# "Want to solve arrears crisis? Make repossession faster and cheaper"



## Brendan Burgess (18 Mar 2015)

I have an article in today's Indo challenging the consensus

*Want to solve arrears crisis? Make repossession faster and cheaper*

It was edited  a little, so here is the original: 

In every other country in the developed world, when a borrower doesn’t pay their mortgage, the lender gives them a few months to get back on track. If they are unable to do so, the bank repossesses the house. The family moves to a home which they can afford. The bank sells the house to another family who can pay the mortgage. If there is a shortfall after the sale, the bank may write it off or they may pursue the borrower depending on the borrower’s financial position.

Mortgage holders in these countries understand that if they don’t pay their mortgage, they will lose their home. As a result, they make a priority of paying their mortgage. They will cut their lifestyle expenditure. They will pay their mortgage before other unsecured loans.  Above all, the risk of losing their home will encourage them to address any problem early on and not to bury their heads in the sand.

This system works well for the vast majority of people. Arrears are minimised. Repossessions are minimised. Mortgage rates are much lower because the banks have low losses on their mortgage lending.

This is the situation in every country but Ireland. In Ireland, if someone doesn’t pay their mortgage, we blame the bank and not the borrower. Banks have to comply with a complicated and bureaucratic Mortgage Arrears Resolution Process - proposed, incidentally,  by an  Expert Group of which I was a member. We place all the responsibility for solving mortgage arrears on the lender. We absolve the borrower of all responsibility saying that they are in arrears “due to no fault of their own”. We throw our hands up in horror at the very mention of the possibility of repossession.

The result? While most people have continued to pay their mortgage, a small minority have exploited the situation. When these people realised that there was no effective sanction for not paying their mortgage, they will try to get away without paying.  30,000 people have now built up over two years of arrears. Some of these have done their best to pay what they can, but many of them have taken advantage of the lack of any effective sanction and made little effort to pay.

Well-meaning debt campaigners have done these borrowers no favours whatsoever as they have just encouraged the borrowers to avoid reality and to delay facing up to their problems.  They have given these borrowers false hopes of debt write downs. If these borrowers had addressed the problems early on, many of them could have got back on track. But many have now left it too late and the problem has gone beyond fixing. These people will lose their homes which they could have kept had they addressed the problem when it first arose.

I have been one of the biggest critics of the banks. The variable rates they charge Irish borrowers are scandalously high compared with the rest of the Eurozone. They offer better deals to new customers than to existing customers. They exploit customers who can’t move lenders due to negative equity. They have tricked many borrowers off their cheap trackers. They have classified some mortgages as unsustainable, where they are clearly sustainable. Where borrowers acknowledge that their mortgages are not sustainable and agree to sell their homes, the banks insist on pursuing them for the shortfalls, instead of writing them off.

But, bad as the banks are, we should also acknowledge the work the banks have done in dealing with customers in arrears. They have been able to come up with a solution for around 80% to 90% of borrowers in arrears who engage with them. Almost 100,000 mortgages have been restructured which has greatly reduced the borrowers’ monthly repayments. Many borrowers have had their mortgages split – in effect the banks have stopped charging interest on a portion of the mortgage. This flexibility by the banks has resulted in around 100,000 unsustainable mortgages being made sustainable. In any other country, the banks would have simply repossessed the vast majority of these homes.

Commentators who call for debt write downs for the 30,000 borrowers in arrears over two years, never specify who would bear the cost of such write downs. Some of the cost falls on the taxpayer who owns 100% of AIB, EBS, and ptsb and 15% of Bank of Ireland. But most of the cost falls on the borrowers who do actually pay their mortgages. Irish variable rate borrowers are paying, on average, 4.2% for their mortgages while the average rate in the rest of the Eurozone is 2.3%.  This means that a borrower with a €200,000 mortgage is paying around €300 per month more than they should be paying. So those borrowers who are paying their own mortgages on time, are also, in effect, paying the mortgages of those who are not paying. And these high variable rates, in turn, are pushing some struggling borrowers into arrears, creating a vicious circle.

