# David Hall Podcast on Inside Business with Ciarán Hancock



## Brendan Burgess (11 Jul 2019)

Ciarán Hancock has a 40 minute podcast with David Hall here. 

Inside Business with Ciarán Hancock 

I started a separate thread on the most astonishing bit Wow! Hall: We need legislation to accelerate repossessions of those who don't engage within three months 

But here are my comments on some other interesting issues discussed. 

*What David Hall means by tsunami* is 20,000 homes repossessed or surrendered between 2013 to 2025. We have already had 9,000 cases of lost ownership and so have 11,000 to go over the next 6 years. 

In other words, 1600 a year over 12 years. With 600,000 mortgages, that is a 1/400 chance each year of losing your home through repossession or voluntary surrender.  Even in a booming economy, there should be a higher level of repossessions. If not, it means that the banks are being too conservative in their lending.

Whatever else this is, it's not a tsunami which means a large and sudden wave. 


*Hall’s logic on Ulster Bank and ptsb sale to vulture funds is just wrong *

Hall: "3200 failed restructurings sold by Ulster Bank to a vulture fund. Multiply that by 5. That is 15,000 people who are going to lose their homes."

 No,  the vulture funds will restructure most of these loans and will repossess very few of them. The vulture funds are not subject to the Central Bank’s stupid NPL rules.  They can do restructures which banks can’t do, because they would still be classified as NPLs on the banks’ balance sheets. 

Likewise he referred to the NPLs sold by ptsb earlier this year.  These were only NPLs by the Central Bank's stupid definition.  They were very profitable split mortgages which Start has said that they will not be selling. And why would they?  A mortgage with 50% warehoused and 50% paying the ptsb SVR of 4.5% is yielding an average of 2.25%. That is still a great return, especially since they bought the mortgages at a discount.  Of course the yield on trackers would be lower. 

*The IMHO is setting up an Insolvency Division *

"With all these loans being sold to vulture funds, the only solution will be PIAs. The vultures won't do deals so they have to be forced on them.  Each PIP needs 5 support staff." 

Personal Insolvency Arrangements are a solution in very few cases.  Kenna quoted the Courts Service figures as showing a 62% drop in PIAs.  I had not picked up on this before, but it's not surprising PIAs will not be the solution for many people. 

A PIA is great when you owe €300k on a house worth €200k and you can service a mortgage of €200k. The PIA will write the balance down for you.  But it’s of almost no use if you owe €200k on a house worth €300k.  It might help in writing off your other debt  - for example, your car loan or credit union debt.

And most of the borrowers in arrears over two years are actually in positive equity.   Here are the Central Bank figures for Dec 2017. With the increase in house prices and actual repayments since, the figures are even better.  I would guess that only 25% are in negative equity now.



120,000 mortgages have been rescheduled by the banks. If the borrower can afford a PIA, the lender will come up with a solution. A PIA won’t be necessary.


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## RedOnion (11 Jul 2019)

A very interesting interview.
When he dials back the rhetoric he talks a lot of sense. Maybe it's because @Brendan Burgess wasn't the opposing view, but it's probably the first interview I've listened to where I found myself agreeing with David Hall.


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## NoRegretsCoyote (12 Jul 2019)

It's very hard to know what Hall really thinks because he keeps moving the goalposts.

He is no great intellect, but he runs rings around journalists unwilling/incapable of putting basic facts to him.

For example he said that 80,000 people meant 20,000 households, or 4 per household. The true average is about 2.5, but of course Ciaran Hancock didn't pick this up.

Hancock then went on to say that all of those over two years ago have no chance ever of repaying, and Hall didn't disagree. This despite Central Bank numbers further up the thread that show well over a majority of these households being in positive equity!


It's hard to have a sensible debate when very basic facts anyone can find with a quick online search are never put to Hall.


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## RedOnion (12 Jul 2019)

NoRegretsCoyote said:


> The true average is about 2.5


Just out of interest, do you have any link backing up this as the average household size of those in deep arrears / at risk of repossession?


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## NoRegretsCoyote (12 Jul 2019)

RedOnion said:


> Just out of interest, do you have any link backing up this as the average household size of those in deep arrears / at risk of repossession?



Sorry that's the Census measure for all households.

I can look up average household size for owner occupiers with a mortgage (not just in arrears) later.

I would be very surprised if it differed appreciably from average for all households though.


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## RedOnion (12 Jul 2019)

NoRegretsCoyote said:


> I would be very surprised if it differed appreciably from average for all households though


I'd hazard a guess it's well over 3. Lots of single occupant houses (pensioners) will be mortgage free. Also lots of smaller households rent.

Anecdotally I would have thought those in deep arrears would be larger households, but I've a very small sample size to go on (and I recognise they are all extreme cases that I'm aware of)


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