A lot has been done for struggling mortgage holders

Bronte said:
Only gain for borrower is that they are kinda staying rent/mortgage free in their own home.
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I've seen elsewhere that the average tracker rate with PTSB is 2.25% whereas the funding cost is 4%.

As such someone on interest only is benefitting to the tune of 1.75% of loan outstanding per annum. If an employer offered such generous terms BIK would be payable!

Another way of looking at it is that someone who paid €600k for a nice house in the boom with a 100% mortgage would be paying €1,125pm interest only at the above rates. Even now, the rental on such a place would be about 25% higher.

It is clear to me that such a person is better off paying interest than rent. So even if they never got a cent from MIS they'd be ahead. Simply being let restructure to interest only rather than be evicted for non-payment of capital is a major benefit.
 
The mortgage crisis, comprising the separate problems of arrears and negative equity, is destroying consumer confidence and the domestic economy. This is not simply an arrears problem, or a NE problem, or a moral-hazard problem (as some here advocate). It is a full-blown economic crisis that needs addressing and it is at the core of the reasons why the domestic economy is still contracting, four years on.......

Those on AAM who advocate kicking the can down the road, whilst hand-wringing about the potential costs to the paxpayer of an over-arching solution, miss the point completely. Let's lose the myopia, at least for a while, and look instead at alternative approaches that have paid off handsomely for entire societies in countries abroad. The circumstances might not be directly comparable to Ireland, but there are other approaches out there that have worked far, far better than the head-in-the-sand approach favoured by too many people in Ireland........

http://www.bloomberg.com/news/2012-...ebt-relief-in-best-crisis-recovery-story.html
 
Brendan Burgess said:
This is an interesting point.

If they can't repay the capital, but they can pay the interest, it's not ideal, but it's a good benchmark for a sustainable mortgage, especially if there is equity in the house. The bank will not attempt to repurchase a home in this situation although they will try to get capital repayments if the believe that the borrower can afford them.
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First - exactly how many homes bought in the last 5/10 years actually have an equity?

Secondly - did we not see recently where by 'the sherrif' came to a house, in Leitrim I believe, who had missed not so many repayments, but because the house was in equity,the bank swooped in to take it?

I haven't read further in the posts so apologies if this was already stated.
 
Brendan Burgess said:
It works the same way as it works for a person who retires at 65 now who has been renting all their life. They can either sell the house and pay off the mortgage or as much as possible of it, or else continue to pay the interest on it.

Either way it's a better option than being repossessed now and being dependent now on the state for their accommodation needs.
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Don't agree.
 
coleman said:
First - exactly how many homes bought in the last 5/10 years actually have an equity?
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Very few. I am not sure of the relevance of this. Around 1/3rd of mortgages in arrears are in negative equity.

Secondly - did we not see recently where by 'the sherrif' came to a house, in Leitrim I believe, who had missed not so many repayments, but because the house was in equity,the bank swooped in to take it?
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I didn't see the case. Repossessions are extremely rare in Ireland. They could not have got an order from the court if they had missed "not so many" repayments. Even if they get an order, the judge always puts a long stay on the order to give the borrower a chance to discharge any arrears.
 
Hi Brendan,

Yes, I think they would be much better off in the long run to be repossessed now and not later. At least they might possibly get the chance, while they are younger to start fresh.
 
Brendan Burgess said:
I didn't see the case. Repossessions are extremely rare in Ireland. They could not have got an order from the court if they had missed "not so many" repayments. Even if they get an order, the judge always puts a long stay on the order to give the borrower a chance to discharge any arrears.
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But they did get an order. It's all over youtube if you want to look at it. More or less the gist of it is, and I'm trying to remember this from memory, is that the constitution states that a man's house is untenable, unless he commits a crime.

If you seach in youtube under 'constitutional and common law's halt Laois Sheriff on home repossession and eviction in ireland' -happened on the 20th Feb.
 
Brendan Burgess said:
I was invited to address the Oireachtas Justice Committee yesterday on the Personal Insolvency Bill. This is an extract from my presentation

[FONT=&quot]2. It is important to recognise what has been done so far for struggling home owners [/FONT]
[FONT=&quot]There is a public misconception that we have bailed out the banks but nothing has been done for home owners in difficulty. This is simply not true. [/FONT]

