the facts.
The only reason the banks haven't acted is that they are completely insolvent and will melt their books.
However, they have to act at some point unless we're happy to keep pouring money into the banking sector for the next generation.0 -
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I just did and I'm not engaging in circular arguments with your imaginary scenarios.
The facts are the facts.
The only reason the banks haven't acted is that they are completely insolvent and will melt their books.
However, they have to act at some point unless we're happy to keep pouring money into the banking sector for the next generation.
What you are proposing is economic stupidity.
You repossess a house with a mortgage perhaps 3 times it value sell it at a 30% discount when in all likelyhood the borrower will pay back a loan that is higher value than the f@@king house but not as high as orginal loan. I taught that most bankers were idiots but I would not give you a whealbarrow to manage.
Your's are the senario's that are figments of your imgination if you think that after repossessing a house you are likley to recover any more funds from the borrower.
Also while you state that the % of mortgages is small compared to population it is mostly held by a section within a section ie those in the 30-40 age group at this stage with young family's.0 -
Farmer Pudsey wrote: »Also while you state that the % of mortgages is small compared to population it is mostly held by a section within a section ie those in the 30-40 age group at this stage with young family's.
And why should that particular group receive favourable treatment from the taxpayer-funded banks? what is so special about them when previous generations and future generations will have to pay for their house with blood, sweat and hard work and this group are to get let off their mortgages?0 -
nice_guy80 wrote: »The property market will NEVER stabilise countrywide and restore confidence until all the people who cannot afford their houses either
a - have debt reconstructed
b - lose their homes
c - debt written off
If there is debt forgiveness then it will be paid for by the non indebted. Savers money may seem safe in the bank but if the bank is in trouble the new rules allow for a bail in - in other words they can take your money. Even if that doesn`t happen, the ECB is keeping interest rates near zero so savers get very little interest while those with tracker mortgages don`t have to pay so much. Then there is talk of printing money to blackmail savers into spending. If savers are forced to spend, that will boost the domestic economy which helps those with debts. The ECB seem to think nothing of undermining Europe`s competitiveness with the rest of the world caused by these internal stimulus measures. This is why it makes sense for those with money to send it out of Europe to Asia/Africa in order to protect it from being used to bail out those with debts.0 -
And why should that particular group receive favourable treatment from the taxpayer-funded banks? what is so special about them when previous generations and future generations will have to pay for their house with blood, sweat and hard work and this group are to get let off their mortgages?
People always recieve favorable treatment from taxpayers money, multinational grants, Unemployed, Bank bail out, public servants, section 23+50 property relief, farming grants( although it makes us a net reciever of EU funding) etc etc.
Most of us here that advacote working through the mortage book think that repossion should be look at like any other business decision. If it is a case that the best outcome or even the same finiancial out come is to let the owner in the house then what is the point of repossing a house and losing money in the process.
In any buisness you often lose money in a transaction/sale/venture. You work to the best outcome. I sometimes sell cattle at a loss over there cost, but there is not point in incurring a higher loss and you are the loser.
The reality is if these people cannot pay there mortgages, but can pay a loan that is the equivlent or higher in value that the value of the house then this is the best outcome for the bank and the taxpayer.realitykeeper wrote: »If there is debt forgiveness then it will be paid for by the non indebted. Savers money may seem safe in the bank but if the bank is in trouble the new rules allow for a bail in - in other words they can take your money. Even if that doesn`t happen, the ECB is keeping interest rates near zero so savers get very little interest while those with tracker mortgages don`t have to pay so much. Then there is talk of printing money to blackmail savers into spending. If savers are forced to spend, that will boost the domestic economy which helps those with debts. The ECB seem to think nothing of undermining Europe`s competitiveness with the rest of the world caused by these internal stimulus measures. This is why it makes sense for those with money to send it out of Europe to Asia/Africa in order to protect it from being used to bail out those with debts.
Debt forgivness happen all the time, limited companies have a form of debt forgiveness in that it limits the liabilaity of the owner to the equity in the company. The ECB is not keeping rates at 0% for trackers mortgage and definately not for Irish one's. history tells us the ECB dose not give a [EMAIL="f@@k"]f@@k[/EMAIL] about the Irish economy. The reason rates are heading for 0% is because accross the EU the economy is sluggish, Trichet made a balls of that increasing interest rates as the economy went into recession. Dragi want to get wealty Germans spending there Euro's(some hope)
I be slow to send money to Africa or Asia unless you are in the know there the only person to look after your money is yourself. there are few get rich quick schemes. At present there are ample investment opportunites in Ireland that may well bear good returns. We saw what happenent to all those that invested in Crotia, Poland and Spain0 -
And why should that particular group receive favourable treatment from the taxpayer-funded banks? what is so special about them when previous generations and future generations will have to pay for their house with blood, sweat and hard work and this group are to get let off their mortgages?
