You do not refer to mortgage insurance, payable in all cases where the loan to value is 80% or more, I believe? When does the lender file a claim for this? How many cases are known where the insurance company has proceeded against the borrower?
How many actions have been taken by borrowers or their reps against reckless lenders in Ireland? I know that these are gaining ground in the USA.
How many cases are there where the lender has written off the loan after the borrower has emigrated?
How much will the lender offer in cash, to the borrower to consent to a repossession order?
The mortgage indemnity guarantee (MIG or sometimes just called ‘bonding’) pays the lender, it doesn’t however, remove culpability on the borrower for the full amount, the claims there are likely already high in any case – we can see that indirectly because so many lenders are only doing loans to a max of 80% LTV (because bonders won’t deal with them any more), and by going with lower LTV’s they don’t affect their moodys rating etc. Regarding the time of claim on a MIG – my understanding is that it kicks in when a loss is realised by the lender, not an operating loss (ie: three missed payments) but one without likelihood of recovery (repo’s).
Regarding reckless lending, I think that is a fine line, i don’t know that we can have a world where we expect adult responsibility and at the same time tell people what is and isn’t good for them [within reason], if society truly worked that way cigarettes would be illegal. While I truly feel for people in financial difficulty – hence I wrote the guide – I also believe that people need to be held accountable for their actions, be those actions well or ill-informed.
On the write off front – if a person does a runner then the negative equity will have to be written off, it will appear in the balance sheet as an impairment charge.
lastly – cash incentives to leave – It happens in the USA, I don’t have figures for Ireland, primarily because any meaningful figures in our property market often don’t exist!
anyway, thanks for dropping by! appreciate your input, and sorry for the delayed response.
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