Compare the repossession situation in Ireland with our nearest neighbour in the UK. We have had a much bigger housing bubble. We have had a much steeper rise in unemployment.  Around 10.5% of Irish borrowers in arrears over 90 days, compared to only 1.5% in the UK.  Between 2007 and 2014, UK banks repossessed 236,000 homes out of the 11 million homes with mortgages.  If we applied the same rate to our 600,000 mortgages in Ireland, we would have repossessed around 13,000 homes. In fact, only around 1,400 homes have been repossessed over that period. So we have ten times the level of arrears, yet only one tenth the level of repossessions.

The UK’s mature attitude to mortgage lending and arrears has allowed the UK lenders to offer much lower mortgage rates. A borrower over the border in Northern Ireland can take out a tracker mortgage at rates as low as 2.2% because they don’t have to also pay for their neighbours who don’t pay their mortgage. The lowest rate available in the Republic is 3.6% and that is not a tracker rate.

Imagine the reaction of a foreign bank considering entering the Irish mortgage market to bring a bit of much needed competition. They would see that the way in which they could deal with borrowers in arrears would be severely limited by the Mortgage Arrears Code. They would realise that if a borrower didn’t pay their mortgage, the lender could impose no effective sanction. They would see that it would take two years and many expensive court appearances to get an order for possession. And they would see that if they attempted to enforce the order and actually repossess the house, they would be condemned by the media and by politicians and that they might well be met at the gate by a group of vigilantes. They would reasonably conclude that mortgage lending in Ireland is more akin to unsecured lending in bandit country and so would allocate their capital elsewhere.

Our failure as a society to face up to the necessity for repossessions early in the crisis has resulted in a huge backlog building up. It has made the position far worse today than it needed to have been. If we had been repossessing 2,000 homes a year, for the past 7 years, we would not have an arrears crisis now and we would not be facing the disruption caused by 20,000 repossessions.

So what needs to be done?

As a society, we need to face the reality that those borrowers who pay their mortgage are also, in effect, paying the mortgages of defaulting borrowers and this has to stop.

The government must change current court procedures to make repossession faster and cheaper so that it is both a real and imminent threat to people who persistently refuse to pay their mortgage. The government needs to address the lack of supply of low cost housing and the lack of social housing to make housing available to those who must lose their homes.


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## Sarenco (18 Mar 2015)

Excellent article Brendan. 

It's a pity that the Indo didn't reproduce your statistics in relation to the repossession situation in the UK in contrast to the position in Ireland.  It really is quite amazing that we have ten times the level of arrears with one tenth the level of repossessions.


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## demoivre (18 Mar 2015)

Brendan Burgess said:


> The result? While most people have continued to pay their mortgage, a small minority have exploited the situation. When these people realised that there was no effective sanction for not paying their mortgage, they will try to get away without paying. 30,000 people have now built up over two years of arrears. Some of these have done their best to pay what they can, but many of them have taken advantage of the lack of any effective sanction and made little effort to pay.



Losing their homes is still the sanction , albeit a lengthy legal process to repossess.


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## TTI (18 Mar 2015)

+1000


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## Delboy (18 Mar 2015)

Well done Brendan, good to see an article contrary to the ongoing media campaign for no repossessions/wide-scale debt write down.  Badly needed. So many people would be well on the road to a fresh start now if this problem had been dealt with decisively over the last 7 years.
Good to see also the point about our high SV mortgage rates being given prominence- people really need to understand whats driving the high rates.


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## Brendan Burgess (18 Mar 2015)

I will be debating these issues on the Late Debate tonight on RTE Radio 1 at 10 pm

Panel: Noeline Blackwell; Jerry Beades, Paul Murphy and Cormac Lucey 

I will also be doing an interview on it on Shannonside Radio at 9.30 am tomorrow.


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## Steven Barrett (18 Mar 2015)

Great article Brendan. 

I've heard of people in arrears on their PRR and refusing to sell their holiday home because they like going there in the summer! 

