@Andy836 Firstly, I am not disagreeing with you in principle. As I said above, I would gladly see Ireland move to a more European model in its property dealings, but at the moment it would be like closing the barn door after the horse has bolted.
Property is a politically toxic topic to most. Its like the 'evictions during the land war of the 1870's' is fresh in peoples heads. Groups such as the 'New Land League' prey on the fear that people have that their homes would be taken off them. You have parties like FF being ultra populist in this area, forgetting they were a major contributor to the cause of this issue
Yes, but has been said on another thread on here about the pension levy - these were unprecedented economic times with high levels of unemployment and emigration. Most who held their jobs took decent pay cuts, and many are only getting back towards parity now a decade later. Many people have experienced a lost decade of earning power. In short it was exceptional times.
For PTSB, I accept they have a large amount of impaired loans due to their lending behaviour during the boom times. However, if they had any sense at all in this, they would sell off the most impaired first - those that are over 2 years in arrears and have not engaged with the bank to agree a revised payment structure & those who agreed revised payment structures and failed to honour them. These could have been sold off relatively easily and there would be minimal media coverage about it since its very hard for anyone to stand up and argue against their sale.
Once this was done, the bank could look at the next tranche and see how to handle it. The only thing I would say about the sale - and agree they should be allowed to sell any loan they wish - is that if a settlement has been agreed between the borrower and PTSB, the purchaser should be legally bound to honour that settlement. So if the mortgage is split and a third parked interest free, the same arrangement should be honoured. I also think they should be under the control and regulation of the CB and answerable to the FSO, the same as any other financial institution.
I appreciate this is not the same BUT:
Lets say KBC decided to sell my fully performing mortgage to a 3rd party - and why should they not be allowed to do that - I am on a 10 year fixed rate and default back to the KBC new business rate in 10 years time. But lets say this 3rd party does not actively sell mortgages - what rate should I default onto then - the KBC rate that has nothing to do with them or some random rate they choose? This is where there are complications with selling mortgages and potential reductions in interest rates that would not be passed on. I also think if a performing mortgage was to be sold at a haircut to a 3rd party, the mortgage holder should be offered a similar deal as well.
Agree re shareholders. Disagree re all senior management and most went on their way with serious pension top-ups that can hardly be defined as accountability.
The banks themselves were bailed out by the taxpayer, and this included provisions for impaired residential loans. I am not sure that many borrowers who have engaged with the bank have been offered much debt forgiveness where affordability is an issue.
I am not proposing mass debt write-off, but where a loan is impaired, the property is in negative equity a decade later, affordability is an issue, surely it makes sense to write the debt down to the current market value (assuming the borrower could afford this mortgage repayment), and the bank take a permanent charge of say 10-25% on the property (depending on the level of write-off) so it cannot be sold or transferred without the bank getting a payment. The bank is not going to get any more than this if it repossesses the property or if it sells the mortgage to a vulture fund.
Because its less politically toxic initially and non-engaging defaulters are most likely to have longer arrears, be strategic in their defaulting, more difficult to get out of the properties and less likely to be able to recover any money from without repossession.
