General discussion of the issue (removed from public meeting thread)

I agree with Brendan's post. It's not about the fact that my neighbour is on a cheaper rate or a tracker, it's the fact that I am paying for loss making products, this is something that was not made clear to me when taking out my mortgage. I expected that my rate would change in line with the cost of funding, as was the case prior to 2008. Banks hold all the power and not having to justify increases or make clear what the make-up of the SVR is a disgrace.
 
Sarenco said:
Danske's SVR rate is particularly egregious. Personally, if I was in very significant negative equity I would seriously consider defaulting.
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That advice needs to be taken very carefully and only after a thorough checking of all financial information of a person. You cannot just state that people should default, there are severe financial implications for doing so.
 
Eureka101 said:
b) which banks banks are prepared to accept you if you are in negative equity?

.
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As you cannot switch you them must try and put yourself in a situation where you can switch. By overpaying your mortgage if possible.

Please note that people may not even have to switch, there are posters on this website who have confirmed the mere fact of telling their current bank they were going to switch promted their bank to reduce the rate. Some though had to go as far as getting their solicitor to call up the title deeds, this shows a bank one means business.

If a lot of people started switching it would prompt banks to reduce rates. It's all about competition. Because customers are so inert it makes banks complacent.
 
Bronte said:
That advice needs to be taken very carefully and only after a thorough checking of all financial information of a person. You cannot just state that people should default, there are severe financial implications for doing so.
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I did not state that people should default. I said that, personally, if I was in very significant negative equity and was being charged Danske's egregiously high rate, I would seriously consider defaulting. I offered no advice whatsoever in this regard.
 
Sarenco said:
For the record, I have zero problem with anybody that walks away from a mortgage if it no longer makes sense for them financially to continue to make payments, even if they can afford to do so. I suspect most people would have a moral problem with this view.
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I suspect most people would have no moral problem with your view. Morality went out of the equation in this matter when these banks were bailed out, subsequently refused to deal flexibly with the crisis, and latterly decided to stiff their captive SVR customers.

What is driving our continued sheep-like compliance are warped notions of respectability and duty, blended with straightforward fear of the consequences of taking action.
 
keepon said:
I suspect most people would have no moral problem with your view. Morality went out of the equation in this matter when these banks were bailed out, subsequently refused to deal flexibly with the crisis, and latterly decided to stiff their captive SVR customers.

What is driving our continued sheep-like compliance are warped notions of respectability and duty, blended with straightforward fear of the consequences of taking action.
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I suspect you may have misunderstood me. I have no moral problem with somebody who is so far underwater with their mortgage that they make a rational decision to strategically default on their loan, in full knowledge of the consequences of their actions (i.e. loss of the property and possible bankruptcy).

I have a major problem with our current system where there are no apparent consequences for defaulting (or at least where any possible consequences are deferred for an extended period).
 
Am I the only person in Ireland who struggles with (a) the clear obsession we have with property and (b) the clear lack of responsibility across both persons and institutions. This is so evident in Ireland today, and more and more as the election draws closer.

Personally I feel the banks are not capable of acting responsibly - they have not shown this in celtic tiger years and not shown this subsequently. Reality is they need regulation and strong regulation at that, especially in areas of public interest. For mortgage lending, I have no issue with the 80% LTV and 3.5 LTI limits, but Income in my view should be your tax return to the revenue and averaged over the previous 3 years.

The only thing that would make banks truly responsible in my view is to share the risk with them. If a customer provides 20% deposit and pays the mortgage off each month, if they fall into arrears and the security is in negative equity, the customer should be able to walk free. They have lost their 20% deposit and all the payments they have made into it, so the bank should also lose something. But this means there has to be a realistic process for recovery of the security and right now this is not happening and is unlikely to happen any time soon.

But to do this, it involves the house being treated as security rather than a home. Sadly in financial terms its security on the loan, and in society terms its a home.

