# The McNamara/Lowe case shows that the courts are imposing too lenient PIAs on lenders



## Brendan Burgess

Warning: This is a very long thread. 

I have long argued that we have the best protected borrowers in the World.  And I have also argued that we should protect genuine borrowers who are in arrears. I have found some of the reports on the PIAs imposed by the court disturbing in that they seem way too generous.  The cost of these is paid by the borrowers who pay their mortgage in terms of the highest mortgage rates in the eurozone.

I attach the High Court judgement in the case of the McNamaras.  To make it more readable, I have edited out a lot of the technical stuff about whether Belvedere College is  a separate class of creditors and so whether the PIA had the required technical support of creditors. And here is my summary

Early 2000s

McMcNamara first encountered financial difficulties
Remortgaged properties and sold some properties to overcome these problems
Up to 2007, Mr McNamara had been earning a high income as a music conductor
2007 Mr McNamara devoted significant time to an unsuccessful attempt to get elected to the Dail. As a result, the household income was reduced significantly.
8 April 2014 – Tanager got an order for possession of the family home – didn’t enforce it
Shortly before October 2016 – Tanager applied for renewal of the execution order
October 2016 – application for the Protective certificate for the PIA
?   Tanager vetoed the proposal
? PIP applied to High Court to overturn the veto
? High Court hearing
August 2019 – High Court decision

*The proposed PIA   - Interlocking PIAs *

Tanager  - jointly€2.267 msecured on the family homeConsumer Auto Receivables€58kjudgement mortgage on family home and 5 acres of land owned jointly*Revenue VAT**€9k **Mr McNamara**Revenue – Property Tax**€3k**Banca Sabadell SA **€210k**Unsecured **BoI Mortgage Bank**€534k** Joint**BoI**€548k **Joint**BoI**€5k**MrMcNamara**Belveder College**€13k **Unpaid school fees **Ptsb**€35k**Unsecured **Cabot**€48k**unsecured*

Proposed to write of €1,7m to Tanager to reduce the mortgage to the agreed value of the home at €550k  - €520k live and €30k warehoused
The McNamaras will make an initial payment of €100k
€420k to be paid over 19 years. – 6 years at 1% fixed, 13 years at ECB + 1%
Parcel of land to be sold for €60k. €30k to go to Consumer Auto Receivables and balance to go into the pot for the unsecured creditors
An inheritance of €182,500 to be made available. The €100k lump sum for Tanager to come from this money.

An investment lump sum of €25k to be made available
A pension policy generating €770 a year to be cashed. (I didn’t follow this bit)
The PIA to last 6 years.
€2,000 a month to be paid on mortgage
Dividend of 5% to be paid to unsecured creditors by way of 36 monthly payments of €960 [These figures don’t add up for me]
*Tanager’s substantial objections *
There are many technical objections about service and notice. But I want to focus on the substantial ones.
g) The proposed write-off of €1.7m is so significant that it “represents a clear unfair procedure”
The proposed arrangement is not a product offered by tanager
They have a suite of options for customers in difficulty such as voluntary sale and Mortgage to rent
They only consider write down where the property is sold
The value of the property is “fictional” [ not sure why they said this if they had an agreed value?]
It is reasonable to predict that the value of the property will rise by 2% a year for the remaining term resulting in a profit for the McNamaras.
H) The debtor is required to complete a  Prescribed Financial Statement and make a statutory declaration that it is complete and accurate.
According to the PFS in October 2016 – the inheritance is worth €182k
According to an SFS sworn in Jan 2016, it was €500k
The SFS referred to a rental income from the inherited property which “seems to have vanished”
j) There is no reasonable prospect that the proposed arrangements will enable the McNamaras to resolve their indebtedness without recourse to bankruptcy
Given their repayment history, there is little prospect that they will be able to meet the €2,000 per month for 19 years and that there will be a default which will trigger a bankruptcy.
The extension of the term from 8 years to 19 years means that they will be 78 and 75 when the mortgage is paid off.
k) There is a greater sum due to the McNamaras from the inheritance than is proposed under the arrangements  - given the variety of inconsistencies disclosed, it is incumbent on the Debtor to disclose the Will and Inland Revenue Affidavit in respect of the estate;.
o) The return under a bankruptcy arrangement would be higher
Payment history
(p) The final ground relied upon by Tanager is that, in the two-year period
prior to the issue of the Protective Certificate, payments to Tanager were
at a level which was significantly below the repayment obligations of
Mr. McNamara and Ms. McNamara. Tanager also relied in this context
on the discrepancies between the SFS on the one hand and the PFS on
the other. For these reasons, Tanager argued that the conduct of Mr.
McNamara and Ms. McNamara during the two-year period in question weighed against the grant ofrelief under s . 11 SA (9) . In this context, s . 11 SA (10) (a) requires the court on any application under s. 11 SA (9) to have regard to the conduct, within a two-year period prior to the issue of the protective certificate, of both the debtor in seeking to pay the debts
concerned and the creditor in seeking to recover the debts due.


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## Brendan Burgess

*The Judge's comments 

The Judge’s comments *
On the sustainability of the mortgage.  The retirement age has move upwards in recent years – there is no retiremenbt age for musical directors or barristers.  Ricardo Multi who is 78 is slated to conduct the Vienna Philharmonic Orchestra in a number of concerts shortly. Burt Bacharach performed here last year at the age of 03  - Barristers regularly work beyond retirement agen.  So this should be no problem for the McNamaras.
69. Insofar as past performance is concerned, it is true that in the years
immediately preceding the issue of the protective certificates, the payment history of
Mr. McNamara and Ms. McNamara was poor. While payments were made by Mr.
McNamara and Ms. McNamara, these payments fell below what was payable under
the terms of the mortgage. However, it is clear from the evidence before the court
that significant payments have been made on a monthly basis since July 2017. Mr.
McNamara in para. 36 of his affidavit sworn in February 2019 has made the
uncontroverted averment that he has been making payments in the sum of €2,000 per
month to Tanager on foot of the mortgage . In the course of the hearing, the court was
provided with a statement of the payments made on a monthly basis since July 2017
in respect of each of the three accounts (namely the 05,06 and 09 accounts). This statement shows that in July 2017 a total of€1,000 was paid. In August 2017 a
payment of €1,500 was paid. Thereafter, in each of the months between September
2017 up to and including December 2018 (both dates inclusive) the total sum of
€2,000 was paid per month by Mr. and Ms. McNamara with the exception of March
2018 when the payment fell short by €100. The account provides a basis to be
confident that Mr. McNamara and Ms. McNamara will be in a position to sustain
payments into the future. In circumstances where Mr. McNamara and Ms. McNamara
are currently making payments of €2,000 per month, there is no reason to suppose that
they will not be in a position to make payments of €2,023.41 during the course of the
arrangement or thereafter. In these circumstances, I believe that there is a sufficient
basis to form the view that the arrangements are sustainable and that, accordingly, the
requirements of s. 11 SA (9) (b) (i) have been satisfied.

