# AIB write off 150k. IMHO helped.



## daftpunk (12 Mar 2014)

AIB is reported to have written 150k off of a 400k mortgage in Dublin.
IMHO involved. 
]AIB writes off €150K in mortgage debt for family
Reports are emerging of a deal between AIB and a family which will see more than a third of their mortgage debt written off, while they stay in their home.

According to the Irish Independent €150,000 was written off under the terms of the agreement which is thought to be the biggest of its kind so far in Ireland.

The Irish Mortgage Holders Organisation was involved in the process.
http://www.independent.ie/business/...-after-150k-debt-is-written-off-30084311.html


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## Delboy (12 Mar 2014)

Sad state of affairs but not surprising in this country. And to really rub the taxpayers nose in it, the bank does'nt appear to have taken an equity stake in the house to allow them to recoup the losses in the future as prices eventually recover or even if the family in question come into money.


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## Bronte (12 Mar 2014)

Delboy said:


> Sad state of affairs but not surprising in this country. And to really rub the taxpayers nose in it, the bank does'nt appear to have taken an equity stake in the house to allow them to recoup the losses in the future as prices eventually recover or even if the family in question come into money.


 
Why is this a sad state of affairs?  A family in total financial meltdown have been given a solution and they get to stay in their home.  Your solution is what, the family should just give up, as that's what they would do if they were forced to hand over the house once the mortgage was paid off.


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## Delboy (12 Mar 2014)

Bronte said:


> Why is this a sad state of affairs?  A family in total financial meltdown have been given a solution and they get to stay in their home.  Your solution is what, the family should just give up, as that's what they would do if they were forced to hand over the house once the mortgage was paid off.



Where did it say anything about total financial meltdown in the Indo? They both have jobs, 1 in a job for life. And why would handing over the house =  'family should just give up'. A bit dramatic there Bronte.

My solution would be for the house to be handed over, a debt arrangement agreed that they could afford for a couple of years and after say 3 or 5 years, their remaining debts are written off.
But debt responsibility seems to be a dirty term in this country now, only to be adhered to by fools


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## daftpunk (12 Mar 2014)

It says they have other loans, debts etc. Are they still outstanding I wonder?
It makes you wonder why people will pay PIPs if the IMHO will do this job for free.


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## Bronte (12 Mar 2014)

Delboy said:


> Where did it say anything about total financial meltdown in the Indo? They both have jobs, 1 in a job for life. And why would handing over the house = 'family should just give up'. A bit dramatic there Bronte.
> 
> My solution would be for the house to be handed over, a debt arrangement agreed that they could afford for a couple of years and after say 3 or 5 years, their remaining debts are written off.
> But debt responsibility seems to be a dirty term in this country now, only to be adhered to by fools


 
Of course it's a financial meltdown, you don't get 150K written off just like that, they couldn't afford the current mortgage, they can now afford most of the new mortgage, with part of it parked, they are able to service their other debts, who is losing what here?

Let's take your scenario, bank would probably lose more on the deal, because of the NE, then the family would also not be able most of the remainaing debt, BECAUSE, they would now be renting. In addition I imagine the other debts would go unpaid. Then the taxpayers would be at a further loss. You seem hell bent on them being punished by losing their home, what does that achive? In other words you'd prefer they went bankrupt/insolvent.

The only reason the bank agreed to this is that the figures stack up by writing off the 150K and parking part of the mortgage, bank saves on a lot in this scenario, time and money, stress of evicting a 'family' publicity etc.  

In any case people are going to have to realise that if the banks start putting everybody out of their homes we will cause more untold stress in society.  Haven't people had enough.


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## Bronte (12 Mar 2014)

daftpunk said:


> It makes you wonder why people will pay PIPs if the IMHO will do this job for free.


 
Nobody is doing anything for free. IMHO may be free to the family, but someone, I imagine AIB are paying IMHO. 

As for the Pip's and the insolvency service, total joke so far.  Another not fit for purpose quango and system.


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## daftpunk (12 Mar 2014)

Bronte said:


> Nobody is doing anything for free. IMHO may be free to the family, but someone, I imagine AIB are paying IMHO.
> 
> As for the Pip's and the insolvency service, total joke so far.  Another not fit for purpose quango and system.



Seriously, you think AIB are paying the IMHO to help write down debt? 
That is a crazy situation if true. I know they initially gave a sum to help fund an office for the IMHO, but if they are now paying them to help families receive write downs it is all gone crazy. PIPs are getting 5-7k approx for each PIA, so families receiving this for free is definitely good news.


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## Brendan Burgess (12 Mar 2014)

Bronte said:


> Let's take your scenario, bank would probably lose more on the deal, because of the NE,



I think that this is the Key Point. AIB will lose less on this deal that they would on repossessing the property.  We are not given the current value of the property, but we are told the value of the property. 

The deal was 


 Main mortgage|€200k
Warehoused forever|€40k 
Written off|€150k
Total|€390kIf the property was bought at the peak, it could be worth around €160k.  

If the bank repossessed, they would get around €150k after costs. They might try to get some long-term payment from the couple, but after they pay rent and living expenses, there probably wouldn't be anything available. 

So the bank gets more from this deal that they would get through repossession. 

