Tracker mortgages: make sure you don’t miss out!

Yesterday the Examiner broke a story about tracker mortgage holders potentially missing out because they are not reading their terms and conditions. This is an issue we have seen first hand in our company, but it wasn’t due to not reading the terms and conditions, it was down to a bank error.

Recently Bank of Ireland had to put 2,000 accounts back on trackers after they mistakenly took them off and onto variable rates. AIB made the same mistake 214 times and PTsb did it 53 times.

In our own brokerages case we saw something similar recently with PTsb, they insisted to a client that no tracker was available. Then, only after the client remortgaged did they admit their error and offer it back. We represented the client in this case and insisted that all costs were also covered in reinstating the mortgage. This means paying solicitor fees, losses on clawbacks, breakage fees for the fixed rate undertaken etc.

Where this happens has tended to be where …

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Irish Mortgage Brokers and MyHome.ie on TV3’s ‘The Morning Show’, 2nd March 2011

We were delighted to feature again on TV’s ‘The Morning Show with Sybil and Martin’ (although Brian was sitting in for Martin) on their monthly property slot.

This week we spoke about the necessity of price drops to get a property sold, it is likely the single most important factor, it is also overlooked that there is often a carry cost or opportunity cost loss if sellers don’t drop prices.

Next month we are likely to cover ’empties’, that will be a fascinating show worth tuning in for!

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Moratoriums and Moral Hazard. How to help responsibly with a ‘Mortgage Rescue Scheme’.

According to FLAC there are 30,000 people in mortgage arrears at present, soon there will be too many people in serious mortgage arrears to avoid the issue any longer, while repossessions in Ireland are relatively rare compared to the UK (3 per 100,000 mortgages v.s. 200 per 100,000 in the UK) it is because many don’t make official statistics via the high court, and voluntary possession is unaccounted for (where the person doesn’t fight the lender and just agrees to a repossession), the ongoing forbearance of banks upon borrowers serves both parties, the banks don’t want to become home owners and equally the borrower doesn’t want to be out on the street.

However, with high unemployment, wage cuts across both private and public sectors and such indebted households (2009 has seen historic highs of 176%) something is going to have to give, and while there …

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How many kicks can a broker take?!

How many kicks can a broker take before rolling over and crying ‘uncle!’. A whole bunch it seems.

Today AIB informed the intermediary market that they were capping commissions at €1,500 per loan as a maximum irrespective of the loan size. We feel that banks reward people unfairly and in a ridiculous short-term manner, AIB are no different but they are doing so at the detriment of brokerage.

I’ll qualify that: currently, broker distributed loans are highly profitable for AIB, they don’t have to pay for broker overhead, branch costs etc. I have it on good authority that they have explained this to broker representation bodies in the past, so why curtail any money a broker might make? (As if the current market wasn’t making it hard enough already!).

Simple, because it means you have more money to keep branch distribution alive, and in order to support unprofitable branches you have to find excess profit elsewhere, one of the soft targets is …

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Banks ARE lending, just not freely or irresponsibly

I have read several articles in this week in our  national papers and in them the authors said ‘banks are not lending’ and in one it was implied that this was somehow wrong. A point of order must be raised, firstly, it’s not wrong and secondly they actually are lending, just not freely or irresponsibly.

The frustrating thing is that even after all of the fallout, all of the crashing property prices, all of the international crisis news, that so many people still don’t get it. Cheap credit and easy lending is what go us here to begin with, we won’t fix the Irish economy with more mortgages being freely available.

Lobbyists take note: While you might strong-arm or influence the Government (I don’t know which method lobbyists use but either way they are effective) into supplying money for mortgages via recapitalisation or Homechoiceloan or any other plan, the fact is that reasonable people will not sign up to it, they will buy when …

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Trade Unions and recessions, why they should not be considered.

Trade Unions, by definition are not academic organisations dedicated towards finding working solutions for the economy, rather they are protectionist in nature, specifically towards their members, which is why I am constantly surprised by the media leverage they achieve in various ‘solutions’ they arrive at for the current crisis.

To put it simply, Trade Unions are to economic progress as Kryptonite is to Superman. The wage deflation required to restore a working status-quo in our nation will not be achieved with increments, or guarantees of high wages, rather the inverse is true, now more than ever there is an argument for removing the minimum wage and allowing employment to find its own level, alternatively we can tax ourselves into oblivion and support artificially long dole queues and public spending.

‘Artificially’? How? Simply put, there are many people now who would likely show up to work for eight Euro an hour, and there are perhaps employers who would be happy to pay this to them, but the minimum wage …

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The tipping point?

Today I am taking out the crystal ball, and asking it if these final weeks of December 2008 and the start of January 09′ are the tipping point of the greatest bear market since the 1930’s. The recession is huge, there has been billions in wealth wiped out, we passed the one trillion mark last month, the total is expected to be over 1.5 trillion USD in total.

The question is, how low will the path of this bear market go? [note: this is about the stock market and not the Irish property market] Central banks around the world are chopping rates, forming bailout packages and doing all possible to get the economy back on track. Today we will consider some of the reasons that we may be actually seeing the start of a tipping point.

I believe the trend will be that we saw what amounted to the greatest financial crash in modern history in nominal terms. The fallout in Q4 only escaped the ‘crash’ moniker (but ‘worldwide financial crisis’ doesn’t exactly have a …

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