Why is there still subprime lending in Ireland?

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The media have been very slow to pick up on this, particularly the VERY OBVIOUS SCAM that it is only provided to new builds. I mean no matter about the sub-prime bit and the pointlessness of the whole scheme, but the requirement for new builds is in there and there is hardly a peep. Are the sheeple really so gullible?
 
Subprime has its advantages and faults.

There are many people who can't get a mortgage due to a bad credit history rating in the past and can afford a property. There are many people who have a bad credit history and cannot afford a property.

When someone is looking for a mortgage, they usually approach a main high street lender first. If the high street lender declines their application and tells them the reason why (which usually happens), it is the borrowers decision to look elsewhere. The attitude of 'I'll get that house come hell or high water' is that of the would be borrower.

When we read posts from readers who are refused a credit card from a high street bank, looking for directions to money lenders, there is an outpouring from people telling them to have sense and save. Is it really so different?

It comes down to individuals having to take responsibility for their borrowings.

That said, my sympathy is for those who fell into repayment problems for reasons beyond their control.
 

Before I say anything, Im agreeing in principle with alot thats being said here but want to point out a few things.

1. If banks werent bailed out we would all be screwed and would have an awful lot more to give out about.

Lesson learned? why are our government reactive as opposed to pro-active? Well we, as a society do the exact same.

Everybody has the answers to the problems we have today that would of helped us yesterday. I can tell you tonights lotto numbers tomorrow morning!!!

2. It actually benefits the economy more if first time buyers are in essence limited to buying newly built houses.

People keep focusing on the bailout of the banks or the bailout of the builders without taking into account of the bigger picture. Rightly or wrongly our whole economy has been built on the pigsback of builders and banks and has fallen by the same hands of these "professionals".

2nd hand house buying would not benefit the economy as much as new house purchases. New house purchases means that builders can give the banks back some of the money they owe them, banks have less exposure to property markets, which means less bad debts and hopefully confidence globally in Irish Banks. I could go on but I hope this gets some thinking on a differant slant to the whole "bailing out" headline that the press are beating us all to death with!!

3. The sooner Joe Duffy's shows and those alike are put out to graze the better. Im all for freedom of speech but its filtered propaganda, designed to upset as many people as possible for ratings. These shows only ever air what they want us to hear.

Lastly, on a grander scale you have to realise that everything the government is doing right now is about trying the get the economy moving again. There is no room for them to "Bailout" certain sections of the privaleged industrys for anything other then boosting the economy. Please, Dont read the rag papers or listen to radio shows to get your facts or knowledge on such complex subjects.
 

NorthDrum,

To answer your points,

1) The Government haven't "bailed" the banks out, YET. They've issued a guarantee to cover all deposits and all loans, but no money has changed hands. We are being softened up in the media by people saying we will have to use the Pensions Reserve Fund to prop up/invest in the banks. Seeing as how the British governments bail out doesn't appear to have had much effect, you'd wonder what the PRF money would do, apart from letting the developers off the hook.

2) This crisis has been built on a bed of dishonesty and to leave it go on will just perpetuate the dishonesty. Poor saps on 40K a year who have been turned down by Banks and Building societies will be fixed up with a loan for a new house that is currently overvalued and will probably drop another 30% in value to its true realistic price over the coming 18-24 months. That is dishonest, unfair and against all the principles of a true free market. I can see these people sueing the government for allowing them to get into this sub-prime situation. The government that should be protecting them, instead they are protecting the bankers & developers who should be allowed to go to the wall, if that is what is necessary.

3) Thank God for Uncle Joe. Yes he is sensationalist but without him and his like we would be nowhere, thanks to a lapdog mentality in the meeja generally.

4) If only it were true that the government were only doing everything to get the economy moving again... it is all about protecting their cronies and party contributors. However, as a country we are headed down a road that not even Bertie could protect them.
 
Mumha said:
NorthDrum,

To answer your points,
Click to expand...

Hi Mumha,

1. I have said in other threads that this is not a bailout. I use the term as it seems to be the one that has stuck with people that easily explains what I am discussing. Its Joe Duffy and his kind that are only heightening peoples ignorance or lack of understanding to the problem at hand.

2. My points were in no way excusing what has happened or what has been done to rectify it. All I am doing is trying to get people to realise that this HAS to be done for all our sakes. How we got here isnt as important now, as how we fix things up.

