Glut of repossessed houses could depress prices ‘by up to 25%’

Villa05

THOUSANDS of mortgage holders face the threat of repossession from next month as AIB and EBS move to end interest-only home loans.
The Irish Sun has learned bank bosses have told their debt collection teams to get tough on those in arrears.
Banking sources claim management want a set amount of customer cases either moving towards repossession or to resume repayments by the end of April.
....................................................
Officially, AIB have said that “there are no targets, there will never be any targets” but sources insist collectors have been set a 10 per cent target by the end of next month.
The bank will honour existing interest-only agreements, but any new applications for paying only interest will have to be proven to be only a short term ‘stop gap’ measure. Those who have already availed of a 12 month interest-only period will be refused subsequent extensions

http://www.thesun.ie/irishsol/homepage/news/4852974/Banks-want-10-of-arrears-cases-paying-up-by-April-or-their-homes-will-be-taken.html

There talking the talk, wonder will they walk the walk. At least there seems to be a realisation that interest only is kicking the can down the road. It is not a resolution.

Villa05

Some new Jobs

Credit Analyst (Mortgage Arrears) - Galway, Cork, Limerick & Waterford - 12 month contract

http://www.gkr.ie/JobSearch.aspx?SimpleSearch=1&KeyWord=Credit%20Analyst

gaius c

Gregory Connor backs up his earlier claims of high rates of strategic default.

Can’t pay, won’t pay: where does the truth lie in the mortgage arrears crisis crisis?

cookie1977

gaius c wrote: »

Gregory Connor backs up his earlier claims of high rates of strategic default.

Can’t pay, won’t pay: where does the truth lie in the mortgage arrears crisis crisis?

It's more speculation. I'd rather see the banks and the government investigate so we know the true figures rather than speaking about an issue that may or may not be a significant portion of arrears. I mean the article mentions the US and says among mortgage holders in arrears with loan-to-value ratios above 162 per cent , half are strategic. Trying to compare our potential numbers to there's is pure hyperbole as the same rules dont apply for mortgage holders here and over there. More attempts at rabble rousing and paper selling.

cookie1977

Actually a while ago he (Gregory Connor) was suggesting up to 35% - 50% of those in arrears where strategic defaulters:
http://www.irisheconomy.ie/index.php/2013/02/19/how-large-are-strategic-arrears-in-the-irish-mortgage-market/

Among the buy-to-let subset, the proportion of strategic arrears in Ireland is likely higher than 35%, and may be greater than 50%, reflecting the particular features of this sub-market (wealthier households, a larger proportion purchased near the height of the boom). Cultural and psychological influences could go either way in a US vs. Ireland comparison so I am using conservative guesses, taking into account the influence of very strict Irish repossession laws.

He says he's using conservative guesses but does not seem to take into any account recourse versus non-recourse mortgages. Wonder why he didn't suggest a figure in the irishtimes article released a month after the one above?

Strong arm

It's unfortunate but there will have to be an increase in repossessions but not as many as are expected, i think.although the plan launched by the government has many flaws it will probably prevent many houses from being repossessed Very few people actually want to live in arrears and under the prospect of losing their homes. In saying that, no solution is going to be fair to everyone - some strategic defaulters will benefit from this plan unless a very close look is taken at the means of each person/couple involved

Treehousetim

Strong arm wrote: »

In saying that, no solution is going to be fair to everyone - some strategic defaulters will benefit from this plan unless a very close look is taken at the means of each person/couple involved

Well if they are hiring proper analysts to do the job, then the fine details will be discernable. In this case they can put everyone's details through a computer system and get a pretty accurate picture of who's genuine and who is not.

cookie1977

Treehousetim wrote: »

Well if they are hiring proper analysts to do the job, then the fine details will be discernable. In this case they can put everyone's details through a computer system and get a pretty accurate picture of who's genuine and who is not.

Surely the banks just asking for copies of salary slips and details and receipts for expenditure would be sufficient to prove if someone is genuine or not,

Villa05

Strong arm wrote: »

It's unfortunate but there will have to be an increase in repossessions but not as many as are expected, i think.although the plan launched by the government has many flaws it will probably prevent many houses from being repossessed

Why? How? I'm genuinely interested, I've identified a potential 40K repossesion cases not including the interest only cases AIB/EBS are reported to be targeting.

Villa05

cookie1977 wrote: »

Actually a while ago he (Gregory Connor) was suggesting up to 35% - 50% of those in arrears where strategic defaulters:
http://www.irisheconomy.ie/index.php/2013/02/19/how-large-are-strategic-arrears-in-the-irish-mortgage-market/



He says he's using conservative guesses but does not seem to take into any account recourse versus non-recourse mortgages. Wonder why he didn't suggest a figure in the irishtimes article released a month after the one above?

