# KBC Exiting the Irish Market



## Gordon Gekko (16 Apr 2021)

I see that KBC are exiting the Irish market.

This was kept surprisingly quiet.

Bank of Ireland have signed a Memorandum of Understanding to take over the performing loan book and KBC’s circa dozen branches will obviously go.


----------



## NoRegretsCoyote (16 Apr 2021)

Here's the story:



> Belgian financial giant KBC Group has signalled it is seeking to quit the Republic after more than four decades and is planning to sell its KBC Bank Ireland unit’s performing loans and deposits to [broken link removed], reducing the number of retail banks in the country to three.
> 
> .......
> 
> ...



I'm surprised they did it now. It was rumoured a few times post-GFC but never happened.


----------



## skrooge (16 Apr 2021)

Impressive they kept it quiet. 

No great suprise though. On the face of it Ireland looked like an attractive place for lenders but when you see how skewed things are towards keeping people in their homes (at almost any cost) and the delays/costs associated with legal enforcement it really is a bit of a quagmire for a lender. 

Timing makes sense. Now is the time to get out before the full Covid-19 chickens comes home to roost.


----------



## NoRegretsCoyote (16 Apr 2021)

skrooge said:


> and the delays/costs associated with legal enforcement it really is a bit of a quagmire for a lender.


Recall that the 2018 Strokestown repossession case was KBC.

I doubt that went down too well at HQ in Brussels.


----------



## Mocame (16 Apr 2021)

This is really worrying I think.  There will be practically no competition in the Irish mortgage market.


----------



## Steven Barrett (16 Apr 2021)

Not good for competition but not surprising. It means non Irish banks have all tried and failed to make it in the Irish market. We're too small and the laws over repossessions make it too expensive to resolve non performing loans. The fact that we still haven't resolved cases from the 2008 crash says it all.


----------



## DublinHead54 (16 Apr 2021)

As a KBC customer last month my mortgage direct debit changed to Pheonix 7 from the regular KBC, this was reported on in the independent. I received a text message saying it was just an error and nothing was unchanged, but I wonder if this was the bank engineering towards the sale. If they have secured 33k mortgages and raised cash by selling an RMBS on the bank of it, that would mean that these mortgages couldn't be transferred to BOI unless BOI just becomes the servicor i.e. the collector of the payments?  

_From research by this publication, it appears that there are 33,000 mortgages worth €5.9bn that were bundled together, securitised and called Phoenix 7. In what is a highly technical piece of financial engineering, KBC Bank Ireland ownership of the mortgages transferred to another entity within the wider KBC Group._



Details on the RMBS



			https://www.fitchratings.com/research/structured-finance/phoenix-funding-7-designated-activity-company-24-02-2021


----------



## nest egg (16 Apr 2021)

I really do dispair hearing this news. Not only are all paying higher direct taxes as a result of banking failures of the past, we're going to continue to pay higher interest rates, which is a tax by another name.

I can only hope the N26s, Revoluts & others of this world can step in, because I don't see an insular, Irish dominated, state owned, banking force being competitive or innovative.


----------



## DublinHead54 (16 Apr 2021)

mojoask said:


> I really do dispair hearing this news. Not only are all paying higher direct taxes as a result of banking failures of the past, we're going to continue to pay higher interest rates, which is a tax by another name.
> 
> I can only hope the N26s, Revoluts & others of this world can step in, because I don't see an insular, Irish dominated, state owned, banking force being competitive or innovative.



In a world of low interest rates and high regulation, retail banking is not profitable and banks costs are continuing to be squuezed. I would also worry that despite the lack of competition the Irish banks will struggle to be profitable and continue under the current operating model.


----------



## Brendan Burgess (16 Apr 2021)

This is my first draft of a briefing note on the issue

Briefing note on KBC sale to Bank of Ireland

Brendan Burgess

Founder askaboutmoney.com



*Very bad news for mortgage holders *

While the Minister for Finance is technically correct that the rights of the borrowers are unaffected, the reality is that the rights of the lender are not affected either. And Bank of Ireland has the right under the contract to charge what they like.

