The Irish Property Owners Association did a survey recently asking investors about their position with banks and how their investment was faring in general. Something that was interesting was the way that people saw the lenders in terms of how aggressive they are on pursuing a debt.
Here is the list…
this piece was about the ‘half rule’, a little known piece of legislation from 1995 which allows people to hand back their car once you reach a certain point in the finance agreement, it’s a great tip for people who are struggling financially.
Charlie Weston ran a story about an S&P report in the Independent stating that the housing slump is over. The thrust of it is that house prices are reasonable compared with wages and rents but that recovery is still some way off.
There are different interpretations of recovery, some people say stability is recovery or that it can be counted in terms of transactions, personally I think that rising prices is part of the definition, otherwise you simply have stagnation with more transactions which is a dynamic that tends not to last.
Our belief remains as it has for many years, the property market is a boom bust prone area with a cycle that lasts between 18 and 20 years. This leads to structural issues that repeat themselves every time and despite the pattern being known nobody has ever rectified it.
S&P say that reduced mortgage lending is holding the market back, if this is true it is surprising that banks don’t find some way to ramp up lending as it would reduce their capital …
My best laid plans have often blown up in my face, so chances are the idea I had which I mentioned to Pat Kenny last week has lots of snags built in; but today it was discussed on the Pat Kenny show (I wasn’t there for it) and given some additional context.
The thrust of the idea is that having something that is more process or practice based rather than principles based would work better in terms of fast and efficient negotiation.
You can listen to the concept in the link above which has the audio clip, but I’ll lay it out here too. When banks lend money they underwrite a person based on their affordability. My idea is that you re-establish a persons disposable income in their new financial circumstances and use the banks own calculations (albeit this time against them) to ‘re-underwrite’ the loan and in that respect reverse their own criteria against them.
This way if banks are conservative on lending they get conservative payments back …
This week we looked at the method we believe people with mortgage problems may end up using more often than personal insolvency to solve their financial problems.
We were asked to speak at the Fianna Fail ard fheis in a panel on the mortgage crisis, our contribution was as an independent opinion on the topic, we were there with other independent experts to give context to the crisis which was a focus in the event. We would stress that in the arena of financial advice that politics doesn’t come into it and that while members of our firm exercise their right to vote, we don’t align ourselves with any particular party.
Due to disclosure requirements I can’t actually tell you much about dealing with banks when it gets to the specifics of some cases, what I can say is that should a person get any debt write down of the type that banks are not doing that you will be asked to sign something like the letter to the left (click for full version).
What we do find frustrating is that there will be an insolvency register where people are named, but that you can’t find out what kind of restructure took place or what creditors accepted.
This is almost like having an absence of case law with which to go to court. It’s a huge oversight and will reduce the effectiveness of advisors who will all act in a common arena totally blind to what all of the others are doing.
As for specifics, this means you can’t ever talk about getting a write down or even a non-write down advantageous re-arrangement. You can be asked to destroy all of the evidence you have referring …
This week five years ago is when independent mortgage advisors were in the middle of getting some harsh news, some lenders were pulling out of the market completely, others were informing us of 50% cuts to procurement fees.
Fair or unfair? In light of things like Croke Park it would be seen as totally unfair, you’d never get any other industry that takes a 50% hit like this as fast (and then there is the separate issue of lending dropping 95% on top of the 50% reduction).
Brokerage has already been down the path the public sector are on. I recall sitting across the table from PTsb chief David Guinane who in late 2007 called in the broker bodies and informed them that they were getting a reduction that they might not be happy about, but that this was not something we could negotiate.
There was talk in brokerage of boycotting both them and Irish Life in return, and while we were still debating about what to do all of the other …