Newstalk Lunchtime: Jonathan Healy and Karl Deeter on Insolvency Service of Ireland

We spoke to Jonathan Healy about the new insolvency service, how it was not going to be possible to determine its success for at least three months (as protective certs last 70 days and can last more), as well as the importance of understanding that the security behind a debt is a very different concept to the decency of the creditor.

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Irish Property Owners Association – a ‘taxsault’ on property owners?

This is a statement sent out from the IPOA, it makes a lot of very valid points and also raises the spectre of cost-push inflation in rental costs. Nobody stands to gain from the current increase in rental costs, not the tenant, not the landlord who is using the increase to set off higher costs from taxes and other state imposed costs and certainly not the people who manage or live in rented property. The only beneficiary of this is the exchequer.

It has been reported that rental rates in some parts of the country are increasing, but that is hardly surprising given the enormous direct and indirect taxation levied on landlords.

The landlords’ national representative body, the Irish Property Owners Association (IPOA), invented a new verb to describe the situation – to “taxsault”.  And they said that is precisely what is happening now.  “Private landlords cannot be expected to subsidise the rising costs of letting,” said the IPOA’s Margaret McCormick. “They have to cover their costs including heavy mortgages, try to earn a sustainable income and pay their taxes, …

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Banking flim-flam, ‘We’ll huff and puff and may or may not blow your house down!’

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 first letter is standard, it came after the client missed about 4 months of payments, to this point there were two calls then this letter.

The letter starts off fairly heavy, in terms of implications, they …

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What banking insiders think of what banks are going to do

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 …

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Spin me right round’ – some thoughts on IBF data

In statistics there are two key components, the first is the actual ‘data’ the second is the ‘inference’ or what the data actually means. If you saw that one summer was hotter than the last by collecting daily average temperatures that would have statistical significance, if on the other other hand you saw that July was 56% hotter than January then you’d be stating the obvious and your ‘inference’ would be laughable.

That we can see this when it comes to meteorology is obvious, and almost nobody would take such news as having any significance, but when it happens in finance it can go unchecked although Eamon Quinn at the Wall Street Journal caught the IBF out on their release which is about mortgage lending being ‘56% up this quarter’.

Here’s the actual quote they lead with ‘The latest figures from the IBF/PwC Mortgage Market Profile, published today, show that the number of new mortgages issued in Q2 2013 has increased by 56.1% on the previous quarter.’ And it …

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Defining ‘Strategic Default’

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 …

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More on pseudo-scientific-legalese from Kilkenny

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 …

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The ‘Kilkenny Trust’ that makes mortgage debt disappear

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 …

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Davenport after Dark on Newstalk: Karl Deeter on mortgage repossessions 1st August 2013

We were asked to speak to Fionn Davenport & Kieran Cuddihy on Davenport After Dark about the changes in the Land Conveyance Law Reform Act 2013 which may result in more repossessions in the future, we agree with this view, the question is what [glossary id=’6898′ slug=’mortgage’ /] holders will be targeted first?

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Talking Point with Sarah Carey: the role of unions, joined by John Moynes, Gerald Flynn & Karl Deeter

I had the pleasure (and it was fun I admit) of joining Sarah Carey on talking point on Saturday. The thrust of the show was about unions (or ‘labour price fixing cartels’ as I like to call them) and their general role in a modern economy. I did try to make some fairly polarised anti-union arguments, but in truth there are always nuances and they get brushed over in any debate even when you don’t try to take a one sided approach.

The pro’s and con’s of unions are many, and some were learned first hand (I mentioned a few of them). Sarah presided well over the shower of troublemakers lovingly called ‘the panel’. John Moynes and Gerald Flynn also did a fine job of justifying the necessity for labour unions in the workplace, they even managed to do it without getting angry at me and I did try to give them every opportunity.

A special hats off to …

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