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Vulture Fund Selling Farm

liam7831

https://www.ifa.ie/ifa-opposes-land-sale-in-co-meath-by-vulture-funds/#.W5lblHrTU0M

Looks like the bank really screwed these two brothers

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whelan2

liam7831 wrote: »

https://www.ifa.ie/ifa-opposes-land-sale-in-co-meath-by-vulture-funds/#.W5lblHrTU0M

Looks like the bank really screwed these two brothers

I dont know the ins and outs , but when I take out a loan I sign for it and give security. They give me the money and I repay the debt according to the agreement to keep my half of the deal. If I dont keep my half of the deal should the bank not be able to recover their money. I dont think these cases being made public does either side any good

L1985

whelan2 wrote: »

I dont know the ins and outs , but when I take out a loan I sign for it and give security. They give me the money and I repay the debt according to the agreement to keep my half of the deal. If I dont keep my half of the deal should the bank not be able to recover their money. I dont think these cases being made public does either side any good

This loan was taken out in 2004-out of 440k only 90k was repaid.....in finding it hard to have too much sympathy to be honest-14years is a long time....now the interest rate seems insane that's it's over 1mil now but anyone taking out a loan knows the risk if they use lands as security...

JustJoe7240

liam7831 wrote: »

https://www.ifa.ie/ifa-opposes-land-sale-in-co-meath-by-vulture-funds/#.W5lblHrTU0M

Looks like the bank really screwed these two brothers

Can't you explain why you think that the banks are screwing these lads? Because they're forcing to sell land they used as security in the event they couldn't meet repayments?

JustJoe7240

L1985 wrote: »

This loan was taken out in 2004-out of 440k only 90k was repaid.....in finding it hard to have too much sympathy to be honest-14years is a long time....now the interest rate seems insane that's it's over 1mil now but anyone taking out a loan knows the risk if they use lands as security...

Reports on 9 o'clock news has the original borrowing at 880k. For 38 acres!!!!

ANXIOUS

JustJoe7240 wrote: »

Reports on 9 o'clock news has the original borrowing at 880k. For 38 acres!!!!

That's just the borrowings.

They paid €1.05m

L1985

JustJoe7240 wrote: »

Reports on 9 o'clock news has the original borrowing at 880k. For 38 acres!!!!

https://m.independent.ie/business/farming/news/farming-news/farming-community-unites-in-protest-of-forced-sale-of-family-farm-online-by-vulture-fund-37309082.html
RTÉ could be right-I'd say there would be a lot of misinformation going around...

goat2

“Our debt support team has looked at this case in detail, we have sought professional advice and we are firmly of the view that this farmer has put a very credible proposal to make structured repayments.”

Martin Stapleton said farm families should be given time to repay their debts over a longer term to keep the farm intact and IFA is standing behind farmers who are committed to implementing a credible solution.

I think personally, that it would be easier on both sides if they were given a bit of extra time to repay, there would be no winners here otherwise,

Turbohymac

Love the way the ifa seem to oppose culture funds..our own banks here in Ireland would do the very same ..none of them gives a f..k about any class of borrower once there making huge profits..but yes failing to repay a loan of that size is madness /greed on behalf of the borrower...two wrongs certainly don't make right.. and as usual were only hearing selected snippets of what actually happened over a long timeline

TheBoyConor

I would imagine that they probably were given time already and either were incapable of keeping up the payments or else completely took the piss or with it.
To only be having payed 90k over 14 years would suggest either of the above scenarios. It's not like they missed one or two payments and the bank swooped in to snatch the farm. They've paid feck all on it and dragged their arse in it for years.

Besides, they put up the land as security. They signed their names to that deal. They knew and accepted the risk that they might have to give up the land if the loan went tits up.
They gambled and they lost.

