# Bank of Scotland now writing down some investment mortgages



## Brendan Burgess (9 Feb 2011)

From RTE 


             Bank of Scotland has confirmed to  RTÉ News that it has begun to cut the capital owed by buy-to-let  borrowers in Ireland in exceptional circumstances.
 The lender said it was still its policy to require customers to pay  their debt in full, but added that it would work with customers to  restructure their debt in bona fide cases.

 Last year Bank of Scotland Ireland shut its branches, asked  depositors to move savings and halted lending. After its lending spree,  it became a victim of the crash and the bank withdrew from the Irish  market.

 RTÉ understands that in exceptional cases the lender is now writing  off part of the capital owed by buy-to-let borrowers who clearly cannot  repay loans. In these cases borrowers frequently have multiple  buy-to-let properties in negative equity. 

 In a very small number of cases capital has been cut for* owner occupiers after a forced sale* has left an outstanding loan.

 The lender's loans are being managed by 800 former Bank of Scotland Ireland staff who work for a new company called Certus. 

 Irish banks have been criticised for not facing up to loans which may  never be re-paid. The significance of Bank of Scotland's develop


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## Brendan Burgess (9 Feb 2011)

This suggests that if you have a cheap tracker, they might be more willing to do a deal with you.

Brendan


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## Luternau (9 Feb 2011)

Sounds like some good news for those who are really struggling. And for the first time, a bank is being pro-active on a sector of the mortgage market where there are many many hardship case and more to come.
On the tracker issue- Buy to Let trackers are probably subject to periodic review and not trackers for the life of the loan. This seems to be the case with PTSB trackers.


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## Celt07 (10 Feb 2011)

*Moral Hazard?*

They seem to be prepared to cut their losses to get the hell out of Ireland as soon as they can. As a mortgage customer of theirs though, the fact that they are writing off mortgages for some, seems to raise the whole issue of moral hazard. At the moment, despite a 20% pay cut and increased taxes, I can still service my mortgage thank God. However, things are certainly a lot tighter each month than I expected they would be when I first drew the mortgage down. I am also in a serious negative equity situation and it's safe to say I would be better off had I not bought my house at all. Why should I continue to pay my mortgage each month when others are getting large chunks written off for them? You would wonder whether you'd be better off stopping payments for a few months and trying to negotiate something? I'm not seriously advocating this as an approach and I am thankful that I am still in a job etc. but I must say it is a bit frustrating to see buy to let investors, who bought on the basis of making a quick buck, getting bailed out. Does anyone else agree with me on this moral hazard issue?


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## TRS30 (10 Feb 2011)

Celt07 said:


> They seem to be prepared to cut their losses to get the hell out of Ireland as soon as they can. As a mortgage customer of theirs though, the fact that they are writing off mortgages for some, seems to raise the whole issue of moral hazard. At the moment, despite a 20% pay cut and increased taxes, I can still service my mortgage thank God. However, things are certainly a lot tighter each month than I expected they would be when I first drew the mortgage down. I am also in a serious negative equity situation and it's safe to say I would be better off had I not bought my house at all. Why should I continue to pay my mortgage each month when others are getting large chunks written off for them? You would wonder whether you'd be better off stopping payments for a few months and trying to negotiate something? I'm not seriously advocating this as an approach and I am thankful that I am still in a job etc. but I must say it is a bit frustrating to see buy to let investors, who bought on the basis of making a quick buck, getting bailed out. Does anyone else agree with me on this moral hazard issue?


 
I am in the same situation. Have a buy to let and my residential mortgage with them. Both are on low trackers and and I can afford to service them, which I appreciate is a fortuante position to be in but don't see why I should be disadvantaged because of this......


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## ajapale (10 Feb 2011)

I heard the boss of KBC Ireland on MI this morning and he stated that BOSI was a failed business model and that his bank would not be following them down that road.


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## angela59 (10 Feb 2011)

Celt07 said:


> They seem to be prepared to cut their losses to get the hell out of Ireland as soon as they can. As a mortgage customer of theirs though, the fact that they are writing off mortgages for some, seems to raise the whole issue of moral hazard. At the moment, despite a 20% pay cut and increased taxes, I can still service my mortgage thank God. However, things are certainly a lot tighter each month than I expected they would be when I first drew the mortgage down. I am also in a serious negative equity situation and it's safe to say I would be better off had I not bought my house at all. Why should I continue to pay my mortgage each month when others are getting large chunks written off for them? You would wonder whether you'd be better off stopping payments for a few months and trying to negotiate something? I'm not seriously advocating this as an approach and I am thankful that I am still in a job etc. but I must say it is a bit frustrating to see buy to let investors, who bought on the basis of making a quick buck, getting bailed out. Does anyone else agree with me on this moral hazard issue?


