# "Variable rates set to become major issue in General Election"



## Brendan Burgess (18 Dec 2015)

According to Charlie Weston in today's Indo

*Variable rates set to become major issue in General Election*

quoting One Big Switch

The high interest rates charged on variable mortgages are set to be a General Election issue with more than half of people surveyed on the topic saying it will influence their vote.


The survey also shows consumers feel TDs do not understand the financial pain caused by high mortgage rates.

The poll by the One Big Switch campaign found that 53pc of respondents agreed that high mortgage rates would have a significant influence on how they will vote in the next election.

Some 65pc of consumers believe their TD has no, or very little, understanding of the financial stress caused by variable rates that are among the highest in the eurozone, according to a poll of 1,600 of the 6,000 mortgage holders who have registered with the One Big Switch.


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## Ger Fleming (19 Dec 2015)

This is good news. I've emailed minister and local tds re this news.


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## orka (21 Dec 2015)

The reporting of the poll results was pretty poor and misleading.  The poll was of members of the Big Switch website - those who feel exercised enough about the issue to get involved in campaigning about it.  So of course a large number of those people feel it's a major issue in the general election - the big surprise for me is that the % wasn't higher.

If it was an independent poll of randomly selected voters. then the TDs might sit up and take notice.  But this is a group of single-interest people agreeing that their interest is important.  I'm not saying it's not (I have a variable mortgage) but this poll isn't an indication that the issue is important to everybody in the country and will have widescale influence on voting.


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## el chapucero (22 Dec 2015)

SVR mortgage holders need Government help- - the present Government have done little except talk and probably will do nothing in the future. All they do is celebrate the surplus money that they take in from whatever source.
The party that will commit to doing something will have my vote.
http://www.newstalk.com/Fianna-Fil-...-protecting-variable-rate-mortgages-customers
For fair play SVR rates need to come down by around 1% ASAP.


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## todo (22 Dec 2015)

In terms of political presence Michael McGrath deserves allot of credit for raising this issue.


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## Dermot (22 Dec 2015)

I do not see the Mortgage issue becoming a MAJOR issue during the election for the following reasons
How many people that could switch mortgages to other providers even with incentives from other providers.  I would wager a very low %
Given that there was a fair bit of publicity and effort put into organising an open meeting re high mortgage rates earlier in the year it was amazing how few turned up to the meeting.
What party can show a credible solution to lower mortgage rates and I mean a credible solution that works.
My long held belief is that the solution to lower mortgage rates is a new competitor in the market that can attract a meaningful amount of customers very quickly which would mean giving a rate of 1% lower than the current lowest rate.
Under the current system there is no chance of this happening and to hope that some bank would consider this the following changes would need to be made at the very minimum with both Homes and BTL's
Reform the whole mess of repossession and reduce the process to less than 9 months including the courts system.
I would also allow a max of 6 months to deal with BTL's
The current situation with repossession is that a lot of decent mortgage holders are paying a very high price for the repossession farce. There might be quite a number of people who are borderline in trouble that might be capable of getting themselves out of trouble if rates were reduced by 1% which would be an added bonus.
No political party is going to produce any radical change to speed up repossessions this side of the election.  If they did, think of the Banner headlines in the media and the fall out from that.
You could argue that this is what needs to be done to create the environment for a new competitor to enter the market but how do you convince enough people that the competitor would materialise and would deliver a 1% reduction.
You would likely loose the argument in the media and yet be right.


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## tonymac (8 Jan 2016)

Hi dermot , you're post makes huge sense just like you did when we spoke on the phone last year. I would like to see a public campaign coming together soon as the campaign ll be starting soon. I feel that it's our last chance to get some publicity for the campaign and would help out including in the publicity end of it, if say Brendan or someone from the previous committee was to act as a figurehead, someone who has a large amount of financial knowledge and background. Just like the meeting though with the honourable exception of some people on this site the will to do something . doesn't seem to be there. I sincerely hope that I'm wrong and that will does exist as the banks have got away with it for so long but for me it's up to us to make it an election issue and to embarrass the he'll out of the government at every opportunity because I don't see becoming an issue otherwise.  It has decided my vote and because he's given us the best support Michael mcgrath colleague in my constituency of dublin West will be getting my no 1. I personally am sure I'm not the only one who is about to get an even greater reason to get involved in a public campaign with my mortgage interest relief going from 166.67 down to 37.50 this month and the government telling us were doing better now so vote for us. I like everyone gained from the use reduction and being a public servant also gained from the previous reduction but despite this  I'm still losing money. Recovery my are.


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## gnf_ireland (12 Jan 2016)

I actually completely agree with Dermot here. This issue will not come into play in any election discussions. I have repeatedly tried to engage my local TD's and election candidates on this, and they are simply ignoring me on it. My last communications with Fine Gael on this was not around reducing the rates, but ensuring that rates offered to new customers are available to existing customers on the same products. There has been no responses from any of them. It is simply not a big enough issue for the electorate to get embroiled in.

While Michael McGrath has been prominent in the discussions, how effective would the proposed bill really be? My strong preference would be the abolishment of SVR rates completely, and have all rates either fixed or tracker rates based off either ECB or EURIBOR. I am not saying these need to be sub-1% trackers, but they need to be based on something concrete that allows long term comparison of products. A favourable SVR rate today may not be favourable tomorrow [e.g. bank A = 3.5% bank B 3.6%], a favourable tracker [bank A 2% over EURIBOR versus bank B 1.75% over EURIBOR] would always be favourable. One of the big challenges currently is any decision around what bank to pick is based on their past behaviours and this is always a dangerous method.

However, while this issue will be raised with every candidate which passes by my door, nothing will be done on this either before or after the election without a serious upsurge in switcher mortgages. This is unlikely to happen given the track record over the last 12 months or so.


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## Gerry Canning (12 Jan 2016)

Dermot/gnf.

