Brendan Burgess
Founder
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There is no reason why a German or French bank would lend to its customers at 2. 64% when they could be making far more profits lending to Irish customers at 4.5%. They presumably believe the Central Bank figures that the additional rate in Ireland is only 0.5% so it's not worth bothering about.
Hi Jim
That is a good argument for German banks to reduce their total mortgage book. But if they are going to write new mortgages, why not write them at 4.5% in Ireland instead of 2.6% in Germany?
Anyone know who is behind Dilosk? I seem to remember hearing that they have funded the loan book with a loan from Bank of Ireland.Dilosk plans to grow its mortgage business in Ireland by offering new residential mortgage loans. The Company will offer mortgages to borrowers seeking to purchase or refinance residential property with a particular focus on residential investment properties (i.e. Buy-to-Let) located in the Republic of Ireland. Dilosk will offer borrowers an alternative source of financing to the traditional banking market.
The difficulty that I see for foreign lenders coming into the Irish market is the difficulties in getting the mortgage paid when problems arise for the borrower.
The legal system is costly and cumbersome.
There are quite a number of delaying tactics that can be used before you get to repossession.
Repossession could take around 6 years and a lot of costs in getting there.
If they go for a niche market they could find others chasing the same market which would cut their margins.
It maybe the case that we have relatively low repossessions in comparison to other countries with similar mortgage problems but borrowers will pay an extra premium on their rate for this.
There are always consequences for actions or inactions.
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