We were asked to comment on the new AIB and IMHO partnership. There are several aspects to this that we find unsatisfactory, however we don’t disagree with trying to help debtors.
Yesterday was the proposed deadline for debt mediation firms to make their submissions to the Central Bank. The guidelines had only come out about three weeks previous to this and given how much was involved they realised that they had made a deadline in trying to rush it through and gave industry an extension, we didn’t need the extension, what we need is the type of common sense which is vitally lacking in the new requirements the Central Bank are pushing through.
There are a lot of things that people don’t hear about in the compliance area that will result in future news stories, this current round of regulation is going to be in that category. The Central Bank has ensured that there will be less choice, that it will be more expensive – which locks borrowers in trouble out of the process and with a general outcome that banks will hold more sway in the future on deals that do or don’t get done than they did in the past. This is a big banking win as far as …
We often find ourselves (usually to our detriment) involved with meetings where a person brings us along to meet with the bank. Something about it always reminds me of that line from Slaughterhouse 5 ‘so it goes’, because there is always a sense of inevitability around them.
Yesterday I had one such displeasure with a subsidiary of one of our pillar banks.
They brought our mutual client in to discuss ‘options’, which is bank-speak for ‘take it or leave it choices’, they made their determination based on the clients most recent behaviour where they had met interest only payments for several months.
When asked if they had considered any other options (the usual host of alternative solutions) we were told ‘they were refused already’, but that decision it turns out was based on information provided eight months ago when the person was unable to make payments.
The ‘new deal’ is not nearly as good as what the old deal could have been, but there is a logical disconnect where you refuse long term solutions based on old information but allow …
The banks are constantly issuing threatening letters, we have posted many of them here. We have seen it all at this stage, couples in their 60’s with lots of equity being told to sell up when they clearly didn’t have to, others who are able to get massive write downs and every other combination of fact you can imagine.
Today we will look at the huffing and puffing portion of banks chasing a person for debts. The page to the left is a chronological example of letters a borrower will get from the bank. In this instance the person is defaulting because they don’t want to go on capital and interest and are engaging in what amounts to a game of ‘chicken’ with the banks.
The letter starts off fairly heavy, in terms of implications, they …
We got a comment on our site from an ex-banker who heard a radio segment where we were talking about banks and repossessions. We got in touch and asked if we could post his comment as a stand alone entry, he agreed, his thoughts are very interesting and in part might help explain why we have repossession orders without repossessions, eye opening reading…
I listened to your piece on Newstalk this morning (19/08/2013) regarding ‘strategic defaulters’ and I just wanted to congratulate you for highlighting the reality of this issue.
I worked for the former *closed bank* for over 17 years and for a two year period I was it’s Mortgage (Residential) Administration Manager. Although I’m out of banking now I still help former clients with negotiations with various banks.
My experience over the past couple of years, and especially this year, in ‘dealing’ with the banks, foreign and domestic, has exposed some incredibly unethical and unfair practices and on the whole I fear …
One of the things the whole strategic default issue lacks is any set definition. There are words that get used with motives embedded in them, such abuse of language only exists when there is not a set meaning to the word. To call a default strategic is two very different things depending on who is talking about it.
To a bankers mind it might mean any loan unpaid where the person has a penny to spare, to a borrower it might only be where a person withholds all money from the lender and goes and lives the life of Reilly.
I’m asking for your help on this one, please use comments to add your thoughts and I’ll re-edit the post appropriately.
To start with I’ll attempt to define a strategic default on multi-investment properties, there are other types so feel free to give the example or way of defining it as you see it.
1. Multi-investment property investors: Where the person is collecting rent and paying interest only, then the bank look for capital and interest and the person goes …
Something that was a strong point of (supposed) fact in the meeting at Kilkenny was that mortgage loans now are not called ‘mortgage loans’ instead they are ‘lines of credit’.
It was also implied that the change of language was very important and meant something.
As a person working in this industry daily that caught me by surprise, thankfully, and unlike other attendees we have the resources to look into this.
See the pdf scan for yourself. The person who said this was telling the truth, at least in part, the ‘credit facility’ thing is mentioned, but elsewhere it’s all about ‘mortgage’ and ‘mortgage loan’, the entire concept is misguided.
If you click on the loan document (click the picture) you’ll see on the first page that it does mention ‘credit facility’ – albeit the scan I did was awful because I had to double black out personal …
There has been talk recently of a group based in Kilkenny who have a method for putting properties beyond the reach of banks. According to papers even Bill Cullen is part of it. Upon hearing about it and how it used a ‘trust’ structure to put property out of harms way we initially thought it referred to [glossary id=’6991′ slug=’unencumbered’ /] properties; but apparently it works for all properties including those for which there is a [glossary id=’6898′ slug=’mortgage’ /] secured against the home according to its promoters.
We were asked by a client to attend one of the presentations the group held, it was in Kilkenny in the back room of the Kilford Arms and was free of charge. The two people who talked at the meeting were a man named Noel Brophy and another named David Walsh, the first was a builder in the USA who returned home and had since gotten into disagreement with lenders, the other a man who was fighting banks but for whom …