If they were let off the hook with it, they you'd get fellas deciding "sure, screw it, I won't bother paying my loans, they won't do anything". Banks must take action both to recover their investment and to send out a message to deter others from taking the piss.

ruwithme

I can never understand some people's personal ambition in life to buy this,build that e.t.c. one brother said he had to sell his home.the other said he remortgaged his.

i don't know if they have families,but sometimes when people borrow such amounts of money do they ever consider the fall out for others around them in the event of not being able to repay there debt.

Bass Reeves

I wonder was this loan from a finance house rather than a mainline bank. These became popular during the boom lads who could not get enough money from banks secured loans from some of these institutions. They usually lend at higher rates and had more severe penalities. Often lads kept up repayment during the boom but when the recession came payments became an issue and penalities kicked in.
TBH if they could not pay the original loan how can they repay the present loan. The thing about some of these loans is lads could not walk away from the auction but want to walk away now with the land but not the loan. What about the lad was the runner up in the auction maybe of it was left to him he could have afforded the property

Mooooo

Original loan was with Ulster bank according to news anyway. Dunno the story perhaps they left it too late to try and make up the arrears thinking the day would never come. Online auction puts a different twist on things also.

Richard Roma

Mooooo wrote: »

Original loan was with Ulster bank according to news anyway. Dunno the story perhaps they left it too late to try and make up the arrears thinking the day would never come. Online auction puts a different twist on things also.

I’d suspect that Independent article had loads of inaccuracies. The farmers are unlikely to have borrowed from Carlisle for a start as they’re a fund who bought loans during the crash. RTE are probably right about Ulster and the amount. There’s no way interest could clock up that quickly as it would be subject to homeloan rules (assuming they live on the farm).

CeilingFly

Guess who pays for all the defauters?

It's not the bank officials.

It's not an insurance company

It's not the shareholders

It's all the other customers that ARE paying their loans - albeit at a higher rate than our continental cousins because it takes far too long and costs far too much in legal fees to enforce security given against a loan.

Iodine1

I am really sorry for anyone in this situation as I believe nobody sets out with this in mind. But things get out of hand and often its one small thing after another before it all adds up and brings the whole show down. But I cant help thinking who using what analysis / forecasts gave that amount on 38 acres? I don't know of any enterprise, (maybe growing houses?) that could cover the repayments, and keep 2 families? Any that could would most likely be very specialised and involve significant other investment such that the farm would only be a small part of the operation.
Now its security on a defaulted loan that's been recalled. Who will lend to any farmer in future if they cannot realise the security? Its like making an investment with only a hope of a return. People or a business with money don't do that.

jay0109

I wonder what the views of the farmers who got outbid on this land back in 2008 are now, given that these brother came in all gun's firing with 800k of a bank loan in their pockets back then.
Do they think these lads should be let keep the land

JustJoe7240

jay0109 wrote: »

I wonder what the views of the farmers who got outbid on this land back in 2008 are now, given that these brother came in all gun's firing with 800k of a bank loan in their pockets back then.
Do they think these lads should be let keep the land

Unless it was a developer planning to use it for housing,I'd say they're blessing their lucky stars,how you'd make a return on that investment is beyond me.

Bass Reeves

JustJoe7240 wrote: »

Unless it was a developer planning to use it for housing,I'd say they're blessing their lucky stars,how you'd make a return on that investment is beyond me.

Reminds me of a story a lad told me. In 2007 himself and three other lads were underbidders on a plot of land near a midsized town. It went to nearly a million he passes it nearly every other day. He still blesses himself when he passes it. He says he more than likely managed his share but the real issue would have been if any one of them had not managed to pay off there share the liability would have fallen on the others to repay

visatorro

Agricultural land was making 20-30k around me before the crash. Presume that was the same in most of the country. Country was on the crest of a wave.

whelan2

visatorro wrote: »

Agricultural land was making 20-30k around me before the crash. Presume that was the same in most of the country. Country was on the crest of a wave.

I was bidding on 31 acres adjoining me in 2008. I thank my lucky stars every day that I didnt get it

54and56

visatorro wrote: »

Agricultural land was making 20-30k around me before the crash. Presume that was the same in most of the country. Country was on the crest of a wave.