While we don't have proper information, the indications from MABS is that, yet again, he's wrong. It appears to be folk heading towards the end of their working lives are the ones in arrears, which makes sense as they would have comprised the bulk of the BTL sector.
The 30-40 cohort were only able to afford the one property and while they might be in serious negative equity, they would not necessarily be in arrears.
Once again Farmer Pudsey is trying to muddy the waters and push for blanket debt writeoffs at the expense of everybody else.0 -
Farmer Pudsey wrote: »Debt forgivness happen all the time
You're quite correct. It's the very basis of free market capitalism but what also happens all the time is that along with the debt being lost, the asset is also lost and given to somebody else who will pay their debts.
The only exception that Irish people should be prepared to consider is where it's business debt and jobs could be lost as a result of the business being liquidated but then again, why should solvent businesses be placed at a competitive disadvantage to insolvent ones?0 -
Farmer Pudsey wrote: »
Most of us here that advacote working through the mortage book think that repossion should be look at like any other business decision. If it is a case that the best outcome or even the same finiancial out come is to let the owner in the house then what is the point of repossing a house and losing money in the process.
The reality is if these people cannot pay there mortgages, but can pay a loan that is the equivlent or higher in value that the value of the house then this is the best outcome for the bank and the taxpayer.
So why write off any part of the debt? Why not extend the term of the loan, rather than saddle the rest of us with the fruits of stupidity or greed or bad luck?
In other parts of the world, multi generational mortgages are common. I accept that it is a tough concept for any parent to saddle their kids with debt, but why should me and (probably) my kids be saddled with the debts of others?
If, to borrow your example, somebody with an outstanding debt 0f €350 000 on a house they paid €500 000 for, but is now only worth €200 000, cannot, for whatever reason, service their current debt, but could service a debt of say €150 000, why not accept that level of repayment, and extend the term? The only difference is that the borrower keeps their home, but pays for it over a longer period. Nobody looses, especially those people who kept their heads during the madness, and didn't over extend themselves.0 -
Isn't restructuring a form of extending the term?0
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While we don't have proper information, the indications from MABS is that, yet again, he's wrong. It appears to be folk heading towards the end of their working lives are the ones in arrears, which makes sense as they would have comprised the bulk of the BTL sector.
The 30-40 cohort were only able to afford the one property and while they might be in serious negative equity, they would not necessarily be in arrears.
Once again Farmer Pudsey is trying to muddy the waters and push for blanket debt writeoffs at the expense of everybody else.
I am not pushing for blanket writeoff however neither am I given to the theory that all the issues are buy to lets or cases with different issues. What I do advocate is that bank should be left look at it as a business decision, amd those that consider that the answer is to wholesale repossess houses in default is more a revenge theory rather than a saving to the taxpayer or a benifit to the banks books.0 -
Farmer Pudsey wrote: »I am not pushing for blanket writeoff however neither am I given to the theory that all the issues are buy to lets or cases with different issues. What I do advocate is that bank should be left look at it as a business decision, amd those that consider that the answer is to wholesale repossess houses in default is more a revenge theory rather than a saving to the taxpayer or a benifit to the banks books.
From the time i was in school i was always taught that if you borrow money from a bank you need to pay it back.
If you cant afford it then you shouldnt be borrowing.
Why should buy-to-let people be any different?0 -
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Why quote something if you're going to ignore completely what it says. Telling people they shouldn't borrow, after they've already done it, is a bit redundant. Its a game of musical chairs, the bond holders, banks and mortgage holder all gambled. Unfortunately the banks, and the bondholders sat down before the music stopped.0
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Why quote something if you're going to ignore completely what it says. Telling people they shouldn't borrow, after they've already done it, is a bit redundant. Its a game of musical chairs, the bond holders, banks and mortgage holder all gambled. Unfortunately the banks, and the bondholders sat down before the music stopped.
But surely allowing people to borrow when they shouldnt have and then allowing them to walk scott-free away from thier debts is not sending out the right message?
The sorts of people who leveraged equity to buy-to-let would do exactly the same thing tommorow if they could....it's not a good message to be sending out,ie encouraging reckless borrowing and "investing" in property.