If by now Variable rate mortgages havn,t hit voting intentions , then SVR,s are nothing but a side issue.
People just seem not to worry about being stolen from, when its  in an organised thievery.
Yet people seem to get exercised over 5p here and there! on small items,

We have permitted messing on tracker rates , minimal recompense on Payment protection insurance etc,
Are we the fighting Irish or the stupid Irish? We pretend we sort things , instead we rely on our (betters) and (government) to act well !

Sorry to sound crankey.


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## tonymac (12 Jan 2016)

Hi Gerry, I couldn't agree with you more, my frustration was expressed in my thread regarding public protest but it's become very apparent that that won't be happening nor will this be a major issue in the upcoming campaign as there are too few of us willing to act on this. As you correctly say people in this country's fight you over 5p and laudable as their efforts are the numbers of people fighting the water charges which relates to a lot less money than what we're arguing about. I'd love to know how many of the people who marched in those protests have an  SVR mortgage. As you also say about the fighting irish vis a vis the stupid irish if only those people realised  that the money they're losing on their mortgages works out at about 20 times more than what water charges are. Maybe it's a case of us irish believing that we're cleverer than we actually are as there's been more than enough publicity about SVR'S that most should be aware of the issue and what's involved or maybe we've just become a much lazier, indifferent people than we once we're.


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## inaquandert (12 Jan 2016)

but someone is needed to organise the protest?   It is something that concerns lots of people myself included - it is something I will be questioning when politicians come looking for my vote.  I have had a lot of leaflets in my door lately and not a mention of SVR rates on any one of them!


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## tonymac (12 Jan 2016)

Correct re organisation of a protest. I would happily get centrally involved but we would need more people to help out with it. From what I'm seeing we haven't got the numbers to do it the way I'd like to do it, eg public protests outside places like the central bank, bank hqs, the Dail and government TDS offices/clinics especially ministers. I've written emails to local TDS etc and also intend to question them. By all means we could take the bull by the horns and just go and do a protest but I feel we just won't get the numbers to run a proper pre - election one. A lot was put into running the meeting in the burlington last year and the crowd wasn't very large even though it did garner a lot of publicity.


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## inaquandert (12 Jan 2016)

I didn't go to the Burlington mainly because it was in Dublin and was too difficult for me to get to both in terms of the time it was on and the place, I really think if it was more central more people would attend.


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## tonymac (12 Jan 2016)

That's fair enough as you're not the first person who had those issues. To be fair to the people like dermot who did so I personally wasn't involved in running it but I was fortunate enough to be able to make it to it. That may well be true re a central location but the general feeling on the night was the attendance was on the disappointing, possibly for the reasons you outlined  but o don't think that was the only one, about 130-140 did make it and seating for 200 was supplied. A lot of good came from it for me re ideas from the floor etc but the main benefit was the publicity , it made the 9 o clock news. I previously sidestep running one centrally in tullamore and was hoping that if I got a few responses on this forum it would encourage me to go for it but the response was negligible which meant I wasn't. I would love to see something happen even a meeting between a few of us which I would gladly attend to see what if anything we could organise either before or during the campaign as I think this could be our last chance . Anyone with ideas or opinions are obviously welcome to voice them but if I was doing anything it'd be in a small meeting room somewhere in central dublin as I wouldn't be prepared to risk too much as a small attendance could leave me with a  bill


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## gnf_ireland (12 Jan 2016)

I agree with you re protest - I seriously doubt it will happen. The vast majority will sit back and not protest, and wait for change. As a nation we are not a protesting one. We are not like the Greeks, French, Spanish etc in that regard. That's why the water protests took the government by surprise - it was not expected in those numbers repeatedly ! The SVR issue would need to see 20-25k people on the streets for it to become a serious issue this close to the election.

Realistically can these sorts of numbers be convened this close to an election? unlikely

But sadly its not just the protest. If you look at this site, the activity on this forum has also dropped off hugely over the last while. Only 9 threads have been created or commented on since 1st December 2015. Back in the summer it would easily have been a multiple of this. 

Despite the good work of some on here in particular, this issue is simply not going anywhere. The government know it, the politicians know it, the central bank knows it and more importantly the banks know it. Any momentum that was there when Minister Noonan called the banks in back in July & September is now gone, simply because not enough people switched. Had people switched, it would have created a market where they would have taken notice.

I agree all of this is not fair. I agree that the water charges are a fraction of the money most people are being hit for with their mortgages. I agree with all of this - but sadly the interest in the SVR issue no longer exists for it to be an election issue.

Sorry to be pessimistic on this, but I have followed this very closely for the last 14 months, and I really believe that the opportunity is lost unless there is a change of government later in the Spring. Nothing will happen if the current government get back into power


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## elcato (13 Jan 2016)

The real problem is that people with mortgages are usually married and working. They don't have time to protest. The Water Charges protestors are made up of a core of unemployed people and the rest just piggy backed on to it.


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## celticbhoy32 (13 Jan 2016)

elcato said:


> The real problem is that people with mortgages are usually married and working. They don't have time to protest. The Water Charges protestors are made up of a core of unemployed people and the rest just piggy backed on to it.




Probably not the most politically correct post thats ever been submitted, but one i agree with 100 per cent


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## tonymac (13 Jan 2016)

celticbhoy32 said:


> Probably not the most politically correct post thats ever been submitted, but one i agree with 100 per cent


I think you have a point but I also am wondering if there's a relatively large portion of the 300k svr holders see public protest as below them. This could be due to some of the tactics the water campaign used which I don't condone  but i cant help thinking that there are wuite a few snobs among our number.Other than that it's a case of life doesn't give people time or they just can't be bothered or they don't realise how much they're being screwed for which shouldn't be a factor with the publicity the campaign was getting.


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## noproblem (13 Jan 2016)

elcato said:


> The real problem is that people with mortgages are usually married and working. They don't have time to protest. The Water Charges protestors are made up of a core of unemployed people and the rest just piggy backed on to it.






What percentage of the people are not paying their water bills?


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## elcato (14 Jan 2016)

noproblem said:


> What percentage of the people are not paying their water bills?


Relevance ?