From Gregory O' Connor's article

There are differences between the Irish environment and the range of US state systems, and there is insufficient Irish data to make definitive claim

He is asking the question; Does a bear sh*t in the woods?
He does research on forests far far away and based on results of that research comes to the conclusion that while few have seen the Bear sh*t in the woods. It is highly likely that Bears do sh*t in the woods where there are bears and trees.

If I could get a deal where my debt is written off while I get to keep €896 per week. You know what I'd be doing in the woods, if you catch my drift

cookie1977

Villa05 wrote: »

From Gregory O' Connor's article


He is asking the question; Does a bear sh*t in the woods?
He does research on forests far far away and based on results of that research comes to the conclusion that while few have seen the Bear sh*t in the woods. It is highly likely that Bears do sh*t in the woods where there are bears and trees.

If I could get a deal where my debt is written off while I get to keep €896 per week. You know what I'd be doing in the woods, if you catch my drift

He's comparing apples with oranges and finding they're almost identical. I disagree with him. It's also Gregory Connor, not O'Connor.

Villa05

Update on NAMA Empties

NAMA says that it is currently renting out 10,000 homes at an annual rent of more than €100m – that’s an average of €10,000 each per year or €833 per month.

However NAMA says that 4,000 properties have been made available for social housing, but of these 750 have been sold or rented. So that leaves 3,250 homes that are presently vacant. We don’t know exactly where these properties are located but NAMA has said in the past that most of its residential property is located close to major urban centres where there is a strong rental demand. That means that 3,250 properties which might be capable of generating €32.5m in rent per annum, if the properties are similar to the 10,000 already rented, are currently lying empty.

http://namawinelake.wordpress.com/2013/03/23/3250-of-namas-irish-homes-are-lying-empty/

I'd like to see the details on the houses given to councils and subsequently sold on.

The_Conductor

Villa05 wrote: »

Update on NAMA Empties


http://namawinelake.wordpress.com/2013/03/23/3250-of-namas-irish-homes-are-lying-empty/

I'd like to see the details on the houses given to councils and subsequently sold on.

NAMA's chief executive, Brendan McDonagh, gave a very interesting speech to the London branch of the 'Chartered Accountants of Ireland' during the week where he decided to debunk myths about NAMA, the quality of the assets its disposed of thus far, where the rest of its assets are, and into which property categories they fall.

He claimed- only 160 of the over 1,500 unfinished estates around the country belong to NAMA. 188 of the country's over 900 hotels are in NAMA and are governed by the Competition Authority to ensure they don't unfairly compete with the other hotels. Less than 12% of NAMAs assets are residential housing units, and of these, while most are in Dublin and surrounding counties, there are also a not insignificant number in Scotland (where NAMA continues to hold over Euro 500 million in assets). 20% of NAMAs assets are in the greater London area, with a further 12% elsewhere in the UK (mostly Scotland and NI).

A breakdown on NAMA's accounts and activities for 2012, is due to be presented to the Minister on Tuesday (I'm not sure whether it is due to be published or what the protocol entails).

cookie1977

smccarrick wrote: »

NAMA's chief executive, Brendan McDonagh, gave a very interesting speech to the London branch of the 'Chartered Accountants of Ireland' during the week where he decided to debunk myths about NAMA, the quality of the assets its disposed of thus far, where the rest of its assets are, and into which property categories they fall.

He claimed- only 160 of the over 1,500 unfinished estates around the country belong to NAMA. 188 of the country's over 900 hotels are in NAMA and are governed by the Competition Authority to ensure they don't unfairly compete with the other hotels. Less than 12% of NAMAs assets are residential housing units, and of these, while most are in Dublin and surrounding counties, there are also a not insignificant number in Scotland (where NAMA continues to hold over Euro 500 million in assets). 20% of NAMAs assets are in the greater London area, with a further 12% elsewhere in the UK (mostly Scotland and NI).

A breakdown on NAMA's accounts and activities for 2012, is due to be presented to the Minister on Tuesday (I'm not sure whether it is due to be published or what the protocol entails).

There is a lot of spin going around about NAMA. Hopefully that report will be available (I expect it will) or a Journo manages to get hold of it through FOI. More McDonagh here:

http://www.irishtimes.com/business/economy/ireland/nama-chief-delivers-upbeat-progress-report-1.1336803

“Everyone says we are ruining the golf industry in Ireland. Four hundred clubs in Ireland, 200 of those happened in the boom – absolutely mad stuff. We have got 17 of them, mainly attached to four-star hotels.”