Steven
www.bluewaterfp.ie


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## rob oyle (18 Mar 2015)

Brendan, I think in the early exchanges you were sidetracked from your salient points above by Jerry hysterics... still listening here...


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## Delboy (18 Mar 2015)

Brendan: from listening tonight, it came across that you were in agreement with most of the others about keeping people in the family home being the only show in town.
I had gotten the vibe from your recent articles that there needed to be a lot more repossessions in order to get the mess sorted once and for all.

So a bit confused by tonight's show


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## Dermot (18 Mar 2015)

Listening to Shannonside as I was passing through the area last week I heard a Co Councillor stating that she would be protesting at repossession Court hearings in the Longford area as she feels that no one should be put out of their homes (the usual rubbish).  She would be expecting all the Councillors in the area to do likewise.  She is a former PD TD and has been a member of a lot of parties.  Her point of view was not challenged really by interviewer.  
I agree with your original post and the implications that you have stated arising from the difficulties in repossessing properties.  ie higher mortgage rates etc.


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## Delboy (18 Mar 2015)

Sounds like it's Mae Sexton....after she left the disbanded PD's, she went Independent before then joining Labour!!! She then left Labour a few years back following the start of this Govt's austerity budgets.
You couldn't make it up


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## Dermot (19 Mar 2015)

Just Googled it and this is the link
[broken link removed]
I'm waiting for some party to propose non repayable mortgages up to €1m.


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## Brendan Burgess (19 Mar 2015)

Delboy said:


> Brendan: from listening tonight, it came across that you were in agreement with most of the others about keeping people in the family home being the only show in town.
> I had gotten the vibe from your recent articles that there needed to be a lot more repossessions in order to get the mess sorted once and for all.



Hi Delboy

It's a very complex issue and it's hard to articulate the intricacies in a 5 way debate.  And there are always interruptions and side tracks. 

It's clear to me that there are probably 20,000 intentional defaulters out there who should lose their homes. 
There are other people living in appropriate accommodation who are paying what they can but not the full amount. The state will have to house them anyway, so it's actually cheaper for us to pay their mortgage interest. 

Brendan


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## Sarenco (19 Mar 2015)

Delboy said:


> Brendan: from listening tonight, it came across that you were in agreement with most of the others about keeping people in the family home being the only show in town.
> I had gotten the vibe from your recent articles that there needed to be a lot more repossessions in order to get the mess sorted once and for all.
> 
> So a bit confused by tonight's show



Sorry Brendan but I'm with Delboy on this one - the constant rhetoric about keeping people in their "family home" is simply annoying at this stage.  Would a renter be entitled to stay in their family home indefinitely if they stop paying their rent?  

Mind you, Cormac Lucey's comments about suspending property rights for a defined period were really weird - we do still have a constitution, don't we?

I feel dirty saying this, but I actually found myself agreeing with Jerry Beades on the benefits of shortening the bankruptcy term in order to give some leverage to borrowers to agree arrangements with lenders that make economic sense.

The usual platitudes from Noaleen Blackwell and Paul Murphy...


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## Brendan Burgess (19 Mar 2015)

Sarenco said:


> Sorry Brendan but I'm with Delboy on this one



Absolutely no need to apologise for disagreeing with me!  Oddly enough, Cormac Lucey introduced a point yesterday by saying "Sorry Brendan, but..."  Cormac and I would agree around 80% of stuff, which is pretty high.




Sarenco said:


> the constant rhetoric about keeping people in their "family home" is simply annoying at this stage. Would a renter be entitled to stay in their family home indefinitely if they stop paying their rent?



What happens in social housing?  How many are evicted for arrears?  

I would prefer a system where their social welfare was diverted towards their rent or their mortgage payment. 

I think we are obliged under international law to house people - not, of course, in a home of their choice in a location of their choice. 

Brendan


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## Bronte (19 Mar 2015)

I only listened to the begining of the show and found it made no sense, and that's coming from a person interested in this issue.  The presenter was not able to keep people on track, didn't seem to know what was being discussed and couldn't control the panel.

