What do have in mind in terms of your suggested "interim regulation" of SVRs?
"Minister Noonan has not asked the banks to reduce variable rates" - Indo
- Thread starter tonymac
- Start date
What do have in mind in terms of your suggested "interim regulation" of SVRs?
I meant that if for whatever reason the current govt is reluctant to implement a full-blown regulation so as not to scare competition away, at least they could have implemented caps or what you suggested for an interim period of say 5 years so that people who bought during the boom and are still in NE and therefore cannot switch are protected. In 5-7 years, no NE, can switch, regulation is not so urgent then. I misspoke, meant regulation for an interim period or something.
I know about mortgage arrears, but don't you see that by keeping rates so high they may be contributing to high levels of defaults, that is, the process becomes self enforcing? I don't know if a likely defaulter profile is someone with SVR, or a tracker. All things being equal though, someone on a SVR is more likely to default I think. But quite frankly I begin to see the situation borderline intolerable: the govt line is we do not want to meddle so as not to scare the competition away, and the banks' line is that the rates are high because we cannot recover our assets. At this stage I don't really care if they choose regulation or repossessions, I just wish they did one or the other.
Well if a mortgage rate cap based on average market rates makes sense in principle, I don't really see why it should only be introduced on an interim basis. The French introduced their statutory cap equivalent to 133% of the average rate on all outstanding mortgages as long ago as 1966!
I take your point that higher mortgage rates may well be contributing to higher default rates and I certainly wish the government would grasp the nettle and deal conclusively with mortgages with long term arrears in an expeditious manner.
I take your point that higher mortgage rates may well be contributing to higher default rates and I certainly wish the government would grasp the nettle and deal conclusively with mortgages with long term arrears in an expeditious manner.
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I don't know about the other point, I don't understand why you think we should move on like it never happened. Do you think the majority of taxpayers in Ireland are not mortgage-holders or the family members of mortgage-holders? I just googled and got "At end-March 2015, there were 757,175 private residential mortgage accounts for principal dwellings."
If you multiply by 2 (2 spouses) and consider that mortgage-holders are in labour force, i.e., not in education or pension, you may in fact get a majority of taxpayers with mortgages. Or close to 50%, dunno. So I think a taxpayer and a mortgage holder most of the time is the same person. My numbers are wrong, you reckon?
Please do not discard the fact that many people during the boom who also had deposit accounts used them for down payments on houses. This money is now gone, evaporated. But performing SVR mortgages yield good profits to the banks, too good. And I would like some kind of acknowledgement that I, as a taxpayer, injected my share of taxes in that bloody bank that could reciprocate a bit. I certainly get it that different taxpayers care about different things but imho the issue of arbitrary mortgage rates and the fact that they are offered by the very banks that the irish taxpayers saved is of sufficient magnitude to warrant public discussion.
If you multiply by 2 (2 spouses) and consider that mortgage-holders are in labour force, i.e., not in education or pension, you may in fact get a majority of taxpayers with mortgages. Or close to 50%, dunno. So I think a taxpayer and a mortgage holder most of the time is the same person. My numbers are wrong, you reckon?
Please do not discard the fact that many people during the boom who also had deposit accounts used them for down payments on houses. This money is now gone, evaporated. But performing SVR mortgages yield good profits to the banks, too good. And I would like some kind of acknowledgement that I, as a taxpayer, injected my share of taxes in that bloody bank that could reciprocate a bit. I certainly get it that different taxpayers care about different things but imho the issue of arbitrary mortgage rates and the fact that they are offered by the very banks that the irish taxpayers saved is of sufficient magnitude to warrant public discussion.
I certainly don't think "we should move on like it never happened" - whatever gave you that impression?
Yes, at end-March 2015, there were 757,175 private residential mortgage accounts for principal dwellings in Ireland (the majority of which would not be SVR mortgages). That's out of a total population of around 4,635,400, the vast majority of whom (directly or indirectly) pay taxes. You don't have to be in employment to be a taxpayer.
While there may be some emotional appeal to talking in terms of "we bailed out the banks, it's just not fair!" - it doesn't actually get you anywhere.
The net margin on SVRs is very high - no debate. I have suggested one approach to addressing this issue that should have no material cost implications for taxpayers.
Yes, at end-March 2015, there were 757,175 private residential mortgage accounts for principal dwellings in Ireland (the majority of which would not be SVR mortgages). That's out of a total population of around 4,635,400, the vast majority of whom (directly or indirectly) pay taxes. You don't have to be in employment to be a taxpayer.
While there may be some emotional appeal to talking in terms of "we bailed out the banks, it's just not fair!" - it doesn't actually get you anywhere.
The net margin on SVRs is very high - no debate. I have suggested one approach to addressing this issue that should have no material cost implications for taxpayers.
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Perhaps I misunderstood but somehow you treat the existing banks as typical businesses in a marketplace and we should discuss rationally their rates, whether to switch, etc. I feel like something is missing here. I am perplexed that the very banks that brought the economy to the brink now behave like it never happened and instead of reducing the rate of the affected customers they offer "2% cash back" offers to new customers and the new cycle of life continues. I can not see them as normal businesses though, normal business are allowed to fail.
My point in "we should [not] move on like it never happened" is that if we introduce govt regulation in a marketplace by bailing them out, or if we regulate house prices now (mandated LTV and LTI) that ensures owners like myself would never be able to recover our investment at the prices bought, why not also regulate mortgage rates for people who lost deposits aka down payments? If they say A, why not say B? I assume my responsibility for losing all my money and taking on too much debt. The bank should assume responsibility for inexplicably relaxing their lending criteria. The question is not only if it is fair or not, it is also if the mortgage contract benefits both parties, i.e., if it is sustainable. If one party sees the contract is not fair, ultimately it is not very sustainable. Maybe I cannot switch now. But the moment I can, I will. I will switch even if another bank offers the same rate. How can the BOI not see that?