3,Uncle Joe is just as bad (if not worse) as the general media. Its common knowledge that he only airs views that concur with either the shows theme or the arguement he is getting across. He is just as dishonest as anybody in all this mess.

4. Again I wasnt saying that the government doesnt have its own interests at heart but that a large part of what they are doing is for the good of us all (no matter what the media or Sir Joe say).

Mumha, personally I agree with pretty much everything you say, but I am just making a point that alot of whats happened had to happen. I love the fact that we live in a democracy where you can openly criticise our establishment, but the likes of Joe Duffy are just the extreme opposite to the lies we get off Politicians or big organisations. Hes like the Michael Moore of media in this country and about as biased as they come.
 

Michael Moore !!! That's a good one ! Ironic that I should be defending Uncle Joe, but you'd wonder would we have been given any explanations at all but for him and others.

True, a lot of whats happened had to happen, but my point is that allowing a property bubble to be created was something that need not occurred in the first place (i.e. a bed of dishonesty). And it is not as if FF didn't have the opportunity to take corrective action years ago, but they listened to their developer buddies instead of independent sources. It is the height of idiocy to believe that we could never have a property crash like the UK and the US (to name but a few).

How we got here is vital, not only to remember for the future, but to hold those responsible, to account for the sins of the past.

Getting out of this mess is now beyond us because FF didn't take the action that was obvious even to the likes of me, we now will depend on a rejuvenated world economy to lift all boats rather than an Irish government. That may take quite a while.
 

Agreed.

Dont get me started on money thats been wasted in the last 15 years on dodgy constructed tunnels, tribunels, stadiums never built, roads not built big enough (that are now being dug up!) . . . . . . .
 
Whilst the concensus of these posts agree that people should be responsible for their personal finances we should therefore take a long look at Fianna Fail as they were (and still are) custodians of the finances of Ireland. How could they not see a 6 billion hole in the economy - blinkered by the opportunity of winning another election perhaps? Therefore Sub Prime lending and anything else that could keep their gravy train going was and never will be legislated against.
 
 
Getting out of subprime is not easy but its worth a try...if you have cleaned up your icb report and maintained a good pay history and house has good ltv then you have a chance...you need to demonstrate income that can afford the required mortgage, clean bank statments(for at least 3 months) and reasonable explaination for why you went subprime in the first place...good luck with your attempts
 
if there is still a market for subprime lending why shouldn't it exist? it is too simplistic to merely believe that 'all subprime lending is bad' there are people using those loans for whom there has been beneficial effects
 
Is it really such hell on earth for a family to have to rent a property? The house is still a house whether you are paying the bank or a landlord. The unease about landlords dates back to famine times and we need to move past it. A mortgage of €200k at 8% sub-prime would cost €16k in interest alone, while a similiar property could be rented for a yield of 4% or €8k.

If a person really wants their own home they should build up a savings record of 5 years while renting to prove to the bank that they are credit worthy - why are they in such a rush to hand €1,000s extra over to a sub-prime lender?
 
To continue your logic, every house should be knocked down as soon as it is sold. If you only allow FTBs to buy new houses, then there is no-one to buy second level houses - the previous level FTBs who bought those entry-level houses will be unable to sell them and so will be stuck where they are. Eventually the property market will grind to a halt. House prices will reduce to site value.

I think its a great idea! (And no, I'm not being sarcastic).

On the other hand, what happens when a second-hand house gets sold:
- the mortgage on it gets paid off
- the person buys another house either trading up or trading down
- in the case of trading down, the overall debt of the economy is reduced and some of the asset value of property is released as cash to promote useful economic activity.

So, you tell me the difference between money from a new house sale, or money from a second-hand house sale.
 
[broken link removed]

The above article is long but worth the read. It is frightening how stupid a great deal of Wall Street actually was when it came to sub prime. I use the quote below as an example:
"He called Standard & Poor’s and asked what would happen to default rates if real estate prices fell. The man at S&P couldn’t say; its model for home prices had no ability to accept a negative number. “They were just assuming home prices would keep going up,” Eisman says."
 

You are Charliemacck, and I claim my five pounds.
 
Foghorn - You have lost me and I suspect many others. Can you please explain.
 
JOB,

I see GE have left the market. There is no real choice of subprime lenders left.

However of the two players left in the market, I think there will be plenty of business for them once they can acquire sizeable funding lines.
 
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