Good article by Brendan on mortgage arrears

Dave Vanian said:
SunShineBoy - my earlier question is of genuine interest to me - If you were asked by the Irish Indo to write a piece on what borrowers should do if they have difficulty repaying their mortgage, what points would you make?
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Presumably his article would have a "more human feel" anyway?
 
I am aware that this will seem like a chicken mealy-mouth fuzzy wuzzy thing to some of you... but I intend to return to my previous position of lurker on this site - learn what I can from reading other's posts without posting anything myself.

I have often heard it said that Ireland is 10 years behind America. In terms on Internet blogs/discussions/forums where you can debate subjects as rational adults.... we most certainly are !!!!

Bon Jour ( as Del Boy would say )
 
SunShine Boy said:
I have often heard it said that Ireland is 10 years behind America. In terms on Internet blogs/discussions/forums where you can debate subjects as rational adults.... we most certainly are !!!!
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Ah - I don't know - I think things are looking up on that front already ...
I am aware that this will seem like a chicken mealy-mouth fuzzy wuzzy thing to some of you... but I intend to return to my previous position of lurker on this site - learn what I can from reading other's posts without posting anything myself.
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Pity you didn't address Dave Vanian's question before scarpering. Oh well...
 
Dave Vanian said:
SunShineBoy - my earlier question is of genuine interest to me - If you were asked by the Irish Indo to write a piece on what borrowers should do if they have difficulty repaying their mortgage, what points would you make?
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Said in somewhat jest but nonetheless valid, hand back the keys and walk away from pouring money into a depreciating asset.

Extreme, maybe, but not beyond a reasonable assessment.
 
IFT said:
Said in somewhat jest but nonetheless valid, hand back the keys and walk away from pouring money into a depreciating asset.

Extreme, maybe, but not beyond a reasonable assessment.
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Presumably Sunshine Boy would not agree with you?
SunShine Boy said:
I am just saying to defaulters... try to work out a solution that least harms you and your family's long-term future rather than leaving yourself destitute by signing over everything you own to the bank.
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Dave Vanian said:
SunShineBoy - my earlier question is of genuine interest to me - If you were asked by the Irish Indo to write a piece on what borrowers should do if they have difficulty repaying their mortgage, what points would you make?
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Sorry... I can't go without responding to this... I was typing my good-bye b4 I seen it.

The points I would make are as follows:

Engage a good Solicitor.
Make a list of your Assets.
Make a list of your Debts.
Make a list of your income streams.
Can you obtain any more credit without being charged outrageous sub-prime rates (probably not).

In a nutshell - Try to negotiate to have as much as your debts written off/reduced as possible.

Don't keep making full payments to the Bank until your Assets have disappeared.

My parting gift to this discussion will be let Clubman agree with the above, say something condescending AND have the last word.
 
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whizzbang said:
Does anyone know why comments are not being published for this article?
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Maybe because of this from the Indo site?
 
IFT said:
Or maybe they are taking a similar line to how certain comments are not allowed on AskaboutMoney. ! No point rocking the boat.
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In case there is any confusion or suspected conspiracy here no posts have been moderated/deleted in this thread so far. I have no idea how the Indo run/moderate their site other than what their terms & conditions state. If anybody thinks that they are suppressing comments then they should contact the web people or the newspaper editor.
 
Thanks for responding. I just can't agree.

SunShine Boy said:
Can you obtain any more credit without being charged outrageous sub-prime rates (probably not).
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Are you recommending here that if a person has got into trouble with debt, they should explore the possibility of taking on more debt?

SunShine Boy said:
In a nutshell - Try to negotiate to have as much as your debts written off/reduced as possible.
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This is the one I have most trouble with. People have entered into a contract with a bank - the bank loans them money; they pay the money back with interest. But if they experience difficulty keeping up their end of the agreement, the bank should simply write off or reduce the debt? Why?

To turn it around, does that mean that if the bank experiences financial difficulty (it happens - see Bear Sterns etc.), they could come back to the borrower and ask to add, say, €100,000 onto the outstanding amount?
 
I would also take issue with SunShine Boy's suggestion that one should engage a solicitor. In most owner occupier PPR situations this should be unnecessary and an undesirable additional expenses given that once the mortgage holder talks to the lender early on and makes best effort to deal with the issue and service the loan to the best of their ability the courts (should it even get that far) will generally look very sympathetically on their case.

I also have a problem with the suggestion that people should actively seek to run away from debts rather than deal with situations which they have ended up in through their own volition.
 
Dave Vanian said:
Are you recommending here that if a person has got into trouble with debt, they should explore the possibility of taking on more debt?
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I presume what sunshine is referring to is the possibility of getting some of the debts refinanced at a lower interest rate.

