RTE: So a fund bought your mortgage, what’s next?

Aengus Cox in RTE did a piece on funds who buy loan and there are sound clips and a written report on it here.

We made the point that “quite often do deals that the banks won’t do and that’s the frustrating thing – there’s massive write-down being done by these funds, and to me that’s a very positive development. They’re putting an end date – an end point – in situations that the banks have not had the courage or capacity to do. And sometimes finalising something is actually part of the solution. Now it might not end the way the person wants but this is an adult world where outcomes are based on decisions and consequences, not on what you want.”

The piece does a very good and fair job of looking at all sides of the argument, those of debt advocates, the funds themselves and market participants.

 

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Could Monetary Policy be affecting the Mortgage Default Rate?

With reference to How does monetary policy pass-through affect mortgage default? Evidence from the Irish mortgage market by David Byrne, Robert Kelly, and Conor O’Toole. 04/RT/2017

With the loosening structure of the monetary policy by central banks after the global financial crisis, which allowed the mortgage interest rates to be lower which could have led to a lower default rate on mortgages. This post will focus on two different types of mortgages the Standard Variable Rate mortgage (most commonly known as SVR) and the Tracker mortgage.

A SVR is a mortgage where the lender has the ability to decide when and if the interest rate on the loan will change while a Tracker mortgage is where the interest rate is set to a certain percentage above the European Central Bank interest rate. As the number of Tracker mortgages were increasing while the European Central Bank interest rate was decreasing, the banks started to lose money on them as the interest rate on the mortgage payments were not high enough to cover the cost of the loan. …

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RTE Radio 1: Talking Money with Karl Deeter & Jill Kerby

On talking Money on the 24th of November we looked at the issue of mortgage arrears and the role of the Insolvency Service in terms of finding ways to get solutions with guaranteed end dates. There is a mismatch between the goal of banks and borrowers and it is resulting in solutions that often don’t work.

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What happens when you are in banks for a meeting…

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 …

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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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Newstalk Breakfast: Shane Coleman talks to Karl Deeter about ‘strategic default’

Today we spoke to Shane Coleman of Newstalk about the article in the Sunday Business Post on strategic default.

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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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