Delboy said


> the bank does'nt appear to have taken an equity stake in the house to  allow them to recoup the losses in the future as prices eventually  recover or even if the family in question come into money.


A fair point. 

If the borrower can make full repayments on €200k, why not simply warehouse the full €200k instead of writing off most of it? 

That way, if house prices increase, the taxpayer would benefit from any increase.  Under the agreement, the borrower will get the benefit of any increase. 

Let's say AIB offered this to the customer. I would probably advise the customer to go bankrupt and get a fresh start in five years.  We are back to Square 1 for AIB, they would get the current value less the costs of repossession.

*What has this family's history of engagement been like? 
*This is also a key issue. If the family has been struggling for 5 years and fully engaging with the lender, then they have probably taken enough pain and deserve to get a deal.


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## 1dave123 (12 Mar 2014)

Hi - does anyone know if, in these type of arrangements, there are any tax implications for the recipient ? ... specifically a gift tax liability relating to the value of the loan being written off ...... or would the Revenue view this as an arms length commercial arrangement and so ignore?   Ta.


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## Brendan Burgess (12 Mar 2014)

1dave123 said:


> Hi - does anyone know if, in these type of arrangements, there are any tax implications for the recipient ? ... specifically a gift tax liability relating to the value of the loan being written off ...... or would the Revenue view this as an arms length commercial arrangement and so ignore?   Ta.



Please don't take this off topic. Either start a new thread or read one of the previous threads on the topic.


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## Delboy (12 Mar 2014)

Brendan Burgess said:


> *What has this family's history of engagement been like?
> *This is also a key issue. If the family has been struggling for 5 years and fully engaging with the lender, then they have probably taken enough pain and deserve to get a deal.



We don't know whether they have been engaging or not. We don't know whether they drive 2 cars (high spec, new or old and clapped out) instead of 1. We don't know what sort of lifestyle they lead...holidays, eating out etc. It's all cloak and dagger stuff.

Whereas their neighbours in a similar enough situation, could be earning slightly more but living far more frugally. But they'll get nothing. 

There should have been at least a stake kept in the house by the bank. At a minimum


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## Brendan Burgess (12 Mar 2014)

Hi Delboy

We don't know. But I spoke to AIB at the time of the launch of their revised split mortgage product and they made it very clear that they would only be giving them to people who had shown that they had engaged with the bank for some time. 

You are right. There is a moral hazard issue here. As there is in treating smokers in hospital and as there is in paying Jobseekers Allowance to people who don't bother to look for work. We often reward the wrong sort of behviour.


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## Sunny (12 Mar 2014)

Delboy said:


> We don't know whether they have been engaging or not. We don't know whether they drive 2 cars (high spec, new or old and clapped out) instead of 1. We don't know what sort of lifestyle they lead...holidays, eating out etc. It's all cloak and dagger stuff.
> 
> Whereas their neighbours in a similar enough situation, could be earning slightly more but living far more frugally. But they'll get nothing.
> 
> There should have been at least a stake kept in the house by the bank. At a minimum


 
What's it got to do with you? Would you prefer they went on RTE and detailed their financial situation and we could then have a public vote as to whether they should get a deal or not?

People are commenting on a media story with very little detail. The bank have obviously decided that this deal maximises the recovery value on the loan. Do you want every deal that AIB makes to be given to you so can approve first? Stories like this should not be reported. Then there wouldn't be any moral hazard.


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## Delboy (12 Mar 2014)

Sunny said:


> What's it got to do with you? Would you prefer they went on RTE and detailed their financial situation and we could then have a public vote as to whether they should get a deal or not?
> 
> People are commenting on a media story with very little detail. The bank have obviously decided that this deal maximises the recovery value on the loan. Do you want every deal that AIB makes to be given to you so can approve first? Stories like this should not be reported. Then there wouldn't be any moral hazzard.



Your right, it's got nothing to do with me. I don't pay taxes, the state does'nt own AIB.
I'm not in negative equity and not paying a large mortgage on a house I've now outgrown. Absolutely nothing to do with me.

Stories like this are leaked. I did'nt put it in the papers. And leaked for a reason I'm sure

I look forward to seeing all the posts on here in years to come when Dail committee's and tribunals are investigating the generous debt write off's of the politically connected/related etc. Because this is Ireland and that will happen


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## Brendan Burgess (12 Mar 2014)

Hi Sunny

It's very important to report these types of deals as they allow others to know what to expect.  AIB says that they write down debt in certain cases, but if we don't know anything about those cases, people don't know what to do.

I would have advised this couple that their mortgage was unsustainable and that they should surrender the house and try to do a deal on the shortfall. Now it looks as if that advice may have been wrong. They might get to keep the house and get a write down. 

AIB won't publish their criteria in case people engineer their situation to meet the criteria.


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## Sunny (12 Mar 2014)

Brendan Burgess said:


> Hi Sunny
> 
> It's very important to report these types of deals as they allow others to know what to expect. AIB says that they write down debt in certain cases, but if we don't know anything about those cases, people don't know what to do.
> 
> ...


 
That advice mightn't be wrong next time though Brendan. The banks have always said it is on a case by case basis. Leaking this to the media makes it sound like this is now standard operating practice for AIB. It's not. We don't know the specifics of this case and we never will. Therefore what was gained by running the story? All it has done is probably given people false hope that all they have to do is ask for a write off and then come on this site moaning when they don't get it.


