"Variable rates set to become major issue in General Election"

The set up of water charging was an unmitigated mess.
I think its far too simplistic to dismiss it as unemployed and piggy backers.
Cleverly,it has been turned in peoples perceptions ,as rabble crowd rather than a protest over incompetence and unfairness.
Means our mortgage holders may say away.
Maybe you SVR people should use the water march to put up SVR posters , you won,t get a better chance this side of election.
Think about it ,if nuff SVR posters are seen, Mr Politician will notice.
In short you have a ready to go protest!
 
I am following this thread with interest and have a variable rate mortgage. I would like to share my viewpoint which might help explain low turnout, lack of interest of SVR holders. I could not attend meeting in Dublin due to location and childcare. I am deeply in negative equity but am also in the fortunate position that I can comfortably pay my mortgage. I have emailed my local TDs and like everyone else did not get any satisfactory reply. I will raise it on the doorsteps if anyone calls to my door in rural Limerick but I don't feel that I have a lot to complain about. I am not on the breadline. If another public meeting was called would I travel 2/3 hours, arrange childcare, be worried about driving the roads in winter? Probably not am sorry to say. I know the banks are taking advantage, I know the politicians are doing nothing for us and I'm annoyed, but I'm doing ok. Is this a selfish attitude?
 
The Water Charges protestors are made up of a core of unemployed people and the rest just piggy backed on to it.

Just that you seem very dismissive of the the non payers with the above sentence. A lot of those people are very serious citizens and are making their feelings known to the relevant authorities.
Then again, this particular post is not about water protestors so your question answered and lets leave it at that.
 
noproblem said:
Just that you seem very dismissive of the the non payers with the above sentence. A lot of those people are very serious citizens and are making their feelings known to the relevant authorities.
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Apologies if that is how it sounded. I was not being dismissive of them. Just pointing out that the initial organisation of protests need a core of bodies which in this case were mostly people who have more time on their hands than others.
 
Fianna Fail has issued a policy position on variable rate mortgages as part of tomorrows Ard Fheis.

"It is unacceptable that Irish variable rate mortgage customers are being charged 2% higher than other EU countries.We will immediately introduce legislation to deal with this and introduce strong deterrents to stop banks from charging excessive rates."
 

At least they are acknowledging that there is a problem and stating their position on it.

Have Fianna Gael made any mention of it at all?
 
Fine Gael are keeping very quiet on this subject.Minister Noonan has had plenty of time to do something concrete but won't get involved.
 
I just cannot see how any political party can claim that they can implement legislation that will control interest rates without causing as much downside as they are trying to solve.
A Government can create the environment that would encourage another Bank to enter the mortgage market. Part of changing the environment would be a complete overhaul of the legislation surrounding the repossession of houses where people who are blatantly not paying their mortgages continue to live in them without paying a cent in many cases. This is and has happened with BTL' as well where rent was collected and pocketed.
The statement by Fianna Fail is simply being populist and that sort of stuff is all to prevalent in this country.
Every party and almost every person knows that mortgage rates are too high. There is a probably 1% of the current mortgage rate spent on covering the excessive losses that were incurred in the past and going into the future. Yes there was a lot of bad lending but there should be a reasonable time frame for an institution to recover the property.
How is it that no political party or independents are calling for change of the repossession legislation. It is not populist but it actually should be. It could save a lot of people a lot of money. I can understand that it would be difficult to get the message across.
It is easier to get a media headline about someone being evicted from a house (and avoiding the reason for it in the follow up story) than to get publicity about what needs to be done in order to lower interest rates. That would be boring.
There is really not much support for the change in legislation regarding repossessions on askaboutmoney either.

Has anyone a workable solution to high mortgage rates that will work without changing the repossession legislation.
 
Clonback said:
We will immediately introduce legislation to deal with this
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How?

What exactly will this legislation provide for?

Will it be a repeat of their private members bill that proposed to give the power to the Central Bank to set rates? We know the Central Bank don't want this power and it seems highly unlikely that they would be allowed to exercise it by the European banking authorities even if they had it. So that won't achieve anything.

Thankfully FF had nothing to do with the policy decisions that gave rise to the current situation where an extraordinary % of mortgages are in some of distress, which ultimately drives up rates on performing variable rate loans. Oh wait...

It amazes me that people fall for this posturing.
 
This has been dealt with in many other threads.