“Everyone says that we own every hotel in Ireland. Fortunately, we don’t – we have 188 of 900. They are in the better locations,”

“Everyone says we are ruining the golf industry in Ireland. Four hundred clubs in Ireland, 200 of those happened in the boom – absolutely mad stuff. We have got 17 of them, mainly attached to four-star hotels.”

Galego

Strong arm wrote: »

It's unfortunate but there will have to be an increase in repossessions but not as many as are expected, i think.although the plan launched by the government has many flaws it will probably prevent many houses from being repossessed Very few people actually want to live in arrears and under the prospect of losing their homes. In saying that, no solution is going to be fair to everyone - some strategic defaulters will benefit from this plan unless a very close look is taken at the means of each person/couple involved

Why unfortunate?

68Murph68

At the moment NAMA has 3,250 residential properties it owns which arent being rented out, but are standing empty.

That's before you even go near the 10,000 homes NAMA says that it is currently renting out at an annual rent of more than €100m

NAMA has said in the past that most of its residential property is located close to major urban centres where there is a strong rental demand.

It's inevitable that these will be sold before too long.

These are all separate from those properties in the mortgage arrears category.

Anyone who thinks that the market is functioning anywhere near normal is really deluded.

cookie1977

68Murph68 wrote: »

At the moment NAMA has 3,250 residential properties it owns which arent being rented out, but are standing empty.

That's before you even go near the 10,000 homes NAMA says that it is currently renting out at an annual rent of more than €100m

NAMA has said in the past that most of its residential property is located close to major urban centres where there is a strong rental demand.

It's inevitable that these will be sold before too long.

These are all separate from those properties in the mortgage arrears category.

Anyone who thinks that the market is functioning anywhere near normal is really deluded.

I dont know of anyone in this thread who said the market was functioning normally.

Villa05

Pernament TSB Spokesperson on Newstalk Breakfast 27 March 2013
- Residential arrears of 90 days or more at 15%
- Debt forgiveness is not in my mindset
- Many of those already on split mortgages are now in arrears on the split mortgage

cookie1977

Villa05 wrote: »

Pernament TSB Spokesperson on Newstalk Breakfast 27 March 2013
- Residential arrears of 90 days or more at 15%
- Debt forgiveness is not in my mindset
- Many of those already on split mortgages are now in arrears on the split mortgage

Permanent TSB also said they are about to deal with 500 mortgages in arrears saying they'd split these mortgages into 2.

The customer repays one half and the second portion is put on ice.

http://www.independent.ie/videos/permanent-tsb-to-do-deal-with-500-borrowers-in-arrears-29156427.html

Galego

Villa05 wrote: »

- Many of those already on split mortgages are now in arrears on the split mortgage

IMO repossession is the only way out for people in these circumstances. Banks should repossess the asset, sell it in the market, and split negative equity 50/50 with the mortgage holder.

The problem with the above is that everyone would try to jump on the wagon. A massive debt forgiveness in mortgages would lead Ireland to a second bail out.

gaius c

Galego wrote: »

IMO repossession is the only way out for people in these circumstances. Banks should repossess the asset, sell it in the market, and split negative equity 50/50 with the mortgage holder.

The problem with the above is that everyone would try to jump on the wagon. A massive debt forgiveness in mortgages would lead Ireland to a second bail out.

If they are losing their actual home (and not BTL's), then there does need to be a certain amount of forbearance in assessing what they can pay of the outstanding debt. Insolvency bill is the way to go and the courts can fairly assess the household means and what needs to be paid during the PIA period.

If we need another bank bailout after all that, then cross that bridge when we need to (and I agree with you btw-we're not clear of the woods by a long shot).

The_Conductor

gaius c wrote: »

If we need another bank bailout after all that, then cross that bridge when we need to (and I agree with you btw-we're not clear of the woods by a long shot).

If we do need another bank bailout- we have the precedent set by Cyprus thankfully- which may focus banks attention a little better, knowing that if they go cap-in-hand to the taxpayer again, they are unlikely to be assisted.

Irrespective of whether its a person's PPR or a BTL property- we need to stop the ostrich approach. Ireland is not special, and owners of property here do not deserve to be treated differently from owners of property anywhere else. We need to get a move on- repossess delinquint mortgages, crystalise the losses for both borrowers and lenders, bite the bullet and quit kicking the ball down the road into the never-never........

cookie1977

smccarrick wrote: »

If we do need another bank bailout- we have the precedent set by Cyprus thankfully- which may focus banks attention a little better, knowing that if they go cap-in-hand to the taxpayer again, they are unlikely to be assisted.