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## daftpunk (12 Mar 2014)

These people could have serious medical difficulties or something on par, and AIB could be generous with this deal. Nobody knows yet, and we may never know. Personally I think it is great for them.
Of course some will argue that by struggling and not missing any repayments, the bank will not write down debt for you. Yet people who default, purposely or not, will see write downs quicker. Bit of an unfortunate situation as the scammers who cheat will benefit alongside the those most in need.
Suppose it's just the way things go.....in Ireland.


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## Delboy (12 Mar 2014)

Sunny said:


> That advice mightn't be wrong next time though Brendan. The banks have always said it is on a case by case basis. Leaking this to the media makes it sound like this is now standard operating practice for AIB. It's not. We don't know the specifics of this case and we never will. Therefore what was gained by running the story? All it has done is probably given people false hope that all they have to do is ask for a write off and then come on this site moaning when they don't get it.



Do you think it was AIB that leaked it? 
David Hall was out very quick on all the radio stations this AM....bit of a turf war going on with IMHO and New Beginnings. Talk of running in future elections.


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## Bronte (12 Mar 2014)

Delboy said:


> I look forward to seeing all the posts on here in years to come when Dail committee's and tribunals are investigating the generous debt write off's of the politically connected/related etc. Because this is Ireland and that will happen


 
Yes that will happen, and has happened.  Haughey and Garrett.  AIB and BofI if I remember correctly.

But this case is only an ordinary family, one of many.  If the figures mean that more is repaid than otherwise is it not a good idea?


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## Bronte (12 Mar 2014)

Brendan Burgess said:


> It's very important to report these types of deals as they allow others to know what to expect.


 
There are many reasons for this to be in the media, based on this publicity IMHO etc will get more clients, more stressed customers will engage with their banks, it gives people hope. We are the end of the barrell time here and it's a been a long time coming. How many years have we debated debt writedowns and moral hazzard. Endlessly. Meantime people are living by the pin of their collar and how many suicides. My sister told me of another one last week. I don't know where you are all living, don't you see what is happening around you. 

Here on AAM in the last two weeks and it's not for the first time I had a PM by a poster in an absolutely awful state. 

This couple are no different to any poster who has come on here. 

Advantages

1. Couple and kids get to stay in their home
2. Bank gets repaid more than it otherwise would
3. It makes financial sense
4. Evicting on the scale that would be required is conter productive, it affects house prices, causes despair and panic. 
5. Puts an end to a couples financial misery
6. Let's people get on with their lives without being punished unncessarily (read George Hook on Irish bankruptcy)
7. The incentive in this story is a good idea, means the couple will work with and for the bank and will not give up

Disadvantages

1. Moral hazzard
2. Makes people who have done everything right and are financial straightened think they have done the wrong thing


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## Bronte (12 Mar 2014)

daftpunk said:


> Seriously, you think AIB are paying the IMHO to help write down debt?
> That is a crazy situation if true. I know they initially gave a sum to help fund an office for the IMHO, but if they are now paying them to help families receive write downs it is all gone crazy. PIPs are getting 5-7k approx for each PIA, so families receiving this for free is definitely good news.


 
Of course IMHO are being paid, the lump sum pays the salary of the guy who arranged the deal with AIB.

IMHO are professionals, I imagine they are accountants/legal people/negotiators.  These people will not work for free.  It's a lot cheaper for AIB to pay say 2K to IMHO then to spend thousands on going to court for years.  

IMHO and New Beginnings are not charities, their services are not free.


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## Wishes (12 Mar 2014)

Maybe it's because I'm single and have no dependent's but I have always found the services of these 'companies' very vague; when I have dealt with them. 

I was never instilled with a sense of confidence that I would walk away with the golden chalice, have a large write down (like the family in this article), keep my home and live happily ever after.  The spiel was always somewhat negative, whereby you would have very little hope in keeping your home.   

To be honest I found one of the companies deplorable to deal with.  Obviously cannot name them, but I paid my minimum fee, received a letter notifying me that they received it.  I never heard from them again. 

Like many others who have posted on this forum in recent years, all of our finances have been on the floor at some stage, but what makes this family any different than the rest of us?  Why are these 'companies' taking stock over one family rather than another?  Why is their prejudice against single people?  Do they too not have a right to stay in their home to?


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## BrokeGuy (12 Mar 2014)

Simple observation.

They can somehow afford to pay capital and interest on a €200k loan but obviously couldnt even pay the interest on the €400k loan (given they are €30k in arrears). 

This makes no sense, the repayments on interest only on €400k are likely to be no different to those on €200k Cap and Int so why the arrears if they can now pay it down on €200k.

Strategic.


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## RoadrunnerLK (12 Mar 2014)

I agree with Battybrennan, where is the incentive to pay in this country? I am living in a sub 90K apartment with a mortgage of twice that. I was out of work for 18 months and sacrificed everything to keep  the show on the road. I don't care what their situation is, they should be told to hand back the house and then have a judgement placed on them for the remainder. This would have happened to me!! Debt forgiveness for all or NONE!!


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## Brendan Burgess (12 Mar 2014)

BrokeGuy said:


> Simple observation.
> 
> They can somehow afford to pay capital and interest on a €200k loan but obviously couldnt even pay the interest on the €400k loan (given they are €30k in arrears).
> 
> ...



