Haven move LTV’s lower

The EBS distribute through brokers via their subsidiary ‘Haven Mortgages’, the EBS have thoroughly debunked the idea that mutuality means anything by charging their existing clients different rates than new clients. They have also failed to be in the driving seat for a ‘third force’, going it alone has not happened, remaining an independent entity has failed, and the likelihood of private equity getting involved will most likely hinge upon state support being part of the package, thus it seems that institutional buyers will be the only serious suitors.

It is in an environment such as this that costs should be most seriously addressed, they have done this with Haven, slashing commissions and workforce, getting the organisation lean, but thus far EBS have failed to pursue efficiency with the same zeal within their own camp, and this zombie-like bank/mutual/whatever, is now reducing LTV’s for the only efficient part of the operation, Haven will now only offer a maximum of 80% LTV to potential clients, leaving 90% loans with the least effective arm of the organisation, the agent network.

It is …

Read More

Self-Employed first time buyer?

Q: I am a first time buyer but I am self employed. Is it true the banks will not lend to me?

A: No not necessarily. If you have been self employed for 2 years or more and have Certified Accounts and Notice of Assessments (Tax Returns) for the the last 2 years proving your earnings than mortgage lenders will accept an application from you.

If they will approve you and how much they will approve you for will ultimately depend on how much you earn, your savings record, your day to day money management record in the last 3-6 months and your credit history record.

Read More

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 …

Read More

The US obsession with home ownership

This is an interesting clip from the Cato Institute and it covers the various vectors of the financial crisis. In this video the speaker talks about the ‘7 steps to failure’ – the basis of the talk is well covered ground at this stage but the addition of the Cato presentation is meaningful and offers some angles that are not commonly considered.

Johan Norberg is a senior fellow at the Cato Institute and a writer who focuses on globalization, entrepreneurship, and individual liberty.

Read More

The Financial Regulator Report

In Ireland each staff member of the regulator costs 23% more than the international average, their cost to the taxpayer is 88% greater and yet they have responsibility – as a ratio toward population- which is only half that of other countries (to be exact its 96% less).

If that isn’t enough, our regulators deal with 15% fewer firms in terms of the number of actual regulated firms per employee, yet it is 26% more expensive to regulate a company in Ireland than elsewhere, and in terms of regulator staff to financial services staff they are dealing with 17% less than in other countries.

We are overpaying for under-service, in fact, in only one other country does the tax payer foot more of the cost of the bill than in Ireland, and for that we get the statistics above based on the figures below. Angry? You should be.

(the breakdown)

Cost per employee: In Ireland it is c. 23% more expensive for every staff member of our regulator than the international average

Cost …

Read More

Property prices, are we near the bottom?

Are property prices bottoming?

there are a few reasons why some commentators feel we are going to start to see recovery.

1. Many New Developments have slashed their prices to stimulate demand: True, having said that, when all sites start to do this in tandem it creates a new low, similar to the paradox of deleveraging in some ways. The current buyer sentiment can be boiled down to this – the people buying are doing so in areas they desire not in ‘areas where property happens to be for sale’ and for that reason we are likely to see further price drops in new build and less in the second hand market. Developers are also starting to chop prices further as they near liquidation, in talking to some they have said that they know various developments are not going to sell so they are talking to the bank about what price is acceptable because the loss is coming one way or the other.

2. Interest Rate reductions have made mortgages a …

Read More

The Criteria Crunch

We have just been informed that one the lenders we deal with are only getting through applications received by the 4th of March, that is a near 20 day delay on new applications they are considering. Why the backlog? Has the market suddenly recovered? Are they being flooded?

No, rather it is a case that in banks nearly everybody has been enlisted to work in ‘collections’ and the staff were taken from every other department, in particular the ‘new business’ section. The bank we are talking about today merged their direct channel with brokerage so even going via a branch makes no difference, the whole company has only four working underwriters.

So inasmuch as the credit explosion saw too many resources being thrown at lending and the expansion of same, the crunch is doing the exact opposite by overshooting the mark in the reduction of resources. For a publicly quoted bank to be 20 days behind means that the market is facing yet another hurdle in reaching its rational level. Lending hasn’t frozen, people are …

Read More

The 'Rich Man' died a 'Pauper'… LTV's and Life Cover

There is a risk creeping into the lives of many that they are not aware of, one that every generation has continually faced and also one that is the greatest wealth destroyer of all, namely death and debt. Nothing kills wealth quicker than death and in particular in circumstances where the estate is not settled correctly in advance or where there are large debts that were not covered.

Every person I know is bulletproof in theory but corporeal in practice and that means that many of us have risks that we are not covering, you can’t cover 100% of the bases 100% of the time but some do need to be covered and it doesn’t have to be rocket science.

How did the rich man die a pauper? We’ll take an example of a person with a home and two RIP’s (residential investment properties), We’ll say that the lady of the house is a solicitor earning €120,000 a year her name is Jane Doe, and the man of …

Read More

The ‘Rich Man’ died a ‘Pauper’… LTV’s and Life Cover

There is a risk creeping into the lives of many that they are not aware of, one that every generation has continually faced and also one that is the greatest wealth destroyer of all, namely death and debt. Nothing kills wealth quicker than death and in particular in circumstances where the estate is not settled correctly in advance or where there are large debts that were not covered.

Every person I know is bulletproof in theory but corporeal in practice and that means that many of us have risks that we are not covering, you can’t cover 100% of the bases 100% of the time but some do need to be covered and it doesn’t have to be rocket science.

How did the rich man die a pauper? We’ll take an example of a person with a home and two RIP’s (residential investment properties), We’ll say that the lady of the house is a solicitor earning €120,000 a year her name is Jane Doe, and the man of …

Read More

Valuations in property are currently meaningless

Free markets, or indeed markets in general, have a tendency to set prices, not through control, not by one person holding up a placard and shouting from the rooftops, but rather through the process of prices reaching a point at where they occur, where demand and supply are reacting with each other.

So if you look for €3 million for a three bed semi in Donnycarney your property will not sell, no matter how much you want it to. At the same time, if you were to list a property there for €50,000 it would sell overnight, and both of these extremes demonstrate a pricing being totally out of balance with the market. The interesting point now though is this: The market itself doesn’t know what is happening, so valuations are currently meaningless. By that I mean the people who go out and value property are not able to make accurate assumptions about property prices in this market, we are seeing this daily, and then dealing with the end result which is …

Read More