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## Gerry Canning (14 Jan 2016)

The set up of water charging was an unmitigated mess.
I think its far too simplistic to dismiss it as unemployed and piggy backers.
Cleverly,it has been turned in peoples perceptions ,as rabble crowd rather than a protest over incompetence and unfairness.
Means our mortgage holders may say away.
Maybe you SVR people should use the water march to put up SVR posters , you won,t get a better chance this side of election.
Think about it ,if nuff SVR posters are seen, Mr Politician will notice.
In short you have a ready to go protest!


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## tommygirl (14 Jan 2016)

I am following this thread with interest and have a variable rate mortgage. I would like to share my viewpoint which might help explain low turnout, lack of interest of SVR holders. I could not attend meeting in Dublin due to location and childcare. I am deeply in negative equity but am also in the fortunate position that I can comfortably pay my mortgage. I have emailed my local TDs and like everyone else did not get any satisfactory reply. I will raise it on the doorsteps if anyone calls to my door in rural Limerick but I don't feel that I have a lot to complain about. I am not on the breadline. If another public meeting was called would I travel 2/3 hours, arrange childcare, be worried about driving the roads in winter? Probably not am sorry to say. I know the banks are taking advantage, I know the politicians are doing nothing for us and I'm annoyed, but I'm doing ok. Is this a selfish attitude?


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## elcato (14 Jan 2016)

tommygirl said:


> Is this a selfish attitude?


Not at all. You are looking after your work and your family. You don't have time to commit.


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## noproblem (14 Jan 2016)

The Water Charges protestors are made up of a core of unemployed people and the rest just piggy backed on to it.

Just that you seem very dismissive of the the non payers with the above sentence. A lot of those people are very serious citizens and are making their feelings known to the relevant authorities.
Then again, this particular post is not about water protestors so your question answered and lets leave it at that.


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## elcato (14 Jan 2016)

noproblem said:


> Just that you seem very dismissive of the the non payers with the above sentence. A lot of those people are very serious citizens and are making their feelings known to the relevant authorities.


Apologies if that is how it sounded. I was not being dismissive of them. Just pointing out that the initial organisation of protests need a core of bodies which in this case were mostly people who have more time on their hands than others.


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## Clonback (15 Jan 2016)

Fianna Fail has issued a policy position on variable rate mortgages as part of tomorrows Ard Fheis.

"It is unacceptable that Irish variable rate mortgage customers are being charged 2% higher than other EU countries.We will immediately introduce legislation to deal with this and introduce strong deterrents to stop banks from charging excessive rates."


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## todo (15 Jan 2016)

Clonback said:


> Fianna Fail has issued a policy position on variable rate mortgages as part of tomorrows Ard Fheis.
> 
> "It is unacceptable that Irish variable rate mortgage customers are being charged 2% higher than other EU countries.We will immediately introduce legislation to deal with this and introduce strong deterrents to stop banks from charging excessive rates."



At least they are acknowledging that there is a problem and stating their position on it.

Have Fianna Gael made any mention of it at all?


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## Clonback (15 Jan 2016)

Fine Gael are keeping very quiet on this subject.Minister Noonan has had plenty of time to do something concrete but won't get involved.


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## Dermot (15 Jan 2016)

I just cannot see how any political party can claim that they can implement legislation that will control interest rates without causing as much downside as they are trying to solve.
A Government can create the environment that would encourage another Bank to enter the mortgage market.  Part of changing the environment would be a complete overhaul of the legislation surrounding the repossession of houses where people who are blatantly not paying their mortgages continue to live in them without paying a cent in many cases.  This is and has happened with BTL' as well where rent was collected and pocketed.
The statement by Fianna Fail is simply being populist and that sort of stuff is all to prevalent in this country.
Every party and almost every person knows that mortgage rates are too high. There is a probably 1% of the current mortgage rate spent on covering the excessive losses that were incurred in the past and going into the future.  Yes there was a lot of bad lending but there should be a reasonable time frame for an institution to recover the property.
How is it that no political party or independents are calling for change of the repossession legislation.  It is not populist but it actually should be.  It could save a lot of people a lot of money.  I can understand that it would be difficult to get the message across.
It is easier to get a media headline about someone being evicted from a house (and avoiding the reason for it in the follow up story) than to get publicity about what needs to be done in order to lower interest rates.  That would be boring.
There is really not much support for the change in legislation regarding repossessions on askaboutmoney either.

Has anyone a workable solution to high mortgage rates that will work without changing the repossession legislation.


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## Sarenco (15 Jan 2016)

Clonback said:


> We will immediately introduce legislation to deal with this



How?

What exactly will this legislation provide for? 

Will it be a repeat of their private members bill that proposed to give the power to the Central Bank to set rates?  We know the Central Bank don't want this power and it seems highly unlikely that they would be allowed to exercise it by the European banking authorities even if they had it.  So that won't achieve anything.

Thankfully FF had nothing to do with the policy decisions that gave rise to the current situation where an extraordinary % of mortgages are in some of distress, which ultimately drives up rates on performing variable rate loans.  Oh wait...

It amazes me that people fall for this posturing.


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## Brendan Burgess (15 Jan 2016)

This has been dealt with in many other threads. 

It's not rocket science.  A default limit should be set on home loan rates at 3% above the ECB rate. If any lender wants to charge more than that, they would have to apply to the Central Bank for authorization to charge more. 

There is no posturing about this. It's a very practical proposal. 

When the lenders begin charging fair rates, it could be reversed.

If new entrants come into the market, those who can move will benefit.

The thousands who are stuck with their lender will be preyed upon even further. 

The government should not be allowing this. They are effectively recapitalising AIB and ptsb and boosting the capital position of BoI on the backs of variable rate mortgage holders.

Brendan


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## Dermot (15 Jan 2016)

Brendan Burgess said:


> It's not rocket science. A default limit should be set on home loan rates at 3% above the ECB rate. If any lender wants to charge more than that, they would have to apply to the Central Bank for authorization to charge more.
> 
> There is no posturing about this. It's a very practical proposal.