Hi Broke Guy 

I have been banging on about this for some time. That if people can pay the interest, they don't need a write down.  

But no one agrees me - not the Central Bank and not even some bankers who say "we want to get our capital back" . I am planning on writing a longer piece about it.


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## Gerry Canning (12 Mar 2014)

I agree with Dellboy in part ; since we are funding this writedown , we therfore should retain a (fairness) stake in the house. Not to screw these people, but to cover us should  their house because of lsomething, gets suddenly overvalued , they still get good value and we share in an upside bonus.

It seems that this was the best/worse solution.
1. House not near worth mortgage.So why foreclose.
2. Customers able to afford enough to pay mortgage on house near present market value.
3. Would cost AIB to repossess..
4. Hope this is a well thought out solution and not a chanchers charter.
5. If 4 applies, this is a very sensible reality based option.


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## Dermot (12 Mar 2014)

I think that before any write offs are agreed that that the following should be looked at.
I believe that for the moment that banks should be looking at parking loans for 10 years or so before granting write offs 
The ability to pay interest only at the prevailing SVR rate for 10 years into the future.
That the repayment to the Bank is at least equivalent to the rental value of the property.
That the bank retains an interest in the house until the "parked portion" is repaid.
The tax payer has to be considered in all of this. The chancers have to see that there are difficult hurdles to overcome. People in genuine difficulty know that they will have to make sacrifices but need help.
I have considered that house prices may change into the future, peoples financial circumstances may improve in various ways.
There also seems to be a huge hang up about negative equity even from people who can afford to pay the mortgage.  It is a home first and foremost and in a lot of situations over time it will recover most of this.


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## Brendan Burgess (12 Mar 2014)

Hi Dermot

Agree fully, but the Central Bank will not allow that. They say  that a mortgage must be long term sustainable by which they mean that the main mortgage must be paid off by age 65 and that the warehouse can't be more than 30% of the value of the house at maturity. 

I would think that 
1) The mortgage be switched to interest only , reviewable every 3 years
2) If the borrower pays the interest in full , the mortgage would become non-recourse. i.e. they could sell it at any time after three years and the bank would write off the shortfall.


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## Dermot (12 Mar 2014)

Agree fully, but the Central Bank will not allow that. They say  that a mortgage must be long term sustainable by which they mean that the main mortgage must be paid off by age 65 and that the warehouse can't be more than 30% of the value of the house at maturity. 

I was not aware of that so Central Bank need to have a look at their rules. I have no wish to take the debate off course can a mortgage in the normal course not go beyond 65. You can delete this post if you feel it is going off the intended debate here.


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## Brendan Burgess (12 Mar 2014)

Hi Dermot

I wrote about it here 

http://www.askaboutmoney.com/showthread.php?t=180997

But it's hard to get the Central Bank to think about these issues.  They have fixed ideas "a mortgage must be paid off in full by age 65 or else it's not sustainable." They know best and won't listen to anyone else. 

Having said that, that is also the conventional view and the view of the vast majority of people.


Brendan


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## ClubMan (12 Mar 2014)

Bronte said:


> Of course IMHO are being paid, the lump sum pays the salary of the guy who arranged the deal with AIB.
> 
> IMHO are professionals, I imagine they are accountants/legal people/negotiators.  These people will not work for free.  It's a lot cheaper for AIB to pay say 2K to IMHO then to spend thousands on going to court for years.
> 
> IMHO and New Beginnings are not charities, their services are not free.



For what it's worth I know one person with a BoI mortgage who contacted IMHO and the covering letter included this:



> Our services operate in two phases ...
> 
> (1) Information gathering and the initial meeting
> 
> ...



I know another with an EBS mortgage who got a letter stating that there was no charge to those engaging with EBS/AIB/Haven.


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## Tiberius (12 Mar 2014)

Fair play to the couple concerned but it must leave a lot of people envious of their settlement and probably scratching their head as they struggle to get by.  Some people are barely keeping their head above water from month to month.   Many people will be in a single salary situation with more than 2 kids looking at this even more enviously.  Its a difficult one to reconcile.


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## Sunny (12 Mar 2014)

battybrennan said:


> Envious and angry  I am single salary and kids!!! As far as I' m concerned there is no reconciling it. I think it's UNFAIR  totally unfair



What is totally unfair? You know nothing about the specific case.


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## Brendan Burgess (13 Mar 2014)

Guys 

I have deleted the personalised comments. 

Please stay on topic and avoid personalised attacks. 

Thanks

Brendan


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## Bronte (13 Mar 2014)

ClubMan said:


> For what it's worth I know one person with a BoI mortgage who contacted IMHO and the covering letter included this:
> 
> 
> I know another with an EBS mortgage who got a letter stating that there was no charge to those engaging with EBS/AIB/Haven.


 
Thanks ClubMan for that, fees seem very reasonable.  It's a pity BofI doesn't fund IMHO like AIB does.  Maybe they will now they see the benefit of it.  It appears this case has spurned a lot of people into action on taking their heads out of the sand and trying to cut a deal with the banks.  And finally it seems banks are ready to engage meaningfully.


