Any ideas for making the mortgage rates an election issue?

[jim]

I tend to agree with gnf...unfortunately
Tracker redress i think has been completed or substabtislly so and its old news and mortgage rates reduced across the board, didnt they?

What i find interesting is that mortg int relief stopped suddenly (2013?). Why? And prob more importantly ehy is it not been abolished completely or else rolled out so subsequent mortgages?

 

[Metatron]

300,000 people are paying mortgage rates much higher than they should be paying.

Government policy could help to bring them down

1. Make repossessions easier
2. Bring back Mortgage Interest Supplement for people in difficulty who are engaging
3. Ban cash backs
4. Require lenders to offer existing customers the same deals as new customers.

I might do a press release on it next week or the week after.

But if anyone has any ideas, let me know.

Brendan

Brendan,

Your points are valid, however we must strive to balance issues for both the banks and the borrowers.

1) Maybe legislation is required to make reckless lending a tort or suable like it is in the USA so we won’t have a repeat of what has already happened,

2) Repossessions are quicker in other Countries particularly where there is non recourse lending, this must be borne in mind.

3) I feel the Central Bank of Ireland’s consumer protection role is utterly conflicted with its regulatory role, this has to change. Maybe something like the FCA in the UK should be considered.

Then mortgage interest rates may drop as banks will lend more prudently resulting in less defaults and such behavior will be self reinforcing.

 

[josh8267]

Brendan,

Your points are valid, however we must strive to balance issues for both the banks and the borrowers.

1) Maybe legislation is required to make reckless lending a tort or suable like it is in the USA so we won’t have a repeat of what has already happened,

2) Repossessions are quicker in other Countries particularly where there is non recourse lending, this must be borne in mind.

3) I feel the Central Bank of Ireland’s consumer protection role is utterly conflicted with its regulatory role, this has to change. Maybe something like the FCA in the UK should be considered.

Then interest rates may drop

The main reason Mortgage rates are higher in Ireland and rightly so , Banks need to cover themselves for losses suffered in the last downturn and get ready for losses the next time around,

It is very easy to be high and mighty when the last downturn did not put your home or health in danger, try telling people on lets say 50K who finished up on Unemployment Benefit of around 180 per week to prioritize the Mortgage repayment so as not to affect future mortgage Rates,

Unemployment rates went from under 5% in 2008 to 15% causing massive defaults on mortgages ,Mortgage lenders know if someone looses there job in Ireland there are no supports in place like other EU states,

The 15% unemployment was a lot higher if you take in the few hundredth thousand who left Ireland in the Downturn,

 

[gnf_ireland]

3) I feel the Central Bank of Ireland’s consumer protection role is utterly conflicted with its regulatory role, this has to change. Maybe something like the FCA in the UK should be considered.

I think this is key to the whole discussion. The Central Bank is inherently conflicted between its consumer protection role and the regulatory role. Which takes priority - well that was easy during the downturn. The functions need to be split out and consumer protection needs to be independent and funded separately.

Then mortgage interest rates may drop as banks will lend more prudently resulting in less defaults and such behavior will be self reinforcing.

And yet you have some calling for 100% mortgages again as people cannot pay rent and save for a mortgage (and I do empathize with them)
Maybe the answer is some sort of insurance product which guarantees the repayment of your mortgage for 5 years, if you have a LTV >80% - a bit like PII

 

[MrEarl]

3) I feel the Central Bank of Ireland’s consumer protection role is utterly conflicted with its regulatory role, this has to change. Maybe something like the FCA in the UK should be considered.

Great point.

 

[josh8267]

Brendan you should get an accountant practice in Germany and Austria to explain there systems when people with large Mortgages go from Employment/self employment to Unemployment in a down turn ,
You should highlight what the next Government need to be doing so things will be better in Ireland for the two million paid employees on PAYE and the 300000 self employed with large Mortgages if there is a downturn in any sector of the Economy,
That would be a good start in making sure people who work are protected in a downturn,
A good example would be to ring fence some of the windfall from Corporation tax into a special fund to support paid employees and self employees in a downturn, along with changes to the Prsi system so these people who have payed in large amounts get more than some one who never worked ond never paied into the system,

 

[Dauhee]

I disagree, if enough people raise the matter, it will be an election issue. Sinn Fein have jumped on this with other policies on housing, rent etc

 

[gnf_ireland]

I disagree, if enough people raise the matter, it will be an election issue. Sinn Fein have jumped on this with other policies on housing, rent etc

Not being funny here, but it was tough enough to get people raising the issue in 2016 when interest rates were in excess of 4% for most people, never mind now where you can reasonably get sub 3% rates (note there are smallish people who cannot for a variety of reasons).

