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

gaius c

68Murph68 wrote: »

Well if Charlie Weston says so it must be true. He's a seriously creditable journalist with an impressive history of offering unbiased comment on the Irish property market.

He's the fella who was complaining about how hard it was to "get by" on €100k per annum.

Villa05

gaius c wrote: »

He's the fella who was complaining about how hard it was to "get by" on €100k per annum.

not to mention advising people to get your mortgage before you have children.
Because at the Indo Bricks and mortar are more important than children

bidiots

Villa05 wrote: »

not to mention advising people to get your mortgage before you have children.Because at the Indo Bricks and mortar are more important than children

Not a fan of Charlie, but this comment is so far removed from original context that it's laughable!


Get a mortgage before you have children due to financial 'health'....etc

Duggys Housemate

khards wrote: »

No, you are clearly wrong.

If there were only 1000 properties on the market but banks were not willing to issue mortgages any more, how much would the houses be worth (I will give you a clue, they would all have to be bought with cash)

If banks let anyone take out million euro mortgages, how much would houses be selling for this time next month?

Any one who is made homeless will not be put into private rental accommodation, there is a new bill being passed the housing amendment bill that will be putting as many of these relocated people into council owned housing.

http://www.oireachtas.ie/viewdoc.asp?fn=/documents/bills28/bills/2013/4413/b4413d.pdf

If you don't think that it has to do with supply and demand ( as well as credit) then why restrict to 1000 houses in your original point? What if there was a 100k surplus in housing in a city with no credit. Prices would tend to zero.

Villa05

bidiots wrote: »

Not a fan of Charlie, but this comment is so far removed from original context that it's laughable!


Get a mortgage before you have children due to financial 'health'....etc

Your comment explains why so many are in difficulty. A mortgage is a long term commitment. By entering into it at a point when your income is at its highest compared to your outgoings and then maximizing the amount you can borrow over the longest term means you have no flexibility for unforeseen and foreseen events.

I think it is absolutely shocking to advise people to apply for a mortgage before you have children if that is your attention. What ever way you want to dress it up, It is putting your whole family at risk

Duggys Housemate

Villa05 wrote: »

Your comment explains why so many are in difficulty. A mortgage is a long term commitment. By entering into it at a point when your income is at its highest compared to your outgoings and then maximizing the amount you can borrow over the longest term means you have no flexibility for unforeseen and foreseen events.

I think it is absolutely shocking to advise people to apply for a mortgage before you have children if that is your attention. What ever way you want to dress it up, It is putting your whole family at risk

That's the way banks operate though. They take your last 6 months disposable minus non-discretionary outgoings. If the out goings are discretionary - like meals out they may ignore them or ask you to cut back. If outgoings are obligatory , like child care, they take that from your post tax earnings and apply the stress test to the lower figure. Yes that is dumb but neither can they predict the future. You may have no kids.

Villa05

Duggys Housemate wrote: »

That's the way banks operate though. They take your last 6 months disposable minus non-discretionary outgoings. If the out goings are discretionary - like meals out they may ignore them or ask you to cut back. If outgoings are obligatory , like child care, they take that from your post tax earnings and apply the stress test to the lower figure. Yes that is dumb but neither can they predict the future. You may have no kids.

Exactly, Nothing has been learned. That is why I feel there is another catastrophic event in the very near future will lead to a further collapse for both the state and house prices. It may be a global event that sets it off, but again we have left ourselves completely exposed.

bidiots

Villa05 wrote: »

Your comment explains why so many are in difficulty. A mortgage is a long term commitment. By entering into it at a point when your income is at its highest compared to your outgoings and then maximizing the amount you can borrow over the longest term means you have no flexibility for unforeseen and foreseen events.

I think it is absolutely shocking to advise people to apply for a mortgage before you have children if that is your attention. What ever way you want to dress it up, It is putting your whole family at risk

My comment just highlighted how out of context your quote was, i.e. It had nothing to do with putting bricks and mortar before children.

"Putting your whole family at risk"...oh ffs. It was advise to someone trying to get a mortgage that they had a better chance before children enter the equation. To me, that's basic maths.

