Report on public meeting 7 May

Brendan Burgess

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Hi folks

This is a quick report. I am heading off for the weekend, so I might do a longer one next week. Any of the other attendees welcome to add to this.

Indo report here:

"Mortgage holders may picket Central Bank"

It also featured on the RTE 9 pm news.


Attendance: around 130

We had a good lively discussion. Plenty of discussion from the floor and some good interaction with the speakers on the panel.

The general view of the meeting
Support for legislation to give Central Bank the power to control interest rates.
Support for legislation to oblige lenders to make new products available to existing customers
Opposed to sale of AIB
Support for active protesting out side Dáil, banks and Central Banks.
People would vote for SVR candidates in general election, but hopefully the problem will be resolved before then.

Giving the Central Bank power to control interest rates
Apparently Michael Noonan has said that if the Central Bank says that they want the power to control interest rates, he will give them that power. Michael McGrath rightly pointed out that it's up to the Oireachtas to decide what powers the Central Bank should have. The Governor's opinion would be listened to, of course, but the Oireachtas would decide.

Opposition to suggested levy
Brian Hayes supports imposing a bank levy if the lenders don't cut the rates. No one from the floor thought that this was a good idea. It would take pressure off banks to cut rates and they would just pass it on to customers anyway.

Brian suggested that the levy would have to be fed back to the SVR mortgage holders through tax relief.



Widespread support for New Beginning's High Court challenge
Ross Maguire set out the options for challenging the legitimacy of the variable interest rates. There was widespread support for this. In fact, some at the meeting felt that the political system would never control the banks and that a legal challenge was the only option.

Setting up a new mortgage bank
There was a fair bit of discussion of this as well. It was pointed out that an online mortgage bank could be set up by the government fairly easily. Others pointed out that the government owns two banks already.

Brian Hayes suggested using the Housing Finance Agency to source funds cheaply and provide cheap mortgages.

It was also pointed out that the Credit Unions have massive surplus funds and they could put them to use in mortgage lending.

Maybe we should approach foreign banks and encourage them into the Irish market.

What next?
Draft legislation and seek cross party support for it
Organise other meetings - probably in Galway and Cork
Seek meetings with Chief Executives of banks
Explore possibility of mass switch of mortgages
Do up a petition for submission to Minister

Brian Hayes and Michael McGrath were very clear that SVR borrowers have to keep up the political pressure. This is a live political issue and if borrowers sit back, then the impetus for change will fade.
 
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The attendance figures are abysmal. Looks to me, the banks and government that SVR payers don't care. Makes me think Irish people are all bluster and no action. Also make me wonder if the protests about Irish water are just hot air. Or it could be the people who won't pay for anything protesting. Greece we are not. And that's probably a good thing.
 
Hi Bronte

We were expecting between 100 and 200 - we had seating for 200. We got good media coverage in advance so I thought we would be up towards the higher numbers. At 7.30 pm it was looking very bad, but by 7.45 we had a reasonably full room. I wouldn't say abysmal, but I was a little disappointed by the turnout.

Having said that, a lot of those attending signed up to help out the campaign. So I think we have broadened the committee a fair bit.

So definitely well worth doing.
 
I atteneded the meeting last night and believe it was well worth having so well done for organising. I can see this campaign gaining momentum so we are heading in the right direction. I believe the key point is the lack of awareness with the general public, I think that in the short term is something for us to build on.
 
I was in attendance last night with my wife and We both felt that it was a very useful discussion so many thanks to those who organised the event and contributed etc.

The turnout was smaller than I would have liked to see. One man who contributed from the floor (he had some financial expertise and helped people on trackers I think he said) spoke of the difficulties the banks conduct was having on families and this resonated with me. Many people affected by this issue are working people with young families (myself included) and it can be difficult to get out in the evenings. We were fortunate to get a baby sitter ourselves as it happens. I think that this is one of the main reasons for the lower than hoped for turnout. I think it would be incredibly short sighted of politicians and others to think that SVR payers don't care.

This issue is hurting people and the economy and it is a vote getter. I have no doubt that people who could not make it last night will still vote on this issue come the general election - paticularly if nothing significant has happened on the issue between now and then.

Regards,

BV
 
I attended last night and felt it was very constructive. The meeting alone is not going to force banks to drop their SVRs but as a step it was a very good one. I'd say everyone in attendance went away with some new ideas and most importantly it sent a strong message that anyone paying an unfairly high SVR does NOT just have to sit idly and accept it. There are actions that can be taken.

Nice to see and read some of the media coverage also. There are around 300,000 SVR mortgages in the country at present so the task is to make as many of these customers as possible aware of the campaign, despite there being no marketing budget.

Well done to all who organised and attended. Sitting around complaining never gets anything done. Taking action - even if it's just to attend such a meeting and tell your friends about it - is how things get done.

Here's a link to an RTE piece.

http://www.rte.ie/news/ireland/2015/0507/699516-mortgage-svr/
 
Am so annoyed I missed this meeting, I think there would be a much larger attendance if the next one is held on a Sat afternoon somewhere in the Midlands, e.g. - Tullamore, so as its within reach for people in many counties.
 