Bank of Ireland has the highest variable mortgage rate in Ireland – effectively forcing its customers to fix their rate if they wish to get any sort of value.


Mortgage rateAnnual interest on €300k mortgageTotal repayments over 20 yearsBank of Ireland SVR4.5%€13,500€455,000KBC SVR3% to 3.3%€9,000 to €9,900€400,000 to €410,000Additional cost of BoI€4,500 to €3,600€55,000 to €45,000





Bank of Ireland
All LTVs: same rateKBC
Different rates for lower LTVsExtra annual cost on a €300k mortgage1 year fixed2.9%2.5%€1,2002 year fixed2.9%2.3%€1,8003 year fixed3%2.25% -2.35%€2,250 to €1,9505 year fixed3%2.4% - 2.5%€1,800 to €1,50010 year fixed3.5%2.85% - 3.2%€1,950 to €900


*If Bank of Ireland’s rates are so high, why do they still have any customers? *

Most borrowers are totally unaware of the mortgage rate they are paying. This is due to a combination of inertia and lack of financial knowledge.

Bank of Ireland attracts new customers with cash back incentives. This confuses customers. Without this incentive, Bank of Ireland would get no new business.

But the cash back allows BoI keep their rates high for existing customers.

If cash-backs were banned, then BoI would have to reduce their rates for all customers.

*But when Bank of Ireland takes over KBC, can’t their customers switch to another lender? *

They can. But most borrowers lack the financial knowledge to switch. They are confused by the offers out there and will usually make the wrong decision.

*We have lost Ulster Bank and, now, KBC. What should the government be doing? *


They should ban cash backs
They should make it easier for lenders to repossess homes where the borrower is paying nothing. Just like any other country in the World.
*What would banning cash backs achieve? *

Ulster Bank and KBC had the lowest mortgage rates. But they were losing business because customers were going to the banks who offered cash back – Bank of Ireland, permanent tsb and EBS.

Customers pay far more over the life of the mortgage, but many are attracted by the cash back which might allow them to furnish the house.

Banning cash backs would create a level playing people and force lenders to compete for new business based on mortgage rates.

In general, if a lender brings down rates for new business, existing customers can avail of them.

*They should make repossession easier *

Everyone agrees that people who get into mortgage difficulty but act responsibly should be protected.

But we have a large group of irresponsible borrowers who make no effort to repay their mortgage.

And the legal system makes it very difficult, very expensive and very time consuming to repossess a property.

The Central Bank rules require that the lender put aside huge amounts of capital for these non-performing loans.

The result is that the lender is forced to sell the non-performing loans at a big discount to vulture funds.


----------



## DublinHead54 (16 Apr 2021)

Brendan Burgess said:


> *But when Bank of Ireland takes over KBC, can’t their customers switch to another lender? *
> 
> They can. But most borrowers lack the financial knowledge to switch. They are confused by the offers out there and will usually make the wrong decision.
> 
> ...




Brendan, great summary. Can I add the following

1. Switching - There is a cost of switching i.e. solicitor fees and maybe a broker. Lenders have also increased lending criteria on the back of Covid potentially preventing those that are paying their mortgages with KBC unable to switch. All the burden for switching is taken on by the borrower
2. What Should the Government be doing - The RWA (Risk Weighted Average) / capital required to be held against mortgages in Ireland vs rest of Europe which makes performing loans less profitable. I think the CBI should address these requirements, perhaps a good indication would be how many mortgages have gone into arrears during Covid. This is the first real world stress test of the mortgage market post the enhanced lending requirements. 

Whilst I agree on the repossession piece, this is now becoming more of a legacy issue as the stricter lending criteria matures in the mortgage market. For example, looking at the figures in the IT article the NPL account for 13% of the portfolio they are looking to dispose off. They could have sold that to a vulture fund, but it seems that the remaining 87% is not profitable enough. With low interest rates the profit is already low, but with high capital costs this further erodes the profitability of a mortgage. 