So what you are saying Brendan is that the Government should enact Legislation to force the Central Bank to reduce home loan rates to 3% or less above the ECB rate. This I presume you would want to apply to current and future mortgages.
How might the Banks react to this is also a very practical question.
They might want a higher deposit than is the case.  They might toughen up on some other lending criteria.  It would I believe lean towards cherry picking of applicants.
I will go back to an old chestnut of mine that this "legislation" would have to include a meaningful and thorough change in the whole repossession legislation.
If that does not happen you will not get that New entrant that we all want and need.  
I wonder is what you propose as simple to implement as you might think.  Why then would the Government not have implemented it?


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## inaquandert (15 Jan 2016)

What's so special about the banks here that rates can't be lower???   - they are lower in all other EU countries and those banks seem to manage very well!    I would agree that a limit should be set and yes - it's a very practical proposal.   If only a politician would take it on.


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## Dermot (15 Jan 2016)

We do not have the repossession mess in other countries that we have here. Nothing special about the banks here


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## Brendan Burgess (16 Jan 2016)

Dermot said:


> I will go back to an old chestnut of mine that this "legislation" would have to include a meaningful and thorough change in the whole repossession legislation.



I fully agree. I have highlighted the issue of deliberate defaulters more than anyone else and have reported on my visits to the courts where chancers are getting away with it.



> If that does not happen you will not get that New entrant that we all want and need.



I have set the interference level very high 3% above the ECB rate. If it deters new entrants who want to charge above this, so what? 
It won't deter new entrants who want to charge fair prices?





> I wonder is what you propose as simple to implement as you might think. Why then would the Government not have implemented it?


Because it would affect the selling price of AIB and ptsb
Because they don't understand the market
Because they are being misled by the Central Bank whose primary role is to build up the capital of the banks even if that is at the expense of a minority of citizens and not all the shareholders.


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## Brendan Burgess (16 Jan 2016)

Dermot said:


> We do not have the repossession mess in other countries that we have here. Nothing special about the banks here



The repossession mess only affects higher LTV mortgages. It might account for an extra 0.5% on mortgages with LTVs over 80%.

But the loss, given default, on 50% LTV mortgages is close to zero, yet, those loans are also charged 2% above the rates that they would be charged in other Eurozone countries.


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## keepon (28 Jan 2016)

Dermot said:


> We do not have the repossession mess in other countries that we have here.



Cost figures, and an evidence-based estimate of the impact on mortgages generally, please.


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## Black_Adder (28 Jan 2016)

I have followed the various postings on this variable rate issue.

(1) Why is legislation required ? Many other countries in Europe seem to have well developed sense of what is fair to their consumers. In fact most of the good consumer legislation comes from European Directives. Good behaviour and good conduct towards consumers particularly house buyers is obvious when you do some research. (Eg long term 20 year fixed rates - sub 3%). We have a conduct issue with Banks.
(2) If you research consumer legislation it is all over the place. No consumer could possibly find the material needed to take on bad behaviour and bad conduct. This is the States woeful neglect of the Consumer in relation to financial services. 
(3) Just look how the FSO debacle ran. 90% upheld in favour of the Banks.
(4) Our 'challenged middle class' do not do protest well. The Water Charges was one where several metaphorical executions should have taken place for the sheer absolute total failure that it is. Once the protest was hijacked - the 'challenged middle class' exited.


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## Brendan Burgess (28 Jan 2016)

Black_Adder said:


> (3) Just look how the FSO debacle ran. 90% upheld in favour of the Banks.



Did you listen to Joe Duffy last week?  It really brought home to me why the FSO rejects so many complaints. 

"I paid insurance for 20 years Joe and when I hit 65, they told me my policy was terminated. And I got back nothing. It's a disgrace Joe." 

"My mother borrowed €100k on an interest roll up basis for 10 years at 6.9% and now they want €200k! It's a disgrace Joe" 

Having listened to it, I am surprised that 10% of complaints are upheld. 

Brendan


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## Brendan Burgess (28 Jan 2016)

keepon said:


> Cost figures, and an evidence-based estimate of the impact on mortgages generally, please.



Good point. I have tried to get figures for the cost of defaults on mortgages of less than 80% LTV and 3.5 times Loan to Income but haven't been able to. 

I have been told anecdotally that such losses are insignificant, even though the banks have been unable to repossess. 

Most of the losses on home loans  have been where there was a combination of 100% LTVs and 5 times Loan to Incomes.  

Brendan


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## Sarenco (28 Jan 2016)

Brendan Burgess said:


> There is no posturing about this. It's a very practical proposal.



Except that is not what FF proposed in their private members bill.  I wasn't referring to your proposal - I was referring to FF's proposal, which I still believe amounts to nothing more than political posturing.

I happen to disagree that your proposal of introducing a "default rate" is practical (for the reasons previously outlined) but that is a different issue entirely.

Look, if people want to reward FF for making populist gestures, that's obviously their right.


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## Brendan Burgess (28 Jan 2016)

So what all of us in the Fair Mortgage Rates Campaign is doing is "political posturing"?

We should all just shut up and stop even discussing the fact that Irish borrowers are paying twice the rates being paid by borrowers in other countries.
We should do as we are told by the Central Bank and the Minister for Finance to wait for competition to bring down the rates?
The 150,000 people who won't benefit from competition should simply continue to smile and pay a few thousand a year more than is justified?

To protest, to argue is political posturing?

Is that your argument?

Presumably your suggestion that the banks should be allowed to charge what they like as long as none charges more than 125% of the average new business rate is also political posturing?

Brendan


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## Sarenco (28 Jan 2016)

Brendan Burgess said:


> So what all of us in the Fair Mortgage Rates Campaign is doing is "political posturing"?



Huh?

I really couldn't have been any clearer that I was simply referring to FF's proposals.  Not your proposals.    Not any proposals of the Fair Mortgage Rates Campaign (which I assume mirror your own proposals although they are not published anywhere to my knowledge).  Not anybody else's proposals.  Just FF's proposals as reflected in their draft Bill.