Brian Hayes issued a press release yesterday to coincide with the meeting

Time to consider a new levy on the banks if the scam on variable mortgage holders continues – Hayes

“Irish banks continue to gouge holders of variable rate mortgages” said Brian Hayes MEP at a public meeting in Dublin tonight. “The banks continue to charge almost 2% more for their product compared to similar mortgage products in the Eurozone. Interest rates for variable rate mortgage holders in the Republic are between 1% and 1.5% higher than similar mortgage customers with the same banks in Northern Ireland. We have a dysfunctional mortgage lending market at present in Ireland that is doing nothing to help the recovery of the country. Effectively variable mortgage holders are subsidising the banks for the losses they are making on tracker mortgages.

“If the banks continue to play hardball with variable customers then the time has come for the government to play hardball back. Unless the banks indicate a willingness to reduce variable mortgage rates and bring them into line with comparable rates in Europe, then the government should introduce a special bank levy which could be used to provide additional relief through the tax system for variable rate mortgage holders.

“The Irish banks have very short memories. It was the taxpayers who saved the banking system. Six billion euro of capital invested in Irish banks was to provide for losses on their mortgage book. On this issue the banks are showing no concern for their customers. In effect they are now operating a cartel, exploiting their variable rate mortgage holders to make up for losses on the tracker loan books.

“The government also needs to consider how it might introduce much needed competition into the mortgage market. Because they were so badly burned on Irish property, foreign banks will be reluctant to enter the Irish property market. However the Central Bank should be encouraging foreign banks to provide long term fixed interest mortgages in the Irish market without necessarily opening branch offices in Ireland.

“The Central Bank should also be supporting plans by the Credit Union movement to provide a limited range of well secured mortgage products.

“In order to introduce more competition into the market I propose that the Housing Finance Agency [HFA] should be tasked with providing 25 year fixed term interest mortgages, to first time buyers in particular. Properly funded the HFA could also offer to take existing variable rate mortgages from the banks and replace them with fixed rates for the remainder of the term. This in turn would force the banks to be more competitive.

“With interest rates at historically low levels there is an opportunity for a state backed institution such as the HFA to borrow long term at exceptionally favourable terms. There is now an opportunity to change in a fundamental way the mortgage market; replacing variable rates with fixed rates for the majority of customers. Such a development would be in the long term interest of mortgage holders and of the banks. Interest rates will not remain at their present low levels indefinitely.”
 
The attendance figures are abysmal. Looks to me, the banks and government that SVR payers don't care. Makes me think Irish people are all bluster and no action. Also make me wonder if the protests about Irish water are just hot air. Or it could be the people who won't pay for anything protesting. Greece we are not. And that's probably a good thing.

Did you go?
 
Brendan
Well done on last night. I thought it was a very useful first meeting and there was some productive initial discussion on next steps. I thought the numbers were fairly respectable - 7.30 pm might be a little late to catch people coming from work. Just an observation.

I would be mostly in favour of the legislative and legal route. I am not sure that meeting with the Chief Executives will bear any fruit but it might keep the pressure up. There was a fair bit of support for protests.

As one speaker said last night, I don't know how feasible mass switching of mortgages is considering that many people are in negative equity and there would be valuation and legal fees etc to consider. Anyway, what is the benefit of switching from one unregulated member of a cartel to another?

I thought the ideal of a new bank/agency was a good one. But these are all long haul projects. As one speaker said, there needs to be a sense of urgency on this.

So what do we do next?

(well done again)

Danmo
 
Thanks to all who turned out last night for our first public meeting.It is a good start and hitting the 9 pm RTE news was excellent.

Let's examine the next steps.
 
Agree, fantastic start and great publicity well done all

From my experience, there is still a huge lack of awareness among SVR holders of the situation and the disparity with other Eurozone countries. Other than here, boards and the broadsheets, I haven't seen any coverage until RTE last night. The scope for more support on this campaign is immense.
 
Am so annoyed I missed this meeting, I think there would be a much larger attendance if the next one is held on a Sat afternoon somewhere in the Midlands, e.g. - Tullamore, so as its within reach for people in many counties.

Good suggestion, living in Cork but would definitely attend if next meeting on Sat and possibly more central.
 
Is there a way for us to sign a petition?

Drive to Dublin on Thursday eve was not possible for me. The turnout was very poor, hopefully it has not detracted from this issue, and all the excellent work people have and are doing.

All the rage against the water charge whereas the penal overcharging by banks on SVR is 20+ times more.
 
Thanks for the report Brendan. A new baby and shift work made it impossible for either of us to attend last night but we have contacted lots of TDs about it and also thanked those who have raised the issue. Don't be too despondent about the turn out, many a good campaign has started small. I agree that lots of people are very uninformed about this, I certainly was until recently. Well done to everyone who organised last night, it was a productive start.
 
I couldn't go as at that hour and an over two hour drive it would have been impossible for me! If the meeting were out of Dublin and during the day it would have been better attended. A petition is a great idea
 
I couldn't support any of the suggestions made.