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## Bronte (13 Mar 2014)

Tiberius said:


> Fair play to the couple concerned but it must leave a lot of people envious of their settlement
> 
> Some people are barely keeping their head above water from month to month.
> 
> . Its a difficult one to reconcile.


 
Everybody is focusing incorrectly on the write off. This is no walk in the park for the couple concerned. Yes they both have jobs, yes there is a large write off, but they will have to still service a large mortgage, no doubt their permitted spending is not generous, they have a parked mortgage that will eventually have to be dealt with and the article mentioned other debts so they presumably like many that posted on here have CC debts, loans/overdrafts and Credit union debt to pay off. 

I don't understand comments that imply the couple should have lost their home, 90% of people in financial distress who fill out the money makeover on AAM, reply that the most important thing to them is 'to stay in the family home' despite the negative equity and the debt to pay down for many years. 

Now we finally have a situation where a bank allows that and everybody is calling foul. Words like chancers when we know nothing about the people involved. There is a sense that this couple should be made to pay forever. Should be punished. Totally forgetting that to have got to this point the couple, massively in arrears would have been scared to open their post or take phone calls. For many years already. Now they are being given a window of opportunity to get on with their lives and that is somehow wrong.


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## Bronco Lane (13 Mar 2014)

From the Irish Independent.
"It is understood the husband works in the private sector and the wife is a public servant, but the couple have seen their income collapse due to pay cuts, hikes in income taxes and other levies."

I would really like to see how their income "collapsed".  Everybody has had hikes in income tax and other levies, pay cuts etc.

When that couple completed their mortgage application during the boom they would have had to supply Income Certificates, supported by P60's, possibly pay slips and other documentation. *They* would have convinced the banks at the time that they could afford the mortgage they were taking on.
Interest rates have not increased noticeably over the past number of years so when they were convincing the bank that they could afford this mortgage did they factor in what their repayments would be if there was an interest rate increase?
Were their pay cuts etc equivalent to what would have happened anyhow if rates had increased?
I think that the write off should have been parked until such time as their salaries returned back to normal which I believe will happen over time. I also believe that there will be some easing of taxes down the road. 
When their income reverts back to the equivalent of their income that they originally had when they originally applied for their loans then there would be no reason why they then could un-park that portion of their loan and resume repayments.


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## Delboy (13 Mar 2014)

another 2 large write off cases in Dublin per the IT
http://www.irishtimes.com/news/cons...-debt-for-two-more-mortgage-holders-1.1722816


> A further two distressed mortgage holders have been given debt write-offs of more than €140,000 each by Allied Irish Banks in recent weeks, The Irish Times has learned.
> Mr Hall said that the two new cases were in line with the first one.
> One of the couples lived alone in a property with a mortgage of just under €400,000, while the second home was owned by a couple with children and their mortgage was slightly larger.


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## Wishes (13 Mar 2014)

David Hall seems to have the Midas touch.  Wish he'd share his secret with the rest of us.


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## Dr.Debt (13 Mar 2014)

Sorry to be cynical but I fear this news story is nothing more than a desperate attempt by Hall / AIB to entice distressed borrowers to engage.
There is no secret that one of the bigger problems facing the banks right now is getting distressed borrowers to engage with the "process"

Why on earth would a bank do a "write-off" deal and then make a concerted media campaign to announce it. I think everyone can clearly see the motivation behind it. I would have my own personal misgivings about the authenticity of this news story


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## Bronte (14 Mar 2014)

Dr.Debt said:


> There is no secret that one of the bigger problems facing the banks right now is getting distressed borrowers to engage with the "process"


 
Which is precisely why the banks have engaged IMHO and are paying them. Consumers see David Hall as someone they can trust and deal with, on the other hand they see the banks as the enemy as they have been hounding them for a few years.

Presumably IMHO is a streamlined team dedicated to getting a solution, and they have a direct line to the banks decision maker.  Anyone dealing with banks is passed from pillar to post, with one nincompoop to another, resulting in people giving up.  When you have 25 year olds asking you why you didn't buy your toilet roll in Aldi, than IMHO who will take it from a different angle, ie what do you really want, then one can see the attraction.


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## Dr.Debt (14 Mar 2014)

Hi Bronte , I agree with the points you make.

My point is that this newspaper report is not what it appears to be at first glance.

At fist glance its an interesting news story about someone who has managed to get a bank to write off some money.

The cynical side of me says its a"staged" press release by the parties involved to entice more people to engage with their process.

In conclusion some people may think that the story is about AIB writing off debt, It is in fact a carefully stage press release to try and entice more people to engage.

If this is true then I feel people would much prefer an open and honest approach from the banks instead of being hoodwinked from the outset like this.


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## ClubMan (14 Mar 2014)

Dr.Debt said:


> The cynical side of me says its a"staged" press release by the parties involved to entice more people to engage with their process.


So it's a conspiracy between the banks, IMHO and the media? Right...


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## Dr.Debt (14 Mar 2014)

I think conspiracy is a bit strong but definitely more advertisement, less news story.


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## ClubMan (14 Mar 2014)

Well nothing new there - a significant chunk of "news" reporting is just rehashed press releases. Read "Flat Earth News" by Nick Davies for example and see what he says about "churnalism".


