Regulating mortage buyers is a political move not a sensible regulatory one.

Politicians are prone to playing politics, that’s a given. What is strange is that so few demonstrate a knowledge of the regulatory environment that banking exists in. While decrying a ‘lack of regulation’ they fail to see that loan sales are actually a result of regulation, the very thing they are saying they want.

If you have a long term agreement with a borrower that is a contract, it can and does stand the test of the courts. A fund buyer won’t seek to overturn that contract even though the loan is technically ‘not performing’.

This is an important point, if you got a split mortgage and it was agreed on a long term basis (as they are) then your loan is non-performing because part of the loan isn’t accruing interest. You are making payments in full on the other part, but it is less than the original contracted agreement. Any losses of interest are accounted for and already booked, but the loan itself is still going to be classified that way.

If somebody buys your loan they have to …

Read More

Ireland without banks, a fascinating paper by Antoin Murphy

Antoin Murphy was and remains one of the most fascinating economic historians in Ireland, his work on John Law is internationally recognized as being the best there is. Here is a paper he did on how Ireland operated without banks, it is a must read for anybody who wants to know more on how the world can work without banks (in a paper oriented system).

Antoin Murphy, Money in an economy without banks, The case of Ireland – bank strike paper

Read More

Today FM: Varadkar comments on housing deposits discussed

We were on Today FM to talk about comments made by the Taoiseach regarding how people come up with money for a deposit to buy a home. While many were finding it a source of outrage, we were making the point that it’s incredibly common and that it actually is a normal occurrence albeit not ‘the norm’ for everybody (because nothing is universal).

This is a good discussion because in our view it shows the way that housing shortages can turn into all manner of talking point arguments, we don’t think it’s realistic to tell parents you can’t help your kids or to say that it’s wrong in any way, but we do agree with Sinead from TheJournal that we have a housing shortage and that this is really where the problem lies.

Read More

Newstalk Lunchtime: Fake bids, do they exist? 21st November 2017

We spoke to Ciara Kelly about the issue of ‘fake bids’ and whether they exist or not. We believe they do but not that they are widespread. The more concerning issue is around the bid that gets accepted because the true conflict of interest would be where a buyer pays an agent to ensure they are the ‘winning bid’, again, this is not widespread but there are enough stories in circulation to believe that it has occurred. The best solution around this is to ensure people register their bids publicly, this would stop most of the chicanery (where it exists) and could even be a form of additional income to the property regulator and an estate agent if there was a fee involved for doing so.

 

Read More

Drivetime: ESRI property report, November 2017

We spoke to Mary Wilson on RTE’s ‘Drivetime’ show about the ESRI Report which stated that property prices would continue to rise for several more years into the future. We know of no significant measure that will reduce the upward momentum of prices at present. In a worrying sense you also don’t see any yield compression – that means that as prices are rising so are yields, this typically indicates a normal relationship with prices and yields (in a bubble yields often drop as the toppy capital prices far outweigh yields).

 

Read More