72. Insofar as the payment record is concerned, it is undoubtedly the case that Mr.
McNamara and Ms. McNamara did not meet their obligations to Tanager in full
during the two-year period prior to the issue of the protective certificate. That is a
factor to which regard must accordingly be had. However, this is not a case where
Mr. McNamara and Ms. McNamara showed contempt for their liabilities to Tanager.
It is clear from the statements of account that, for much of the period in question,
payments were made to Tanager albeit at a level which was significantly below the
contractual obligations of Mr. McNamara and Ms. McNamara respectively.
74. I am satisfied that a sufficient explanation has been provided on behalf of Mr.
McNamara and Ms. McNamara in relation to their failure to meet their contractual
obligations in respect of the repayment of their debts. For completeness, I should add
that, even if the explanation had not been satisfactory, this is not a case where I
believe it would be appropriate on this ground to reject the proposed arrangement. In
this context, I am influenced by the fact that, notwithstanding their previous
repayment history, real efforts have been made since August 2017 to make substantial
monthly payments to Tanager. As noted above, Mr. McNamara has stated on
affidavit that €2,000 per month is currently being paid to Tanager. Thi

eturn to solvency. Obviously, that is not always a governing criterion. Thus, for
example, if debtors show a contempt for their creditors, that is a factor that would
weigh heavily with the court in any consideration of an application under s. 11 SA. In
this case, however, I can see no basis to suggest that Mr. McNamara and Ms.
McNamara have shown contempt for their creditors. At worst, they have delayed in
facing up to the consequences of their insolvency. However, in these proceedings,
they have now faced up to the consequences of their insolvency and have acted
appropriately. Accordingly, I have come to the conclusion that the past payment performance of Mr. McNamara and Ms. McNamara should not operate to prevent an
order being made under s. l 15A (9).
*The Bankruptcy comparison *
The PIP argued that the creditors including Tanager would be better off under a PIA than bankruptcy.
They said that the value of the property would be reduced by 15% in a forced sale.  Tanager said that this was excessive but produced no evidence to support this.  The ISI says it’s 10%.
They allowed nothing for the time value of money. 
Tanager said that a discount rate of 5% should be used.
83. With regard to the Society of Actuaries 5% discount rate, the practitioner, in
para. 59 of his replying affidavit, says that this suggestion on the part of Tanager is
incorrect for many reasons. In the first place, the underlying cost of funds to Tanager
is a relevant consideration and this has not been provided or disclosed by Tanager.
Furthermore, the practitioner suggests that there is no scope for a discount for the time
value of money in circumstances where the arrangement envisages that, in the future,
Mr. McNamara and Ms. McNamara will be paying and maintaining a mortgage
payment based on a variable rate equating to the ECB rate plus 1 %. He also makes
the point that a personal insolvency arrangement is a debt resolution mechanism
whereas net present value calculators are used in circumstances where there is a need
to value a future investment.
*The interest rate on the mortgage *
b) Insofar as the interest rate is concerned, it clear from Appendix 2 to the
proposed arrangements in both cases, that, for the duration of the
arrangements, the fixed monthly payments of €2,023 .41 are as much as
can be afforded by Mr. McNamara and Ms. McNamara during that
period. There is therefore no scope to provide for a higher rate of
interest during the currency of the proposed arrangements than the
proposed 1 % rate. Insofar as the period after the arrangements is
concerned, one might get the impression from reading Appendix 7 to the
arrangement in both cases that the practitioner intends that the interest
rate would remain at 1 % even after the arrangements come to an end.
However, in respect of the 09 account, the rate equates to the ECB rate
plus 1.25%. Nonetheless, it seems to me that this slight divergence in
rate as between the rate provided for in the proposed arrangements and
the rate applicable to the 09 account is not sufficient to demonstrate that
Tanager will, as a consequence, suffer an unfair prejudice. This is
particularly so in light of the fact that, as explained in sub. para. (c)
below, Tanager has provided no sufficient evidence of the cost of funds
to it. For the avoidance of any doubt as to the rate of interest to be
applied after the expiry of the arrangements, in the event that the court
ultimately makes an order under s l l 5A (9) confirming the coming into
effect of the arrangements, the order will expressly record that the rate of
interest, post arrangement, will equate to the ECB rate plus 1 %.
(c) In my view, it is very significant that Ms. O'Brien has provided no
evidence dealing with the cost of funds to Tanager. In support of her
contention that a rate of 1 % is insufficient, Ms. O'Brien says nothing
about the cost of funds to Tanager. Instead, her evidence highlights that
Tanager does not offer fixed rate loans but that _"other unrelated_
And the judge quoted a precedent set in another PIA case
_"57 . ... I am not satisfied that the objecting creditor has shown me 
sufficient evidence that the proposed fixing of interest would, over 
the balance of the extended term of 2 _7 _years, be unfairly prejudicial 
to it merely on account of the interest rate, and the evidence 
adduced on the part of the objecting creditor ... is predicated on a 
treatment of the objecting creditor as a lending bank, and not as an 
investment fund. I have insufficient evidence on which I could 
conclude that the proposal to fix the interest rates for the proposed 
extended term is unfairly prejudicial to the objecting creditor having 
regard to its status. " 
_
*The future value of the home *
alue of the family home. The suggestion put forward by Ms. O'Brien
in her affidavit that the value of the family home is likely to appreciate in the future is not based on any empirical evidence or any valuation
evidence from a valuer. It is simply conjecture on Ms. O'Brien's part.
Secondly, Ms. O'Brien, in making this case, fails to take account of the
very real consideration that the household income is limited . On the
figure set out in Appendix 2, there is no scope to provide for additional
payments to reflect the possibility that house prices might rise in the
(e) For these reasons, I am of the view that the complaints made by Ms.
O'Brien (as summarised above) do not withstand scrutiny. I also bear in
mind in this context that Tanager will recover more under the proposed
arrangement than it will in a bankruptcy.


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## Brendan Burgess

*The judge's comments on the inconsistencies between the SFS and PFS 

The inconsistencies between the SFS and PFS *
90. With regard to the Tanager's objections based on the discrepancies between
the SFS and the PFS, there are, undoubtedly, inconsistencies between both
documents. In particular, in the SFS, it is stated that the value of Mr . McNamara's
half share in his parents' house is of the order of€500,000 and that Mr. McNamara is
in receipt of monthly rent from that property of the order of €800 per month. In
contrast, the PFS says nothing about any rental income. Furthermore, the PFS
suggests that the value of the inheritance is significantly less than €500,000. The
value given for the inheritance in the PFS is €182,500. This is also the figure which is
subsequently utilised in the proposed arrangements. Given that the SFS was
completed in January 2016 and the PFS was completed in October 2016, it is difficult
to understand why there should be such an obvious discrepancy between both
documents. This is highlighted by Ms. O ' Brien in para. 26 of her affidavit and
reiterated by her in para . 34 of her affidavit. In my view, Ms. O'Brien was entirely justified in raising the issue.
91. Furthermore, in the course of the hearing, counsel for Tanager contended that
there is no reference in the SFS to the Revenue debt or to the judgment mortgages.
Counsel submitted that the SFS was a _"grossly misleading" _document. He also
contended that it _"beggars belief" _that the value of the inheritance would drop, in
such a short space of time, from €500 , 000 to €182,500. While the latter point is
certainly made in Ms. O'Brien's affidavit, I cannot see anything in her affidavit which
makes a complaint in relation to the SFS in respect of the revenue debt or the
judgment mortgages.