People applying for mortgages they can't afford is another days work and has been discussed ad nauseum on many forums!

EricPraline

Villa05 wrote: »

Worth posting this before its deleted from the Indo comments section

Anyone promoting debt forgiveness write downs etc must always remember, where money is concerned there is no such thing as forgiveness, it is just passed on to someone else. That someone else will be our children and theirs. I'm not saying debt forgiveness will not happen, but be very careful your taxes could be used to forgive the debts of your future landlord. Thats why blanket debt forgiveness is a no go area

I think that comment from the Indo website is the most succint summary I have seen of the implications of debt forgiveness. There's no free money pit to pay for it.

the groutch

khards wrote: »

It doesn't matter in the eyes of the banks and the law they are all defaulters and can all be repossessed equally.

the banks are very foolish if they view everyone equally.
at least with the "can't pays", they have a chance of it getting repaid in the medium/long term.

Villa05

bidiots wrote: »

My comment just highlighted how out of context your quote was, i.e. It had nothing to do with putting bricks and mortar before children.

"Putting your whole family at risk"...oh ffs. It was advise to someone trying to get a mortgage that they had a better chance before children enter the equation. To me, that's basic maths.

People applying for mortgages they can't afford is another days work and has been discussed ad nauseum on many forums!

Read my post again, take the blinkers off this time

bidiots

I advise you to do the same.

username123

EricPraline wrote: »

I think that comment from the Indo website is the most succint summary I have seen of the implications of debt forgiveness. There's no free money pit to pay for it.

As has been pointed out here and elsewhere its either some form of debt forgiveness or some form of social housing and assistance. The problem exists. It gets paid for by taxpayers one way or another.

Villa05

username123 wrote: »

As has been pointed out here and elsewhere its either some form of debt forgiveness or some form of social housing and assistance. The problem exists. It gets paid for by taxpayers one way or another.

Not as simple as that, apparently unemployment amongst those in arrears is half the national average, therefore the state will not be picking up the tab for rehousing in the vast majority of cases. The issue is how do we minimise the cost to the taxpayer.

Villa05

In a word, mortgages. The banks covered by the original guarantee and subsequent re-capitalisation which are still in business now number just three – Bank of Ireland, AIB and Irish Permanent. Of the original six, Anglo and Nationwide have been closed and Educational merged into AIB. These three surviving Irish banks have roughly €80bn outstanding in mortgage loans in Ireland. The total amount outstanding in mortgages for the entire Irish banking system is €142bn according to the Central Bank data for end-2012 released during the week. The balance is owed to the foreign-owned banks operating here

http://www.independent.ie/opinion/analysis/colm-mccarthy-strategic-defaulters-must-be-pursued-29120466.html

So foreign Banks (who seem much more eager to repossess) have 43% of the mortgage loan book. Given that they were late into the mortgage market, one can assume that they have a greater proportion of high risk mortgages and therefore a higher level of Arrears.

They alone, once the laws are changed, will repossess sufficient to create heavy downward pressure on price.

StillWaters

Villa05 wrote: »

So foreign Banks (who seem much more eager to repossess) have 43% of the mortgage loan book. Given that they were late into the mortgage market, one can assume that they have a greater proportion of high risk mortgages and therefore a higher level of Arrears.
They alone, once the laws are changed, will repossess sufficient to create heavy downward pressure on price.

Certainly BoS have sold on much of their loan book at a discount, so they may be more likely to do deals than reposess.

cookie1977

The central bank has written to all banks to ask for copies of the terms they gave some indebted customers which were deemed very favourable but who had to sign non disclosure agreements to get the deal. AIB and EBS have said they only offer some deals to debts linked to businesses and BOI and IBRC refused to comment.

Will be interesting to see some of these deals.Finance Committee chairman Ciaran Lynch had written to the CB enquiring why some customers were getting these secret deals while others were seen as not entitled to the same deal.

The Central Bank also said it is also considering whether to require lenders to provide more information to consumers about such agreements as part of the revised Code of Conduct on Mortgage Arrears, due to be published this week.

http://www.rte.ie/news/business/2013/0625/458809-central-bank-arrears/

The revised code of conduct will be an interesting read alright.

gaius c

StillWaters wrote: »

Certainly BoS have sold on much of their loan book at a discount, so they may be more likely to do deals than reposess.