I was also very clear why I think their promise to introduce legislation to deal with this issue is simply political posturing:



Sarenco said:


> How?
> 
> What exactly will this legislation provide for?
> 
> Will it be a repeat of their private members bill that proposed to give the power to the Central Bank to set rates?  We know the Central Bank don't want this power and it seems highly unlikely that they would be allowed to exercise it by the European banking authorities even if they had it.  So that won't achieve anything.



I would characterise the adoption of any policy by a political party or candidate that has no realistic chance of addressing an identified issue, simply to appeal to a cohort of voters, as political posturing.

That's all.


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## Clonback (28 Jan 2016)

Sarenco said:


> Huh?
> 
> 
> 
> I would characterise the adoption of any policy by a political party or candidate that has no realistic chance of addressing an identified issue, simply to appeal to a cohort of voters, as political posturing.


Michael McGrath has a clear understanding of Fianna Fail policy and in my view he is in no way posturing.In fact he is held in high esteem across all political parties for his balanced views.Just watch him in the Dail


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## Brendan Burgess (28 Jan 2016)

Sarenco said:


> I would characterise the adoption of any policy by a political party or candidate that has no realistic chance of addressing an identified issue, simply to appeal to a cohort of voters, as political posturing.
> 
> That's all.



OK, I see where you are coming from.

There is a serious problem which needs to be solved.  I think our solution is better than the FF solution, but it does not mean that the FF solution is just political posturing. 

I gather that it's also FF policy to oblige the banks to treat existing customers the same as new customers. That is not posturing either.

You have a suggestion, which I consider meaningless. It would simply allow the cartel to continue.

But maybe between the lot of us who are concerned with the problem, we can come up with a solution.

The Central Bank might not want the power. They  might well want to protect the overcharging by the banks. But that does not mean that we have to accept that. And if someone challenges it who happens to be a political representative, it does not mean that they are posturing. 

I suspect that during the General Election campaign we will have candidates making statements on the issue who showed no interest in the issue up to now. That might well be characterised as posturing.

Brendan


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## Sarenco (28 Jan 2016)

Brendan

I really was not trying to re-ignite an old debate about our respective proposals to deal with this issue.  However, I would point out that my proposal was simply intended to prevent lenders charging usurious rates, relative to the wider market, to borrowers that are not in a position to re-finance their loans.  

My proposal was never intended to address any alleged cartel.  We already have laws that prevent market participants colluding with each other to fix prices.  If you genuinely believe any market participants are colluding with each other, then I would suggest that you should report this illegal activity to the Competition Authority.

I simply don't agree with you that price fixing by the State, in any market, is ever appropriate in any circumstances.  You can obviously disagree with this position but I hope you will agree that it is hardly an extreme position to hold in a free democracy.

I never suggested that challenging any prevailing policy position was posturing.  I hope I have been absolutely clear about what I regard as political posturing.  In my book, making any proposal or promise that a candidate for any office knows, or ought to know, will be totally ineffective to address a given issue simply to make the right "noises" and garner votes is posturing.  

Separately, could you direct me to any published statement of the aims and policies of the Fair Mortgage Rates Campaign?


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## Sophrosyne (28 Jan 2016)

Sarenco said:


> If you genuinely believe any market participants are colluding with each other, then I would suggest that you should report this illegal activity to the Competition Authority.



But isn't that the problem. The Competition Authority has no function concerning banks. This function has been retained by the Central Bank.


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## Sarenco (29 Jan 2016)

Sophrosyne said:


> But isn't that the problem. The Competition Authority has no function concerning banks. This function has been retained by the Central Bank.



No, banks have never been exempt from complying with the Competition Act.


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## Sophrosyne (29 Jan 2016)

Sarenco said:


> If you genuinely believe any market participants are colluding with each other, then I would suggest that you should report this illegal activity to the Competition Authority.



I repeat, why would one report this specifically to the Competition Authority, which has no function in relation to banks?


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## Sarenco (29 Jan 2016)

Sophrosyne said:


> I repeat, why would one report this specifically to the Competition Authority, which has no function in relation to banks?



Why do you think the Competition Authority has no function in relation to banks as regards the discharge of its functions under the Competition Act?


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## Sophrosyne (29 Jan 2016)

Because of the cooperation agreement in February 2011. The NCA, now subsumed into the Competition Authority agreed to forbear its functions in relation to competition in favour of the Central Bank.


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## Mr Holmes (29 Jan 2016)

Can you rebut this ?


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## Sarenco (29 Jan 2016)

Sophrosyne said:


> Because of the cooperation agreement in February 2011. The NCA, now subsumed into the Competition Authority agreed to forbear its functions in relation to competition in favour of the Central Bank.



That makes no sense.

The NCA never had any role in enforcing the Competition Act prior to its amalgamation with the Competition Authority.  I genuinely don't know what you are talking about - how can any agreement between two State agencies override an Act of the Oireachtas?


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## Sophrosyne (29 Jan 2016)

Sarenco said:


> how can any agreement between two State agencies override an Act of the Oireachtas?



Nevertheless, that is currently the case.


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## Sarenco (29 Jan 2016)

Sophrosyne said:


> Nevertheless, that is currently the case.



So you say.  Can you post a link to this agreement and I will try and look at it tomorrow?

I would genuinely be amazed if an agency that had no statutory role in enforcing a particular legislative provision (such as the Competition Act) agreed to forbear exercising its (non-existent) functions in relation to that provision.


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## Brendan Burgess (29 Jan 2016)

Sarenco said:


> Separately, could you direct me to any published statement of the aims and policies of the Fair Mortgage Rates Campaign?




Hi Sarenco

Apologies, you have asked for this before. 

We are working on putting these down on paper as part of our strategy to make it an election issue. 

Brendan


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## Sarenco (29 Jan 2016)

Sophrosyne said:


> Because of the cooperation agreement in February 2011. The NCA, now subsumed into the Competition Authority agreed to forbear its functions in relation to competition in favour of the Central Bank.



