Maybe it's a topic for a different thread [seems it was and was split into its own thread], but why shouldn't those who cannot meet their loan obligations and require loan restructuring be charged more? Isn't it basically a form of subprime lending so something that you support? Otherwise it's like applying a form of community rating to the mortgage market rather than pricing products according to risk? Or is it a case of having to apply this sort of "community rating" in order to avoid bigger market and societal problems?I fully support sub-prime lending.
But I agree with the CCMA prohibition on banks charging customers more because they are in arrears or restructured. So the mortgages sold by ptsb should be on the same rate as existing ptsb customers.
Brendan
Compare to insurance.
Customers get No Claims Bonuses for not making claims.
And if they do make claims, they usually face higher premiums.
Brendan
That seems quite different to other countries where people can hand the keys back.
The last crash in 2008 the banks forced people into default by forcing unsurvivable terms on people. Which ultimately ended up as bad loan for the bank. Instead of extending length of the term and giving them a lifeline.
I should have qualified that. By saying in some cases they only offered unviable restructuring terms. Plenty of cases in the media at the time.That is just not correct. The banks did not change people's terms (apart from the tracker scandal). People went into default because they could not or would not pay their mortgage. In 130,000 or so cases the lenders agreed a restructuring with the borrower. But they were never forced on the borrowers.
Brendan
I don't think that is correct. In some US states they have non-recourse lending. It's a terrible idea as it results in higher mortgage rates for everyone.
I should have qualified that. By saying in some cases they only offered unviable restructuring terms.
I wonder how many of these ultimately escaped these debts leaving the banks, Nama and tax payer to carry the can.
That is just not correct. The banks did not change people's terms (apart from the tracker scandal). People went into default because they could not or would not pay their mortgage. In 130,000 or so cases the lenders agreed a restructuring with the borrower. But they were never forced on the borrowers.
Brendan
That is not a "qualification". That is something completely different.
In many cases borrowers had completely unsustainable mortgages. The banks bent over backwards to accommodate them.
But many borrowers wanted their negative equity written off and without it said that the bank wasn't being flexible.
Brendan
Well ACC charged same, I have had sight of it applying same to mortgagors loan accounts. The value of it is that some Providers gouged more money from customers than legally allowed to.Not sure the value of it.
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