We were asked to comment on the Central Bank mortgage loan proposals, we believe they are as blunt an instrument as you could use and that a more nuanced solution would be not only easier to implement but more effective. Equally, we don’t expect any such approach to be undertaken as too much of the regulators reputation has been staked on this policy.
TV3 Ireland AM speak to Irish Mortgage Brokers about mortgage caps
We were asked to speak to Ireland AM on TV3 about the proposed mortgage caps, some of the concerns about what the outcomes may be and the curious case of how the Government themselves are trying to circumvent this plan.
Newstalk: Lunchtime speaks to Irish Mortgage Brokers about ‘mortgage caps’
Jonathan Healy of Newstalk spoke to Karl Deeter about capping mortgage loan to values and loan to income amounts. This is a logically compelling idea but it won’t fix the supply shortage or necessarily prevent the problems we are told it will fix. It will also mean that about 2 in 3 first time buyers face an adverse effect that people who already bought didn’t have to deal with, namely that of trying to save up a 20% deposit.
We have ceased to offer debt management services under the Central Bank regulations
Irish Mortgage Brokers have informed the Central Bank that we will not continue the debt management services industry under their regulation. This blog serves to notify people who may want to enquire with us that we are no longer authorised by the Central Bank (we can still offer insolvency solutions). No clients have been adversely affected and we are liaising with the Central Bank to ensure the termination goes smoothly.
Particular issues relate, in our view, to how the Central Bank has approached the regulation, the delays, repeated requests for identical information and specifically seeking management accounts when audited accounts were provided.
We also faced huge delays from the Central Bank in processing and responding to queries which they resolved by asking for more information rather than accepting blame (point above being one such example).
The efforts thus far seem to amount to seeking unrealistic demands from industry then only pulling back when they are shown to be operationally impossible. In the first ‘consultation’ the Central Bank suggested that a mediator hold indemnity for the entire quantum of debt they …
Protection of Residential Mortgage Account Holders Bill 2014
Normally I expect a better outing from Fianna Fail – in particular where Michael McGrath is concerned. Their new bill for protecting mortgage account holders (aimed mainly at IBRC former Nationwide loan holders) is a banger.
It gets down to details in section 3 onwards. In section 4 it calls any buyer to ‘be bound by such Codes of Practice that govern residential mortgages that are in force at the time of the sale and/or transfer or are subsequently introduced by the Central Bank’. This is misinformation.
You can’t ‘opt in’ to regulation, something we already covered here, you are either regulated or not and mimicking best practice doesn’t mean anything as there is no binding force behind it.
In section 4.2 it states that ‘It shall be a precondition to the sale or transfer of residential mortgage loans by persons or entities who acquire, either by purchase or transfer, residential mortgage loans from financial institutions regulated by the Central Bank to other persons or entities …
TV3 The Insider on the ‘half rule’
this piece was about the ‘half rule’, a little known piece of legislation from 1995 which allows people to hand back their car once you reach a certain point in the finance agreement, it’s a great tip for people who are struggling financially.
A strange contradiction, making a problem then complaining about it…
At the Central Bank conference on distressed property markets yesterday there was an excellent line up of speakers, the event was launched by the Governor who said that ‘Household financial distress is at unprecedented levels in Ireland as can be seen, for example, from the extraordinary rates of arrears on the servicing even of mortgages secured on owner-occupied homes‘.
That line is the one that made headlines, it was designed (intentionally or not) to make a point which various regulators keep making – that banks are not dealing with this problem.
So all we get from this is that mortgage arrears have miraculously gone to ‘extraordinary levels’ somehow and somebody needs to fix that… The justified rage being that we pre-capitalized the banks (recapitalizing would have necessitated the capital being used first not held to the bitter end) to the tune of €64bn.
Matthew Elderfield said it in March of last year, ‘time to face up to reality’. This was echoed in a talk given to the …
Estate agents who may be unqualified?
Edel Morgan has an interesting article in the Irish Times today about estate agents having problems getting their licenses set up – the financial services industry went through the same set of issues nearly ten years ago. New forms, paperwork and bureaucracy always suffer teething problems but on the point below there is an obvious answer:
However one south Dublin estate agent, who declined to be named, said he is worried that he may not meet the requirements for licensing despite nearly 20 year’s experience. He was trading under his own name for less than three years prior to his application and the legislation says that sole traders or independent contractors need to show “evidence that the applicant was the holder of a licence or permit issued under the Auctioneers and House Agents Acts 1947 to 1973 for three of the five years immediately preceding the making of the application.”
In financial services there was a similar problem of people having a long established work record but lacking the specific qualifications that were developed for the …
Are banks breaking rules by charging account fees?
“AIB will charge me for not having enough money in my account, apparently I can’t even afford to be broke.”
Regulation is a tricky area, it is a branch of law more than of finance and like law it is open to interpretation, precedent and individual cases.
So when I see Anne Fitzgerald of the NCA say that AIB is ‘breaking the rule that required it to act in the best interests of its customers’. I am concerned because it doesn’t present the context of the rule, rather it just makes a statement.
The actual rule being mentioned is Section 2.1 & 2.2 of the 2012 Consumer Protection Code. Chapter 2 in general covers consumer credit, payment services, and electronic money. The actual text of this section (2.1/2.2) is as follows:
“A regulated entity must ensure that in all its dealings with customers and within the context of its authorisation it that it (2.1)acts honestly, fairly and professionally in the best …