92. In fairness to Mr. McNamara and Ms. McNamara, I believe that I should
confine myself to the issues raised by Ms. O'Brien in her affidavit insofar as the
discrepancies between the SFS and the PFS are concerned. As noted previously, Mr.
McNamara swore an affidavit in response to Ms. O'Brien's affidavit. Thereafter,
Tanager did not choose to reply to Mr. McNamara notwithstanding the opportunity
given to Tanager to do so.

93. Nonetheless, given the discrepancy between the SFS and PFS insofar as the
value of the inheritance and insofar as the rental income is concerned, Mr. McNamara
is, in my view, under an obligation to explain himself. On the face of it, the
discrepancy raises an issue as to whether the full means of Mr. McNamara and Ms.
McNamara are being brought to bear for the benefit of their creditors under the
proposed arrangement. Section 1l5A (9) (b) (ii) requires that the court, on an
application of this kind, must be satisfied that there is a reasonable prospect that
confirmation of the proposed arrangements will enable the creditors of Mr.
McNamara and Ms. McNamara to recover the debts due to them to the extent that the
means of Mr. and Ms. McNamara reasonably permits. In tum, if their means have not
been brought to bear, this would raise a question as to whether Tanager (which suffers uch an extensive write-down of debt under the proposed arrangements) will suffer an
. Furthermore, it is absolutely crucial in proceedings under the 2012 - 2015 Acts
that debtors proposing to seek relief under the Acts should comprehensively and
accurately disclose all their assets and liabilities in their PFS. The proper functioning
of the system depends on full disclosure being made.
uch an extensive write-down of debt under the proposed arrangements) will suffer an
94. Furthermore, it is absolutely crucial in proceedings under the 2012 - 2015 Acts
that debtors proposing to seek relief under the Acts should comprehensively and
accurately disclose all their assets and liabilities in their PFS. The proper functioning
of the system depends on full disclosure being made. Creditors, practitioner

96. I am conscious that there may well be a very good explanation for the
difference between the SFS on the one hand and the PFS on the other (insofar as the
inherited property is concerned). While Ms. O'Brien has very properly raised an issue
in relation to the discrepancy, the fact that there is a discrepancy does not _ipso.facto _
mean that the PFS is inaccurate. It may well be the case that there is a good
explanation for the difference in value. In these circumstances, an issue arises as to
whether it would be appropriate to dismiss the applications given Mr. McNamara's
failure to properly address the discrepancies. In the course of the hearing, counsel for
the petitioner argued that there was no need to address the issue at all in circumstances
where, if it transpired that the value of the inheritance turns out to be greater than
€182,500, the _"windfall assets" _provisions of the proposed arrangements would be
triggered. In this context, clause 9 of Part IV of the proposed arrangements provide
that the McNamaras will be required to introduce an amount of not less than 75% of
the net proceeds of any inheritance received by them during the term of the proposed
arrangements. However, it seems to me to be inappropriate to leave the matter to be
dealt with in that way. As noted above, the issue of the discrepancy between the
information contained in the SFS and in the PFS was very properly raised by Ms.
O'Brien in her affidavit and, in my view, Mr. McNamara was under an obligation to
explain the difference. Furthermore, given the very significant write down of debt roposed in this case, it is difficult to see why I 00% of the inheritance should not be
deployed in part repayment of Mr . McNamara's debts.
97. In light of the failure of Mr. McNamara to explain the apparent discrepancies
highlighted by Ms. O'Brien in her affidavit, the question which now arises is whether
that failure to explain the position should lead to the dismissal of the present
applications or whether, instead , Mr. McNamara should be given a further opportunity
to fully and accurately explain the discrepancy. With some considerable misgivings, I
have come to the conclusion that I should give Mr. McNamara a further opportunity
to address the issue on affidavit. In this context, I bear in mind the consequences for
Mr. McNamara and Ms. McNamara in the event that the present applications are
refused. They will lose possession of the family home.
98. I therefore propose to adjourn the matter for a brief period to give Mr.
McNamara an opportunity to explain the position in relation to the inheritance, its
value, and the rent payable in respect of the inherited property . I will not direct proofs
for Mr McNamara and the practitioner but it would be appropriate to support
whatever is said in the affidavit by any relevant exhibits. If an adequate explanation
can be given for the differences between the SFS and the PF in relation to the
inheritance and the rent, then this should dispose of the three grounds of objection
summarised in para. 86 above. On the other hand, if the affidavit is incomplete or
unsatisfactory, further argument may be required as to whether the applications
should be refused in the circumstances.


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## Brendan Burgess

My views

*Even if there were no issues with the payment record or the PFS, this PIA is way too generous*

The mortgage will be written down to the current value of the house - €550k
They will pay a fixed rate of interest on this of 1% or €5,500 a year for 6 years
So most of the annual mortgage payments of €24,000 will be paying down this loan.
After 19 years, they will own the property outright with no mortgage.

No one else in the whole country gets to rent a house worth €550k for €460 a month which is what is happening here.

No one else gets the option to buy a home like this for €550k with money forced out of the bank.

There was 8 years left on the mortgage and Tanager has been forced to extend it to 19 years at ECB +1%.


*Their payment record has been appalling *

The legislation is very clear that before overruling a Veto, the judge must pay attention to the payment record of the borrower over the two years prior to the application for the PIA.

We know that Tanager got an order for possession in 2014. They would not have got that if the payment record had not been appalling.

The McNamaras applied for a PIA in 2016.

As the judge said
"69. Insofar as past performance is concerned, it is true that in the years immediately preceding the issue of the protective certificates, the payment history of   Mr. McNamara and Ms. McNamara was poor."

According to the judgement, they have been paying €2k  a month since mid 2017.

We do not know whether they were simply unwilling to pay or unable to pay. In any event it doesn't matter. This record suggests that it is unlikely that they will pay the mortgage over the next 19 years.

*They have been paying for other things instead of prioritising their mortgages *
Their children went to a private school. 

He stopped work to stand for election to the Dail although he was already in financial difficulty.

I have no problem at all with people going to private schools or standing for the Dail but I do object to getting everyone else to pay for it. 

*It is very unlikely that they will be able to pay this mortgage from their income *
They are aged 59 and 56 now.  They have not been earning much in recent years - or certainly not enough to pay €2,000 a month between them.

It is very unlikely that their careers are going to take off in their 60s and their 70s to enable them to pay the mortgage.

*The inconsistencies between the SFS and PFS *

From the judgement:
90. With regard to the Tanager's objections based on the discrepancies between the SFS and the PFS, there are, undoubtedly, inconsistencies between both documents. In particular, in the SFS, it is stated that the value of Mr . McNamara's half share in his parents' house is of the order of€500,000 and that Mr. McNamara is in receipt of monthly rent from that property of the order of €800 per month. In
contrast, the PFS says nothing about any rental income. Furthermore, the PFS suggests that the value of the inheritance is significantly less than €500,000. The value given for the inheritance in the PFS is €182,500. This is also the figure which is subsequently utilised in the proposed arrangements. Given that the SFS was completed in January 2016 and the PFS was completed in October 2016, it is difficult to understand why there should be such an obvious discrepancy between both documents. This is highlighted by Ms. O ' Brien in para. 26 of her affidavit and reiterated by her in para . 34 of her affidavit. In my view, Ms. O'Brien was entirely justified in raising the issue.