It was about 15 minues in before it was clarified we were only talking about home loans. 

And one thing is now clear, nobody seems to have concrete figures.


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## Delboy (19 Mar 2015)

Brendan Burgess said:


> Hi Delboy
> There are other people living in appropriate accommodation who are paying what they can but not the full amount. The state will have to house them anyway, so it's actually cheaper for us to pay their mortgage interest.
> 
> Brendan


I would wager that a large % of that cohort would not require the State to house them if they lost their current house i.e. they have jobs/income and could afford to rent or even at a later stage, buy a smaller house with a more affordable mortgage.


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## Delboy (19 Mar 2015)

Sarenco said:


> I feel dirty saying this, but I actually found myself agreeing with Jerry Beades on the benefits of shortening the bankruptcy term in order to give some leverage to borrowers to agree arrangements with lenders that make economic sense.


Jerry Beades only wants the 1 year bankruptcy brought in so that the Banks will be forced into debt write downs asap. He made it clear that the 'family home' shouldn't be lost just because your a bankrupt.
So as usual on this issue, he only supports something if it involves taxpayers forking out and no one losing a house


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## Bronte (19 Mar 2015)

*Eviction and social housing*

It is logical that people should be evicted if they cannot afford their mortgage.  And I agree that ordinary mortgage holders are paying over the odds because of defaulters not being dealt with.  But the solution Burgess proposed was social housing.  But there is no social housing, and rent allowance in Dublin will not cover a family home (as far as I can tell - due to the rent hikes and rent allowance not increasing).

There will be no increase in social housing, or not much of it, they cannot cope with the current lists, have bambozzeled us with 'plans' but I see no houses being built  in any meaningful quantifies.  And the problem is getting worse.

*Solution*

How many people are in a house where they can afford a mortgage that is written down to the level of that repayment.  Is this not a solution where that level would equal the house value.  Obviously not a solution where the house value means the bank would get a lot more by selling on the open market.


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## Bronte (19 Mar 2015)

Delboy said:


> I would wager that a large % of that cohort would not require the State to house them if they lost their current house i.e. they have jobs/income and could afford to rent or even at a later stage, buy a smaller house with a more affordable mortgage.


 
Can that be backed up with figures?  As in how many people are in this situation?


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## Bronte (19 Mar 2015)

Delboy said:


> Jerry Beades only wants the 1 year bankruptcy brought in so that the Banks will be forced into debt write downs asap. He made it clear that the 'family home' shouldn't be lost just because your a bankrupt.
> So as usual on this issue, he only supports something if it involves taxpayers forking out and no one losing a house


 
If one year forces debt write downs asap, is that not a good thing.  Instead we have had about 7-10 years of can kicking by banks.   Was that brought up last night, it wasn't in the Indo article.  The fact that banks did nothing initially when the crisis hit and have been very slow to deal with borrowers and have in fact been can kicking.

Some things that are clear are:
a) The insolvency legislation is not working
b) The insolvency service has hardly any clients
c) We are not seeing solutions
d) Mabs should have been allowed become involved in helping people through the insolvency rather than broke people having to pay PIP's. 

So maybe Jerry Beades is right (on some things)

The fact that borrowers over extended was mentioned, and I agree they were culpable, but they were let down by a) the government and b) the central bank and big time by c) the banks who throw all rulebooks on prudent lending out the window, including people being given money based on 'hypotetical rents' and 'certified' income and 'false' P60's.


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## Delboy (19 Mar 2015)

Bronte said:


> Can that be backed up with figures?  As in how many people are in this situation?


I don't have the figures but we have seen a high % of the arrears from the recent county by county data are in Dublin. Unemployment has fallen from 15% to just below 10% and is continuing to fall (it's probably much lower in Dublin and surrounding areas).