Can I ask (as a completely ignorant city dweller) what profit an acre of land actually produces on average after all costs (labour, materials etc) are paid? I know there are different crops and options such as dairy farming etc so I'd be interested to see what the average historical profit per acre is for the most popular options:-

- Growing wheat/corn
- Dairy farming
- Rearing dry/beef stock (showing my ignorance of terminology here!!)
- Rearing sheep
- Etc etc

_Brian

This is a general point as I’m not familiar with this situation.

If land can never be sold to recover a debt will the banks not stop taking it as collateral against loans ??

What’s the point if they can’t use it to recover the monies owed as per the deal ??

Drumpot

whelan2 wrote: »

I dont know the ins and outs , but when I take out a loan I sign for it and give security. They give me the money and I repay the debt according to the agreement to keep my half of the deal. If I dont keep my half of the deal should the bank not be able to recover their money. I dont think these cases being made public does either side any good

I agree with your sentiments and believe we are all subject to the contracts we sign and agree... Everybody......

So What about when banks are struggling to honor contracts they signed ? Why doesn’t the same apply to them? Why do you expect an individual to honor a contract with an institution that’s failed to do the same ?

I’ve seen explanations of why the banking system was saved for the supposed greater good. So why is it even morally acceptable to expect an individual to uphold a level of integrity on a contract that the entire system doesn’t respect when it doesn’t suit ?

54and56

Drumpot wrote: »

So What about when banks are struggling to honor contracts they signed ? Why doesn’t the same apply to them? Why do you expect an individual to honor a contract with an institution that’s failed to do the same ?

Large banks became systemic. Individuals and (normal) companies are not. Governments have to choose between letting a systemic bank fail and the consequences which would flow from that Vs rescuing it and the lesser consequences of that.

In saving a bank the owners (shareholders) of the bank typically get totally wiped out which may be some comfort.

Letting a systemic bank fail would be a pyrrhic victory which might feel good for a short period until the tsunami of knock on consequences flooded the economy negatively impacting every business and every person to a much greater effect than the negative impact that is felt from stepping in to save a systemic bank. It's not "fair" at all, just the lesser of two options.

Poor regulation allowed some banks to become "too big to fail" and the blame for that is 100% at the feet of government.

Drumpot wrote: »

So why is it even morally acceptable to expect an individual to uphold a level of integrity on a contract that the entire system doesn’t respect when it doesn’t suit ?

Because if lenders can't have confidence that the colateral they are accepting in the event that the loanee doesn't honour his repayment commitments can be accessed via a court action they will not lend and if there is no way to enforce contracts all economic activity would effectively stop other than buying and selling for cash. Again, it may not seem "fair" but without a court system to enforce contracts which both parties can have confidence in the economy would collapse.

Drumpot

Je_suis_Jean wrote: »

Large banks became systemic. Individuals and (normal) companies are not. Governments have to choose between letting a systemic bank fail and the consequences which would flow from that Vs rescuing it and the lesser consequences of that.

In saving a bank the owners (shareholders) of the bank typically get totally wiped out which may be some comfort.

Letting a systemic bank fail would be a pyrrhic victory which might feel good for a short period until the tsunami of knock on consequences flooded the economy negatively impacting every business and every person to a much greater effect than the negative impact that is felt from stepping in to save a systemic bank. It's not "fair" at all, just the lesser of two options.

Poor regulation allowed some banks to become "too big to fail" and the blame for that is 100% at the feet of government.

Because if lenders can't have confidence that the colateral they are accepting in the event that the loanee doesn't honour his repayment commitments can be accessed via a court action they will not lend and if there is no way to enforce contracts all economic activity would effectively stop other than buying and selling for cash. Again, it may not seem "fair" but without a court system to enforce contracts which both parties can have confidence in the economy would collapse.