It's not rocket science. A default limit should be set on home loan rates at 3% above the ECB rate. If any lender wants to charge more than that, they would have to apply to the Central Bank for authorization to charge more.

There is no posturing about this. It's a very practical proposal.

When the lenders begin charging fair rates, it could be reversed.

If new entrants come into the market, those who can move will benefit.

The thousands who are stuck with their lender will be preyed upon even further.

The government should not be allowing this. They are effectively recapitalising AIB and ptsb and boosting the capital position of BoI on the backs of variable rate mortgage holders.

Brendan
 

So what you are saying Brendan is that the Government should enact Legislation to force the Central Bank to reduce home loan rates to 3% or less above the ECB rate. This I presume you would want to apply to current and future mortgages.
How might the Banks react to this is also a very practical question.
They might want a higher deposit than is the case. They might toughen up on some other lending criteria. It would I believe lean towards cherry picking of applicants.
I will go back to an old chestnut of mine that this "legislation" would have to include a meaningful and thorough change in the whole repossession legislation.
If that does not happen you will not get that New entrant that we all want and need.
I wonder is what you propose as simple to implement as you might think. Why then would the Government not have implemented it?
 
What's so special about the banks here that rates can't be lower??? - they are lower in all other EU countries and those banks seem to manage very well! I would agree that a limit should be set and yes - it's a very practical proposal. If only a politician would take it on.
 
We do not have the repossession mess in other countries that we have here. Nothing special about the banks here
 
Dermot said:
I will go back to an old chestnut of mine that this "legislation" would have to include a meaningful and thorough change in the whole repossession legislation.
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I fully agree. I have highlighted the issue of deliberate defaulters more than anyone else and have reported on my visits to the courts where chancers are getting away with it.

If that does not happen you will not get that New entrant that we all want and need.
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I have set the interference level very high 3% above the ECB rate. If it deters new entrants who want to charge above this, so what?
It won't deter new entrants who want to charge fair prices?



I wonder is what you propose as simple to implement as you might think. Why then would the Government not have implemented it?
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Because it would affect the selling price of AIB and ptsb
Because they don't understand the market
Because they are being misled by the Central Bank whose primary role is to build up the capital of the banks even if that is at the expense of a minority of citizens and not all the shareholders.
 
Dermot said:
We do not have the repossession mess in other countries that we have here. Nothing special about the banks here
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The repossession mess only affects higher LTV mortgages. It might account for an extra 0.5% on mortgages with LTVs over 80%.

But the loss, given default, on 50% LTV mortgages is close to zero, yet, those loans are also charged 2% above the rates that they would be charged in other Eurozone countries.
 
I have followed the various postings on this variable rate issue.

(1) Why is legislation required ? Many other countries in Europe seem to have well developed sense of what is fair to their consumers. In fact most of the good consumer legislation comes from European Directives. Good behaviour and good conduct towards consumers particularly house buyers is obvious when you do some research. (Eg long term 20 year fixed rates - sub 3%). We have a conduct issue with Banks.
(2) If you research consumer legislation it is all over the place. No consumer could possibly find the material needed to take on bad behaviour and bad conduct. This is the States woeful neglect of the Consumer in relation to financial services.
(3) Just look how the FSO debacle ran. 90% upheld in favour of the Banks.
(4) Our 'challenged middle class' do not do protest well. The Water Charges was one where several metaphorical executions should have taken place for the sheer absolute total failure that it is. Once the protest was hijacked - the 'challenged middle class' exited.
 
Black_Adder said:
(3) Just look how the FSO debacle ran. 90% upheld in favour of the Banks.
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Did you listen to Joe Duffy last week? It really brought home to me why the FSO rejects so many complaints.

"I paid insurance for 20 years Joe and when I hit 65, they told me my policy was terminated. And I got back nothing. It's a disgrace Joe."

"My mother borrowed €100k on an interest roll up basis for 10 years at 6.9% and now they want €200k! It's a disgrace Joe"

Having listened to it, I am surprised that 10% of complaints are upheld.

Brendan
 


keepon said:
Cost figures, and an evidence-based estimate of the impact on mortgages generally, please.
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Good point. I have tried to get figures for the cost of defaults on mortgages of less than 80% LTV and 3.5 times Loan to Income but haven't been able to.

I have been told anecdotally that such losses are insignificant, even though the banks have been unable to repossess.

Most of the losses on home loans have been where there was a combination of 100% LTVs and 5 times Loan to Incomes.

Brendan
 
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