This is crazy.  Tanager pointed out this discrepancy in their affidavit and neither the PIP nor the McNamaras even attempted to answer it. They clearly felt that this too would just be waved through by the judge.

At a court hearing for a possession order, the bank has to jump through so many hoops that it's very easy to slip up.  Every last thing must be proven and evidenced. Yet in this case, the borrower can just assert what the inheritance is worth and was not required to show the Inland Revenue Affidavit or the Will.


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## Brendan Burgess

*I am surprised at how Tanager conducted this case*

I am not a lawyer, but it seems that a lot of time was wasted on legal technicalities which diluted the force of the real arguments. 

Half the judgement is taken up with arguing issues such as whether Belvedere College constitutes a separate class of creditors or whether the Revenue was a secured or unsecured debt.  And whether proper notice of this and that had been served. 

The big arguments should have been 

1) These guys have an appalling payment record 
2) It is very unlikely that they will have much of an income in their 60s and 70s
3) The PFS appears to be wrong by a huge amount
4) The bank has an order for possession which is rendered meaningless by this whole process


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## Brendan Burgess

*Is it any wonder we are charged the highest mortgage rates in the eurozone?*


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## gnf_ireland

@Brendan Burgess 
Like some of the high profile cases floating around, I do find this one incredible. I would not like to be in the situation the McNamara's find themselves in, but in reality I don't think this will be the last we hear of this.

If I go into a bank today, I cannot get a mortgage of 1% fixed for 6 years and ECB+1.25% beyond that. I have a proven track record of paying my mortgage on time every both and yet I am not afforded this. Why is someone who track record has been poor given this? The equality of it is just appalling !

But in reality, it is unexceptionally unlikely they will be able to continue working at a normal rate until they are 79. There is a big difference between wanting to and being able to. Its simply not a viable proposal. Taking individual cases out of world famous people doing it, probably in the 0.0001% of those in the industry is not practical. Today, the most mortgages can only be taken out until 68, 70 on exception - yet the basis of this arrangement is that they have the ability to pay their mortgage until 79.

The inheritance thing is mind boggling ! 

But the biggest issue for me is the fact that during a time they were clearly bankrupt and were in debt at a very serious level, they still sent their children to a private school - Belvedere College. The level of entitlement shown by this is astounding to me !! 

As for how banks issued nearly 300k in unsecured loans to them is also beyond me !


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## cremeegg

Excellent work, a real public service Brendan.

The judge's focus on Tanager's cost of funds seems misplaced to me. The time value of money has no direct connection with any cost of funds. My personal experience with judges (painful) was that they are usually well informed, but here the judge just seems to misunderstand.


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## Brendan Burgess

Hi gnf

I got very annoyed on the radio about the Belvedere thing. 

You are paying the highest mortgage rates in the eurozone to pay for them to send their kids to Belvedere. 



gnf_ireland said:


> As for how banks issued nearly 300k in unsecured loans to them is also beyond me !



There is very little information on how the debt evolved. But my guess is that these are the shortfall on investment property mortgages.

I also assume that the mortgage of €2.2m on a house worth €550k is because there was cross security. 

Brendan


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## gnf_ireland

Brendan Burgess said:


> I got very annoyed on the radio about the Belvedere thing.
> 
> You are paying the highest mortgage rates in the eurozone to pay for them to send their kids to Belvedere.



I assume the children are still not going to Belvedere, and that it was a historical debt. I seriously doubt any private college would allow that level of debt to accrue over an extended period. Its more the attitude that while owing millions they still felt their children should go there, without being able to afford it. 




Brendan Burgess said:


> There is very little information on how the debt evolved. But my guess is that these are the shortfall on investment property mortgages.
> I also assume that the mortgage of €2.2m on a house worth €550k is because there was cross security.



Strangely, this part does not annoy me as much. With investment properties, risk is taken onboard and normally has a higher rate of interest than a PPR. The deposit amounts should also be higher, although maybe not the case back then. I have a feeling they may have been afforded excess funds due to their fame at the time. But if an investment goes bad, they have lost the property and there is a shortfall. If the person cannot afford to pay that shortfall, the only real option is to write it off. But at the end of the day, the person does not have anything from it either, and cannot gain in the future from it.
I think for BTL's, if there was a minimum deposit of 40% and a higher interest rate, if sold at a loss on the open market, the investor has lost at least 40%, the bank should also take some of the loss for their bad decision to lend the funds in the first place. It might make them think twice about excessive lending !!

The issue is the PPR - they will own the house at the end of it, having effectively paid minimal interest on the loan for years - assuming they can keep up the repayments, which I doubt they can. They will end up having to deal with that in the future, but maybe there will be equity in the house the next time so may be willing to look at other options as they will have something to lose this time. They had nothing to lose here, as they were completely bankrupt prior to the debt writedown !


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## Brendan Burgess

gnf_ireland said:


> I assume the children are still not going to Belvedere,



They are now 19 and 21. 



gnf_ireland said:


> Strangely, this part does not annoy me as much.



Nothing strange about that. It doesn't annoy me either. 

I have no problem with people borrowing to invest in property, although I would usually advise against it. 

But I have speculated here.  It's possible that they bought their house for €1.5m and have paid little or nothing on it over the years, so the mortgage might be due to the purchase of the home alone.


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## noproblem

So how are they paying back the judgement now or is there something we don't know?


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## Delboy

I'd assume the private school debts were accumulated over the last 2 years of the youngest attending there as Belvo is about 6k a year. A fairly cynical move if I am right in that assumption.

I've seen talk online that the €550k valuation on their house is pure fantasy stuff. Tanager alluded to this also during the court proceedings though I'm sure the option was there for them to get an independent valuation.

I sure would like to see the house myself to test that valuation! But it looks like they'll one day have a valuable asset too pass on to their sons that was obtained at a heavily discounted rate courtesy of the taxpayer.

Heads they win, tails we lose


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## Brendan Burgess

Delboy said:


> I've seen talk online that the €550k valuation on their house is pure fantasy stuff. Tanager alluded to this also during the court proceedings though I'm sure the option was there for them to get an independent valuation.



Tanager referred to the valuation as a fantasy valuation and I said that on Matt Cooper.

But since then I have noticed in the judgement that it was the valuation agreed by Tanager and the PIP. Had they disagreed, the ISI would appoint an independent valuer.

Someone who knows the house has tole me that it's a fair valuation.

Brendan


----------



## Delboy

Fair enough


----------



## gnf_ireland

Delboy said:


> I sure would like to see the house myself to test that valuation! But it looks like they ill one day have a valuable asset too pass on to their sons that was obtained at a heavily discounted rate courtesy of the taxpayer.


Not sure it is at the cost of the taxpayer ! The losses made were from whomever sold the debt to tanger and to be fair, it is more than likely irrecoverable anyway

The bigger issue is what happens if they default from now on - which in my opinion is likely given the age etc they need to pay the mortgage to !

