We were very pleased to see that we were mentioned in the Sunday Times ‘Money’ section this week in an article by Niall Brady in which he examined the implications of reduced competition and increased regulation in the financial services market in Ireland.
For our part we were asked about mortgage credit and had this to say: ‘Karl Deeter of Irish Mortgage Brokers said: “Lenders are using every blunt instrument in the box to frustrate loan applications. One of my clients was turned down on the pretext her employment wasn’t secure. She works in reinsurance and, because of last year’s record floods, her employer recorded a loss. It is part of a global reinsurance giant, though, that makes €3 billion in profits a year. That’s the type of stupidity that borrowers are dealing with.”
First-time buyers must have at least a 10% deposit and a record of saving to back it up. “Banks aren’t interested in parental gifts or guarantees,” said Deeter. “They are interested in your ability to meet the repayments — not somebody else’s. Make sure you pay your rent by standing order, not cash or cheque, so that lenders can see the money leaving your account’.
We are of the belief that lenders are going to continue to contract credit in 2010 but that a new trend will arise in which they start to extend credit more freely but at much higher margins, this will help to offset the losses being made by trackers but they will need to wait until they have dealt further with their bond issues and also that of the arrears on the book, to see how deep they run.