David Hall challenged on his forecast of a tsunami of repossessions

Brendan Burgess

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Interesting. 20,000 over 6 years is hardly a tsunami. With 600,000 mortgages in total in the country, 3,000 a year would probably be a reasonable "normal" level of repossession.

I estimate that there are about 7,000 legal proceedings in the system.
About 20% of these end in orders for possession, so, say around 2,000 which would be 1,000 this year and 1,000 next year.

It is not possible to have a tsunami of repossessions.
It is technically possible to have a tsunami of legal proceedings.
The lenders could probably lodge 40,000 legal proceedings though I suspect that they don't have the resources to even draft this number of proceedings.
The courts, the arrears teams and the legal teams would not be able to process them, so there would be delays between adjournments of around a year each time.

However, there has been an 80% fall in legal proceedings initiated since 2014. That could indicate a backlog or it could indicate that lenders realise that these proceedings are very slow, very expensive and pretty pointless.



Brendan
 

Leper

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A couple setting out in life pour all their savings and scrimp to buy a house. Their life is put on hold and they try to pay the mortgage every month. Their life is determined by what is left over after paying the mortgage. I remember paying interest rate of 19.75% to AIB Home Loans. If that happened these days there would be a revolution. Back in the day interest rates rose nearly every month . We gave up holidays, parked the car in the garage, shopped from meal to meal, begged for overtime at work, worked in part-time jobs that few would do, ignored Christmas and revived the old bike which was a life saver and under no circumstances turned on the immersion. In a nutshell we busted our butts to an extent at sometimes life appeared to be not worth living (I don't say this lightly). Miss a mortgage payment and the bank were on your case in a flash threatening you with eviction, demanding return of your cheque book and generally making you feel like you were a leech of society.

In the meantime local authorities handed out homes like confetti to many who faked earnings etc and later offered these properties for sale to the same tenants at a fraction of their value . Eventually, the banks handed out huge loans that never had a snowball's chance in hell of being repaid. The price of property rocketed and very soon many found themselves in negative equity. The financial crash came and the banks cried like a two year old dispossessed of a licked lolly pop.

From where I sit David Hall is representing many who abide by the rules and for some reason or other just could not keep up loan repayments. I am not talking about the people who bought to let or such like and never repaid a penny; these are scroungers. But, there must be some middle ground where people who tried their best to pay can be facilitated without being condemned to penury.

It is very easy to sit pontificating about others on the high moral ground and many think they will never see a poor day. Life is strange and none of us can see too far ahead.
 
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noproblem

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Good man Leper, none can see too far ahead, but an awful lot thought they could see everything regardless of distance and jumped on the bandwagon. Bandwagon ran out of diesel and now they won't pay at the pumps to refill. A good long walk won't do some of them any harm at all and I bet they'll measure the distance next time.
 

Brendan Burgess

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38,156
From where I sit David Hall is representing many who abide by the rules and for some reason or other just could not keep up loan repayments. I am not talking about the people who bought to let or such like and never repaid a penny; these are scroungers. But, there must be some middle ground where people who tried their best to pay can be facilitated without being condemned to penury.
Hi Leper

Very interesting post.

I have always advocated that the borrowers who are in trouble but who are engaging deserve protection and help.

I have strongly, if unsuccessfully lobbied, that the Housing Assistance Payment - HAP - should be extended to helping mortgage holders
who would qualify for social housing, who can't afford their mortgage. I don't see why we pay renters but not home owners.

But I want to see the thousands of people who pay very little and who duck and dive, repossessed quickly. Now, to my astonishment, David Hall is calling for it too: Wow! Hall: We need legislation to accelerate repossessions of those who don't engage within three months

I have also criticised the Central Bank rules for forcing the banks to sell NPLs.

But I have no problem at all with the banks selling the thousands of mortgages of those who don't pay.

David Hall does great work, but he makes these wild statements about tsunamis of repossessions and the bullying and harassment by vulture funds which really scares the life out of people. Not only does this scaremongering really cause great distress, it causes the politicians to make stupid policies instead of focussing on legislation which would help people, for example
  • controlling mortgage rates or banning cash back
  • extending HAP to mortgage holders
  • Obliging vulture funds to offer the same mortgage rates which the selling bank offers
Instead of analysis, we have shouting matches.

Brendan
 

The Horseman

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Hi Leper

Very interesting post.

I have always advocated that the borrowers who are in trouble but who are engaging deserve protection and help.