Is this the co-operation agreement you are referring to?

http://www.ccpc.ie/sites/default/files/documents/Central-Bank-NCA-framework.doc.

If so, it has absolutely nothing to do with the enforcement of competition law.

Here's a link to a response to a recent OECD questionnaire on behalf of the Competition Authority. 

http://www.ccpc.ie/sites/default/files/S-14-009 Competition in Financial Consumer Protection.pdf

I would draw your attention to the response to question 1.5:

_*"The Competition Authority is responsible for enforcing Irish and European competition law in financial services and all other sectors."*_

Hopefully that's clear.


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## Brendan Burgess (29 Jan 2016)

Hi Sarenco 

I think you are correct in law. 

In practice, the  "whatever they are called now" NPPC has made it quite clear that they have no interest in the area.  And I suspect that is because they have been told by the Central Bank to keep out of their territory. 

Brendan


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## Black_Adder (29 Jan 2016)

Now there is a fair bit of ranting going on here at the moment.

1. Mr Burgess referred me to the similar rants on Joe Duffy on RTE as the basis of 'for jasus sake lads' and that all the complaints submitted to the FSO were similarly packaged. There is an element of truth to that. What is clear if the hapless consumer did not raise specific matters,  then the FSO did *not *raise the matter for him. Secondly after reading many of the previous FSO 'decisions' it is clear that Mr Prasifka went off down technical contract law route and ignored *virtually all of the powers* he had. Quite simply ask yourself why so many reviews are now taking place. He made a complete shambles not only of his understanding of his powers, he also allowed technical arguments and ignore so many aspects in cases that he must stand as the greatest disaster from the consumers point of view that took the office. A total utter disaster - and that is not opinion - it is based on reading his considered cases and the Act that created the beast. *He was an utter disaster.*
2. As regards the Competition & Consumer Authority - they have lost any sense of purpose and if you read some of the nonsense they are writing now compared to what they used to do - it is absolutely shocking. The memorandum does exist.
3. Central Bank through their Consumer Protection Director are taking action - albeit cautiously. 
4. The continuing saga of the variable rate customers - why was this and the tracker issue not brought to fruition in that Banking Inquiry as the Banks continuing conduct is simple the proverbial two fingers at the challenged middle class. You had dozy parliamentarians who hid behind lawyers as the basis 'we cannnot make adverse findings " is the claptrap they spouted. Since when is showing various figures to each CEO to comment on not the route they should have gone? For if the answer was 'I don't know / cannot comment / etc" you would have had your answer. On the other hand Richie Boucher would *not lie *and his answers would have shaken the Nation to its core. He is blunt and he would have told it as he saw it. 
5. Forget the legislative approach - we need new entrants and new Building Societies - we just canned the last one. Great country!


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## Sarenco (29 Jan 2016)

Brendan Burgess said:


> Hi Sarenco
> 
> I think you are correct in law.
> 
> ...




Hi Brendan

The Competition and Consumer Protection Commission (to give them their full name) has certainly made it clear that they do not believe undertaking a further study on mortgage rates would address the underlying issues in the banking sector or would be a good use of their resources.  However, they haven't said that they wouldn't take action if presented with evidence that lenders are actually operating a cartel (ie colluding with each other to fix prices to the detriment of consumers).

If presented with clear evidence to this effect, I don't see how the Commission could refuse to take action without being in dereliction of their statutory duty.


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## todo (29 Jan 2016)

The way I see it there are 3 main things that need to be highlighted for the general election.

1. Consumer protection codes not being enforced, FSO not exercising its powers unfair lean towards the banks.
2. Very unfair terms in the mortgage contract, one side has complete control over the rate.
3. Unjustifiably high interest rates, profiteering/cartel by the banks because they can do it.


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## Dinarius (3 Feb 2016)

Nothing is going to happen in the mortgage market until rates start to rise - whenever that is.

Those on tracker mortgages will then start paying their way, rather than being subsidized by the STV market like they are currently.

I think that a probable scenario will be something like this; if rates rose, say, 2%, those on 1% trackers would pay 3%, but those on, say, 3.5% STVs might only pay 3.75%, or some such.

Remember that the current rise on the market is predicated _entirely_ on STVs not getting out of hand. If any sudden move in interest rates was passed on fully to the STV market also, we would very quickly have another 2007/08 scenario. It is the tracker market that will carry most, if not all, of the rise in rates, in my opinion.

But, when that happens is anyone's guess.

D.


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## tonymac (3 Feb 2016)

Dinarius said:


> Nothing is going to happen in the mortgage market until rates start to rise - whenever that is.
> 
> Those on tracker mortgages will then start paying their way, rather than being subsidized by the STV market like they are currently.
> 
> ...


Hi Dinarius ,  I hope you're right that they will leave the SVR'S alone for the most part when the rates do rise but I certainly won't be taking that for granted with the form our dasterly banks have shown to date. You are correct with the point you make re what happened in 2007/08 but if they try that they'll have a lot more re - possession cases on their hands with the numbers of people who won't be able to cope with the repayments, If say the ECB went to 3% and at the current differential between trackers and us we'd be up to 6-7%, I know what ll be happening my apt keys. As they've interfered in the rental market by regulating the rates an increase wouldn't be possible for a long time after the rate increase to compensate for these rises. I agree by the way with the rent regulation and I'm not a landlord but they were able to interfere with that side of things but according to themselves, namely the government and the central bank, when abdicating responsibility they can't interfere in rate setting.  On the subject that this thread is really about roll on the campaign and my chance to give them a taste of what it's like for SVR holders and this time an agreed reply won't be good enuf, you can fool some of the people some of the time but you can't fool all of the people all of the time, please do the same, as many of us as possible .


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## Dinarius (3 Feb 2016)

Hi Tony,

Thanks for the reply.