I'm in the market for a larger family home having stupidly bought a small/affordable townhouse during the mid noughties when single. It's now too small for a few kids, and with more planned, we need to upsize. But we're now getting whacked by whopping annual house price increases and school availablility (another scandal in this country that is never tackled).
So my mistake was to have been ultra prudent when I should have fallen for the bank/media/peer group hype and bought a much bigger house in a much nicer area. By your logic, I would now have my mortgage written down to suit my current financial means i.e. the person who did this gets rewarded while a prudent eejit like myself has to soldier on and make do.
Thats some lotto win for some


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## Bronte (19 Mar 2015)

I hear where you are coming from.  I'm only proposing it for those where the value of the house would not get the bank any more money by selling the house.

For example, if they have a mortgage of 300K on a house worth 150K.  And they can afford a mortgage of 150K.

Is it better to evict, and then they have to rent, but they cannot afford the rent and so the government has to step in.  So an additional cost to the taxpayer.  And lots of money by current bank mortgagees paying over the odds mortgage to pay the receivers, accountants and layers for the evictions and legal process.

At the very beginning of this mess I mentioned on here how a lot of money would go on fees/legal.  The top accountants actually hired people for the windfalls coming from insolvencies.

One day I'd like to see the figures for the PIP's, legals, accoutntants, receivers, estate agents.  It's a whole industry all of it's own. 

Burgess (I think) mentioned last night that people were staying in houses, not paying and speding the spare cash on school fees (he mentioned but I guess holidays or lifestyle).  Those people do not deserve any sympathy and honestly it makes no sense to me that banks are putting up with this, but nobody can confirm this for sure.

We don't seem to be able to quantify exactly who is doing what.


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## Brendan Burgess (19 Mar 2015)

Bronte said:


> *Solution*
> 
> How many people are in a house where they can afford a mortgage that is written down to the level of that repayment. Is this not a solution where that level would equal the house value. Obviously not a solution where the house value means the bank would get a lot more by selling on the open market.



Hi Bronte

The banks do their very best to come up with a sustainable solution. If someone is engaging with them and is paying something,the banks can come up with solutions in around 80% to 90% of cases. 

Let's say I have a mortgage of €300k SVR on a house worth €200k.  If I have shown that I can make the repayments on a mortgage of €200k, then the lenders will usually give me a split mortgage i.e. they will warehouse the €100k, usually interest free.  I have seen the lenders give split mortgages to people with trackers and very little negative equity.  I would not do that as a lender. 

That is a better solution than the one you propose of writing down the mortgage to €200k.  What happens if the property rises in value to €280k? The borrower sells it and makes a profit of €80k.  

If someone sells their home at a loss and has been cooperating with the lender, then I think that the shortfall should be written off or settled over maybe 3 years. 

But while someone continues to own their home, then I don't think that their debt should be written down.  It should be warehoused.


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## Brendan Burgess (19 Mar 2015)

Bronte said:


> Can that be backed up with figures?  As in how many people are in this situation?



Hi Bronte 

Around 75% of those in default are working according to the Central Bank. 

Brendan


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## Bronte (19 Mar 2015)

Brendan Burgess said:


> Let's say I have a mortgage of €300k SVR on a house worth €200k.  If I have shown that I can make the repayments on a mortgage of €200k, then the lenders will usually give me a split mortgage i.e. they will warehouse the €100k, usually interest free.
> 
> If someone sells their home at a loss and has been cooperating with the lender, then I think that the shortfall should be written off or settled over maybe 3 years.
> 
> But while someone continues to own their home, then I don't think that their debt should be written down.  It should be warehoused.


 
That too seems a good idea, a better one actually, but only if the borrower gets the shortfall written off if house is sold at a loss.  And that is to be put in writing.  It wouldn't seem right that you pay your 200K, and sell for a loss and have nothing to show for it.  It would 'incentivise people to pay, would make people happier and more stable, good for society.

How many split mortgages have been completed and have they worked? 

I would always be wary of small print in banks.  Not nice if after paying the 200K that the banks then comes for fees, costs, charges on the warehoused bit and that we are here on AAM debating that in 20 years time.  Where is the protection in Split mortgages?