I have strongly, if unsuccessfully lobbied, that the Housing Assistance Payment - HAP - should be extended to helping mortgage holders
who would qualify for social housing, who can't afford their mortgage. I don't see why we pay renters but not home owners.

But I want to see the thousands of people who pay very little and who duck and dive, repossessed quickly. Now, to my astonishment, David Hall is calling for it too: Wow! Hall: We need legislation to accelerate repossessions of those who don't engage within three months

I have also criticised the Central Bank rules for forcing the banks to sell NPLs.

But I have no problem at all with the banks selling the thousands of mortgages of those who don't pay.

David Hall does great work, but he makes these wild statements about tsunamis of repossessions and the bullying and harassment by vulture funds which really scares the life out of people. Not only does this scaremongering really cause great distress, it causes the politicians to make stupid policies instead of focussing on legislation which would help people, for example
  • controlling mortgage rates or banning cash back
  • extending HAP to mortgage holders
  • Obliging vulture funds to offer the same mortgage rates which the selling bank offers
Instead of analysis, we have shouting matches.

Brendan
When the HAP payment is paid to mortgage holders does the State get shared ownership of the property. What about the person who bought an identical house at the same time in the same location but is meeting their mortgage obligations without any help.

If the State does not get something back from this you then have a situation where two separate properties were bought at the same time in the same place. At the end of the mortgage one party has paid more than the other (as they will receive HAP subsidy) but yet both parties end up with the same value property. How is this fair?

This again goes against those who do the right thing and get screwed again!
 

Leper

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887
1. In my later working days as an unpaid trade union rep there wasn't a month went by without some member approaching me looking for advice regarding mortgage repayments and arrears. Their biggest concerns were (a) The bank were not engaging (b) The amounts of arrears were increasing (c) Letters were arriving regarding threats of eviction, penalties etc.

2. These people paid what they could and showed me receipts of payment, letters from the banks and written summaries of telephone calls from the banks point-of-view. You could not include such people in the "won't pay anything brigade."

3. In the recession negative equity set in and people owned houses that were worth less than what was left to pay. Even the banks knew repossession was a bad deal and somewhat laid off on their customers.
,
4. Property prices jumped again after the recession. Suddenly, the banks were on to this like locusts and (i) Repossessions were once again an option for them (ii) Selling off any loans in arrears to a Vulture Fund. Repossessions were always considered bad news and so the Vulture Fund has become the easier option.

5. I bet that the Vulture Funds took possession of the outstanding loans quite cheaply. Therefore, I see no reason why the banks could not engage with their customers more favourably. I am not saying that loans should be written off. But, even a Leper without financial qualifications (or for the record no qualifications whatsoever) can see that there are options e.g. extending the term of the loan. I can think of more options too.

6. Is David Hall scaremongering? No, he's not. He is saying what he believes and he says it well. Then a certain person says that people in arrears are better off dealing with Vulture Funds (described as "rubbish" by David Hall). I agree with him. I predict that repossessions will become more widespread too.

7. How many people committed suicide because of the behaviour of the banks? How many people self-harmed while trying to take their own lives? The answer is we don't know, but thinking these did not happen is crazy. There isn't a house in the country worth a drop of blood, let alone suicide. Lose sight of this and you might as well take out shares in a Vulture Fund.

8. I have no sympathy whatsoever with people who took out loans and just refused to repay anything. But you see, the banks have a major problem here. They gave out the loan and nothing is coming back in their direction. Eventually, the banks will crawl to these mortgagees and perhaps settle for something rather than nothing. The cannon fodder are those genuine people that try to pay as much as they can afford. It appears the bank is treating them with contempt by not entering into worthwhile negotiations.

9. Do we need David Hall? Yes we do. He is filling a need created by the banks. The banks can only blame themselves for the emergence of David Hall.

10. You're earning well, you're in line for promotion, your bonus payments are always on track, life is good etc etc. Can these change? - Yes they can and considerably faster than you think. You don't know when misfortune will hit you. Your job can cease, somebody can get seriously ill, divorce can happen etc etc. Who can say that none of these will happen? If they do happen, can you afford to keep paying the mortgage?

11. When the banks need to increase their profits, they can come up with plans. I'm sure even they can come up with something to assist genuine defaulters with mortgage repayments. Even I can offer some solutions, so can they, if they wish.


The Bottom Line here is we need the banks to engage with its customers. Anything else is a disaster.
 