  • [FONT=&quot]54,700 mortgages worth €12 billion have been restructured [/FONT]
  • [FONT=&quot]While around 50,000 mortgages are in arrears, only 275 homes have been repossessed against their owners’ wishes in the last 2 years. [/FONT]
  • [FONT=&quot]The Central Bank’s Mortgage Arrears Code[/FONT]
    [FONT=&quot]Protects struggling borrowers from losing their cheap trackers [/FONT]
    [FONT=&quot]Bans penalty interest and charges on arrears [/FONT]
    [FONT=&quot]Obliges borrowers to engage with people before they go into arrears[/FONT]
    [FONT=&quot]Prevents lenders from taking legal action for one year – although in practice it’s a lot longer[/FONT]
  • [FONT=&quot]The Mortgage Arrears Resolution Process( MARP) lays down the ground rules for borrowers and lenders. It’s not perfect, but it is a major step forward.[/FONT]
  • [FONT=&quot]18,000 borrowers are receiving Mortgage Interest Supplement which pays almost all their mortgage interest [/FONT]
  • [FONT=&quot]Those who bought between 2004 and 2008 are getting enhanced Mortgage Interest Relief as a result of the recent budget.[/FONT]
[FONT=&quot]These measures do not solve the problem, but they alleviate it dramatically and give the vast majority of borrowers an opportunity to recover.[/FONT]


[FONT=&quot]3. The value of the Deferred Interest Scheme has not been fully appreciated[/FONT]
[FONT=&quot]The Cooney Report proposed a Deferred Interest Scheme and this has been accepted by almost all lenders.[/FONT][FONT=&quot]Where a borrower can only pay 66% of the interest, the balance is deferred for at least 5 years. [/FONT]

  • [FONT=&quot]Gives a useful definition of what a sustainable mortgage is [/FONT]
  • [FONT=&quot]Protects borrowers from repossession or legal action while they have a chance of recovering [/FONT]
  • [FONT=&quot]Sets a good criterion for what an unsustainable mortgage is. Most people would agree, that if someone can’t pay 66% of their interest, their mortgage is not sustainable. [/FONT]
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Sorry, but this is a bit unclear - is this in relation to the banks that are now a part of NAMA or all banks? Including sub prime lenders??
 
coleman said:
Sorry, but this is a bit unclear - is this in relation to the banks that are now a part of NAMA or all banks? Including sub prime lenders??
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Hi Coleman

There have been very few repossessions by all the lenders, but the sub-primes account for a very high proportion of them.

But the tax relief and MIS is provided by the government.

The Mortgage Arrears Code was introduced by the Central Bank and imposed on the lenders.

The gist of my argument is that it is incorrect to say that nothing has been done. A lot has been done.
 
coleman said:
But they did get an order. It's all over youtube if you want to look at it. More or less the gist of it is, and I'm trying to remember this from memory, is that the constitution states that a man's house is untenable, unless he commits a crime.

If you seach in youtube under 'constitutional and common law's halt Laois Sheriff on home repossession and eviction in ireland' -happened on the 20th Feb.
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Hi Coleman

This is Freeman rubbish which is dealt with here

http://www.askaboutmoney.com/showthread.php?t=166353

I don't know the details of that case. But as I said, it's very difficult for a bank to get a repossession order in Ireland and they only get it after months if not years of default.

Brendan
 
Brendan Burgess said:
Hi Coleman

The gist of my argument is that it is incorrect to say that nothing has been done. A lot has been done.
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Hi Brendan,

I never said the above. I said I disagreed with this:

Originally Posted by coleman http://www.askaboutmoney.com/showthread.php?p=1248423#post1248423
Don't agree.
Hi Coleman

Which bit don't you agree with? Are you saying that they would be better off repossessed now instead of being repossessed at the age of 65?

Hi Brendan,

Yes, I think they would be much better off in the long run to be repossessed now and not later. At least they might possibly get the chance, while they are younger to start fresh.
 
RIAD_BSC said:
The mortgage crisis, comprising the separate problems of arrears and negative equity, is destroying consumer confidence and the domestic economy. This is not simply an arrears problem, or a NE problem, or a moral-hazard problem (as some here advocate). It is a full-blown economic crisis that needs addressing and it is at the core of the reasons why the domestic economy is still contracting, four years on.......

Those on AAM who advocate kicking the can down the road, whilst hand-wringing about the potential costs to the paxpayer of an over-arching solution, miss the point completely. Let's lose the myopia, at least for a while, and look instead at alternative approaches that have paid off handsomely for entire societies in countries abroad. The circumstances might not be directly comparable to Ireland, but there are other approaches out there that have worked far, far better than the head-in-the-sand approach favoured by too many people in Ireland........

http://www.bloomberg.com/news/2012-...ebt-relief-in-best-crisis-recovery-story.html
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Very good - Thanks for posting it RIAD BSC
 
we definitely fall into the category of folk who would be much better off if we could walk away and start again. We have already had the loan restructured twice and still totally unsustainable..... how does the new law help us?
We were always afraid that that debt would follow us and in years to come the banks would repossess any new home or car
 
To be honest Munchy - I'd be kind of going with what saves YOU now. Forget about them coming after you in years to come - think about now and what your family needs. Your family is the number 1 priority - not the banks - and do not forget that. No judge will ever do anything to you whereby your monies are there to sustain you and your family - I will keep repeating that - mind you and your family.
 
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