With all due respect I understand the reasons why the banks were saved, I just don’t understand how effectively little to nothing has been done to properly reform them and protect society from inevitable future bank issues that will require state aid.

Banks became too big to save and the solution was to merge them and make them even more systemically important to the economies they serve. That was part of the cluster f*ck solution.

Secondly , the system is fatally flawed in that the only protection mechanism is regulation that flip flops according to the government at the time. It’s just crazy to think regulation will somehow protect us from future bank f**k ups!!!

Lastly protecting banks for the supposed greater good (Iceland showed there are ways of letting a bank collapse without bailing it out) doesn’t allow you to apply a different expectation on an individual because it suits. It’s selective principles not based on what’s objectively right or wrong but just based on the skewered rules of the game that always favors the casinos/banks.

Our accepting of this banking system is akin to a Catholic Church that refuses to properly address the rampant abuse in its institution. People choose to ignore or pass off banks behaviors as just part and parcel of the system. You can explain it all you want but the bottom line is that the banking system is fundamentally flawed and destined to fail over and over again.

54and56

Drumpot wrote: »

With all due respect I understand the reasons why the banks were saved, I just don’t understand how effectively little to nothing has been done to properly reform them and protect society from inevitable future bank issues that will require state aid.

Apparently changes have been made to reduce the risk of future bank collapses that will require public intervention to rescue them but only time will tell. The longer we go without a rescue the better the changes are working I guess. Isn't it over 10 years since a bank had to be rescued with public money?

Drumpot wrote: »

Banks became too big to save and the solution was to merge them and make them even more systemically important to the economies they serve. That was part of the cluster f*ck solution.

Secondly , the system is fatally flawed in that the only protection mechanism is regulation that flip flops according to the government at the time. It’s just crazy to think regulation will somehow protect us from future bank f**k ups!!

I'm not an expert but I think the new bank capital requirements were implemented to prevent big banks from becoming overly leveraged and thus overly risky.

Regulations may flip flop as governments of different flavours win elections but that's the way we choose to organise ourselves. If there is a better option which most people would support (communism? dictatorship?) then why aren't we all clambering for it? Is democracy perfect? Absolutely not.

Drumpot wrote: »

Lastly protecting banks for the supposed greater good (Iceland showed there are ways of letting a bank collapse without bailing it out) doesn’t allow you to apply a different expectation on an individual because it suits. It’s selective principles not based on what’s objectively right or wrong but just based on the skewered rules of the game that always favors the casinos/banks.

Our accepting of this banking system is akin to a Catholic Church that refuses to properly address the rampant abuse in its institution. People choose to ignore or pass off banks behaviors as just part and parcel of the system. You can explain it all you want but the bottom line is that the banking system is fundamentally flawed and destined to fail over and over again.

Sounds like you have a platform to get yourself elected so you can go change the system!!

Drumpot

Je_suis_Jean wrote: »

Apparently changes have been made to reduce the risk of future bank collapses that will require public intervention to rescue them but only time will tell. The longer we go without a rescue the better the changes are working I guess. Isn't it over 10 years since a bank had to be rescued with public money?

I'm not an expert but I think the new bank capital requirements were implemented to prevent big banks from becoming overly leveraged and thus overly risky.

Regulations may flip flop as governments of different flavours win elections but that's the way we choose to organise ourselves. If there is a better option which most people would support (communism? dictatorship?) then why aren't we all clambering for it? Is democracy perfect? Absolutely not.

Sounds like you have a platform to get yourself elected so you can go change the system!!

Ha, I’m not looking to get elected I’m asking questions people can’t answer. Your default explanations rely on regulation that clearly doesn’t work. The presumption you make is that they have fixed it and that we will find out how that goes during the next crisis.

Incidentally you talk as if the 08 bailout was the first example of a bank needing state aid....

https://www.google.ie/amp/s/www.irishtimes.com/opinion/when-the-taxpayer-rescued-the-aib-big-boys-1.156260%3fmode=amp

The question isn’t if , it’s when will banks need another dig out. This is the perfect time to actually implement meaningful reform but what we wil get is the usual reactive reform when it’s too late...