But they have, banks have raised their margins on variable rate mortgages for existing customers. They have pulled finance on mortgages where six months and more ago they had agreed it.

I seem to remember from my very rusty abd very brief dip into contract law something about the balance of power in a contract and the onus this places on the party in power? (Or is that a completely different country?!).
 
ClubMan said:
I also have a problem with the suggestion that people should actively seek to run away from debts rather than deal with situations which they have ended up in through their own volition.
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I would disagree. It is a contract between two parties whereby one party agrees to loan another party monies in exchange for holding overright ownership of the asset. Should the party break the contract ( run away is an emotive word when it is, in fact, only a breach of contract ), the other party knowing of this risk still has overright ownership of the asset.

There is no 'dealing with situations' but can be, in some cases, a logical conclusion to an unreconcilable problem.

The risk of the contract is mutual but you seem to suggest that the lendee should be more responsible.
 
yoganmahew said:
I presume what sunshine is referring to is the possibility of getting some of the debts refinanced at a lower interest rate.
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Fair enough, although this would have to be done before the borrower experienced any difficulties, which would require remarkable foresight. If the borrower's income has reduced dramatically for some reason, or some loan repayments have been missed / paid late, they'll have no hope of switching to another lender.


yoganmahew said:
But they have, banks have raised their margins on variable rate mortgages for existing customers. They have pulled finance on mortgages where six months and more ago they had agreed it.
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Not the same thing at all. Banks have stayed within the terms of the agreed contracts, i.e. only amended variable rates for existing customers on Standard Variable Rates where the original loan offer specifically permits this.

I've seen no examples where a bank has gone back to a customer and asked them to renegotiate the original contract that was signed. All existing tracker rate rates have been untouched, ditto fixed rates.
 
Please keep the discussion on topic "The Brendan Burgess Indo article" and post about AAM moderation policy elsewhere.
 
I think that Brendan's article is very balanced and fair. This is Ireland , not N. America and in my humble opinio ,for the average person who has a morgage on an average house , his advise to let the bank know of one's changed circumstances is the correct one. I know of someone who was in very serious trouble and got immense help by being honest with the bank and it took a few years to get back on their feet , but they did, and held onto their home.
On the other hand people who have huge unsecured debt and live beyond their means and then get into trouble may not get that level of help. And should they?
As regards walking away from debt and handing back the keys, well you have to live somewhere and will end up paying rent, why not pay that amount back to the bank every month? If its an average house and as now. its hard to sell houses , surely the bank would prefer that rather than evicting you?
I'm just giving my opinion but from what I know of N America, going down the Chapter 11 (bankruptcy ) route is a very different situation to here.
So thanks to Brendan for his advise.
 
Well here comes the self confessed 'bankophile'....

Personally, I think Brendan's article is very fair (but there again I'm sure SunShine Boy would say what else would I say....)...

What frustrates me at times (and yes I know before everyone jumps on me that banks have centralised a lot of their lending/underwriting functions etc) - is that we are viewed upon as faceless entities - don't foget those of us in the front line share the same day to day challenges of raising families, paying mortgages etc etc as everyone else - so if you do get in to difficulty, please do talk with your banker (whoever he/she may be) - give that front line person the ammunition to fight your case for you, if you do you'll be amazed at what can be achieved - not talking with them, or feeding them committments that you know you can not keep will damage their credibility to represent both your case and others.

Don't think I've ever used AAM as a PR vehicle for my employer - but there again only others can judge that.

In summary - if you see any dark clouds on your financial horizon - take time to talk it through with your banker ....

Regards,


BM
 
Dave Vanian said:
To turn it around, does that mean that if the bank experiences financial difficulty (it happens - see Bear Sterns etc.), they could come back to the borrower and ask to add, say, €100,000 onto the outstanding amount?
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Have you heard about savings gone becuase a bank run into trouble? Guarantees only say up to 25K per account? And if say you have 100K in there and the bank goes bonkers you loose 75K just so?
What was the name of the rock-bank in England recenty?

So you don't have a full guarantee that all your savings are actually save. And every bank does a risk assessment and your interest rate will depend on it. Can you negotiate with a bank saying "I want 10% interest on my savings becuase I think you are likely to crush in the next two years?" Don't think so.
 
newirishman said:
Have you heard about savings gone becuase a bank run into trouble? Guarantees only say up to 25K per account? And if say you have 100K in there and the bank goes bonkers you loose 75K just so?
What was the name of the rock-bank in England recenty?
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You mean Northern Rock? The bank in which absolutely nobody lost a penny in deposits or interest?
So you don't have a full guarantee that all your savings are actually save.
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You do with Northern Rock. And you have more than the €20K or so under the Irish depositor protection scheme with some other banks that operate here that are regulated by other european national central banks/regulators (e.g. Rabo).

These points are not exactly central to the original article in question though...
 
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