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## Bronte (14 Mar 2014)

Dr.Debt said:


> In conclusion some people may think that the story is about AIB writing off debt, It is in fact a carefully stage press release to try and entice more people to engage.
> 
> If this is true then I feel people would much prefer an open and honest approach from the banks instead of being hoodwinked from the outset like this.


 
2 things on this, everybody, well nearly everybody don't think they are being hoodwinked by the banks, they all believe it.  And it's true, the Irish were taken to the cleaners by the banks. 

Secondly, this story is about the bank writing off debt, they are, they always have, and they always will, the story is press managed, all corporates do this, but it's good for the bank, good for the borrowers and good for Irish society that people now engage.  

This story along with posters in the last while gives me hope that the banks are finally seeing the light and offering people solutions.  

I believe you are in debt management yourself, maybe even a PIP?  IMHO/David Hall has pulled off an amazing feat with his IMHO.  He's managed the a) get customers to engage and b) get the banks to pay for it c) get deals done d) outdone PIPs e) shown up the nonsense that is the Irish insolvency service f) made a mockery of government policy on dealing with debt


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## Bronte (14 Mar 2014)

ClubMan said:


> Well nothing new there - a significant chunk of "news" reporting is just rehashed press releases.


 
That's exactly what it was, someone rang up Charlie Weston to put out the 'right' story. Weston himself wrote an article on the very same day on this story. If you read the two articles you can see they read like press releases, you just move a few words around. Makes the reporters life easier too.

In another couple of months in the Indo I'm expecting page spreads on distressed property sales. But with a positive angle for the banks as they will in the property supplement be paying big bucks for advertising.

You heard it here first folks.


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## ClubMan (14 Mar 2014)

Bronte said:


> get the banks to pay for it


One bank?


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## Bronte (14 Mar 2014)

ClubMan said:


> One bank?


 
I believe it's more than one bank, maybe it's that he's in talks with some other banks.  I'll try and find a link.


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## ClubMan (14 Mar 2014)

Bronte said:


> I believe it's more than one bank, maybe it's that he's in talks with some other banks.  I'll try and find a link.


OK - I thought it was just AIB (and by extension EBS and Haven) but maybe it's more. But anyway - it does seem to me that it would be worth some people talking to IMHO alright if they can get results like this. Whether or not such individual deals are fair or right or commercially sensible is another matter I guess...


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## Bronte (14 Mar 2014)

ClubMan said:


> OK - I thought it was just AIB (and by extension EBS and Haven) but maybe it's more.


 
KBC too

http://www.independent.ie/business/...group-to-keep-families-in-homes-30058922.html

_The group is in talks with Ulster Bank and Permanent TSB about offering similar services to financially distressed customers of these banks._

Only one not involved yet is Bank of Ireland.

(Just as an aside, I don't know David Hall, and I have nothing to do with IMHO etc)


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## Sunny (14 Mar 2014)

Stories like this wouldn't harm someone's chances of getting votes in the European Elections either. If the rumours are true of course!


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## Dr.Debt (14 Mar 2014)

Hi Bronte

The IMHO is running a very strong media campaign about  their activities. How successful they are in getting debtors to engage  is another question. I don't have sufficient or reliable enough  information on their success rate to comment on that but I would place a  question mark there where you don't seem to have one. Have IMHO  been successful ? I would like to know if they have managed to follow  through with the kind of numbers that they forecast from the start. I  think it would be interesting for them to announce their success rate.  Surely there would be no better advertisement to other debtors than to  announce their success rate in graphic detail and especially  if it is true that they  have managed to put through hundreds of deals as is reported elsewhere.

I  wouldn't agree that the IMHO have outdone PIPs. I dont mind admitting  that I am a PIP and a busy PIP at that. As a PIP, I can tell you that  I'm not busy with formal insolvency arrangements per se. I find that  only about 10% of all my clients are suitable for a formal insolvency  arrangement. Out of that 10% only about 4% follow through to a formal  arrangement. I find that people who are eligible and suitable for formal  insolvency arrangements will invariably have alternative options as  well. Very often the alternative options are more attractive.I'm not  sure if I'm representative of a typical PIP (I'm not a full time PIP by  any means)however I can tell you that my PIP time is consumed with  assisting people evaluating their options and assisting them through  informal arrangements and bankruptcy preparation. We have had lots of  success helping people communicate with their banks and achieving deals.  There's no fanfare and press announcements. Its all done quietly  with the minimum of fuss. My assessment of the situation is that 55% of  cases can be solved through informal arrangements with banks. People who  are not financially savvy need assistance with evaluating their  situation and they need assistance communicating with creditors. Lots of  cases can be solved relatively easily like this without having to enter  into a very bureaucratic process. This is the work that the IMHO is  involved in also. 35% of cases are bankruptcy cases, plain and simple  and 10% are suitable for formal insolvency arrangements (but only 4% of  these will actually proceed)

I have grave doubts at this stage that  the ISI will ever really be effective. It will never get the numbers  that it once thought it would get. I accept that what the IMHO is  providing is actually what is needed (the manner in which it advertises  is my only dislike) So when Bronte says that PIPs have been outdone. I  think you mean the ISI has been outdone. Many PIPs are doing similar work to the IMHO