*For Irish mortgages, modelled RWA densities are considerably higher than other European countries, with average risk-weights in Dec-18 (36%) almost 2.5 times the EU average (15%).*
*Current strategies to address high NPE levels will reduce the gap; however, this could be offset by conservative adjustments that may be introduced following the outcome of the ECB TRIM exercise.*
*The divergence in RWA density across individual Irish mortgage portfolios is significant. This will cause inconsistencies in minimal capital requirements set by the Supervisor.*
*Banks must endeavour to increase understanding of the strengths and limitations of internal models and ensure regulatory capital requirements accurately reflect their underlying credit risk. Senior Management must ensure that any excess variability when compared with other European banks is understood and, where possible, addressed through model redevelopments.*

[broken link removed]


----------



## ryaner (16 Apr 2021)

The cost of switching is not, at least for me and multiple people I've spoken to, the monetary cost. Having gone through the process last 2 years ago, there would need to be a very large saving for me to consider doing it again. The process was just too time consuming.

Finance Minister Paschal Donohoe was quoted as saying "competition would remain strong between domestic banks" after this. Has there ever been real competition between the domestic banks?


----------



## PGF2016 (16 Apr 2021)

ryaner said:


> The cost of switching is not, at least for me and multiple people I've spoken to, the monetary cost. Having gone through the process last 2 years ago, there would need to be a very large saving for me to consider doing it again. The process was just too time consuming.


To counter this there are others like me who didn't find the process overly onerous and would do it again if there was a payback. I don't think anyone should be put off by the process. We need to encourage more to switch where possible. 


Back on topic. What's happening to the current and savings account holders?


----------



## NoRegretsCoyote (16 Apr 2021)

Dublinbay12 said:


> 2. What Should the Government be doing - The RWA (Risk Weighted Average) / capital required to be held against mortgages in Ireland vs rest of Europe which makes performing loans less profitable. I think the CBI should address these requirements, perhaps a good indication would be how many mortgages have gone into arrears during Covid.



I am not the expert here. But what degree of discretion does the Central Bank actually have here with respect to the EU legislation? Also remember that all Irish mortgage lenders except ptsb are directly supervised by the ECB.


----------



## Paulk (16 Apr 2021)

Hi all,

We currently have a tracker mortgage with KBC and we have made a number of over-payments over the years, with the option to redraw at a later stage. Do you know what the implications of KBC exiting the market will be for our mortgage? Perhaps, we should redraw the over-payments now.


----------



## PGF2016 (16 Apr 2021)

Paulk said:


> Hi all,
> 
> We currently have a tracker mortgage with KBC and we have made a number of over-payments over the years, with the option to redraw at a later stage. Do you know what the implications of KBC exiting the market will be for our mortgage? Perhaps, we should redraw the over-payments now.


Nothing has been agreed yet so you should do nothing for now.


----------



## DublinHead54 (16 Apr 2021)

NoRegretsCoyote said:


> I am not the expert here. But what degree of discretion does the Central Bank actually have here with respect to the EU legislation? Also remember that all Irish mortgage lenders except ptsb are directly supervised by the ECB.



They will likely be regulated by the Joint Supervisory team which has both ECB and CBI. The rules that applied should be the Basel rules which I understand are adopted in the same fashion across the EU. The irish lenders have Advanced IRB permissions which means they calculate the RWA based on internally developed models that have been approved by the regulators, the other option is a standardised approach which is generally more punitive.  The below from KPMG gives a good summary, my two cents is that banks are trying to make a 10% Return on Equity, and a 36% RWA probably doesn't let them get there or there are more efficient places to deploy capital. My view is that KBC must have looked at it and said even by selling the NPLs the remaining performing assets will not generate the necessary ROE to sustain the business model. I should qualify, I am not an expert in this and just suggesting it may be an avenue to explore.

