Bank of Ireland's Life Loan on Joe Duffy

In my view, the agenda here is being pushed by disgruntled prospective beneficaries of their parents' wills.

Which is more preferable...the more common scenario of elderly parents with loads of assets and low incomes (the wealthiest people in the cemetary)...or a simple product which enables elderly parents to enjoy their latter years and the fruits of their labour?
 
My memory of the adverts for life loans was everyone was smiling in them and stating in them that nothing to be repaid until you die...I think the banks at the time believed that house prices were going to increase year on year and there was very little risk in them(life loans),It just seems banks took advantage of the situation that some older people were in, maybe it was legal and the rest but does not mean it was right, so in conclusion instead of being a cheerleader for the banks i will be a cheerleader for Orla and her mother and the others affected by this.
 
What are you cheerleading -- that loan repayments should be optional? What is it you're saying is wrong with these products? In what way did the banks misrepresent the product, or otherwise take advantage? In fact, name one thing about these loans that could not be foreseen on the day they were taken out ... which Orla and the other guy said they fully understood?
 
I suppose the family could rent out the house or is there some clause in the agreement that prohibits this? They could then get an income for the mother and wait for their inheritance as the house increases in value.

When the husband was being "paid off" I am sure that there were solicitors involved. What additional advice did they get at the time about this? Did the family not bother to ask?
 
Bronco Lane said:
I suppose the family could rent out the house or is there some clause in the agreement that prohibits this? They could then get an income for the mother and wait for their inheritance as the house increases in value.
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Even if allowed, that's only worthwhile if the rental income plus the capital appreciation is better than the interest rate of 6.5%. And bear in mind the rental income is taxable, and so are the capital gains once the house ceases to be a private dwelling house.

But why are we talking about the family "waiting for their inheritance". The house and money belong to the mother. She has the benefit of a large sum of money borrowed ten years ago that she doesn't have to worry about repaying, ever. She could live to be 120 and be laughing all the way to the bank, while the bank sucks up the shortfall when the house is eventually sold. The rest of the family has no automatic right to benefit from the arrangement. It's not their money!
 
On the other hand, 'Orla' said they had difficulty selling it, so may not be very rentable. Or, they are having difficulty achieving a sale price that returns the "inheritance" they want, which means it might also have difficulty achieving a rental return that outpaces the compound interest.
 
dub_nerd said:
The rest of the family has no automatic right to benefit from the arrangement. It's not their money!
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We can all take the moral high ground on these issues. As a parent I would like to leave some money to my children and grandchildren. I think most people would.
I also think that most children would like to inherit something from their parents. When the children begin to have an expectation or an elevated sense of entitlement is where the problems begin.
I think if we see our parents enjoying their life to it's fullest we are happy. Some people might see this in another way. They are squandering our inheritance type of attitude.

One of the above cases has received a lot of coverage in the media. The husband was not shown in a kind light. We don't know the story but he has now been identified because of the media coverage. He received circa €160k or did he? We actually don't know. Maybe he only received a portion of this and if so what happened to the rest of the money?

Was this half the value of the house at the time? Would the "husband" have been able to purchase a property for himself with his half during the tiger years?

Why has the daughter, after 10 years, decided to raise this issue? Why not after 5 years? Why not after 6 years? Why not after 7 years? Why not after 8 years? Why not after 9 years? Who paid the utility bills, insurance and maintained the property for the past 10 years? The mother?

What has changed? The mother has moved in with the daughter? The house still requires the same costs to run. The mother can continue to maintain it as she has done over the past 10 years. Maybe the daughter now sees the cost and what is involved in running this house. Why did she not see this over the past 10 years?

Or is there something else going on? Maybe.....why am I left to look after mother and deal with the empty house while the other siblings do nothing? I feel I should be paid for this.......maybe?
 
SoylentGreen said:
We can all take the moral high ground on these issues.
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And so we should!

SoylentGreen said:
As a parent I would like to leave some money to my children and grandchildren. I think most people would.
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Well then the best strategy is unarguable -- if you want to maximise your children's inheritance, don't borrow against the equity in your home.

The rest of your questions are, I feel, irrelevant. Why did the money have to be borrowed? Who got the money? Who supported the mother, then and now. What are the expectations on the part of the child? None of those are the concern of the bank. So what is the complainant's legitimate complaint about the bank, if any?
 
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SoylentGreen said:
Why has the daughter, after 10 years, decided to raise this issue? Why not after 5 years?
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This is a very good point.

Why did she not raise it when she got the letter of offer and saw
  • The interest rates was 6.5%
  • It was fixed for 15 years
  • The illustration showed that after 10 years, €300k would be outstanding.
I don't read the Irish Independent and then go back to the shop afterwards telling them that it was too dear and to give me half my money back.

This is what Orla is doing.

Brendan
 
It's a fantastic point. The answer is that the customer wants a two way bet. If property prices had skyrocketed, we wouldn't hear a peep about this.
 
Absolutely agree
I also recall the borrowers were required to in get independent legal advise.,,,
 
so whats the lesson here?... that the banks are the knights in shining armour coming to the rescue of these poor old people with big houses with greedy offspring??.. by the way are the banks still offering this wonderful service?.
I would think not..
 
The lesson here is that there are thousands of elderly people living in large mortgage-free houses who would like to continue living in these houses who need money for a variety of reasons - adapting the house to their needs; doing urgent repairs; paying for medical care; etc.

Those people should prioritise their needs over their children's inheritance.
Lenders should provide a product which allows those people to borrow the money and roll up the interest.
The media should not demonise those lenders ten years later when they seek recovery of the money lent and the children want to keep their inheritance intact and hope by lobbying Joe Duffy or Charlie Weston that they can embarrass the bank into giving them some write-off.

Hopefully the bank will ignore them.
 
Just wondering
1. Are these products still available?
2. If somebody has such an arrangement, how would this impact the Fair Deal Scheme?
 
mtk said:
Yes they met a real need
I remember querying a senior aib guy why didn't offer them - fear that this ( media rubbish ) might happen !
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Or the parent dies, and the offspring refuses to move out of the house (possibly with a bit of help from the likes of Jerry Beades )
 
When were such schemes discontinued? Specifically, pre or post the introduction of the Fair Deal Scheme in 2009? What I'm trying to understand is whether it would still be possible for a bank to offer such a scheme now with particular reference as to how such an offering would impact on the Fair Deal Scheme?
 
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