Drop rates so banks can lend more…

In the ongoing variable rates pricing fracas there are many points being overlooked. The first is why our mortgage rates are higher than other European countries, but we should just ignore that – at least to stay popular.

We’ll say that the government/Central Bank pressure works and banks drop their rates, what next?

We might get around to the greater number of people under price pressure for housing (the renters), but that’s unlikely, instead we’ll inadvertently drive up house prices a little more by making credit more easily available.

Because the lower the variable rate the lower the stress test. Lower rates equals more credit, it’s a fact of life in lending.

You heard it here first. The lower variable rates go the more it frees up a persons lending capability. We have covered the way the Central Bank lending rules won’t work to the point of being annoying (and we weren’t alone, the ESRI and …

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A critique of the new Central Bank and CCMA measures

This article appeared in the Sunday Business Post on the 17th of March 2013

A senior banker described the new rules introduced by the Government and Central bank as ‘a charter for the obvious’ because ‘banks need to become banks not terminal collections companies’, and while some are quick to lend support or decry it as a travesty, we should instead look at the factual impact the new targets and code of conduct on mortgage arrears will actually have.

Policy makers say it is a leap forward, debtor lobbyists say it is nothing short of throwing borrowers to the wolves, both are wrong, its just a new set of trade off’s.

Being able to repossess a property is normal in any housing market, ‘bans’, ‘delays’ or ‘moratoriums’ on repossessions have been used in several nations (Czech Republic, Russia, Hungary, Ireland and the USA) and are government lead. In our case it was Government lead until the Dunne ruling in 2011 hard wired it into law. This must be reversed, it is …

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The bailout has arrived, Irish banks in line for Government funds.

The banking bailout has come along, as many of us always thought it would, in the form of a (potential) €10 billion Euro package. An announcement was made yesterday and shares in financial institutions surged on the back of the news. The actual details of the deal are scant at present.

The Minister of Finance remarked on RTE radio that the main thing he hoped to see as a result of this was for lending to return to the market, we can only assume this refers to enterprise lending and not to mortgages as the mortgage market has not frozen to the same degree the business loan/credit area has.

The National Pension Fund Reserve is the area the funds will come from, an obvious issue here is that the fund made losses of c. 33% in the last year and cashing out now will mean those losses are crystallised without hope of return should the markets come back any time soon. …

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