People don't like to believe that, but....I appreciate that some people are under a lot of financial stress and higher mortgage rates are not helping but are we in danger of creating yet another negative to already long list of reasons not to provide credit in Ireland.
I can't help but think this sounds a lot like rent caps and eviction bans. It helps the small number of insiders but will ultimately lead to a situation where new mortgage providers will avoid Ireland like the plague. Or for those that stay they will just cherry pick.
The risk of doing business is priced into the the rates. If you can't reposes the collateral you'll price accordingly. If you cant control the price you charge you'll just stop offering the service.
Can a similar outcome not be achieved using existing systems like a PIA?
Hi skrooge
We do not want to discourage new lenders coming into the market.
But that does not mean that we would encourage vulture funds to buy perfectly good loans and hike up the rates to about twice they would pay with their original lender.
I defended the sale of Non performing loans to vulture funds on the basis that if you don't allow repossessions, don't complain if the banks sell those loans.
But I was very critical of the Central Bank forcing ptsb to sell perfectly good split mortgages to a vulture fund. These guys are now being charged 6.5% in many cases.
It's a question of balance. We must give the banks the tools to deal with the small percentage of non-payers, yet at the same time we should not throw to the wolves, those borrowers who experienced problems but who dealt with them responsibly.
Brendan
Though I think we still have to acknowledge that a spilt mortgage is fundamentally based on the fact the loan is impaired. Its ultimately not doing what it was originally suppose to do.
Performing and profitable are two different things.
there needs to be something objective there.
First, should a borrower not be able to take a case against PTSB?
Okay so something is better than nothing but if that something is less than it should have been there is an issue.As a lender I would much prefer a profitable loan which was "non performing according to the original agreement"
Than an unprofitable loan which was performing in accordance with the original agreement.
This is the problem which you, the Central Bank and the banks can't seem to grasp.
Brendan
You call it generous, there's nothing generous about saying we think can't repay your loan and we'll nobble your credit history, for no reason. Either there were grounds for splitting the mortgage or there wasn't.On what basis? That they were too generous?
Doubt it would fly.
Brendan
You call it generous, there's nothing generous about saying we think can't repay your loan and we'll nobble your credit history, for no reason. Either there were grounds for splitting the mortgage or there wasn't.
Fairness is something difficult to measure objectively. I do not think one should be forced to offer fixed rates. One potential solution would be to consider to have a law that future selling of mortgages should only be possible to institutions which also offer fixed rates as well - but then no one could prevent them of having a variable rate of 6.5 % and a fixed rate of 8%.... I do not believe the government could nor should be the one setting out mortgage rates. If they try the Irish market would be even less attractive for foreign mortgage providers.I don't understand the regulatory, accounting, and business decisions to increase the rate on a restructured loan from 4.5% to 6.5%. What I do know is that it will tip a lot of people into default and misery.
It feels fundamentally unfair when I can fix for five years at less than half of 6.5%.
I am all in favour of debt discipline and the legal system is far too easy on the "won't pays" who are out there. But I've seen a few threads on AAM where people are wearing a hairshirt already at 4.5% with the dream of paying off their mortgage some day and 6.5% seems to breach some fundamental principle of fairness.
Could an argument be made that if the rate rise is the factor that puts a consumer into arrears that this goes against the protections and guiding principles of the Consumer Protection Code ?I don't understand the regulatory, accounting, and business decisions to increase the rate on a restructured loan from 4.5% to 6.5%. What I do know is that it will tip a lot of people into default and misery.
It feels fundamentally unfair when I can fix for five years at less than half of 6.5%.
I am all in favour of debt discipline and the legal system is far too easy on the "won't pays" who are out there. But I've seen a few threads on AAM where people are wearing a hairshirt already at 4.5% with the dream of paying off their mortgage some day and 6.5% seems to breach some fundamental principle of fairness.
But as Brendan has always said the rules that protected the people in genuine bother from loosing their homes was exploited by people who just gamed the system . PTSB sold Project Glas to Start for a 38% discount , had half that discount been applied on a sensible manner to genuine arrears cases then the funds would not have been needed .Just in terms of an classification on the loans a performing PIA is a performing loan per Central Bank..if the main banks embraced the personal Insolvency system many loans would not need to have been sold
I agree Banks should make better effort at working things out...some have no real interest doing itBut as Brendan has always said the rules that protected the people in genuine bother from loosing their homes was exploited by people who just gamed the system . PTSB sold Project Glas to Start for a 38% discount , had half that discount been applied on a sensible manner to genuine arrears cases then the funds would not have been needed .
I offerred a Bank €3m in settlement once. They rejected and sold the properties for about 1.75m booking the loss against the tax payerI agree Banks should make better effort at working things out...some have no real interest doing it
Thats criminal in anybodys book . No wonder we are in the state we are now in .I offerred a Bank €3m in settlement once. They rejected and sold the properties for about 1.75m booking the loss against the tax payer
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