_Irish Retail Mortgages – RWA estimates_​_For their mortgage portfolios, all five Irish retail lenders have Advanced Internal Ratings Based (IRB) permission. This means that key credit risk parameters (Probability of Default (PD) and Loss Given Default (LGD)) are modelled internally from each Bank’s individual default and loss history. Key regulatory requirements include:_

_The PD must be calibrated to a long-run average measure minimising any pro-cyclicality within the estimate. This ensures capital levels aligned to grades within credit rating systems remain stable through both benign and stressed conditions._
_The LGD must be estimated with a downturn measure – which is representative of adverse economic conditions._
_Key factors_​_In a European context, the average risk-weight in Dec-18 (36%) is almost *2.5 times the EU average* (15%). This is partially driven by two key factors:_

_*Ireland’s ongoing high percentage of Non-Performing Exposures (NPE):* NPEs attract higher risk weights when compared to Performing Exposures, which adversely skews the overall RWA figure for mortgage portfolios._
_*Incorporation of Ireland’s most recent default and loss experience into Advanced IRB models: *EBA guidelines on PD and LGD estimation require banks to have a representative mix of “Good” and “Bad” years in their reference datasets. The Irish mortgage data history contains strong adverse bias from the recent financial crisis. The extreme volatility from the recession to the current benign conditions is also likely to increase sensitivity in both the PD calibration and the downturn LGD estimate._

In the European context, the expectation is that the gap between Irish banks’ RWAs and the EU average is likely to reduce. This will be driven by a number of factors, including:

The on-going initiative in Irish banks to reduce NPLs: with portfolio sales likely to reduce the skewed impact of higher non-performing risk-weights; and
*Updated re-calibration of long-run average measures: *the recent improvement in the Irish economy should increase the number of “Good” years in the reference dataset. This should offset some of the bias towards the previous more stressed years.

[broken link removed]


----------



## NoRegretsCoyote (16 Apr 2021)

Dublinbay12 said:


> They will likely be regulated by the Joint Supervisory team which has both ECB and CBI. The rules that applied should be the Basel rules which I understand are adopted in the same fashion across the EU. *The irish lenders have Advanced IRB permissions which means they calculate the RWA based on internally developed models that have been approved by the regulators,*



Correct! So how much discretion does the CBI have in this regard? Some posters think that the CBI can wave a magic wand and reduce the risk weights. It's not clear to me that they can.

I fully agree this backward-looking approach doesn't make sense for two reasons:

The Irish property boom and bust was one of the largest ever recorded anywhere in the world, ever;
Macro-prudential rules are now in force to stop mortgage lenders from repeating the crazy stuff they did in 2003-2008.
But the rules are the rules and I would like to know what powers the CBI actually has here.


----------



## DublinHead54 (16 Apr 2021)

NoRegretsCoyote said:


> Correct! So how much discretion does the CBI have in this regard? Some posters think that the CBI can wave a magic wand and reduce the risk weights. It's not clear to me that they can.
> 
> I fully agree this backward-looking approach doesn't make sense for two reasons:
> 
> ...



I don't know exactly but the banks can propose model changes and seek approval from the CBI on a simple level. I don't believe there is a magic wand but there is definitely a more collaborative approach that can be taken. I have experience in financial services and dealing with regulation and in essence, there is no upside for the CBI or regulator to approve anything that results in less conservatism. Objectively they are not concerned with the ROE targets and viability of the banks business model and are only looking at one area in a silo.

Now that Banks are actively leaving the market this is an area requiring government intervention to push the case. Ultimately the data will tell the story, we've just gone through a real-world economic shock and house prices are remaining resilient, it will be interesting to see how many are defaulting on their mortgages now vs 08/09.


----------



## NoRegretsCoyote (16 Apr 2021)

Dublinbay12 said:


> I have experience in financial services and dealing with regulation and in essence, there is no upside for the CBI or regulator to approve anything that results in less conservatism. Objectively they are not concerned with the ROE targets and viability of the banks business model and are only looking at one area in a silo.