The ISI is an  organisation full of very capable and good people however its trying to  manage a dinosaur which in my estimation will only serve about 4% of  total distressed borrowers. The 4% usually represents people with good  incomes and multi banked.I think whats needed now is a network  of PIPs concentrated on helping clients achieve informal settlements  with their creditors in a very streamlined way. I think this is what  the clients want. This is what the banks want and this is what many  PIPs want. The cost of negotiating an informal arrangement with a bank  will be a small fraction of what a formal arrangement costs. At the  moment the tail is wagging the dog. Informal arrangements and bankruptcy  is where all the action will be for the foreseeable future. Major  restructuring is needed before the formal process can work. Unfortunately there is major denial building up around this and it will be some time still before anyone will admit that the Emperor has no clothes. Obviously this is just the experience of one PIP and I accept that other PIPs may have had different experiences and may come to different conclusions


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## Gerry Canning (14 Mar 2014)

Bronco Lane. 
Interesting comments.

You highlighted that THEY would have convinced the Banks.
.......................................................................
In fluffy times the Banks were gagging to shovel out the money.
I assume this couple, like others ,took Mr (professional)Bankers advice on what they could afford. Upshot was couple and in particular Mr (professional)Banker were  hoping salaries would keep on the up and had no expectation of ever seeing lower nett pay.
Could it be that AIB belatedly accept that original mortgage was always at best a challenge? AIB will not admit that their actions fuelled the problem, but remember mortgages were being given out @ 5 times salary by these (professionals) ? 

I also take on board your comment on Rates not increasing.
Had they increased  I shudder to think were we would be at!


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## Brendan Burgess (14 Mar 2014)

Dr.Debt said:


> Hi Bronte
> 
> The IMHO is running a very strong media campaign about  their activities. How successful they are in getting debtors to engage  is another question. I don't have sufficient or reliable enough  information on their success rate to comment on that but I would place a  question mark there where you don't seem to have one. Have IMHO  been successful ? I would like to know if they have managed to follow  through with the kind of numbers that they forecast from the start. I  think it would be interesting for them to announce their success rate.  Surely there would be no better advertisement to other debtors than to  announce their success rate in graphic detail and especially  if it is true that they  have managed to put through hundreds of deals as is reported elsewhere.



I am surprised at the suspicions of IMHO expressed by debt advisors generally - not just you Dr Debt. 

Here are the numbers you asked for 

https://www.mortgageholders.ie/blog...-on-initiative-between-imho-and-aib-ebs-haven

AIB is happy, because they have given them more money to expand it.
KBC checked it out and thought enough of it to set up a similar initiative. 

They are far more transparent than private debt advisors. I have no idea what your relationship is like with AIB or what your success record is.  I have a fair idea of IMHO's.  And they don't charge. 

Brendan


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## Dr.Debt (14 Mar 2014)

Hi Brendan

I have no beef with the IMHO. I'm surprised to hear that they dont charge a fee. I previously heard 800 euro but that's possibly not correct so.

The initial target from IMHO was to settle 300 cases per month. Based on the link you provided, it seems that they have succeeded in getting settlements on about 40 cases per month. Number of cases solved per employee head / per month is therefore only 8 so no better (and probably less) than a good PIP is managing to do at the moment and PIPs are not getting public endorsements from AIB or anyone else.

Its not a ****ing contest. Its not about who is doing the most work or solving most cases. For me its all about the big picture and the best way to solve the mess in overall terms and the best way to get the debtors to engage with the process


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## Bronte (14 Mar 2014)

Dr.Debt said:


> . I'm surprised to hear that they dont charge a fee. I previously heard 800 euro but that's possibly not correct so.


 
Very informative post earlier there Dr. Debt. 

The 800 Euro fee sounds about right, I understand that applies to those who are not AIB/KBC etc. 

My view of IMHO is that they are now doing the job the insolvency service ought to have done. Going further, Mabs should have been the IMHO/insolvency agency and free to users.

The insolvency service has managed with all it's staff about 8 cases, how many staff and at what cost I wonder.

Mabs cannot even get people though the 'simple' debt relief system - see poster GuineaPig. IMHO won't ever handle these type of cases because it's not going to be a money spinner. 

You yourself seem to be seeing a lot of people but getting no return, I imagine it's the same for many PIP's and eventually you'll give up on it.


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## Bronte (14 Mar 2014)

Brendan Burgess said:


> Here are the numbers you asked for
> 
> https://www.mortgageholders.ie/blog...-on-initiative-between-imho-and-aib-ebs-haven
> 
> They are far more transparent than private debt advisors.


 

You see based on just that link you have to hand it to IMHO, clear and transparent.  Go onto the insolvency website by comparison, really slick, really complicated, presumably newly designed at hugh cost, impossible to find anything easily, and no figures that are of any meaning.


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## Kine (14 Mar 2014)

Some banks (UB) are simply not doing anything - split mortgages, write offs etc. Doesn't matter who you hire to act on your behalf, if the bank isn't doing anything, there is NOTHING you can do (Assuming you don't want to go down the insolvency route etc). 

In broad terms, it's all a numbers and statistics game, you will be offered a 3yr interest only option so if you agree, you are now classed as a file in the "restructured" basket and go towards hitting their Central Banks target. 

Don't forget, it is cheaper for the bank to enforce and take the property than write off a large NE chunk in one go.


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## Gerry Canning (14 Mar 2014)

Wonder is this view over the top? 