A neighbour of mine ended up in trouble with a bank over property investments and ended up selling the family home they lived in for 43 years and moved into an apartment to clear the debt. His wife left that house in absolute tears, as you can imagine. The problem was he has assets, so the bank played absolute hardball with them. Here we have a couple who have a massive debt write-off and still get to stay in their house. The equality of it is very strange ! 

Just shows, if you go into debt, may as well go big !


----------



## Bronte

cremeegg said:


> Excellent work, a real public service Brendan.
> 
> The judge's focus on Tanager's cost of funds seems misplaced to me. The time value of money has no direct connection with any cost of funds. My personal experience with judges (painful) was that they are usually well informed, but here the judge just seems to misunderstand.


I’m amazed the judge can just decide what interest rate a bank can charge. And an interest rate no client of that bank can get. That’s like telling Dunnes Stores  what price they may sell a bag of potatoes for.


----------



## Brendan Burgess

Bronte said:


> I’m amazed the judge can just decide what interest rate a bank can charge. And an interest rate no client of that bank can get. That’s like telling Dunnes Stores what price they may sell a bag of potatoes for.



100% agree.  

But it's worse than that. The PIP set the interest rate and the judge approved it.

Brendan


----------



## noproblem

Shocking when ordinary people who work hard and pay their bills, etc, see this happening but apparently it's open to everyone to avail of if difficulties arise or ?. Personally, it tells me something about the people involved.


----------



## gnf_ireland

noproblem said:


> Shocking when ordinary people who work hard and pay their bills, etc, see this happening but apparently it's open to everyone to avail of if difficulties arise or ?. Personally, it tells me something about the people involved.


I fully believe that there needs to be measures to draw lines on things when people are in serious financial situations. I have absolutely no issue with mechanisms for sorting out this, and we need to be able to put the past behind us and start afresh. No difference to the justice system - pay your due,and you start again.

But two things frustrate me about this case:
1. the sense of entitlement the parties had to continue to send their children to private school when they knew they could not afford it. The children are 19 & 21 according to a previous post. They applied for a PIP in 2016, and were unable to meet commitments in the 2 years prior (financial difficulties started in the early 2000's). Why on earth would someone who was bankrupt justify sending their kids to private school
2. The revised mortgage arrangement is unsustainable and is not something that I can walk off the street and get today. The rate is amazing and the age the mortgage is required until is madness. It is not a solution in my view, but exceptionally favourable terms based on their prior fame. This will be back in the courts within a decade again ! I am all for solutions, but this is not a solution - it is a short term fix


----------



## cremeegg

Bronte said:


> I’m amazed the judge can just decide what interest rate a bank can charge. And an interest rate no client of that bank can get. That’s like telling Dunnes Stores  what price they may sell a bag of potatoes for.



Well they have been telling landlords what price they can rent three properties at for a number of years.


----------



## Brendan Burgess

gnf_ireland said:


> but exceptionally favourable terms based on their prior fame.



To be fair. I doubt that their fame has anything to do with it.

There have been other cases where the people were not known, so we didn't hear about them.

If you read the attached judgement, the judge refers to other cases which he used as precedent.

Brendan


----------



## Palerider

Excellent thread, fairly balanced but you are missing a bigger picture point....

Vulture funds have done very badly in this country, yes the high profile ROI stories are evident but there is a big set of heavy curtains that we don't see behind.....there are many more horror stories to come out yet, the funds have found that their model which works in other countries falls short here mainly due to the legal process, the cost of, the delays with and the uncertainty of the Court decision.

I'm not a flag flyer for vultures but they are a necessary part of a modern functioning lending market, when we make a mess again and in my view we are well on the way who will be there to hoover up the dross.


----------



## Brendan Burgess

Palerider said:


> Vulture funds have done very badly in this country,



Hi Palerider 

I wouldn't agree with this.  

Take even the present case. How much did they buy that loan for? It was probably about €250k.  So they are making a good return on it anyway.

There is still competitive bidding for bad loans so they must be happy with their experience so far.

Brendan


----------



## noproblem

gnf_ireland said:


> 1. the sense of entitlement the parties had to continue to send their children to private school when they knew they could not afford it. The children are 19 & 21 according to a previous post. They applied for a PIP in 2016, and were unable to meet commitments in the 2 years prior (financial difficulties started in the early 2000's). Why on earth would someone who was bankrupt justify sending their kids to private school


It's possible relatives or similar paid the fees


----------



## Brendan Burgess

noproblem said:


> It's possible relatives or similar paid the fees



Belvedere College is a creditor in the PIA, so it appears that they paid them themselves at least some of the time.

And if the relatives are going to help with fees for a private school, would it not be a higher priority for them to help pay the mortgage? 

Of course, in practice, it's not because they can get the mortgage written down.

Brendan


----------



## Dazzler123

You read an awful lot about couples who cannot afford to have children. If i was in that scenario i would buy my house at the maximum i could afford and start having kids. If you can no longer afford the mortgage, it doesnt matter. You just need a brass neck and a PIP to get a writedown and a reduction in interest rate. 

Yet more encouragement for strategic default in this country, while everyone else pays for it in higher interest rates.


----------



## Palerider

Brendan Burgess said:


> Hi Palerider
> 
> I wouldn't agree with this.
> 
> Take even the present case. How much did they buy that loan for? It was probably about €250k.  So they are making a good return on it anyway.
> 
> There is still competitive bidding for bad loans so they must be happy with their experience so far.
> 
> Brendan



Time will tell, I have had direct dealings with funds and have ex colleagues working within funds, they are not having as straightforward a time as you might think, their pipeline is mostly full, we are still scratching the surface and more stories will come out in time.

Their model to swoop, aggressively manage and then cash out in double quick time is not how we do things here in Crazyland.


----------



## Brendan Burgess

Palerider said:


> their pipeline is mostly full,



I don't understand that?  Can you explain? 

One problem any lender has in Ireland is that the whole arrears management and legal process is so complex, that they cannot get the staff to handle it.

In the MacNamara's case, Tanager got a number of adjournments in order to prepare a response to the PIP, but never got around to it.

Brendan


----------



## Palerider

They progress cases stopping on the brink of further progressively larger legal outlays with uncertain recovery timescales and amounts, this pipeline continues to fill as other files get to this stage.

There are files that have not had any real attention yet and these in time will back up this pipeline further before getting jammed in the court system.

People are not hearing from many of the vultures but their debts have not gone away, the number I hear is that most debt is purchased at 65-70% of a discount but I have no hard evidence of that, regardless they seek 100% in all cases and can be very challenging to make a deal with, I know this from representing people and have no desire to mediate vulture debts again.

You are correct about attracting the right staff to assist them, in my dealings few were deal makers and most impractical.


----------



## Bronte

Brendan Burgess said:


> 100% agree.
> 
> But it's worse than that. The PIP set the interest rate and the judge approved it.
> 
> Brendan


That’s hilarious. That’s sarcasm by the way BB. Great analysis. Would love to know all the radio shows you were on in relation to this to listen back. I’m going to print out the judgement and have a read, fascinating stuff.

You ought to analysis the Ryan case too. 

All this reminds me of Mrs. Cornflakes. Too surreal yet true.