I stand by my point that everything that's happening now is predicated on the SVR market. So, those buying are buying at rock bottom in terms of % rates (whether you agree, or not, that the margin the banks are taking is extortionate) and when rates do rise, it is those on trackers who will take the brunt of the hit. There is no way, in my view, that a _pro rata_ rise will occur in both tracker and SVR. There would be riots on the streets. The % difference will get closer, _not_ stay the same.

D.


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## tonymac (3 Feb 2016)

Dinarius said:


> Hi Tony,
> 
> Thanks for the reply.
> 
> ...


Hi Dinarius I think you're dead right that thery'd be riots if the rises are pro rata. I don't begrudge those on trackers by the way, , good luck to them, it's the banks  behaviour at the end of the day and that of the people who have a consumer protection role I'm angry with call it capitalism if you wish.


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## todo (3 Feb 2016)

Dinarius said:


> There would be riots on the streets



I very much doubt the riots would happen. 


SVR customers are being fleeced at the moment and there is very little noise about it.

I would not be surprised if tracker and svr rates increased by the same amount, lets say by 0.25% every so often.

If the banks feel they could get away with it, you can be certain they will try.


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## tonymac (3 Feb 2016)

todo said:


> I very much doubt the riots would happen.
> 
> 
> SVR customers are being fleeced at the moment and there is very little noise about it.
> ...


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## inaquandert (3 Feb 2016)

I doubt riots would happen either - SVR rate holders are being fleeced and no one cares. It's not an issue with politicians who come knocking at the door and to think that the banks would then be happy with the extra from tracker rate mortgages that they'd leave SVR holders alone for the most part makes no sense. They would keep pushing rates up as far as they thought possible 'cus they are greedy. The banks seem to do whatever they like here. According to todays newspaper the central bank will do nothing about it either - not their problem!!!    I wish a foreign bank would come and offer rates like in the rest of Europe and let our banks go bust. Or that we had a few decent politicians who would push for fairness.


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## Delboy (5 Feb 2016)

Here you all go....get FF into power and all your worries will be washed away
http://www.independent.ie/irish-new...able-rates-for-mortgage-holders-34426917.html


> Fianna Fail has insisted it will introduce measures to "beat" banks into slashing variable rates for mortgage customers in a move that has placed the party on a collision course with the Central Bank.
> During a press conference on housing today, Fianna Fáil senator Darragh O'Brien said he disagreed with Governor Philip Lane's claims that banks cannot be compelled into rate reductions, adding: "Phillip Lane isn't the oracle".
> 
> The party says its economic plan, due to be published next week, will contain a pledge to introduce "strong deterrents" aimed at stopping banks from charging excessive rates...
> ...



They'll beat the banks into submissions so they will. Rise and follow Michéal


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## Brendan Burgess (5 Feb 2016)

Hi Delboy

They don't need to "beat" the banks into submission at all. 

They just need to insist that banks treat customers fairly.

1) That they offer existing customers the same rates as new customers - At the moment KBC and BoI offer low rates to new customers while keeping their existing customers on  higher rates
2) If the lender is no longer open to business, some form of limit on what they can charge customers. As of now,the vulture funds could hike the rate to 10% and there is nothing anyone could do about it - borrower, government or Central Bank.


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## bungaro (5 Feb 2016)

i met michael mcgrath recently (he lives locally) and asked him about the svr issue and he did seem to be really involved in doing something about it, not just lip service. i'm hoping he calls canvassing some evening as i'd like to see if it something he is hearing on the doorstep. also asked simon coveney (he's local too) but wasn't as convinced by his answer, just general talk as opposed to anything substantial


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## Delboy (5 Feb 2016)

Brendan

As you know, they can 'insist' all they want but the Banks can chose to ignore them.

The talk by FF of 'beating' them into lowering their rates is bluster of the highest order, designed to dupe those who think it has some meaning into voting FF.


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## Brendan Burgess (5 Feb 2016)

Delboy said:


> As you know, they can 'insist' all they want but the Banks can chose to ignore them.



I know nothing of the sort. 

I would argue that the Central Bank could insist that lenders treat customers fairly under the CPC.
They could change the CPC to make it a specific condition that treating customers fairly means giving existing customers the same rates as new customers.  The banks could not ignore that.

And if the Central Bank does not want to do its job, the Oireachtas could bring in legislation to do it. 

It may well be political posturing by Fianna Fáil, but if they are in power after the next election, they could actually deliver this.


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## Delboy (5 Feb 2016)

Just cannot see any of that happening. And if it even came close, I could see the new customer rates being increased to match those of the existing customers, rather than the other way around.
Although competition entering the market could actually force the rates lower for all if that condition was in place, unlikely as it is IMO to come about.

As for FF delivering...I'll agree to disagree with you on that!


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## Brendan Burgess (5 Feb 2016)

Delboy said:


> As you know, they can 'insist' all they want but the Banks can chose to ignore them.





Delboy said:


> Just cannot see any of that happening.



Well do we agree that the Banks simply can't choose to ignore the laws?   

There are two issues here 

1) Customers should be treated fairly.  If the banks don't do so, the Central Bank should insist on it. If the Central Bank does not insist on it, then the Oireachtas should legislate for it. 

I presume that you don't think that I am politically posturing by campaigning for that? 

2) Michael McGrath has kept the issue in the news. If he is in the next Government, he might lose interest in the topic. But as of now, he is the most ardent advocate. 