My point in "we should [not] move on like it never happened" is that if we introduce govt regulation in a marketplace by bailing them out, or if we regulate house prices now (mandated LTV and LTI) that ensures owners like myself would never be able to recover our investment at the prices bought, why not also regulate mortgage rates for people who lost deposits aka down payments? If they say A, why not say B? I assume my responsibility for losing all my money and taking on too much debt. The bank should assume responsibility for inexplicably relaxing their lending criteria. The question is not only if it is fair or not, it is also if the mortgage contract benefits both parties, i.e., if it is sustainable. If one party sees the contract is not fair, ultimately it is not very sustainable. Maybe I cannot switch now. But the moment I can, I will. I will switch even if another bank offers the same rate. How can the BOI not see that?
You alleged that I equated the interests of taxpayers with those of mortgage holders but you equally equate the interests of taxpayers with those of non-mortgage holders. There is no such a thing as "the taxpayer" in general, we all have different preferences and goals, correct? A taxpayer with kids wants better education, a taxpayer without kids wants something else. A taxpayer in Dublin wants metro north, a taxpayer in tipp town does not care. If the current regulation that places brakes on house prices benefits taxpayers without houses who want to buy at the disadvantage of taxpayers who are house owners (not only those who want to sell but also those who want to switch but have a high LTV), you cannot say it benefits "the taxpayer" in general, it benefits specific taxpayers. I think that the number of taxpayers who happen to be mortgage holders is large enough (whether you multiply 760K by 2 spouses or by 4, the median family in Ireland) to see that there is a large group of taxpayers who may want a lower rate in return for their bail out. I don't think it is emotional, it is commonsensical.
"The net margin on SVRs is very high - no debate." Yes, not debate here. Noonan seems to be the only one who does not see that. Pity he is the only one who matters.
"The net margin on SVRs is very high - no debate." Yes, not debate here. Noonan seems to be the only one who does not see that. Pity he is the only one who matters.
Not one word from Minister Noonan about rip off mortgage rates in his budjet statement.No special bank levy.
Michael McGrath put it up to him again with a great response about what he promised he would do for SVR mortgagees.
It is obvious Fine Gael don't care
Michael McGrath put it up to him again with a great response about what he promised he would do for SVR mortgagees.
It is obvious Fine Gael don't care
Ger Fleming
Registered User
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Michael Noonan doesn't listen to anyone except his bosses in the banks. Mortgages didn't even get a mention. I can assure Noonan that his government won't get a mention the next time I vote.
Awful stuff, ive put something together in the thread about the bank levy just continuing till 2021, as I said there it shouldve been upped significantly. Obviously were not a priority to this government , wait until the rates start going up, the amount of arrears and repossessions that will affect SVR holders then. Will we then be able to apply for social housing then seeing as we'd ve been priced out of trying to provide for ourselves and our families as well as having the stress of dealing with the banks coming after us.
Brendan Burgess
Founder
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The bank levy was extended!
http://www.askaboutmoney.com/threads/bank-levy-extended.196097/#post-1448041
This is bad news for mortgage holders. It will be recovered from them.
Brendan
Not quite.
The Minister said that “the issue of a penal banking levy in the Budget or powers for the Central Banks to regulate interest rates will be considered at that time [in September] if sufficient progress is not made.”
He was never specific as to what would or would not constitute "sufficient progress" for this purpose.
Exactly he wasn't specific which allowed him to come out and say go and switch and competition will sort this out. What about the captives who can't do either and are stuck paying high svrs until they can switch. Roll on the election and hopefully enough people who are captives will do the appropriate thing for them and leave the boxes with FG and LAB candidates blank just like what was done for us today, NOTHING
Trust me Kerrigan, neither was i although that doesn't prevent me from being very annoyed about it as a lot of us have been emailing etc, just shows how much they've been listening to us. As I've mentioned in another thread god help us when the rates start going up again, imagine the arrears and repossessions then if it gets bad enough. They've had numerous chances to deal with this most especially today and they haven't. Roll on spring 2016 and the election god help any FG or LAB candidates I get to meet.
What I've been saying on this forum about my sense of unfairness regarding svrs and the treatment of people who have them will be highlighted as will the specifics of the captives who can't take ministers advice to switch etc. I will seek legal protection for these people, certainly protection that lasts until they're in a position to shop around as they are at the mercy of the banks. I do acknowledge that these people have the biggest debts and are a higher risk to banks but as I've said previously people on svrs are carrying a far bigger burden for getting the banks back to profitability than most others, something should be done to help them at least until they're in a position to shop around. I have said that the mortgage relief scheme should be continued which I know you've said to me and others that you're taxes could be spent better on health care etc. That's fine and laudable but god help us when not if rates start going upwards. They'll be some arrears and repossessions then I'd imagine and then people will need social housing after being put out of their homes by the banks. I'm taking it that sooner or later they will become much more aggressive about repossessions.
That's my point really Tony.
"Something should be done" sounds a bit like "down with this sort of thing" to me - it's just incredibly vague.
I have no doubt whatsoever that a multitude of parties and candidates will share your sense of outrage (or at least will be anxious to give that impression) but I would be far less confident that any will offer any meaningful proposals in this regard - they certainly haven't so far.
Yes, FF and SF have published private members bills to give the Central Bank the power to fix or adjust rates but what difference would that make? The Central Bank has made it quite clear that it doesn't want this power and wouldn't exercise any such power even if it did have it.
I'm not trying to have a go - I happen to agree with you that there is a cohort of variable rate borrowers that are deserving of legal protection and I have made certain suggestions in this regard.