 

I agree with you on this one, it seems you get more respect the more money you owe forget anyone servicing their mortgage and debts as best they can.


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## johnnygman (10 Feb 2011)

I think investors who bought to buy to let and make profit, I would have little sympathy for these. The first time buyers in difficulty with massive neg equity are the ones that I would feel are the people who have been hard done by this whole meltdown.


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## shnaek (10 Feb 2011)

I agree with you, Celt07.


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## Pope John 11 (10 Feb 2011)

Celt07 said:


> .....but I must say it is a bit frustrating to see buy to let investors, who bought on the basis of making a quick buck, getting bailed out.



Are you sure its just the buy to let investors than BOSI are looking to help out?

Are they not trying to help out first time buyers too, who are not investors, and who are solely in the house for living requirements, but now find themselves in negative equity, and perhaps without work?

Perhaps I didn't pick the news up right.


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## manns (12 Feb 2011)

This is pretty interesting. Bank of Scotland are writing down their loans. Any idea by how much? I wonder are any of the other banks also following suit. BOS must be inundated by their clients inquiring about this write down. Anyone hear anything about RaboBank (ACC). They are in the same boat I think, planning to leave the country. I hear that they are also doing deals but I dont have any confirmation. Anyone out there with any hard facts on this. Also anyone willing to discuss what BOS are saying when asked about write downs.


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## ajapale (12 Feb 2011)

Brendan Burgess said:


> From RTE   RTÉ understands that in exceptional cases the lender is now writing   off part of the capital owed by buy-to-let borrowers who clearly cannot   repay loans. In these cases borrowers frequently have multiple   buy-to-let properties in negative equity.


Manns,
KBC have announced that they will not be following BOSI's lead.
aj


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## manns (12 Feb 2011)

Thanks for the info re KBC. What about ACC? AIB I think maybe doing something too but quietly and confidentially. Not sure but I know a lady working in the bank and she kinda said that they are busy negotiating with clients but aren't going to open the flood gates by announcing like BOS. I dont know what they are negotiating on and how easy they are to work with. The bank are going through a hard time of it so I guess they like the other banks will eventually have to start negotiating more and more as their clients are struggling. You know the problem is that as the banks increase fees and interest, its only going to have a bigger negative impact on the clients which inturn will affect the bank even more. It will be like the government and the taxpayers, the more that jobs are lost, the more a smaller group of taxpayers will have to fork out extra taxes to keep the country going, likewise, the more the banks generate bad debts and lose clients, the more the clients that remain will end up forking out more in fees and interest to keep the banks going. Its a difficult one.


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## JoeT (14 Feb 2011)

With BOSI starting to address investors in distress, it will surely follow that other financial institutions will follow suit. I wonder how long these institutions will start to help owner occupiers with distressed loans? Also, after mortgage holidays mentioned by government have expired - will they be willing to write off any debt from mortgage arrears?  Maybe this is already happening - I've noticed 8 houses in my area whose for sale price has reduced dramatically in the past 2 weeks, by 50% in 2 cases. But still, nobody's buying.


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## TheFatMan (22 Feb 2011)

Has anyone had any communications with BOSI on this as yet?
I'm planning on making contact with them about a residential tracker mortgage
Cheers


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## TRS30 (23 Feb 2011)

TheFatMan said:


> Has anyone had any communications with BOSI on this as yet?
> I'm planning on making contact with them about a residential tracker mortgage
> Cheers


 
Have not heard anything but would be interested to hear how you get on. If you could post when you hear from them, would appreciate it.


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## barepockets (23 Feb 2011)

I have a residential mortgage with BOSI and have agreed interest only for the term of the mortgage. I am now planning to contact them about doing a deal so if anyone has any suggestions please let me know.


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## nimu (12 Mar 2011)

I was just wondering if you anyone has had a contact with them (BOSI/Certus) yet? I have had a few letters from them but haven't responded yet as I fear they may initiate a forced sale even though I pay the loan on time every month. Its interest only and set to expire in four months. I can't transfer the mortgage to another bank as I owe them 240k but would only get about 160k.


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## johnobee (18 Apr 2011)

barepockets said:


> I have a residential mortgage with BOSI and have agreed interest only for the term of the mortgage. I am now planning to contact them about doing a deal so if anyone has any suggestions please let me know.



would be interested to hear how this went.

cheers


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## diver (19 Apr 2011)

I also have a residential tracker mortgage with BofSI. Does anyone know whether they are increasing their rates yet as per the recent ECB hike?


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