----------



## gnf_ireland

Brendan Burgess said:


> To be fair. I doubt that their fame has anything to do with it.
> There have been other cases where the people were not known, so we didn't hear about them.


Apologies Brendan - that nearly makes it even worse !! The fact that those who are bankrupt can get a much better mortgage deal than those who struggle to pay, but make massive sacrifices to do so. So much for risk based lending and interest rate setting !

I am not against anyone keeping their house if they can afford it, and not against anyone who genuinely needs a write down getting one. But like a lot of people, I don't believe someone can afford the house if they cannot pay market rate for the loan. Its the rest of us, who pay our mortgage every month, who ultimately pay for this - not only for the past mistakes, but also the favourable terms they continue to receive.

Imagine a couple up to road from them, having saved like crazy for 5 years to get the deposit for a house while renting at the same time. The best the can afford is a house for 410k. At 3%, their mortgage repayments are the same - 1960 euro a month, except one lives in a 550k house subsidised by others, and the other has to stand on their own two feet and do it all themselves.


----------



## NoRegretsCoyote

Brendan Burgess said:


> *It is very unlikely that they will be able to pay this mortgage from their income *
> They are aged 59 and 56 now.  They have not been earning much in recent years - or certainly not enough to pay €2,000 a month between them.
> 
> It is very unlikely that their careers are going to take off in their 60s and their 70s to enable them to pay the mortgage.



Does the ISI not have guidance for what consitutes a reasonable value for a home for two people? The median selling price of a dwelling in Ireland is about €250k. Why do they get to keep a house worth more than double this?

I have looked through this thread and all the media coverage. I cannot see any reference to the McNamaras' actual *income* over the last few years. I know barristers and musicians have volatile incomes. But are they not obliged to disclose their earnings to the court over the last number of years?

I am still none the wiser as to how they have accumulated over €2m in debt either. I can only speculate that Frank self-funded some orchestral tours which saw poor ticket sales. If this is the case then what he has is a lot of *business *debt, and the reporting should reflect this.

Finally, c 1992, the pair of them were in their late 20s/early 30s and on very good money in RTÉ. Absent serious financial mismanagement, this should have seen them pay off a mortgage by 40, rather than be faced with mortgage payments into their 70s.


----------



## Bronte

Noregrets it looks like it was property speculation that caused the debts. Which is why the mortgage debt on the home is so massive.


----------



## Brendan Burgess

gnf has pointed out in another thread how big the house is which I had missed completely. 

_The couple applied for planning permission in May 2005 to extend their already substantial three-bedroom family home into a six-bedroom residence.

The floor space at Park House, in Growtown, just outside Dunshaughlin, Co Meath, was to increase by two-thirds, from 435 square metres to 715 square metres, and there would also be a new entrance hall, drawing room and sun room.

Separate from the house, the application included plans for a large two-car garage with an upstairs, providing generous additional space._


----------



## Bronte

Brendan Burgess said:


> gnf has pointed out in another thread how big the house is which I had missed completely.
> 
> _The couple applied for planning permission in May 2005 to extend their already substantial three-bedroom family home into a six-bedroom residence.
> 
> The floor space at Park House, in Growtown, just outside Dunshaughlin, Co Meath, was to increase by two-thirds, from 435 square metres to 715 square metres, and there would also be a new entrance hall, drawing room and sun room.
> 
> Separate from the house, the application included plans for a large two-car garage with an upstairs, providing generous additional space._


BB they didn’t extend the house was my reading of it.

I fully expect them to default again. They will have massive legal bills and have a rather cavalier attitude to paying their mortgage up to now. Like underpaying one month recently by 100 Euro.


----------



## Brendan Burgess

Bronte said:


> they didn’t extend the house was my reading of it.



It's clear that they didn't. But the house was already 5000 sq ft. They were refused permission to increase it to 8,000 sq ft. 

Brendan


----------



## NoRegretsCoyote

Brendan Burgess said:


> It's clear that they didn't. But the house was already 5000 sq ft. They were refused permission to increase it to 8,000 sq ft.
> 
> Brendan


Why isn't there an ISI standard on what an acceptably-sized house is?

Two people don't need 5000 sq ft when I'm paying a 3% mortgage for my 1100 sq ft.


----------



## Delboy

How can a 5,000sq ft house only have 3 bedrooms???
The 550k valuation IMO is ridiculous, despite what has been said in previous posts. It's not much more than double the average house price in Meath and is quiet close to Dublin. It's got large gardens around it too. 






Here's a good piece on said couple and some other well known Irish D list celebs who've gotten into financial troubles and yet, have been let keep their oversized, high valued homes rather than downsize








						'Justice is blind' to star power as celebrities fight for their homes
					

We've had a summer of celebrity down at the repossession courts as one society couple after another appears before judges in attempts to hold on to various luxury high-brow residences in the face of lenders and funds attempting to make good on massive outstanding arrears.




					www.independent.ie


----------



## Dazzler123

Brendan Burgess said:


> It's clear that they didn't. But the house was already 5000 sq ft. They were refused permission to increase it to 8,000 sq ft.
> 
> Brendan



Im no estate agent but 500k for a 5000 sq ft house, in dunshaughlin seems like the bargain of the year .


----------



## Bronte

Brendan Burgess said:


> It's clear that they didn't. But the house was already 5000 sq ft. They were refused permission to increase it to 8,000 sq ft.
> 
> Brendan


A larger house means bigger bills for everything. What amount of you income are they allowed to live on, isn’t there limits. Heading into old age just getting that lawn cut is going to be costly. And it looks like they’ll have no private pensions either, I do not believe a word of it that they will be working full tilt well into their seventies.


----------



## Bronte

Dazzler123 said:


> Im no estate agent but 500k for a 5000 sq ft house, in dunshaughlin seems like the bargain of the year .


This one on 4.5 acres is 800k, 5 bed, 190m2









						Detached Houses for Sale in Dunshaughlin, Meath | Daft.ie
					

Find Detached Houses for Sale in Dunshaughlin, Meath. Search 19 Detached Houses for sale on Daft.ie now.




					www.daft.ie
				




Seems to be less than half the size.


----------



## Brendan Burgess

Delboy said:


> The 550k valuation IMO is ridiculous,



The valuation was agreed by Tanager and the PIP. 

Someone from the area told me that it was reasonable. 

But it seems very good value for such a large house. 

Brendan


----------



## Brendan Burgess

Delboy said:


> Here's a good piece on said couple and some other well known Irish D list celebs who've gotten into financial troubles and yet, have been let keep their oversized, high valued homes rather than downsize



The sub-heading says it all. 

*Those who struggled to pay modest debts look on in awe as huge loans written down*


Brendan


----------



## Brendan Burgess

I had  missed an important point in my earlier analysis. 

In any other country in world, they would just go bankrupt and start again from fresh. 

But after this deal, his mortgage is effectively being written down to €450k on a house worth €550k. 

They are using his inheritance of €100k - not to pay off unsecured creditors, but to reduce the mortgage on his home from €550k to €450k. 

And of course, the mortgage will be for 19 years at ECB +1%.

So they are being catapulted from complete insolvency into positive equity. 

Where in the World would this happen except Ireland? 

