Mortgage Arrears for the first half of 2010

We expected a 10% increase in mortgage arrears for the first half of this year, moving the total from 32,321 households to 35,531, however it increased 10.73% and the final figure was  36,438 [statistics for the last four quarters are below].

There is an ongoing inability for banks to deal effectively with people in arrears, both in terms of having the operational capacity or liquidity to offer debt relief in some form, and on the other side we have the Financial Regulator who is incrementally stripping away their power to enforce the mortgage via repossessions.

The arrears of the second half 2010 will go up again, there is no sign of either a slowing growth in arrears, or of a slow down in the rate of growth.

The only growth area in our economy at present seems to be in the deterioration of debt quality . . . but for the second half of the year it will not only be an ‘unemployment’ lead increase, rather it will be with the additional impact of lenders creating the problem via mortgage …

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Mortgage Mediation, a solution for mortgage holders in Florida (could it work in Ireland?)

Currently about 25% of the mortgages in Florida are delinquent, there is a huge amount of foreclosed property on the market, short sellers can’t offload fast enough, property prices are falling, and it is also a judicial foreclosure market meaning people have similar issues to the problems we have here when a home in negative equity is repossessed, they owe the difference.

A possible solution being tried there is that of mortgage mediation. This is vastly different than the scheme in place in Ireland, and perhaps active mediation with a set point of contact and a set representative would be a good idea, chances are we’ll never know because it is not likely to be rolled out in Ireland.

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Difficulties with mortgage repayments?

The Irish Bankers Federation has produced a guide for people who may be having difficulty in servicing their mortgage. This is a timely publication and relevant to many consumers. We previously published our Repossession Guide in early 2009 but it doesn’t cover the new Code of Conduct for Mortgage Arrears 2010 and the IBF one does.

Ultimately much of the information is common sense with some of the Code of Conduct being applied, having said that, it is vital to understand and utilise the information contained in the guide if you find yourself in difficulty, as this may be the only thing standing between you and a pointless repossession. Losing your home is one thing, doing it unnecessarily is another.

There is a wider question in Ireland about how we are going to solve our mortgage mess, the figures of houses in serious arrears continue to increase and forbearance cannot become a long …

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Have your say: On dealing with mortgage arrears

This post is hopefully a free for all on the topic of mortgage arrears. I would like to pose several questions, feel free to answer as you see fit.

1. For people in mortgage arrears, should they be helped? And if so then how?

2. Does the individual bear responsibility for their borrowing, and if so then is it correct to support that borrowing? Should a person ever be liable to repay help they receive in such an instance?

3. At what point should a person not be given help? And equally, when should financial help begin?

4. How would this be financed?

We look forward to your answers!

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If you are in financial trouble, don’t be an idiot

A part of me feels bad about not having any pity for some of the people who recently had their homes repossessed. Note: I said some not ‘all’, the reality is that I agree with repossessions for people who bury their head in the sand. In many cases the person had made no payment in three or four years and avoided any contact from the lender.

How do you negotiate with a person who won’t even come to the table? Or worse yet, who refuses to acknowledge there is an issue to come to the table for! The IBF recently decided to start working with MABS on a new protocol for people in financial difficulty, we fully support such a move, and for people in mortgage arrears, or indeed any financial arrears we even wrote a guide for …

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Debt Management: no tax break for people in trouble

Financial services (such as brokering) are a zero VAT business, we cannot charge VAT for our activities, we do however, pay VAT on all of our supplies and in one respect that makes financial services good for the Revenue Commissioners, it’s a one way street.

Equally, it makes everything more expensive for a financial services company, but we won’t be expecting any sympathy on that!

However, what happens when that financial service is for a person in difficulty? A guideline given by the Revenue Commissioners to a debt management company in Dublin has lead to the interpretation that ‘Debt Management’ is subject to VAT.

What that means is this:- If you get into trouble servicing your debt and you hire a professional service to help you negotiate with lenders and to arrive at settlements on interest and principle amounts due then you will have to pay VAT on the fee applicable by the company that is helping you to get out of trouble. Thus the service becomes 21.5% more …

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Blogs and sites that cover the topic of finance and economics

I was at a meeting last week and the topic of ‘what I read’ came up, I spend on average, about six hours a day reading, granted that is not always books, it can be blogs, websites etc.

The sites that I like are listed, in no particular order below, some are article driven, others are debate/forum driven.

The Economist Financial Times Calculated Risk Across the Curve Credit Writedowns Irish Economy The Property Pin Politics.ie NewDeal2.0 BreakingNews London School of Economics John Mauldin’s Investor Insight (ezine/weekly letter) VoxEU Raging Bear

If you do a google search for any of these sites you’ll find them with ease and they are all sources of very interesting information

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Financial road maps

Having a plan is important in many areas of life, I would feel it is vital in personal finance, yet a surprising amount of people totally fail on this matter and go through life in an ad hoc manner and they are often wondering why some people seem to do better even though they don’t earn as much as they do. Animals in the forest don’t worry about finance, they do worry about food though, hence they gather for winter, squirrels have figured this out so it is disappointing, given the superiority of human intellect, that many private individuals have not planned for an ‘economic’ winter.

A simple method is a budget, it can be complex or it can be crude but in either case having a crude one is better than having none. Sometimes this is worked out using percentages, for instance:

After tax income x 60% = all expenses (mortgages, bills, food, entertainment etc.)

After tax income x 10% = discretionary expenses (something you may have buy from time to time)

After tax …

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