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## Delboy (19 Mar 2015)

Brendan Burgess said:


> If someone sells their home at a loss and has been cooperating with the lender, then I think that the shortfall should be written off or settled over maybe 3 years.
> 
> But while someone continues to own their home, then I don't think that their debt should be written down.  It should be warehoused.


Thats it, simple as. No one's a winner and the Mortgage/House buying system retains some shred of credibility.
But will it be implemented in a place like this!


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## Bronte (19 Mar 2015)

Brendan Burgess said:


> Hi Bronte
> 
> Around 75% of those in default are working according to the Central Bank.
> 
> Brendan



Now Brugess, I don't belive a word out of the mouth of the CB.  Sorry but I don't.  They've lied for years now on mortgages rates despite you 'investigating' and proving it to them.  And they were pretty much useless during the boom. 

The only source I'd believe is the banks, they must have figures.  Maybe the PIP's on here would also have an idea.


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## Delboy (19 Mar 2015)

Where do you think the CB got their figures from!


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## tvman (19 Mar 2015)

Excellent article Brendan


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## Bronte (19 Mar 2015)

Delboy said:


> Where do you think the CB got their figures from!


 
They also get the mortgage interest rate figures from the banks, but by miraculous mathematical calculation they change in the CB reports to something else.


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## Brendan Burgess (19 Mar 2015)

Bronte said:


> That too seems a good idea, a better one actually, but only if the borrower gets the shortfall written off if house is sold at a loss. And that is to be put in writing. It wouldn't seem right that you pay your 200K, and sell for a loss and have nothing to show for it. It would 'incentivise people to pay, would make people happier and more stable, good for society.



Hi Bronte

When a borrower is offered a split mortgage, they have a choice between accepting it and going bankrupt.  I have argued that in many cases of deep negative equity, they would be better off voluntarily surrendering their home and going bankrupt or trying for a PIA. 

My compromise was that if the borrower maintained the repayments on a split mortgage for 5 years, then they should have the right to sell the property and that the shortfall would be written off. 

Brendan


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## Bronte (19 Mar 2015)

Brendan Burgess said:


> I have argued that in many cases of deep negative equity, they would be better off voluntarily surrendering their home and going bankrupt or trying for a PIA.
> 
> My compromise was that if the borrower maintained the repayments on a split mortgage for 5 years, then they should have the right to sell the property and that the shortfall would be written off.


 
Agreed that in many cases of deep NE the property should be sold.  Is this what is happening?

As for your second point, it's not the law so banks don't have to do it, so borrowers who enter split mortgages really really need to know what they are getting into. 

(Jerry Beades - we'd need a whole thread on him, other than 1 year bankruptcy, what is his solution to the mortgage crisis?)


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## Andy836 (19 Mar 2015)

There seems to be a number of posters here referencing the houses value & negative equity when calculating a write down.

These reference points have nothing to do with "unsustainable" home loans. 

If a home loan is to be written down, it needs to be written down to an amount based on the Borrowers ability to pay, not an amount based on the property value. If the Bank believes they can get more back through a sale of the property on the open market then the Bank should be facilitated in doing so. If someone can't service a market rate then they do not "deserve" or have a "right" to live in that locality. I grew up in a nice part of Dublin yet I've no subsidized right to live there now.

If I had my way, I'd allow the Banks retain a profit participating interest in the property for the remainder of the mortgage - e.g. if in 15 years time the property's value is back above a threshold set at 50% of the discount in value of the original loan, (e.g. if in 15 years the house value increased to $250k securing a $300k loan which was written down to $200k), then the Bank should have the right to foreclose and retain 50% of the profit (ideally I'd like them to get 100% of the profit but that's not PC). The Bank's ability to do so should be set at 18mths valuation intervals to provide tenure security (which is 50% more certainty a renter gets!) and prior to a sale going through an independent valuation is required with the sale & valuation costs for the Bank's account - i.e. they're unlikely to do it unless they're sure values are higher. 