Brendan


----------



## bill_cash

Brendan Burgess said:


> I had  missed an important point in my earlier analysis.
> 
> In any other country in world, they would just go bankrupt and start again from fresh.
> 
> But after this deal, his mortgage is effectively being written down to €450k on a house worth €550k.
> 
> They are using his inheritance of €100k - not to pay off unsecured creditors, but to reduce the mortgage on his home from €550k to €450k.
> 
> And of course, the mortgage will be for 19 years at ECB +1%.
> 
> So they are being catapulted from complete insolvency into positive equity.
> 
> Where in the World would this happen except Ireland?
> 
> Brendan



Sometimes I find this country very hard to understand. I often think that there is just something lacking in modern Irish people/and or Western Europeans in general. Cases like this (+ the forever war in Clontarf) or the Margaret Cash fiasco, although from different ends of the social spectrum seem to be linked by a general sociatal willingness to always be mugs.


----------



## noproblem

Are they allowed to sell the house, then if they gets lucky with the sale and achieves a "good price" can they pay back the mortgage and pocket the difference or do what he wants with it? Or, what's the scenario if anything happened to the couple, can the house be inherited?


----------



## Brendan Burgess

section 103 of the Act says that iff the house is sold within 20  years of the PIA coming into effect , the increase in value from the €550k will be paid to Tanager.

If it's sold after 20 years, it's theirs. I presume if they die, that would be the equivalent of a sale.

Brendan


----------



## noproblem

Thanks for that, so they got a good deal it could be said plus they have a house, providing they do certain things in certain ways.  I still wouldn't like their future to be honest, they're welcome to it and I actually feel sorry for them in a lot of ways.


----------



## Brendan Burgess

noproblem said:


> I actually feel sorry for them in a lot of ways.



I feel sorry for them too.

But I feel more sorry for the 350,000 people paying the highest mortgage rates in the eurozone as a result of this deal;  who would love to pay a mortgage rate of 1% and  who never took most of the year off to stand for election; who could never afford to send their kids to private school; who never got a present of €100k instant positive equity.

Brendan


----------



## gnf_ireland

Brendan Burgess said:


> I feel sorry for them too.
> 
> But I feel more sorry for the 350,000 people paying the highest mortgage rates in the eurozone as a result of this deal; who would love to pay a mortgage rate of 1% and who never took most of the year off to stand for election; who could never afford to send their kids to private school; who never got a present of €100k instant positive equity.



I think this quote sums out my feels also.
They have been pretty lucky in life, all things considered. They had very good careers at a very early age, and not sure where it all went wrong. That said, their future is not exceptionally bright and I would not like to be in their position.
But they, and others, have got very good deals here and like everything - someone has to pay. And that is the likes us us, who pay the balance for them to stay in their 5000 sq foot home !

And don't get me started on Clontarf !!


----------



## NoRegretsCoyote

@gnf_ireland 

In both this and the Clontarf case the borrowers cling to the house even though it is much more than they actually need.

I get the impression that once you lose the house, there is no option of another house. This is how insolvency law is set up. So they make whatever case they can to keep the house.

People with debts still have to live somewhere. It would be better (in both the McNamaras and the Clontarf case) if the judge ordered the house to be sold and basically gave them a voucher for another €250k house. This will keep a roof over their heads at the standard that the average enjoys.


----------



## noproblem

Brendan Burgess said:


> I feel sorry for them too.
> 
> But I feel more sorry for the 350,000 people paying the highest mortgage rates in the eurozone as a result of this deal;  who would love to pay a mortgage rate of 1% and  who never took most of the year off to stand for election; who could never afford to send their kids to private school; who never got a present of €100k instant positive equity.
> 
> Brendan


Yes, I fully agree. It was in that context my comment was meant.


----------



## Bronte

Why did revenue get paid the full amount owing.  Is that due to the insolvency legislation.  

There was a lot of legal argumentation about the status of the creditors. Particularly revenue (owed VAT of a low amount of under 10K).  The judge went to great lengths to suggest that Revenue would be counted as a class of creditor who were happy with the arrangement - and the bank argued they shouldn't be counted.  Well of course Revenue would approve it, they were getting full payment.  This is despite the fact that 97% of creditors voted against the arrangement.


----------



## Bronte

There living expenses are based on the ISE rate for 2 adults and 2 dependant children, plus a second car, college expenses and extra clothing allowance.  

How many barristers in Ireland are practising over the age of 70?

How did they calculate the earning of two people who are self employed.


----------



## Brendan Burgess

Bronte said:


> How many barristers in Ireland are practising over the age of 70?



Well whatever sort of practice she has now, she ca, with her husband,  afford just €2,000 a month in repayments, so she is clearly not in high demand as a barrister. That is unlikely to improve into her 60s and 70s.

Brendan


----------



## gnf_ireland

NoRegretsCoyote said:


> @gnf_ireland
> 
> In both this and the Clontarf case the borrowers cling to the house even though it is much more than they actually need.
> 
> I get the impression that once you lose the house, there is no option of another house. This is how insolvency law is set up. So they make whatever case they can to keep the house.
> 
> People with debts still have to live somewhere. It would be better (in both the McNamaras and the Clontarf case) if the judge ordered the house to be sold and basically gave them a voucher for another €250k house. This will keep a roof over their heads at the standard that the average enjoys.


Absolutely - this is exactly the issue. If the house is lost, there is no option for another house so they cling onto it as long as they can. I agree an mortgage 'voucher' for the average cost of a 3-bed house in the region (on the assumption they can afford it) and the existing house sold would be more realistic


----------



## gnf_ireland

Bronte said:


> How many barristers in Ireland are practising over the age of 70?


This is a very valid point. They use the example of a minority who are still at the bar beyond the age of 70. They should have looked at the statistics of the overall profession, and the income of those who remained on, not only after they hit 70, but also before that point.
Self employed people by their nature have very volatile incomes - barristers are no exception, and its known as not being the most reliable of incomes.

Same applies for musicians. Robert Mugabe stayed in power until he was 93, does not mean all political leaders will be able to do so.


----------



## Bronte

Brendan Burgess said:


> Well whatever sort of practice she has now, she ca, with her husband,  afford just €2,000 a month in repayments, so she is clearly not in high demand as a barrister. That is unlikely to improve into her 60s and 70s.
> 
> Brendan


You're forgetting that they also have the ISI living expenses amount plus the second car, college and extra clothing allowance.  It looked to me like McNamara had been the main earner, maybe Lowe didn't take on many cases and concentrated on the children.  Now she presumably could decide to work more, but there really wouldn't be any incentive to do so I think a wouldn't extra income go to the PIP for the creditors.  I guess that has a time period and maybe then she would work extra to provide for them later.


----------



## gnf_ireland

Bronte said:


> I guess that has a time period and maybe then she would work extra to provide for them later.


as a self employed person she has to get the work. That may be easier said than done

I would question why they were granted the luxury of ISI living expenses + additional? What makes their situation different to others? If the expenses are 'necessary' why are they not included in the ISI living expenses, even with a caveat on when they can be applied


----------



## Bronte

I suppose GNF the rules are a bit flexible to suit a particular set of circumstances.  The judge (or PIP) said the extra clothing was due to their professions.