Until this issue is resolved, Ireland will continue to pay high SVR rates as these are the customers paying for those in arrears. It is not the trackers that are being subsidised but those in arrears. Sadly this harsh reality is not 'media friendly' so being ignored by enlarge. And on-going efforts of the government to keep those in arrears in their homes will only continue to make the problem worse for SVR mortgage holders.

The reality is any 'intervention' by the government must be pragmatic and swift, and needs to include a charge on the property to stop it being transferred or sold without the charge being released. It is not realistic to have the state write down/pay down mortgages for individuals from tax payers funds without some of restriction being imposed.

*for the record I am an SVR customer with BOI currently*
 
highsvr said:
I will attend meeting also. Thanks for all the great work in highlighting this issue. Think the key is political pressure and election, whatever party promises to resolve the issue could be getting huge number of votes!
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A politician's promise. Really?
 
Hi MorgVar

Could you tell us what specifically you would like our elected representatives to do (or promise to do)?

Genuine question.
 
MorgVar said:
. Our message must go way beyond this website if we are to have any impact eg its disappointing only approx 350 likes on facebook page to date- needs to be many thousands. .
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That sounds very low to me, so maybe this issue does not impact as many people as we would be led to believe. Maybe it's because it's Easter. Maybe it's because someone needs to organise this.

As a high variable rate mortgage holder on an investment property your campaign to reduce rates comes too late in the day for me as it will have little impact. But I support the campaign if it doesn't mean it make things worse for PTSB returning to normal which is as far as I can see what needs to happen. Ideally repossessions need to happen, and they are not, the market if not function, and there is a reason banks are not pursuing buy to let mortgages, which I suspect it because the loans are too high compared to the underlying asset.
 
GNf . Like your comments .
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Have you any suggestions on how to get Mr Banker to reduce rates?, Mr Government to act?.Mr Customer to react?
 
We could try sending them all a copy of the film its a wonderful life lol this is an emotional film about one mans fight against the banks and people standing together. But I wouldn't say any of them would have an emotional bone in their bodies the way they are treating the people that bailed them out.
 
Like Deanes suggestion.
1. Review any other product you have with your Bank and see can you move it.{make sure it doesn,t move to another SVR bandit}
2. Like Kerrigans,suggestion.
Stop DD and pay with cash.
 
Sarenco said:
Hi MorgVar

Could you tell us what specifically you would like our elected representatives to do (or promise to do)?

Genuine question.
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I do not speak for Mr MorgVar but I am inclined to agree with him.

For my part, I would like our elected representatives to acknowledge that public policy on mortgage arrears and repossessions has undermined competition in the mortgage market. That this has both enabled and made it commercially attractive for banks to raise interest rates for variable rate customers at a time when their borrowing cost have fallen significantly. That consumers need to be protected in this environment and that it is just and appropriate to legislate for a cap on the rate of interest banks can unilaterally impose.

Politics is all about balancing competing interests and I think SVR customers paying higher than average interest rates are deserving of some form of protection.
 
Sarenco said:
I have a major problem with our current system where there are no apparent consequences for defaulting (or at least where any possible consequences are deferred for an extended period).
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I have no such problem, especially if it's the family home that's in question. If it's not, then the investor's back is not so hard against the wall and it might be different, I dunno.

We need to get past moral finger-wagging here. There currently are plenty of homes being repossessed by the banks, for whom as we all know 'consequences' are a remote concept preserved for others, with the tacit support of the government and CB. That is the reality of the current system.

Collective defaulting, or threatening to do so, was raised in this thread as an option for forcing SVRs to reasonable levels. That is not a moral issue, or even a particularly revolutionary one, since refusing payment is a perfectly normal response to massive over-charging. Of course, it needs to be considered carefully in tactical terms.
 
keepon said:
I have no such problem, especially if it's the family home that's in question. If it's not, then the investor's back is not so hard against the wall and it might be different, I dunno.

