On the 31st of July we spoke to Myles Duggan who was covering for Pat Kenny (same day as Pat’s big announcement!) about mortgage defaults, compliance and changes to the ability of banks to repossess homes.
My best laid plans have often blown up in my face, so chances are the idea I had which I mentioned to Pat Kenny last week has lots of snags built in; but today it was discussed on the Pat Kenny show (I wasn’t there for it) and given some additional context.
The thrust of the idea is that having something that is more process or practice based rather than principles based would work better in terms of fast and efficient negotiation.
You can listen to the concept in the link above which has the audio clip, but I’ll lay it out here too. When banks lend money they underwrite a person based on their affordability. My idea is that you re-establish a persons disposable income in their new financial circumstances and use the banks own calculations (albeit this time against them) to ‘re-underwrite’ the loan and in that respect reverse their own criteria against them.
This way if banks are conservative on lending they get conservative payments back …
One of the downsides of financial advice is when a person comes to you and it is too late to help, recently I had a client who was about to give up their home, they couldn’t even afford to pay me for advice, but in hearing their story I thought I could turn them around and told them if it works they can take care of it some other day.
The first thing they showed me was a letter (click on it for the big version) which basically said ‘you can’t afford your home, time to give it up’. You’ll notice a big white space to the right of it which makes it less legible, that isn’t what happened when we scanned it up, it went to them like that.
So the demand to get out wasn’t even presented in a fully readable format. This couple are in …
As a firm we believe compliance is important, relevant and while not always efficient it helps to smooth out some of the issues in firm/client relationships. This is why we encourage every firm working with indebted people to respond to the Central Banks call for submissions on the new proposals for the CCMA 2013.
Amongst the suggestions are that banks stop using auto-diallers and instead are allowed more points of contact but it must be by a human, also that the hours used at present from the CCA 1995 are revised and made less invasive, the trade off being that this doesn’t apply if people don’t engage or if they expressly permit it.
There are many points to consider, from revocation of tracker mortgages, to disclosures, paperwork required etc. but the main point we want to make is that people should submit their suggestions and don’t wait until afterwards to scratch your head and say ‘why does it work this way? Why didn’t somebody think of …
If you were to read the headlines and not delve into the figures you’d be forgiven for thinking banks are either taking back houses wholesale or are about to. There will be a marked increase that is for certain, but have a look at some of the actual figures below.
This shows actual repossessions versus surrenders and abandonments. It’s clear to see that jingle mail and people giving back properties voluntarily is far greater than those being ‘turfed out’. The ratio is generally more than 2:1 against repossessions.
Some of these properties are being sold at a loss, some have equity, others are owned by people who just leave the country, the main thing to consider though, is that for the 95,000 loans more than 3 months behind (the topline figure of almost 150,000 ‘in stress’ is a little misleading) only 200 were taken back without consent in 2012.
That’s a mere 0.2% of the loans in arrears, and it’s still a nearly insignificant 0.85% of …
We are doing an online survey for people who bought investment properties in the past, the survey is here.
If you can answer it please do, the research is in conjunction with Brian Lucey from Trinity College, Marie Hunt from CBRE and Irish Mortgage Brokers.
It will help to get a feel for what motivated property purchases and perhaps give some greater insight into the people behind the Irish investment property market.
Your help is appreciated,
Irish Mortgage Brokers
This article appeared in the Sunday Business Post on the 17th of March 2013
A senior banker described the new rules introduced by the Government and Central bank as ‘a charter for the obvious’ because ‘banks need to become banks not terminal collections companies’, and while some are quick to lend support or decry it as a travesty, we should instead look at the factual impact the new targets and code of conduct on mortgage arrears will actually have.
Policy makers say it is a leap forward, debtor lobbyists say it is nothing short of throwing borrowers to the wolves, both are wrong, its just a new set of trade off’s.
Being able to repossess a property is normal in any housing market, ‘bans’, ‘delays’ or ‘moratoriums’ on repossessions have been used in several nations (Czech Republic, Russia, Hungary, Ireland and the USA) and are government lead. In our case it was Government lead until the Dunne ruling in 2011 hard wired it into law. This must be reversed, it is …