Brendan


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## Dermot (5 Feb 2016)

If it were so simple just to legislate why did the current Government not do it. It would have certainly not have been unpopular politically and would have just sailed through on a vote.  There may be other reasons apart from getting AIB ready for market.  The chances are that the outgoing Government will not be returned so why would they be protecting AIB if they could make themselves more popular by interfering with the market.  I just think that there is more to it than that.
I would personally think that it might not go down terribly well with incoming banks either.
Where might it stop if mortgage holders can get the law changed. SME's might also want it/ Farmers might want it and other interest groups would join the lobby brigade and find an very good advocate on the opposition benches who would be able to keep themselves in the limelight as well.
The reduction in income from mortgages will be offset into some other area of banking to make up the losses.
I notice that the market does not see the shares of our 2 main Banks as a great buy given their price over the past couple of years.  They do not reflect any improvement in the economy.  I do not hold any but just making the comment


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## PadKiss (5 Feb 2016)

In my research into rates accross Europe there is a strongly held belief with some lenders that a family home and ownership of one is a desire that benefits the entire and broader economy. And is encouraged. In addition and almost as critical is the unwritten rule that this paticular loan (home loans) is not one that's available for profit driving or 'fleecing'. Banks know and view the broader aspect of their business benefits in the longer run by offering proper rates of interest in home loans. This view creates a hidden certainty that they are safe with their lender something that's certainly not available  Padraic


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## PadKiss (5 Feb 2016)

_Here I meant to add sorry _


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## Ger Fleming (10 Feb 2016)

I received a reply  from Minister Noonan today to an email I sent him last Dec re ptsb rates.  I am a customer and I am on 4.5%*rate. His reply stated that basically  he had no power to  intervene and it was important  that the bank remains in profit.  His email was much longer but was just full of the usual spin  and for the most part said that he was powerless and could do nothing.  Both he and I know that this is not true  and I intend replying to him and point that out.


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## tonymac (10 Feb 2016)

Hi Ger,  sounds like the spin I got when he sent me a reply before Christmas. He mentioned the profitability of the banks  in his reply to you that's the one difference between the two replies. Just shows what the people who can do something about this and won't really think, eg to he'll with you and me and all the others getting screwed, just use them for getting the banks back in profit and it saves the state doing it. Just get these off our books for the best possible price ASAP and  damp the ordinary people. It's a horrible feeling being a sucker isn't it and for us its twice.


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## Kerrigan (11 Feb 2016)

What about the foreign lenders some of whom are fleecing SVR holders - surely Noonan doesn't have an obligation to get those banks back in profit?


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## Black_Adder (11 Feb 2016)

This is not a political issue perhaps because of three reasons:

(1) We do not know what politicians have exposure to AN Other Bank 
(2) If judgments have not been sought (yet) then maybe politicians feel they cannot get involved
(3) The 'challenged middle class' do not do protest and are focused on survival


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## tonymac (11 Feb 2016)

He doesn't have an obligation to get them back in profit but he does have an obligation to stop those people being savaged just like the other banks and to do what he and the CB haven't been doing, enforcing the consumer protection code.


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## Paul Reilly (12 Feb 2016)

Its clear that only one party is going to TRY to reduce variable rates in the upcoming election and I never vote for them but this time I am.

Everyone would know who if the stupid tv3 presenter didnt keep interupting when this leader spoke about mortgages.

Only one leader mentioned mortgages in last nights debate

Do politicians not realise that housing relates to mortgages as well as rent.

Apparently if you have a mortgage you never go homeless...according to parties

Imagine discussing health but not mentioning hospitals
Imagine crime without mentioning rhe event of burglary and dublin
Imagine 8th amendment without child

Imagine economy without USC

Oh sorry im not allowed mock the usc

Politicians keep arguing against what other parties are proposing instead of sayong what their manifesto is CLEARLY

Unless VMR is reduced in the next 2 years drastically Irelands population will have to hand over at least 20000 homes and unless TRS is extended as one leader promised on tv3 debate.

The rest argued for usc


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## Brendan Burgess (12 Feb 2016)

Which leader referred to TRS in the debate?  I thought it was Micheál Martin, but I paid not attention to it as there isn't any good reason for giving mortgage holders tax relief. 

Gerry Adams did raise the variable mortgage rate issue, but got interrupted by the presenter. 

Brendan


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## Sarenco (12 Feb 2016)

FF are proposing to retain TRS until 2020 and to introduce a first time buyers' scheme. 

There is absolutely no justification for calling on the taxpayer to subsidise any private house purchase - more populist nonsense from FF.


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## Delboy (12 Feb 2016)

Labour have a 1st time buyers scheme also.
And Labour and FG have some vague promise to bring in a Dublin allowance for 'young workers' because the cost of living is so high up here.

The madness of it it all would drive you to drink


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## tonymac (12 Feb 2016)

I know this won't happen but if TRS is being removed and the likes of AIB and PTSB are being sold some of the money raised should be given back to people like us who have been contributing most to getting the banks back profitable and getting them attractive for sale aa a dividend. Sorry I'd better wake up from the dream I was having about the day we got treated fairly but now I'm back in the real world I know the chances of that are very slim indeed. It was a nice dream though.


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## Paul Reilly (12 Feb 2016)

Yes Brendan

It was Michael Martin for all of 2 seconds

Gerry Adams asked a question at the end but presenter interrupted

Extending TRS isnt a waste. How can you think that? Without TRS my mortgage is over my means. No reduction in variable will do this unless by 1.5per cent which will NEVER happen

So I gotta vote for Fianna Fail. FG n Labour no and cant vote SF cause Gerry Adams isnt my favorite person even though all the rest of sinn fein are good.


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## Sarenco (12 Feb 2016)

The poorest third of our society will never be able to afford to purchase a home.

Why should their taxes be used to subsidise your borrowings?

If the State does manage to recoup its investment in our banks then I hope the proceeds are used for truly worthy causes, like providing for the mentally ill.


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## Dermot (12 Feb 2016)

What does the FF manifesto say on TRS ???. What period of mortgages does it cover in the promise.  House prices had fallen by 30% or more by end of 2008 and continued to fall for some years after and have not reached the boom prices yet.  In many parts of the country they are at less than 50% of boom time prices.
Anyone who took out a mortgage between 2000 & 2006 and who paid their mortgage P & I have between 10 & 16 years knocked off their mortgages which would be attracting a relatively low amount of Interest. So we are now into the relatively "boomier Bertie period" of 2007/2008 during which time there was quite an amount of tracker mortgages availed of. I know all were not trackers.

So if TRS  were restored how would it be targeted fairly.

Every type of mortgage across the board regardless of when they were taken out?.
Every mortgage holder regardless of their income.?
Any limit to the amount of Interest that would be subsidised.?


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