Irrespective of whether its a person's PPR or a BTL property- we need to stop the ostrich approach. Ireland is not special, and owners of property here do not deserve to be treated differently from owners of property anywhere else. We need to get a move on- repossess delinquint mortgages, crystalise the losses for both borrowers and lenders, bite the bullet and quit kicking the ball down the road into the never-never........

But isn't that part of the problem. There has been no clear effort by the banks or the government to assess the existing mortgages in arrears and determine what are workable with some sort of proper deal (not interest only for a while but a real solution) and what are utterly unworkable and need to be repossessed.

It is, as you say, head in the sand at the moment.

papsita

lima wrote: »

Yes, because they need to. Most of the houses in my range out there are awful, yet there is stock being withheld by people who haven't services their mortgages in over two years!! I mean come on!!!!

My fear is that more and more people are being normalised to this situation. it's frankly shocking to be honest.

Repossess homes asap, let the market bottom out, and let the new generation of home buyers (like me) start the whole cycle again (that last bit is sarcasm)

I totally agree Lima.

cookie1977

Like permanent TSB yesterday AIB is to look at splitting mortgages in arrears. 1400 AIB mortgages have been offered a splitting option. Half would be repaid over a set time period and the other half would be frozen. If after up to 25yrs the frozen part is still not clearable then it may be written off.

BOI is charging interest on frozen loan so that's not much help to those mortgagees.
AIB not charging interest on frozen loan.

Reported on RTE Six One news just now

cookie1977

There was discussions on Leo Varadkar's comment yesterday that people, struggling to pay mortgages, would have to give up work if child care costs were high. Most opposition parties in the dáil came out against this but to be honest I really dont see the problem. If you're struggling with a mortgage that you could afford if you stay (either parent) home instead of paying for child care then that should happen.

In my instance as long as I or my wife earn 1 euro more then out costs with child care then it's worth us going to work but if our costs rise such that it would be better for one of us to stay home then we will. I'm a bit puzzled by the outrage in the media against this.

jmayo

There was outrage last week about how people were going to be told by banks that they woudl have to sell their cars, stop their sky tv packages, etc if they wanted to get deal on mortgage and loan debts.

AFAIK john waters was wailing about how awful it was for banks to be dictating to people how they should live.

What he and others appear to be forgetting is an old proverb which states you "cut your cloth to meet your measure".

Some peopel are in for a rude awakening where they will realise that certain things like second cars, satelite tv packages, private schools are not going to be allowed for as part of a debt restructuring deal or a personal insolvency.

There is childcare and there is childcare.

StillWaters

cookie1977 wrote: »

There was discussions on Leo Varadkar's comment yesterday that people, struggling to pay mortgages, would have to give up work if child care costs were high. Most opposition parties in the dáil came out against this but to be honest I really dont see the problem. If you're struggling with a mortgage that you could afford if you stay (either parent) home instead of paying for child care then that should happen.

In my instance as long as I or my wife earn 1 euro more then out costs with child care then it's worth us going to work but if our costs rise such that it would be better for one of us to stay home then we will. I'm a bit puzzled by the outrage in the media against this.

Enda Kenny has come out and said there is no way one party will be asked to give up work. Childcare is a temporary expense whereas people (women) who give up work for a while to care for their children bear a wage scar for the rest of their career. It doesnt make long term economic sense.

cookie1977

StillWaters wrote: »

Enda Kenny has come out and said there is no way one party will be asked to give up work. Childcare is a temporary expense whereas people (women) who give up work for a while to care for their children bear a wage scar for the rest of their career. It doesnt make long term economic sense.

I can understand that. And perhaps depending on how long your kids need cover might come into the equation. But if it's a new born they'll need child care for 4-5 years and even after they go to school they'll need after school care so as an option (having to give up work) it should not be completely removed from the table.

StillWaters

cookie1977 wrote: »

I can understand that. And perhaps depending on how long your kids need cover might come into the equation. But if it's a new born they'll need child care for 4-5 years and even after they go to school they'll need after school care so as an option (having to give up work) it should not be completely removed from the table.

I think its sticking it to the Government to address the dearth of affordable childcare. Whether its making it tax deductable, providing more non profit provision, or wrap around provision in schools. Saying quit work to suit the banks was a silly statement when the issue is much more complex than that, and affords the Government the opportunity to wiggle out of grasping the nettle they should have a long time ago.
Off topic rant/