David Hall challenged on his forecast of a tsunami of repossessions

[Purple]

On the whole the work he has done and the transformative nature of his work for ordinary people pitted against the banks far outweighs any less positive aspects.

What's an ordinary person?

You could equally say the banks, the govt, the ECB, the troika , the builders did huge damage as well as him - that's the realpolitik. Hall is is in the ha'penny place of damage creation than those above.

The Troika and the Governments that followed the crash have generally done a good job, realpolitik considering. David Hall make scaremongering predictions, based from on nothing what I can see, and that has resulted in hundreds of million in bad spending by the government and hundreds of million in higher mortgage repayments by younger, possibly ordinary, people.

 

[Leo]

What's an ordinary person?

The small minority who benefited from deals, not the majority of us who are paying higher mortgage rates.

 

[lff12]

The small minority who benefited from deals, not the majority of us who are paying higher mortgage rates.

Exactly - I think Hall has been a good advocate for those with arrears, but the crux for me is that many of his ideas & plans are hugely costly & only help a very tiny few. 6000 owner occupiers is not a lot when you consider that there are 720,000 PDH mortgages out there. And the costs of that 6000 get passed to the bulk of that 714,000 mortgage holders, including a good number of the 47,000 who are in arrears, and about 66000 restructured, many whom are bearing the cost of subsidising the minority that are not paying, in IMHO arrangements, or other favourable restructured arrangements.
And it also incidentally, hasn't benefited tenants, as many BTL mortgages got short shrift compared to OO mortgage holders, at the expense of their tenants who were subjected to changes of owner or eviction for sales - who are probably paying even more than average mortgage holders.

 

[Protocol]

Here is a blog post b y Seamus Coffey of UCC about repossessions:

The Ongoing Trickle of Repossessions

The latest mortgage arrears statistics from the Central Bank provide an update for the end of September (Q3) 2023. They show there continues...

economic-incentives.blogspot.com

 

[Delboy]

‘The low level of legal proceedings needs to be clarified’ – banks and vulture funds accused of giving homeowners in arrears ‘free houses’

A leading mortgage arrears campaigner has questioned why banks and vulture funds are not taking action against people who don’t make payments on their home loans.

www.independent.ie

David Hall is wondering why there are no repossessions happening!!!
He must know of some really rotten defaults happening when he's saying that some level of repossessions are needed.

 

[presidenttttt]

I think I agree with him on the general point of repossessions being low (while not agreeing with scummy vulture fund charging above market rates- although no man on the street is allowed to say they agree with mortgage providers. Excluding the short term volatility of mortgage rates in past 18 months, Irish people have paid far higher interest rates on mortgages, in a large part I believe because providers do not enter the market due to risk, risk of complexity of securing their asset when someone isnt paying. It is something like 6 months in Denmark from missed payment to repossession, and while that seems the other end of the extreme it must be anything between 6 and 16 years in Ireland?

 

[Purple]

I think I agree with him on the general point of repossessions being low (while not agreeing with scummy vulture fund charging above market rates- although no man on the street is allowed to say they agree with mortgage providers. Excluding the short term volatility of mortgage rates in past 18 months, Irish people have paid far higher interest rates on mortgages, in a large part I believe because providers do not enter the market due to risk, risk of complexity of securing their asset when someone isnt paying. It is something like 6 months in Denmark from missed payment to repossession, and while that seems the other end of the extreme it must be anything between 6 and 16 years in Ireland?

I agree with that though I don't see a problem in general with lenders charging higher rates on higher risk loans.

 

[presidenttttt]

I agree with that though I don't see a problem in general with lenders charging higher rates on higher risk loans.

Sure, makes sense, but practically asking someone to pay 8% when they can barely afford to repay at 3% is just destroying people- the loan shouldn't have been issued in the first place.

Ironically, to your point, lenders typically don't define interest based on risk. I'm surprised the big players don't assess individually- are they allowed?

I'm expecting the smart banks like Revolut to analyse my data and offer us a rate in line with risk. Of course the people who don't need cheap money will get it then but back to your point that higher risk should mean higher rate...

 

[lff12]

This point cannot be stressed enough.

Terry O'Malley in the Central Bank did a paper on this last year. Look at table 1.

View attachment 3895

The sample is only for owner occupiers in arrears of two years or more. Of this group the average mortgage holder has an LTV of 90%, an age of 49 and 15 years remaining on the mortgage. This does not look particularly unsustainable to me.


A quarter of this group have a property valued LTV of 24% or less, a property worth €176k or less, a rate of 1.2% or less and a monthly instalment of €440 or less. This is a completely sustainable mortgage even for a family on benefits and will pay for itself immediately if rented out. These people are only in arrears for two years or more because they know that the legal system is borrower friendly and lending is much cheaper than an overdraft or a credit card.

End of the day they string it out for a few more years, and the lender takes their entire estate. Its the children of these people that I do feel sorry for.

 

[lff12]

I agree with that though I don't see a problem in general with lenders charging higher rates on higher risk loans.

Exactly - if that isn't the case we are straight back to 2010 and 2011 were most people couldn't get a loan at all. That's where a dogged insistence ends up.

 

[lff12]

On the whole the work he has done and the transformative nature of his work for ordinary people pitted against the banks far outweighs any less positive aspects. None of us are perfect. You could equally say the banks, the govt, the ECB, the troika , the builders did huge damage as well as him - that's the realpolitik. Hall is is in the ha'penny place of damage creation than those above.

"the transformative nature of his work for ordinary people" ensured that ordinary people couldn't get any kind of mortgage for about 8 years, house prices sky rocketed again minus the necessary new builds, and now here we are.