Not a fully developed idea and unlikely to get political traction LOL


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## Delboy (19 Mar 2015)

Hi Andy836

I could just see the wailing from the Indo when the Bank tries to realise their interest and a scared old couple appear in a story saying how they now have no funds to pay for quality nursing home care thanks to the big bad banks


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## demoivre (19 Mar 2015)

How many long term arrears cases would we have if we had non recourse mortgages for the last twenty years  ?


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## Andy836 (19 Mar 2015)

Delboy said:


> Hi Andy836
> 
> I could just see the wailing from the Indo when the Bank tries to realise their interest and a scared old couple appear in a story saying how they now have no funds to pay for quality nursing home care thanks to the big bad banks



Almost every hard-luck story in the papers is riddled with holes. I think this says a lot about new media (churnalism & click bait) and the Irish public who lap it up.

However, my idea actually suggests the "put upon victims" would take 50% of the "profit" - drinks on them!!!!


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## Andy836 (19 Mar 2015)

demoivre said:


> How many long term arrears cases would we have if we had non recourse mortgages for the last twenty years  ?



Are you referencing the US mortgage market?

i.e. the market that is classed by all the Irish "experts" in the media as "non-recourse"?

This being in spite of only 11 states in the US being classed by most academics as "non-recourse" and within that group there being variations on the technical details - i.e. (i) some either allow a bank to short sell or pursue deficiencies but not both, (ii) regulatory costs are so prohibitive that banks don't pursue, (iii) purchase mortgages only (i.e. the original loan used to buy the house is classed as non-recourse however any subsequent refinancing of that loan is full-recourse (US mortgages are refinanced regularly as rates change)
I note that a 12th state, Nevada, has now brought through legislation stopping Bank's pursuing deficiencies on home loans taken out since 2009 (but not those beforehand).

the article below outlines the differences in state laws

[broken link removed] 

Interesting tit bits
The IRS also views debt write-off in some cases as a taxable gain.
For Feb 2014, approx 21% of all US home sales were distressed. 
Total US delinquency rates at Feb 2014 were 2.8% with Connecticut, the only "non-recourse" state having a higher delinquency rate higher than the national average. http://www.newyorkfed.org/outreach-and-education/community-credit-profiles/#map/hpi
Non-recourse mortgages are typically capped at much lower LTV or LTC rates - some cite 50-60% although there are instances where you'll see 70% rates. In contrast to the "torture" people are suffering in ireland having to scrape together a 20% deposit.


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## demoivre (27 Mar 2015)

Banks shouldn't be allowed veto a PIA, under the 65% rule, where the borrower going bankrupt to deal with a shortfall after the house is repossessed and sold, results in a greater loss to the bank.


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## Gerry Canning (30 Mar 2015)

From the threads.

1. One year Bankruptcy , will galvanise everyone and speed things up = a Plus.
2. Why should someone stay in a Large house in a good area rather than sell and move to a smaller home in different area . (they will still have a home and no debt) = a Plus.
3. Split Mortgages appear, if they are well worked, to give people and banks a sporting chance of resolution = a Plus.
4. Loan needs to written down to what person can afford.(rest is dealt with by Splits/retention of future profits etc) = a Plus.

We ,rightly, have a serious mistrust of Banks.
We, rightly , have a nagging doubt that there are too many leg lifters in arrears.
We, rightly , do not want people to live in palatial surroundings if they don't pay their bills.
We , rightly , see the Golden Circle managing to stay in their homes ,yet they don,t have to get out and trade down.

I do not see any of us wishing people to be thrown out but if people continue to believe they can stay (not-paying) without sanction ,or without accepting fair resolution, we are going nowhere.

We need a referee, not an extended negotiator,  on offers, and I don't mean another Quango!


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## El_Pedrino (11 Apr 2015)

I agree with you completely Brendan, but I do query one word that keeps cropping up: families. There are a lot of single people like myself who are indirectly disadvantaged by the constant references to families by commentators, because the word provokes an emotional reaction against repossession. The fact is, if the system stops pussy-footing around repossessions and in doing so gets people back on track and releases properties to the market, everyone as a whole is better off.


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