Exactly. CBI has a financial stability mandate, not a competition mandate. They are also very aware of their mistakes 15 years ago and for sure there is a conservatism bias.




Dublinbay12 said:


> Now that Banks are actively leaving the market this is an area requiring government intervention to push the case.



I agree. I just think this will have to be pushed on other margins other than supervision.


----------



## MrEarl (16 Apr 2021)

I think we should be giving our Regulators and Legislators a very big thank you, for protecting us from all of these nasty Banks. Just super stuff, for Irish consumers 

Between the Regulator (Central Bank) imposing excessive capital requirements on Banks, and our Government failing to properly legislate for dealing with the eviction of those who don't pay their mortgages, dodgy cashback offers etc., they'll have run every Bank out of the county, or else into the ground, before they are done!


----------



## SPC100 (16 Apr 2021)

So what are we going to do?


----------



## jpd (16 Apr 2021)

Do you mean apart from paying extra interest on loans and higher fees?


----------



## time to plan (16 Apr 2021)

SPC100 said:


> So what are we going to do?


Complain a bit on an Internet forum.


----------



## camlin90 (16 Apr 2021)

The ECB have a digital euro in the pipeline, so the days are numbered for banking as we know it, and these moves by privately owned banking firms make total sense.

Long term, everyone will have an account with the ECB with an app for deposits and loans. Most people will think this is great. The digital euro will allow all transactions to be centrally tracked - negative interest will also be a lot easier to apply.

Worth having a "google" of "digital euro" if you're sceptical - also have a look at what the People's Bank of China are doing.


----------



## NoRegretsCoyote (16 Apr 2021)

camlin90 said:


> Long term, everyone will have an account with the ECB with an app for deposits and loans.


The ECB will never grant loans or accept retail deposits.


----------



## Ciaran6410 (16 Apr 2021)

So should we fix our mortgage rates now?


----------



## camlin90 (17 Apr 2021)

NoRegretsCoyote said:


> The ECB will never grant loans or accept retail deposits.


"This report examines the issuance of a central bank digital currency (CBDC) – the digital euro – from the perspective of the Eurosystem. *Such a digital euro would be a central bank liability offered in digital form for use by citizens and businesses for their
retail payments. "

"Depending on its 
characteristics as a form of investment, it might induce depositors to transform their 
commercial bank deposits into central bank liabilities. "*

Straight from the horses mouth: https/www.ecb.europa.eu/pub/pdf/other/Report_on_a_digital_euro~4d7268b458.en.pdf

As they say on twitter - "remind me of this"


----------



## NoRegretsCoyote (17 Apr 2021)

camlin90 said:


> Such a digital euro would be a central bank liability offered in digital form for use by citizens and businesses for their
> retail payments. "


From the same report:



> While the Eurosystem would always retain control over the issuance of a digital euro, *supervised private intermediaries would be best placed to provide ancillary, user-facing services and to build new business models on its core back-end functionality. A model whereby access to the digital euro is intermediated by the private sector is therefore preferable.*



Essentially what they are talking about is virtual cash with the service provided by e-money providers.

Millions of EU citizens will never have bank accounts with the ECB, nor will it issue ever issue loans.


----------



## peemac (17 Apr 2021)

Dublinbay12 said:


> As a KBC customer last month my mortgage direct debit changed to Pheonix 7 from the regular KBC, this was reported on in the independent. I received a text message saying it was just an error and nothing was unchanged, but I wonder if this was the bank engineering towards the sale. If they have secured 33k mortgages and raised cash by selling an RMBS on the bank of it, that would mean that these mortgages couldn't be transferred to BOI unless BOI just becomes the servicor i.e. the collector of the payments?
> 
> _From research by this publication, it appears that there are 33,000 mortgages worth €5.9bn that were bundled together, securitised and called Phoenix 7. In what is a highly technical piece of financial engineering, KBC Bank Ireland ownership of the mortgages transferred to another entity within the wider KBC Group._
> 
> ...