We need to get past moral finger-wagging here. There currently are plenty of homes being repossessed by the banks, for whom as we all know 'consequences' are a remote concept preserved for others, with the tacit support of the government and CB. That is the reality of the current system.

Collective defaulting, or threatening to do so, was raised in this thread as an option for forcing SVRs to reasonable levels. That is not a moral issue, or even a particularly revolutionary one, since refusing payment is a perfectly normal response to massive over-charging. Of course, it needs to be considered carefully in tactical terms.
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I'm not sure if you are accusing me of moral finger-wagging but it is patently untrue to say that there are "plenty" of homes being repossessed by the banks. The number of repossessions to date has been minuscule.
 
Bomb Voyage said:
I do not speak for Mr MorgVar but I am inclined to agree with him.

For my part, I would like our elected representatives to acknowledge that public policy on mortgage arrears and repossessions has undermined competition in the mortgage market. That this has both enabled and made it commercially attractive for banks to raise interest rates for variable rate customers at a time when their borrowing cost have fallen significantly. That consumers need to be protected in this environment and that it is just and appropriate to legislate for a cap on the rate of interest banks can unilaterally impose.

Politics is all about balancing competing interests and I think SVR customers paying higher than average interest rates are deserving of some form of protection.
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Hi Bomb Voyage

I am in full agreement with your analysis that the policy response to date on mortgage arrears and repossessions has undermined competition in the mortgage market and has lead to an inappropriately high cost of credit in Ireland.

it seems to me that the SVR campaign should be calling on Government for a change in its policy approach and should be making specific proposals in this regard. Simply complaining about high SVR mortgage rates without making any specific proposals is surely an empty gesture.
 
paul_5.65 said:
4 years ago, the EBS withdrew their so-called fixed-rate product. When I inquired as what was to stop them putting up their interest rate to say 10% they told me they were legally entitled to do so. Anyway, I panicked & fixed at 5.65%. Six months later they reintroduced their fixed rate, I guess job done as far as they were concerned.
You see, when you sign a mortgage here in Ireland you are in effect acting as guarantor to the banks other "investments".
How this works is the bank bundles a chuck of mortgages together and uses them as collateral to borrow money from German and French banks. The reason these mortgages are so valuable to Banks is because of the magic words on the mortgage "the bank may increase rates from time to time given market conditions".
Apparently both the financial regulator, nor the central bank see anything wrong with this.
Take me for instance. Ted McGoven of EBS borrowed over a Billion euro to which he gave away to some "high net worth" individuals.
Of course the collateral was made of cards and NAMA had to take on the bad loans.
What EBS customers did not realize is when we signed a mortgage contract with EBS we were covering Ted's losses.
How the exchequer got us to do that was subsidize AIB's tracker book.
If there was a way to legally prove that a mortgage contract cannot be used as collateral for other lending by a bank.
In the EBS's case, they could not have accessed their developer loans without using mortgages as a guarantee to the loans, and since I did not give permission to the EBS to use my mortgage as a method for them to take on monster loans then I believe there is a case against either the financial regulator for allowing this to happen, or the EBS. (Examine your mortgage contract an see if you have given the bank permission to use your mortgage to guarantee their other loans.
Forget about going down the SVR rate reduction route, cut to the chase and take a class action suite against the banks and financial regulator.
What do ye say
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Not sure if you can take a class action under irish law
 
As a SVR customer with former Danske (now Pepper) on the 4.95% rate, I was wondering that if there is some reduction on the SVR interest rates would this only affect the banks like BOI, AIB, KBC, PTSB etc or would an asset management agency be obliged to pass on a reduction ?

In negative equity ourselves so can't switch to a main bank but thinking worst case scenario, for us, is that from consumer and political pressure the main banks make an allowance on their interest rates and we will miss out as we are stuck with this asset management agency, unless of course we were to get some relief from a favourable decision in the Millar case.
 
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