Money lending interest rates regulated

The Department of Finance is a crucial part of the government of the republic of Ireland. During the current year, the Financial Services Division of this sector is looking into the interest rates that government approved money lenders are charging their consumers.

According to the Central Bank of Moneylending and the Consumer Credit Act (1995), money lending is “the practice of providing credit to consumers on foot of a money lending agreement.” Usually, these credits are taken in the form of cash but can also be the purchase of goods on credit from a catalogue.

In general, money lenders make getting money quick and easy. They are especially beneficial for those with a higher chance of being denied the ability to take out loans due to bad credit history, low income or a variety of other financial reasons. Many people who are also uneducated or inexperienced in the financial sector may find themselves turning to this easy alternative.

These vendors are most beneficial to be used as a last resort option when you are in need of …

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Buffet on staying out of debt

When one of the best investors the world has ever known says you should stay out of debt it might be worth listening to! We are advocates of keeping debt as low as possible, this involves financial habits and life habits that lead to financial success. Enjoy the video, the words of this video are full of wisdom.

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Why not make a bank’s veto backfire on them?

There are two views that have been mentioned recently, one is that bankruptcy should have a reduced term to 1 year and the second is that banks have a veto on insolvency deals.

Perhaps the best way to resolve the issue isn’t to make bankruptcy one year for everybody, but rather to make it one year when and where a bank has rejected an insolvency solution put forward by a personal insolvency practitioner.

This would mean their decision to veto has a negative impact upon them, there are consequences to rejecting genuine offers. Obviously this would require some tweaking because individual cases and circumstances can become quite complex, but it would certainly help a creditor to sharpen their mind if they knew that a refusal could then have worse outcomes without affecting their contractual rights.

The good thing about this is that it would also channel more people into the proper route for dealing with debt (the official regulated insolvency one) and keep them out of what will probably become a scandal some day in the future (the informal channel …

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How bad did we manage the mortgage crisis? Pretty bad, here’s Cormac Lucey on it

Cormac Lucey looked at the deplorable state of how we managed the mortgage crisis in the Sunday Times, the clippings are below.

The piece talks about the countless regulatory failures we have endured, and that we did this despite knowing there were better options available.

When you make it nigh impossible to do the right things, it’s no surprise that you get the wrong outcomes.

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Devil in the detail in debt write downs

(this article appeared in the Sunday Business Post on the 23rd of March)

The banks are starting to write down debt. Should we be surprised? Recent news of large write downs on home loans by AIB has left out some of the necessary detail to add context to the story. The lender has equally shied away from confirmation of what happened, making it all a bit opaque.

Why would a bank choose to offer a capital reduction by writing off part of a mortgage? An alternative is to split the loan into a part which the customer can afford to pay and another part which is ”warehoused. If zero interest is charged on the warehoused part, then the affordability for the customer can be the same as if this part is written down, even if the psychological impact is different.

It is likely that there are peculiarities in the cases where debt has been written down, which means this will only happen in the minority of cases. For example, if a loan was on a one off house with a …

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The Mortgage Restructuring Arrangement Bill 2013, a brief look under the hood

This is a piece of legislation currently at Bill stage, I can’t help but think they didn’t get anybody involved in the actual mortgage industry to contribute to this.

It was put forward by Deputy Joan Collins who is part of the new political party United Left (please update that website folks!). The ideas put forward do have some merit, but it smacks of left wing thinking wrapped up in centrist jargon which might stand a chance of passing a slightly right of centre decision making government.

Much of it has similar references to the Insolvency Act 2012, with a difference being that this is a negotiation that can be acted on independently of the insolvency solutions. It could probably do with some re-writing, for instance at several points it talks about people who don’t make it through this being able to go for a DRN, DSA or PIA – when (for …

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Continuing slowdown in growth of arrears is welcome, says IBF

Below is a statement from the Irish Bankers Federation regarding today’s arrears figures.

Continuing slowdown in growth of arrears is welcome, says IBF

The Irish Banking Federation (IBF) notes that the latest Central Bank statistics on mortgage arrears confirm a continuing slowdown in the rate of growth in arrears.  While the total number of private residential mortgages in arrears has increased, as had been expected, this further slowing of growth in arrears is particularly welcome.

As the following statistics and graphs show, the slowdown in the growth in arrears is evident across different stages of arrears:

·a decline in the number of early stage arrears of less than 90 days – a quarter-on-quarter decline of 1.3%

· a further slowing in the pace of increase in arrears over 90 days – the slowest quarter-on-quarter rate of increase since Sept’09

· a further slowing in the pace of increase in arrears over 180 days

The decline in early-stage arrears (less than 90 days) is particularly significant as it confirms that fewer customers are falling into arrears.

At the same time, the …

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