My mortgage is with a phoenix securitization. Has been for many years.

This is their 7th securitization. It's actually mentioned in the terms and conditions that they can do this.

Seems it's a fairly standard thing that banks do.


----------



## AJ1 (18 Apr 2021)

How long do you think it will take KBC to exit? Will bank of ireland have to keep the same terms and conditions?

 I'm due to finish a 3 year fixed rate later this year with kbc and was thinking of doing another 3 year fixed or maybe 5 year fixed and overpay as much as possible. . could look at switching but font think it will be possible for us. My income has reduced over the past few years due to now working part time and we now have 3 children.


----------



## skrooge (18 Apr 2021)

You have to love the press release 






						KBC Bank Ireland enters into a Memorandum of Understanding with Bank of Ireland Group - KBC
					






					www.kbc.ie
				




It has "intention to explore a route that could potentially lead to" which sounds as non-commital and vague as you can get.  

I would have thought you've time to refix. If you're in doubt why not call them and see what the break fee would cost to break and refix now. 

If you're concerned about not being able to switch and the potential risk of rising rates KBC do offer good short term fixes.


----------



## NoRegretsCoyote (18 Apr 2021)

skrooge said:


> It has "intention to explore a route that could potentially lead to" which sounds as non-commital and vague as you can get.


It's drafted by the lawyers.

Presumably they have to disclose a minimum of information but can't be definitive until the due diligence is done.


----------



## Brendan Burgess (19 Apr 2021)

I have an opinion piece in today's Irish Times 









						Exits of KBC and Ulster Bank leave other banks free to hike rates
					

Mortgage market must be more attractive to foreign lenders




					www.irishtimes.com
				




*Least worst*​_While Irish banks have a lamentable record in their treatment of customers, the two banks who are leaving are the least worst. Neither discriminated between new and existing customers. Whatever rates they offer to new customers, they also make available to existing customers. So, when KBC reduces mortgage rates to attract new business, their existing customers benefit from such a move.

Bank of Ireland and PTSB have separate rates for new and existing customers. If a Bank of Ireland customer wants a competitive rate, they must switch to another bank. But most customers are too busy or too lacking in financial knowledge to undertake the arduous job of switching to another lender.

...

The Government needs to take radical action to make the mortgage market more attractive to foreign lenders. They must ban cash backs immediately and they must reform the legal system so that any lender considering entering the Irish market can be sure that they will be able to get their money back if the borrower refuses to pay._


----------



## Allpartied (19 Apr 2021)

Brendan Burgess said:


> I have an opinion piece in today's Irish Times
> 
> 
> 
> ...



What about a bit of responsibility on the lender. 
American banks can repossess the asset fairly easily, but that is the end of the borrower's obligation. 
The reason borrowers resist repossession in Ireland, is because the full loan is still due, even after the asset has been surrendered. 

A change to easier repossessions, with normal safeguards for critical cases, should be accompanied by new rules which discharge the full debt once the asset is taken by the bank.


----------



## NoRegretsCoyote (19 Apr 2021)

Allpartied said:


> A change to easier repossessions, with normal safeguards for critical cases, should be accompanied by new rules *which discharge the full debt once the asset is taken by the bank.*


Isn't this more or less what happens with a PIA?


----------



## Leo (19 Apr 2021)

Allpartied said:


> American banks can repossess the asset fairly easily, but that is the end of the borrower's obligation.



Yeah, but if you're looking to go over 80% LTV expect to pay private mortgage insurance that can cost 2% of the total loan value pa.


----------



## Brendan Burgess (19 Apr 2021)

Allpartied said:


> American banks can repossess the asset fairly easily, but that is the end of the borrower's obligation.



This is a common misconception.  It applies in some states but not all states. 

And rates are much higher and LTVs are much lower in those states which have non-recourse mortgage lending.

