Central Bank and ESRI butt heads

The ESRI and the Central Bank butt heads.

This headline appeared in the Indo today. We agree with the idea of a safer market, but also agree with the ESRI on this, that it was badly timed, inappropriate and will actually cause more problems than it fixes due to being badly timed.

We would agree, our submission on the subject was one of the few that articulated the problems, why the moves wouldn’t prevent boom-bust and gave empirical evidence supporting same. Meanwhile many others were falling over themselves to commend Patrick Honohan and the Central Bank for being such good regulators.

They may have insulated the banks, but it’s at the expense of a market that will not provide for all of the people that need housing, in doing this it also helps to encourage speculation as one by-product is higher yields which re-attract investors into a market.

The ESRI have articulated this better than we did, and we support their findings. Oddly, the person behind the statements was the best economist the Central …

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2015-03-25 yield curve

What is happening with fixed rates?

We have been asked a few times about fixed mortgage rates and why they are lower than standard variable rates at the moment.

This has been going on for a few months in the mortgage market and the reason is fairly simple, lending rates are going to drop over time.

The one year fixed rate has traditionally been one that is used to attract business to a bank or building society. They are often a loss leading rate and after availing of it the person goes onto a higher rate or another fixed rate so we have to strip them out.

But from the 2yr rate onwards you normally paid a premium over and above the standard variable rate. So what is happening?

Lower fixed rates mean that banks are going to capture a margin that is likely to decline in the near future. The Euro yield curve is below.

What you see is that it is negative (below zero) for many years into the future, in fact, it’s only hitting …

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mortgage complaints to the FSO 2015

Answer: The Central Bank don’t deal with mortgage complaints is why…

We should probably pose the question, ‘Why haven’t the Central Bank dealt with any complaints about abuses of the Code of Conduct on Mortgage Arrears?’.

The answer is the blog topic. The Central Bank are a regulator, not a receiver of and adjudicator of complaints.

The Central Bank do have a sanction regime, but it is mainly regarding that of regulation from the perspective of qualifying for regulation, for complaints about the CCMA the most appropriate authority is the Financial Services Ombudsman.

And they have been dealing with mortgage complaints for quite some time, they even have a category for it in their reports.

Not only that, their own chairperson notes (see page 11) that mortgage related complaints were a massive 50% of the complaints received! And in many cases the complaints are partially substantiated and a lower number fully substantiated.

In general complaints are down, complaints received for 2014 were 4,477, a decrease overall of 42% year on year.

This is encouraging as it means more complaints are being dealt with prior …

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Irish Mortgage Brokers at the inaugural Euromoney Conference

The EuroMoney conference was held for the firs time in Dublin last week and opened by the Minister of Finance Michael Noonan. It had a great line up of speakers including several CEO’s of our largest financial institutions and was an opportunity for professional practitioners to discuss recent developments and many aspects of the market in general.

Karl Deeter was there to represent Irish Mortgage Broker and to take part in the panel discussion on property.

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getting cock blocked

Why not make a bank’s veto backfire on them?

There are two views that have been mentioned recently, one is that bankruptcy should have a reduced term to 1 year and the second is that banks have a veto on insolvency deals.

Perhaps the best way to resolve the issue isn’t to make bankruptcy one year for everybody, but rather to make it one year when and where a bank has rejected an insolvency solution put forward by a personal insolvency practitioner.

This would mean their decision to veto has a negative impact upon them, there are consequences to rejecting genuine offers. Obviously this would require some tweaking because individual cases and circumstances can become quite complex, but it would certainly help a creditor to sharpen their mind if they knew that a refusal could then have worse outcomes without affecting their contractual rights.

The good thing about this is that it would also channel more people into the proper route for dealing with debt (the official regulated insolvency one) and keep them out of what will probably become a scandal some day in the future (the informal channel …

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SME Awards 2015

SME Awards 2015

We are fans of business, in particular SME’s and thought we’d help spread the word about the SME Awards 2015.

Here’s the detail:

The SME Awards are an informal national business awards ceremony that will take place on April 25th in the Radisson Hotel, Cork. The Awards are modelled on the Web Awards and the Social Media Awards, two very successful awards shows run yearly by Mulley Communications.

The SME Awards differ from other awards as:

FREE – Any SME can enter the awards without paying a fee.

The public are involved in judging as are your peers.

Sponsors can’t be nominated in any category and can’t influence judging.

The costs to come along to the ceremony are not prohibitive and tuxes are not required. €50 early bird tickets but you can still win if you don’t attend.

They’re informal and fun.

Is it not another awards show in a sea of hundreds more?

Not really. We ourselves are a small business and we work with SMEs daily. We know the stresses, the joys and the high you can get …

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RTE Drivetime: Talking money on ‘Kidults’ with Karl Deeter & Jill Kerby

This week on RTE Drivetime’s ‘Talking Money’ segment we looked at the issue some parents have with ‘Kidults’ who are grown up children living at home. There are many reasons behind the increased occurrence of people remaining at home, and there are both advantages and disadvantages, we tried our best to give some tips that might help!

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RTE Sean O’Rourke Show: Karl Deeter & Ronan Lyons on Central Bank rules

Last week on the Sean O’Rourke Show Karl Deeter and Ronan Lyons (Trinity College & Daft.ie) had a good robust debate about lending rules and whether restrictions were good or bad. This week in light of the actual changes that occurred they had a second conversation on the outcomes.

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The Anton Savage Show: Anton speaks to Irish Mortgage Brokers

Anton had Karl Deeter on to discuss the proposed mortgage loan caps that were being discussed by the Central Bank. Our view is that something more nuanced was needed, thankfully, at the time of posting this we now know the details and they did opt for a more carefully balanced solution.

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