Central Bank:

Other than dictating the market clearing funding rate, the Central Bank should not be getting involved in rate setting.
Putting a cap on a Bank’s customer rates effectively interferes with the pricing of risk.
If a Bank can’t price its own risk then one could argue they could have recourse to the Central Bank - shadow directorship, overstepping its mandate etc.
Irish credit rates are high and so are Irish RISK levels.

- Mortgage Default rates are up at 10%,

- There is limited ability to enforce security,

- There is public & social opposition to enforcements,

- As a result, enforcement costs are very high - mandated delays between the event of default and potential settlement, multiple court hearings, non-payment in the intervening period.

- LTI coverage is poor, increased tax, lower incomes etc – evidenced by the spokesperson, Sarah, who admitted she couldn’t switch as she couldn’t meet the new LTI threshold.


Is it even possible to give the Irish Central Bank the power to set maximum interest rates? Is the Irish Central Bank not an agent of the ECB?
I find it interesting to hear Noonan during the week saying (i) he’d await the report from the Central Bank, then (ii) he’d call in the Banks and tell them to reduce their rates. He has completely prejudged the report. Any other sector of society and people would’ve picked up on this.

Brian Hayes:

The Brian Hayes comments represent “me fein” politics at its finest.
How many in attendance will now think about voting for Mr Hayes or Mr McGrath?
Provide people on variables with Tax Subsidies? This is potential tax income being directed at one group in society that could go elsewhere – social housing lower PAYE rates for everyone, increased health spending. No debate? What about the impact this would have on the valuations of AIB & PTSB? The proceeds from which are to be used to repay state debt.
As for “Irish banks continue to gouge holders of variable rate mortgages……………..The banks continue to charge almost 2% more for their product compared to similar mortgage products in the Eurozone”
That’s the thing. These are not similar products. In the rest of the Eurozone, you can enforce your security.
As for the FHA providing “25 year fixed term interest mortgages”? That statement doesn’t even make sense. Is the tenor fixed? Because that’s what “fixed term” means. Smacks of someone talking about something someone isn’t familiar with. What break fees would be incurred on these fixed rate loans? Or are borrowers locked in their “1st time buyer” properties for life?
“The Central Bank should also be supporting plans by the Credit Union movement to provide a limited range of well secured mortgage products”
No problem with Credit Unions doing mortgages but the second part of his statement is More Nonsense – as outlined, Irish home loans are not well secured. The Banks are struggling to enforce their security.


Ross Maguire:

Challenge the legitimacy of variable interest rates? What sort of statement is that (maybe Brendan paraphrased him – BB was rushing).
Libor/Euribor are bloody variable rate used by the entire world - How can it be illegitimate?
Is he questioning the use of internal Bank rates i.e. rates no linked to some publicly quoted rate?
The fact there was widespread support for this is hardly surprising considering the audience (a room full of SVR borrowers).


My thoughts:

- The housing market is completely dysfunctional.
- Supply is virtually non-existent.
- Average build costs are way too high - build up like any normal city. I’ve lived in a 14 story building and a 38 story building – both very nice looking and both fine. Why can’t this work in Dublin? The sky line is not that great guys.
- If you want, take the new “Bank levy” and build proper commuter transportation infrastructure – dual line tracks with express trains.
- Fix the repos. Allow a bank enforce its mortgages quickly. Housing people afterwards is the state’s problem – not those of the Banks.
- By making a Bank provide free accommodation to delinquent borrowers the costs are ringfenced directly onto that Bank's customer base rather than the entire taxpayer base.
- Introduce proper rental market controls. Landlords cannot evict delinquent tenants. The PRTB is a waste of time. If you want, set proper rental increase caps linked to cost inflation, interest rate inflation and tax inflation.
 
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Again, spot on analysis by Andy>
Other than dictating the market clearing funding rate, the Central Bank should not be getting involved in rate setting.

But your 'thought' re:
- Fix the repos. Allow a bank enforce its mortgages quickly. Housing people afterwards is the state’s problem – not those of the Banks.
..should carry the proviso that all these mortgages should -

A) become non-recourse
B) with no short fall chased upon voluntary sale and
c) credit rating not affected.

If the above (or a variation thereof) is not included in a 'fix the repos' solution..
.. then I and thousands of others will happily reside where we are until the banks 'engage' with us, under our 'terms'.

Folk might not like it (and the above proviso may sound like 'a pipe dream'); but in any discussion, in any arrangement (negotiated or forced) -

..our families come first,
not our neighbours,
not the state and
NEVER the banks.
 
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The purpose of this first SVR campaign meeting was to focus on reducing interest rates and I feel we sould maintain that focus.If interest rates are reduced that in itself should limit repossessions.
 
The purpose of this first SVR campaign meeting was to focus on reducing interest rates

I agree with much of Andy's post above and certainly wouldn't support any of the reported proposals.

I have to say that I find it very frustrating that the SVR campaign puts so little emphasis on demanding that our government deals with the underlying reasons for the high mortgage rates. I don't mean to insult anybody but it seems very childish to me to simply demand reductions to SVR rates and I suspect this contributed to the disappointing turnout at the meeting.

And as for the carpetbagging politicians...:rolleyes:
 
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