The vast majority of Irish borrowers are responsible. 
We want to pay our mortgage even when it's a struggle.

We don't want to pay an additional 2% and be obliged to get a 30% deposit because a small minority want to borrow the money and not pay it back if the value of their property falls. 

Brendan


----------



## Allpartied (20 Apr 2021)

Brendan Burgess said:


> This is a common misconception.  It applies in some states but not all states.
> 
> And rates are much higher and LTVs are much lower in those states which have non-recourse mortgage lending.
> 
> ...



As I understand it, there are a number of high population states that only offer Non-Recourse loans. 

In all other states both recourse and non-recourse must be available to borrowers. 

So, why not give people the choice.  A higher interest rate, but knowing that only the asset will be surrendered to meet their obligations. 

The Celtic Tiger crash saw tens of thousands of Irish people owing 400k or 500k on houses worth less than 100k. 

It was a complete disaster for them and continues to be a disaster, 15 years later.


----------



## Leo (20 Apr 2021)

Allpartied said:


> So, why not give people the choice. A higher interest rate, but knowing that only the asset will be surrendered to meet their obligations.



People are very poor at predicting future events that will materially affect their ability to pay. How many would take out life protection policies if they weren't forced to? How many currently opt for income protection?



Allpartied said:


> The Celtic Tiger crash saw tens of thousands of Irish people owing 400k or 500k on houses worth less than 100k.



The challenge is that the option of a significantly larger deposit and perhaps a doubling of the interest rate will do nothing to protect those buyers  who are buying at the very limits of affordability, as many were back in that era. Most wouldn't have come close to 30% deposits and likely couldn't have afforded the affects of an extra couple of percent on the monthly repayments.


----------



## Protocol (20 Apr 2021)

Allpartied said:


> So, why not give people the choice.  A higher interest rate, but knowing that only the asset will be surrendered to meet their obligations.




I thought about this.

Is it possible?

Have two types of mortgages?


(A) repossession happens at max 12 months from default date

(B) other mortgage type is as now.


----------



## NoRegretsCoyote (20 Apr 2021)

Allpartied said:


> As I understand it, there are a number of high population states that only offer Non-Recourse loans.



Texas and California, which have a high population. But not a majority of the US by population.



Allpartied said:


> So, why not give people the choice. A higher interest rate, but knowing that only the asset will be surrendered to meet their obligations.


Adverse selection. Groucho Marx once said he wouldn't want to join any club that would have him as a member 



Protocol said:


> Have two types of mortgages?



I doubt that the Irish legal system would cope with this very well. As I understand it County Registrars are generally slow to grant posession orders in order to provide a level of minimum protection to borrowers in distress. I doubt that they would move any more quickly if the borrower had signed something at origination to make repossession quicker.


----------



## banjopotato (21 Apr 2021)

One thing I know about the US mortgage market is that it's a lot easier than it is here for even middle-aged people to get very long (e.g. 30-year) mortgages and almost always at rates fixed for the length of the term. I imagine this has to do with non-recourse loans: if the mortgage attaches only to the asset, the borrower's age matters less (right?).

With an aging population over here and young people having to wait longer and longer to get on what I refuse to call the 'property ladder' (oops, just did), the rigidity of lenders here--where you generally can't have a mortgage term that lasts past your retirement age--will have to be addressed. Especially as fixed 'retirement ages' are progressively abolished.


----------



## DublinHead54 (22 Apr 2021)

camlin90 said:


> The ECB have a digital euro in the pipeline, so the days are numbered for banking as we know it, and these moves by privately owned banking firms make total sense.
> 
> Long term, everyone will have an account with the ECB with an app for deposits and loans. Most people will think this is great. The digital euro will allow all transactions to be centrally tracked - negative interest will also be a lot easier to apply.
> 
> Worth having a "google" of "digital euro" if you're sceptical - also have a look at what the People's Bank of China are doing.


Conflict of interest. One of the biggest challenges


----------

