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Having read the headline and intro i was looking forward to this, but I’m left a bit confused having read it.
What does the mystery ex-banker find so unappealling or predatory about threats to repossess? Of course it isn’t “nice”. How else do debts get paid in the economy?
“Dear Mr. Deeter,
Would you please pay your mortgage? PLEASE. Don’t be so mean to us. We loaned you that money in good faith.
Regards,
Mr AN Sadsack”
If it makes sense for a bank they may prefer reduced payment, or periodic payment, over repossession. In any effort to recoup a debt the threat is often more valuable than the actual practice. Is this news now?
As far as Irish mortgage holders are concerned: you don’t know you’re born, as the saying goes.
I think the issue is (because I’m not against repossessions, I think it’s the natural outcome for unpaid loans) that they don’t do it in order to actually take possession, they do it to obtain an option which can be a call or put depending on how they intend to exercise it. It also becomes a latent threat that can/can’t be used. There could be some sense in a rule that a property that isn’t possessed upon receipt of an order within a number of years then has to start again perhaps?
In regard to AIB losing €4m on the sale of 17 properties, I have read elsewhere that the balance is made up by the banks through their ‘insurance’. Is this correct? Have banks insured their lending so that it pays out in the event of a loss on the sale of a repossessed property? This is a fundamental question that goes to the heart of the behaviour of the banks and must be addressed by the media.
That depends on whether they took out the insurance or not and whether the insurer didn’t already go bang. There is thing called an ‘indemnity bond’ or ‘mortgage indemnity guarantee’ and it covers the bank for losses of the part between 75% and whatever LTV they went to (if they lent 92% then it would be covering for 17% of the balance).
The banks do have these in some instances, in many they don’t, on others they self bonded and in some examples they have it but the insurer has ceased trading. This is something which becomes known during the possession process normally.
Waaaiiit, just a second: so a repossession order is valid for 12 years? So the bank can wait until there is further equity in the property, and then decide to cash in their “investment”? Sinister indeed.
Ronan (above) is obviously a banker….
Ronan: Point me to the banker that lost his house when we started bailing out the banks, please? Point me to the politician among those responsible who lost his house, his savings, his freedom, over the mess they presided over. Point me to the senior regulator who lost his job, got fined and jailed over the mess they approved of. Point me to the tax dodging TD’s who have been since dragged to court and sued, losing everything because they refused to pay their tax. Point me to the bank that is being forced to co-operate with it’s new shareholders – that’s us, the public since we bailed them out – instead of controlling the options.
“Strategic Defaulter”, and other weasel words, used to avoid legalities and shirk responsibilities. The bank uses these weasel words to make you look like an opportunistic b-stard that won’t pay because you don’t want to. Never mind that you can’t pay because your money is taken to bail the same bank out of it’s own gambling debts…
The usual bunch of non-sequiturs mixed with emotional nonsense. If you can’t pay your mortgage you shouldn’t retain the property, it should be sold to someone who can. Currently the person who can buy it is looking at paying rising prices, or rising rents, all because his/her taxes are being used to keep people in homes they can’t afford.
It was wrong to bail out banks, and it is wrong to socialise the debts and arrears of those who can’t or won’t pay at the expense of those who can. Your mammies told you long ago that two wrongs don’t make a right. Pay your mortgage or move on.