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Dazzler123

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Messages
62
1. In my later working days as an unpaid trade union rep there wasn't a month went by without some member approaching me looking for advice regarding mortgage repayments and arrears. Their biggest concerns were (a) The bank were not engaging (b) The amounts of arrears were increasing (c) Letters were arriving regarding threats of eviction, penalties etc.

2. These people paid what they could and showed me receipts of payment, letters from the banks and written summaries of telephone calls from the banks point-of-view. You could not include such people in the "won't pay anything brigade."

3. In the recession negative equity set in and people owned houses that were worth less than what was left to pay. Even the banks knew repossession was a bad deal and somewhat laid off on their customers.
,
4. Property prices jumped again after the recession. Suddenly, the banks were on to this like locusts and (i) Repossessions were once again an option for them (ii) Selling off any loans in arrears to a Vulture Fund. Repossessions were always considered bad news and so the Vulture Fund has become the easier option.

5. I bet that the Vulture Funds took possession of the outstanding loans quite cheaply. Therefore, I see no reason why the banks could not engage with their customers more favourably. I am not saying that loans should be written off. But, even a Leper without financial qualifications (or for the record no qualifications whatsoever) can see that there are options e.g. extending the term of the loan. I can think of more options too.

6. Is David Hall scaremongering? No, he's not. He is saying what he believes and he says it well. Then a certain person says that people in arrears are better off dealing with Vulture Funds (described as "rubbish" by David Hall). I agree with him. I predict that repossessions will become more widespread too.

7. How many people committed suicide because of the behaviour of the banks? How many people self-harmed while trying to take their own lives? The answer is we don't know, but thinking these did not happen is crazy. There isn't a house in the country worth a drop of blood, let alone suicide. Lose sight of this and you might as well take out shares in a Vulture Fund.

8. I have no sympathy whatsoever with people who took out loans and just refused to repay anything. But you see, the banks have a major problem here. They gave out the loan and nothing is coming back in their direction. Eventually, the banks will crawl to these mortgagees and perhaps settle for something rather than nothing. The cannon fodder are those genuine people that try to pay as much as they can afford. It appears the bank is treating them with contempt by not entering into worthwhile negotiations.

9. Do we need David Hall? Yes we do. He is filling a need created by the banks. The banks can only blame themselves for the emergence of David Hall.

10. You're earning well, you're in line for promotion, your bonus payments are always on track, life is good etc etc. Can these change? - Yes they can and considerably faster than you think. You don't know when misfortune will hit you. Your job can cease, somebody can get seriously ill, divorce can happen etc etc. Who can say that none of these will happen? If they do happen, can you afford to keep paying the mortgage?

11. When the banks need to increase their profits, they can come up with plans. I'm sure even they can come up with something to assist genuine defaulters with mortgage repayments. Even I can offer some solutions, so can they, if they wish.


The Bottom Line here is we need the banks to engage with its customers. Anything else is a disaster.

But the banks have engaged and options have been availed of in their tens if not hundreds of thousands...

These include term extensions, interest rate reductions, writeoffs, split mortgages, pia's, bringing another borrower in, moratoriums on payments and multitudes of other arrangements.

Those who will engage have done. What is left are those that will not engage or will not play fair by reneging on agreements, or not being fully truthful about their income and/or assets.
 

Leper

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887
From Palerider (a good poster on this forum) written 8th March 2019 on another thread:-

"I have mediated between debtors and vultures, it is not pleasant, I have no interest in doing so ever again.

Some observations...

A. Where they have good security they hold out for full repayment.
B. They are very slow to engage with the legal process, it takes them years in most cases before they might go into Court.
C. Their business model is not working in Ireland, the legal system is cumbersome, slow and expensive, the protections for debtors in most cases such as this one allow procrastination.
D. The legal profession are the winners as are the Auctioneering houses especially those that specialise in distressed sales.

Still, this case surprised me and will frighten vultures away from this country, vultures are necessary to have a functioning banking system and this high profile case is counter productive to the needs of the country."
 

Brendan Burgess

Founder
Messages
38,156
Leper
You are missing the point completely.

The banks have restructured 120,000 mortgages. They didn't do this through not engaging with their clients.

Of course, there are cases where the banks have not engaged properly. I see it all the time. But they have engaged often enough to restructure 120,000 mortgages.

And be absolutely clear, if you have a client who is engaging with their bank and paying something meaningful, and the bank won't engage with them, but seeks a repossession, the bank hasn't got a hope in hell of succeeding.

Brendan
 
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