There has always been great difficulty in mobilising on this issue outside of askaboutmoney forums !

 

[gnf_ireland]

You should highlight what the next Government need to be doing so things will be better in Ireland for the two million paid employees on PAYE and the 300000 self employed with large Mortgages if there is a downturn in any sector of the Economy,
That would be a good start in making sure people who work are protected in a downturn,

I am not sure how I would handle this for employees, as its a tough one, but for self-employed and very small companies, allowing them to carry a '6 month buffer' cash reserve within their company before paying the close company surcharge would be a nice first step. The ability to have some sort of working capital to adjust to a downturn is essential for any company. The current taxation system clearly discourages this for close companies.

A good example would be to ring fence some of the windfall from Corporation tax into a special fund to support paid employees and self employees in a downturn, along with changes to the Prsi system so these people who have payed in large amounts get more than some one who never worked ond never paied into the system,

Personally I would like the corporation tax windfall to be put away and used to secure the future pension rights of all current workers who are paying PRSI into a pot that they may never be able to withdraw from as the system is built on quicksand at the moment. The old age pension liability is not going to go away, and while raising the pension age will only result in more people signing on. I am not sure its feasible for people to work to the age of 70 (irrespective that some people may want to)

 

[MrEarl]

Hello,

The Corporation Tax "Windfall" should be used to reduce the National Debt - that helps everyone, because ultimately we all have to service it, and some day, repay it !

 

[josh8267]

I am not sure how I would handle this for employees, as its a tough one,


What is/was wrong with the system we had in place up until 1985 in Ireland,for Employees ,
I started work in 1968 on reaching 16 in 1969 I started paying a Insurance stamp the full stamp came out of my wages in other words my weekly wages dropped by the cost of the full insurance stamp until some time in the 1970s it got changed to the system that still exists all over the EU to this day ,
(the new system name Back in 1970s speaks for itself Pay Related Social Insurance Funded by Employers and Employees ), if you lost your job you got 75% income for for so long falling to 50% falling again to 25% of your wages,
I used it myself the only time I was out of work from the start of December 1967 until august 1984 Mortgage interest rates were in the high teens,

The incentive Back then Was if you found yourself unemployed you were always looking around and working every day you could find so as to extend your 75% pay related Which helped not defaulting on your Mortgage,

You can track the recklessness of paying people Who never worked a day in there life back to when it got changed,

 

[josh8267]

MrEarl
While I was reading what you posted ,I was listening to the news lots of well off interest groups linen up for a big payday out of any extra tax win falls
What you are suggesting wont fly I am afraid
But a well thought out press release making the case for % corporation tax to be set aside for a downturn in the Economy would take lots of wind out of there sails of pressure groups,
the results would be the same as what you are suggesting most political parties would find the public on side if done correctly but someone needs to suggest it ,
As far as I am concerned Brendan is one person who could state in in a way that no party in its right mind would ignore,
but it needs to be ring fenced so it cannot be taken like a rainy day fund so it should be set up in a PRSI fund so it cannot be got at like the last rainy day fund,

 

[pguyo]

Purely biased from my point of view but refusal to offer new customer rates to existing customers needs to be addressed.

 

[MrEarl]

Existing customers of banks who are unhappy with their rates, should move to new lenders, for better rates.

It's not rocket science, numerous banks are making contributions towards the cost of legal fees for moving, and the large majority of people are in a position to move, so there's the solution IMHO. The small percentage of people who can't move, fall into a minority and probably have other issues that need attending to, ahead of their homeloan rate.

TV companies, Gas & Electric companies, Car insurance companies etc all offer incentives to new customers ahead of their existing customers, it's the way the competitive market operates, whether we like it or not. So, it's up to us to look after ourselves and move provider.