I don’t have the technical knowledge to know exactly what should be done but I know that everything should be done to allow banks fail in all scenarios. That should be the stress test, only then do they truly have to adhere to the rules like everybody else. If that makes them less profitable and slows down inflation and economies then so be it. It’s the prudent thing to do but as a species we aren’t great with thinking long term or learning from our mistakes....

Turnipman

_Brian wrote: »

This is a general point as I’m not familiar with this situation.

If land can never be sold to recover a debt will the banks not stop taking it as collateral against loans ?? What’s the point if they can’t use it to recover the monies owed as per the deal ??

Excellent question.

The answer, of course, is because this is Ireland of the Morons. A land governed by clowns, whose populace (led by a media whose default condition is shock and outrage) has largely replaced joined-up thinking and logic by emotion and reactive kneejerking.

54and56

Drumpot wrote: »

Incidentally you talk as if the 08 bailout was the first example of a bank needing state aid....

https://www.google.ie/amp/s/www.irishtimes.com/opinion/when-the-taxpayer-rescued-the-aib-big-boys-1.156260%3fmode=amp

The question isn’t if , it’s when will banks need another dig out.

You are misinterpreting how I'm talking. I absolutely know that there have been bubbles and busts which affected whole economies from the Tulip Bubble in 1637 to the great depression in the 1920's to the most recent great recession starting in 2008.

After each event regulations and rules etc are put in place to prevent a repeat but it seems we as humans will always find a way through good old fashioned greed to fcuk things up again, just in a slightly different way which the "new" rules can't prevent.

None of us have an infallible crystal ball. Will there be booms and busts in the future? Probably. will they be exactly the same as the booms and busts of the past? Probably not but they may look similar e.g. there may well be another property bubble but it may not be caused by sub prime lending and collateralisation of mortgages etc.

Will banks fail in the future? Possibly but when we don't know and for what reason will likely be different to previous failures. If you knew the date and reason with the certainty you proclaim you should gather up all the cash you can get your hands on and short the relevant bank stock ASAP!!

Drumpot wrote: »

If that makes them less profitable and slows down inflation and economies then so be it.

Inflation has been historically low for decades and worryingly low in economies like Japan. Inflation isn't a problem at the moment although issues like Brexit may trigger increased inflation.

The paradox is that a good dose of hyper inflation would float all those with excess borrowings out of their negative equity positions e.g. you owe €3m for property currently worth €2m. Hyper inflation comes along of 50% per annum and over a period of 3 years your €2m property is worth €6.75m relative to the €3m you owe the bank. The big downside however is that retiree's on fixed incomes see that value of what they can buy with their monthly €2,500 crash and end up on the poverty line as a loaf of bread originally costing €2 would
end up costing €6.75 yet they are stuck with a fixed income of €2,500 per month.

Drumpot wrote: »

as a species we aren’t great with thinking long term or learning from our mistakes....

100% correct and that's because of our own mortality. We think about our own short term needs and to hell with the future.

You'll enjoy this:

tanko

Turnipman wrote: »

In which case there's absolutely nothing to stop the IFA from paying off the debt from its substantial reserves and taking over the lads' loan.

Seeing as the IFA's "professional advisers" have advised that there's a credible proposal on the table, then it's a complete no-brainer!

So c'mo IFA, quit the posturing and put your money where your mouth is.

Excellent point, but this will never happen. The IFA aka the Irish Factories Association is only interested in one thing which is lining their own pockets with the €13 million which irish farmers are stupidly giving them every year and having a good time with it.

The salaries and pensions in the IFA are so obscene and embarrasing that they wont even publish them.

If the lads in this case wont pay back the money they borrowed then the land should be taken off them.
But of course both they and the useless sh*tes in the IFA think that someone else should pick up the bill.