If there *is* widespread debt forgiveness this cycle is doomed to repeat itself as already the property market is showing signs of another bubble forming,something the Govt seems to actively be encouraging.0 -
There two different things here.
1. An existing problem.
2. Avoiding creating a new problem.
The solution for one isn't the solution to the other.
Indeed the cause of one problem isn't the same either.0 -
Farmer Pudsey wrote: »I am not pushing for blanket writeoff however neither am I given to the theory that all the issues are buy to lets or cases with different issues. What I do advocate is that bank should be left look at it as a business decision, amd those that consider that the answer is to wholesale repossess houses in default is more a revenge theory rather than a saving to the taxpayer or a benifit to the banks books.
The pillar banks are taxpayer supported. They have no interest in actually making hard business decisions because they know the taxpayer will lap up whatever losses come their way. Only last week, we got more worthless bank shares in lieu of dividend payments because the bank won't pay us back.
Letting the bank "look at it as a business decision" when wholly supported by the taxpayer and then doing all sorts of deals in complete secrecy is the sort of thing we'll be having tribunals about in twenty years time.
We need to know who is getting the writeoffs while keeping the houses and why they got them but others didn't.0 -
But surely allowing people to borrow when they shouldnt have and then allowing them to walk scott-free away from thier debts is not sending out the right message?
The sorts of people who leveraged equity to buy-to-let would do exactly the same thing tommorow if they could....it's not a good message to be sending out,ie encouraging reckless borrowing and "investing" in property.
If there *is* widespread debt forgiveness this cycle is doomed to repeat itself as already the property market is showing signs of another bubble forming,something the Govt seems to actively be encouraging.
When I started work and even going to school there were lads that wanted to borrow money especially when working and staying away from home. ''Can I have a fiver(or a tenner) until Friday''
After a while you knew the lads that would pay it back without asking. those you had to remind(which I hated) but would pay when reminded and those that you had to chase or would never get it back from. I knew who not to lend to after a while and those that I would prefer not to lend to(because i had to remind them) and those that no matter if they asked you for a fifty it was no issue.
The banks during the boom did not following proper banking procedure. I heard a banker who is Irish and the head of a Chilean bank speak about banking and he was very critical of Irish banks during the boom. He considered a lot of the lending reckless in the extreme.0 -
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Now you say it, I see it. !0
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Farmer Pudsey wrote: »When I started work and even going to school there were lads that wanted to borrow money especially when working and staying away from home. ''Can I have a fiver(or a tenner) until Friday''
After a while you knew the lads that would pay it back without asking. those you had to remind(which I hated) but would pay when reminded and those that you had to chase or would never get it back from. I knew who not to lend to after a while and those that I would prefer not to lend to(because i had to remind them) and those that no matter if they asked you for a fifty it was no issue.
The banks during the boom did not following proper banking procedure. I heard a banker who is Irish and the head of a Chilean bank speak about banking and he was very critical of Irish banks during the boom. He considered a lot of the lending reckless in the extreme.
Well said. I also heard the valid point made that none of the bankers who lent the money recklessly have been punished, and unless they are / will be, the cycle is deemed to repeat itself. At the least some should be asked to surrender their bonus received or future pension. In other countries some bankers go to jail. Here they all get rewarded.0 -
Even ignoring the bankers themselves. There really hasn't been any changes in oversight, or regulation. There's no controls to stop it happening again. Its not just in this sector either. Ireland really does not take regulation or enforcement seriously across so many industries, not just the banking. Its a deeply ingrained culture of playing loose and fast with rules, laws and regulation.0
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Even ignoring the bankers themselves. There really hasn't been any changes in oversight, or regulation. There's no controls to stop it happening again. Its not just in this sector either. Ireland really does not take regulation or enforcement seriously across so many industries, not just the banking. Its a deeply ingrained culture of playing loose and fast with rules, laws and regulation.
I would not totally agree we either over regulate or under regulate we seem to be unable to achieve a happy medium. We have a competition Authority unfit for purpose. The regulation at Power, Gas and Telecoms is over worried about competition. Yet solicitors and professionals continue on regardless. We pay thought the nose for health services yet you are waiting 4-12 months for any sort of appointment even with HI.. Banks etc seem to have a free role. Health and Safety is a joke if you want to shift a bollard or safety cone you will need an acre of paperwork or training. It makes it easier not to work rather than do the job you are supposed to. Then we have REPACK how much do they spend and waste.0
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