AIB now have a nice bit of soft media comment on how IMHO are good guys and that AIB are assisting people etc.
I have no doubt IMHO are good people trying to sort issues, but  at the rate cases are being sorted we will never get through the backlog.
I have little doubt that Pip,s will tire.

In short, issue is not being sorted?


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## Dr.Debt (14 Mar 2014)

In relation to transparency, I do think its wrong that the ISI has been allowed to avoid giving any tangible progress report on its activities.

Unless I'm reading this completely wrong, the ISI business model is failing dismally. I would be very surprised if there is more than 200 live cases in the ISI system at this time. If the case load at the ISI is well below expectations and the costs are stacking up (70 -90 people employed there) It wont be very long before the ISI will be before the PAC trying to explain why they are 10 million in the red.

I wouldn't blame the ISI staff entirely for its failure but if it is running unexpected losses as I suspect it might be, someone should be flagging this now.


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## RainyDay (14 Mar 2014)

Dr.Debt said:


> In relation to transparency, I do think its wrong that the ISI has been allowed to avoid giving any tangible progress report on its activities.
> 
> Unless I'm reading this completely wrong, the ISI business model is failing dismally. I would be very surprised if there is more than 200 live cases in the ISI system at this time. If the case load at the ISI is well below expectations and the costs are stacking up (70 -90 people employed there) It wont be very long before the ISI will be before the PAC trying to explain why they are 10 million in the red.
> 
> I wouldn't blame the ISI staff entirely for its failure but if it is running unexpected losses as I suspect it might be, someone should be flagging this now.



ISI has only been running for a few months, right? Why not submit an FOI request or get a friendly TD to submit a PQ if you want information?


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## Brendan Burgess (14 Mar 2014)

The Insolvency Service is appearing before the Oireachtas Finance Committee on 3 April, I think. 

Why not do a briefing note on your views and the questions you would like asked, and send it to one or two of the members? They are there to represent you and would welcome some informed briefing. 

Membership list


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## ClubMan (14 Mar 2014)

Dr.Debt said:


> I have no beef with the IMHO. I'm surprised to hear that they dont charge a fee. I previously heard 800 euro but that's possibly not correct so.





Bronte said:


> Very informative post earlier there Dr. Debt.
> 
> The 800 Euro fee sounds about right, I understand that applies to those who are not AIB/KBC etc.


For borrowers not with AIB/EBS/Haven (or certain others?) €150 for initial consultation (subject to ability to pay) and €800 to engage/negotiate with the lender.

http://www.askaboutmoney.com/showpost.php?p=1377736&postcount=33


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## ClubMan (20 Mar 2014)

Edit: oh - I just saw it posted elsewhere already. Sorry! 


Is this new info or something posted already?

http://www.rte.ie/news/business/2014/0319/603254-aib-mortgage-write-offs/


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## Bronte (20 Mar 2014)

Brendan Burgess said:


> The Insolvency Service is appearing before the Oireachtas Finance Committee on 3 April, I think.


 
DRN's (under 20K of debt)

How many debt relief notices have been granted. 
Do they think the system works well. 
How would they improve it. 
Do they think there is too much paperwork
Why do Mabs cancel the application if you don't come back to them with the uptodate documents, why do you need to constantly get up to date documents
Why does someone have to go via Mabs, why can't they liase directly with ISI, via modern technology, and submit electronically
What are they doing about the fact that some instituitons won't supply the correct information, any information, too late etc

ISI

How many staff
What do they do
What is the cost of the ISI
What is the average cost per DRN/Insolvency etc
Do they think naming people in a small country like Ireland puts off applications


Bankruptcy


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## daftpunk (20 Mar 2014)

Bronte said:


> DRN's (under 20K of debt)
> 
> 
> Do they think naming people in a small country like Ireland puts off applications
> ...




You are only entered into the register. The register can be viewed only if somebody knows who they are looking for. They have to perform a search. There will be no public advertising/display of persons entered. A late change made to the legislation if I remember correctly.


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## Bronte (20 Mar 2014)

daftpunk said:


> You are only entered into the register. The register can be viewed only if somebody knows who they are looking for. They have to perform a search. There will be no public advertising/display of persons entered. A late change made to the legislation if I remember correctly.


 
There is a link on their website, are you saying if you know the name of somebody you can look at it that way, or can you visit their office and see the entire list?

_____________

I found this very handy guide to how to fill out the form for bankruptcy


[broken link removed]

It's only 33 pages long !  It's actually quite funny really because the ISI have obviously been bombarded with questions on how to fill it out and no doubt had to send lots of forms back to be fixed.  Maybe somebody in there could instead design a foolproof easy form.


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## daftpunk (20 Mar 2014)

As far as I was made aware, you can only search on the website, if you know the persons details you are looking for. If you know their name and they have/had a protective cert of agreement in a PIA or DRN, then you can view the details. But there will be no advertising in papers or the likes with names and details etc., like originally planned.


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## Bronte (20 Mar 2014)

And what's to stop a newspaper printing the names? It's bound to happen.  I've give it a go with Paddy Murphy or Mary O' Brien !


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## daftpunk (20 Mar 2014)

Hope your stereotype names bring you hours of fun Bronte. I'd change Paddy to Patrick if I was you...better chance;/


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