----------



## gnf_ireland

Bronte said:


> I suppose GNF the rules are a bit flexible to suit a particular set of circumstances. The judge (or PIP) said the extra clothing was due to their professions.


Flexibility is fine and makes sense in a large number of scenarios. However, there does need to be consistency in rules applied.
But the real question is whether they did in fact get a sweetheart deal due to their 'fame', or whether they were treated the same as everyone else in a similar situation.
https://www.businesspost.ie/news/star-appeal-sweetheart-deal-450824

I guess only those who know the ins and outs of the PIP process, and have experience in a reasonable number of rulings,  can really comment on that ! I genuinely hope they did not get a sweetheart deal, but I have a niggling feeling they may have !


----------



## elcato

Brendan Burgess said:


> Where in the World would this happen except Ireland?


Nice one Burgess.


----------



## noproblem

Just putting this out there. 
Instead of saying they did or didn't get a sweetheart deal, would it not be 100% true in saying they got a deal in accordance with the law as is laid down and that the same law is available to everyone in the country? In what way outside of the law as laid down could the Judge have taken it upon himself to do his own thing with the couples case and if so could someone challenge it?


----------



## Brendan Burgess

Hi np

Of course the judge acted within the law. 

But the whole point is that the law is too biased and is costing borrowers the highest mortgage rates in the eurozone. 

Brendan


----------



## noproblem

Brendan Burgess said:


> Hi np
> 
> Of course the judge acted within the law.
> 
> But the whole point is that the law is too biased and is costing borrowers the highest mortgage rates in the eurozone.
> 
> Brendan


Yes it is but no good people blaming or saying the McNamara's got lucky with a sweetheart deal when the same bad or loose law allows everyone the same "privilege" and yes, high interest rates are the price everyone else has to pay for this debacle. We may hear an awful lot more of these more well known couples, but probably not so much about ordinary people.  In any case, someone is going to become a sort of winner in all of this, be that the occupant/s of the house,  the people who gave them the loan, or the people who bought out the loan. In the middle of it all is the piggy, ie, the Judge. Maybe that's why we have the appropriately named, "Piggy Bank".?


----------



## Sunny

I agree with everything said about this agreement. Apologies if this was covered but how did they end up with a debt of 2.7m secured on a property that is only now worth 550k?? And I find it hard to feel any sort of sympathy for Tanager who bought the loan on those terms presuming they could take the asset.


----------



## Bronte

Sunny said:


> I agree with everything said about this agreement. Apologies if this was covered but how did they end up with a debt of 2.7m secured on a property that is only now worth 550k?? And I find it hard to feel any sort of sympathy for Tanager who bought the loan on those terms presuming they could take the asset.


It looks like they had to sell other properties and the NE from those ended up on the home.  The one item they don't want to sell is their home.


----------



## NoRegretsCoyote

I splashed out a fiver and downloaded the Folio from the Land Registry. I can't attach it but will send it to anyone interested.

It seems they bought this house in 1989 - when they were in their mid- to late-twenties. RTÉ salaries clearly went a long way back then. 

I find these Land Registry documents a bit difficult to interpret but there was a mortgage of £150,000 taken out from Anglo in 1998 which seems to have been repaid in 2008. No original mortgage from 1989 shown either. Does this mean there was none, or just that it was fully repaid?

Since 2005 there are various judgements registered by Bank of Ireland, a car loan company and IL&P. Some of these subsequently transferred to Tanager. No amounts given.

PS: this is more than any Irish journalist has bothered to find out!


----------



## noproblem

Well done, but I would imagine they used that house as collateral for other investments that probably went belly up. Every Tom, Dick, and Harry thought they were property developers a few years ago.


----------



## Conan

We regularly see complaints about the level of mortgage interest rates in Ireland.  After yesterday's decision in the McNamara/Lowe case perhaps we can see why. A borrower makes no repayments for years, gets a PIA, has €3m written off AND keeps their big 5 bed detached house. Why can they not sell the house, downsize to a 2 bed semi and repay more of their debts? Clearly the concept of loan repayments is alien to some (including Judges).


----------



## Brendan Burgess

Hi Conan

The judge is applying the law.  The politicians we elected made the law. 

The law is crazy to allow this. 


Brendan


----------



## demoivre

Conan said:


> We regularly see complaints about the level of mortgage interest rates in Ireland.  After yesterday's decision in the McNamara/Lowe case perhaps we can see why. A borrower makes no repayments for years, gets a PIA, has €3m written off AND keeps their big 5 bed detached house. Why can they not sell the house, downsize to a 2 bed semi and repay more of their debts? Clearly the concept of loan repayments is alien to some (including Judges).



For a PIA to be put through the PIP has to show that the creditors would be worse off if the debtors went bankrupt.

I find the notion that our altruistic banks will lower their SVRs to be in line with other EU countries if all debts owed to them are repaid a bizarre one, and a deluded one.


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## seamus m

What would tanger have paid for loan ?The bank had already written off loan out of books but I didn't see them reduce mortgage rates.


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## Conan

seamus m said:


> What would tanger have paid for loan ?The bank had already written off loan out of books but I didn't see them reduce mortgage rates.


Yes, the Bank would have written down the loan and taken the resulting loss . But it is the writing down of all those losses (and being forced to sell on a book of impaired loans to “vulture funds”) that contributes to trying to recover some of that loss through charging higher interest rates than otherwise are justified. The fact is that with all the impaired loans we have seen in Ireland it is virtually impossible to force defaulting borrowers to sell the mortgaged property, even if as part of a downsizing exercise. The McNamara/ Lowe case demonstrates this (and accepting that this is merely a celebrity version of what is happening in many other cases). But if Banks know that it is virtually impossible to recover property from defaulting borrowers in Ireland, this must factor into the pricing of mortgage rates.


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## cremeegg

demoivre said:


> I find the notion that our altruistic banks will lower their SVRs to be in line with other EU countries if all debts owed to them are repaid a bizarre one, and a deluded one.



No one thinks this. I am surprised that you think some people think this.

What people do think is that if banks could realise their security effectively, both the existing banks and potential new entrants to the market would have a greater appetite for new business. 

Business would be more profitable because they would not have to price in as many defaults. They would see that greater overall profits could be made by lending more money, and the way to attract more business would be to charge lower rates.

Banks would make more profits on a bigger loan book. More people would be able to buy homes. More homes would be built because more money would be available to pay for them.


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## Leo

cremeegg said:


> No one thinks this. I am surprised that you think some people think this.



Indeed, if the banks were profiteering as suggested there'd be a queue of foreign banks looking to get into the market here.


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## mtk

Removed as I made a mistake


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## Brendan Burgess

Hi mtk

Have you a link or can you explain how it was resolved? 

Brendan


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## Sarenco

I think that @mtk is confusing this case with the Ryan/Flood case -









						Ryan and Food to sell home in €1.2m  vulture fund deal
					

Restaurateur Ronan Ryan is to sell the family home he shares with his wife, former Miss Ireland Pamela Flood, under a deal hammered out with a vulture fund.




					www.herald.ie


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## mtk

Sorry my mistake feel free to delete my message(S). Sarenco is right I confused it with the ryan case .


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## cremeegg

Homer nods


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