How are BoS going to "do deals" when they have already sold the loans?

StillWaters

gaius c wrote: »

How are BoS going to "do deals" when they have already sold the loans?

Certus or whoever bought will. BoS dumped quite a lot in 2011 and then dripfed Allsop. I don't think they are exposed to Ireland much anymore, certainly not residential.

gaius c

StillWaters wrote: »

Certus or whoever bought will. BoS dumped quite a lot in 2011 and then dripfed Allsop. I don't think they are exposed to Ireland much anymore, certainly not residential.

Think it through. Certus bought the loans with the intention of making money. They'll make the most money by repo'ing the asset and pursuing the debtor for the difference between the sale price and the original loan.

Just because they bought the loan for less doesn't mean that's all they are looking to recover. That might be how NAMA works but Certus are under an actual obligation to turn a profit. If they can get 100% of the original loan back, that's what they will do. If they only get 90% back, they'll still probably make a tidy profit but the debtor is going to be fairly battered & bruised by the end of the experience.

Because they are a debt collection agency, they are going to have no interest in "but I can make repayments at what it's worth now" pleas.

kaymin

gaius c wrote: »

Think it through. Certus bought the loans with the intention of making money. They'll make the most money by repo'ing the asset and pursuing the debtor for the difference between the sale price and the original loan.

Just because they bought the loan for less doesn't mean that's all they are looking to recover. That might be how NAMA works but Certus are under an actual obligation to turn a profit. If they can get 100% of the original loan back, that's what they will do. If they only get 90% back, they'll still probably make a tidy profit but the debtor is going to be fairly battered & bruised by the end of the experience.

Because they are a debt collection agency, they are going to have no interest in "but I can make repayments at what it's worth now" pleas.

Certus didn't buy anyone's loans. They provide services to banks that wish to outsource loan servicing and arrears management. If they are to re-possess / do a deal with the borrower, Certus will negotiate on the banks behalf but the final decision rests with the bank that originated the loans.

jmayo

kaymin wrote: »

Certus didn't buy anyone's loans. They provide services to banks that wish to outsource loan servicing and arrears management. If they are to re-possess / do a deal with the borrower, Certus will negotiate on the banks behalf but the final decision rests with the bank that originated the loans.

But whoever did buy loans would operate as gaius_c pointed out.
And if certus are working on any form of commission basis then they will try and maximise it.

Villa05

Ulster Bank talking tough

Jim Brown also blamed coverage of debt forgiveness in the media for adding to the number of people who were deliberately not paying their mortgages.
Mr Brown said that Ulster Bank was experiencing cases of strategic defaults among mortgage borrowers.

He added: "We are seeing cases of those who can pay but who won't pay."
The bank also said 35% of those who are in arrears of 90 days or more were not making any payments on their mortgages.
The lender said those borrowers would be going into the "legal system".

http://www.rte.ie/news/business/2013/0702/460170-ulster-bank/

meanwhile one of our "Pillar" Banks makes the top 5 in the world. I wonder who will be footing the bill for Anglo Mark II

AIB’s latest losses are the fifth biggest of any bank in the world, according to The Banker magazine’s latest Top 1,000 World Banks ranking

http://www.rte.ie/news/business/2013/0702/460188-aib-losses-banking/

khards

No, repossessions cannot happen here in Ireland!

http://www.independent.ie/business/personal-finance/property-mortgages/banks-target-homes-with-value-for-repossession-29390734.html

Banks 'target homes with value for repossession'

BANKS stand accused of targeting the more "responsible" mortgage defaulters for repossessions, ahead of those in huge arrears.

It is claimed that distressed homeowners with equity in their homes and who talk to their bank are more likely to be targeted for repossessions.
Stricken borrowers who still have value in their homes are more likely to lose their home to the bank.


But those in negative equity are more likely to be given a debt deal, according to a leading support organisation for borrowers.
The New Beginning group, which deals with 50 new repossession cases each month, claims evidence from its client base suggests this pattern of action by the banks.
People who have equity in their homes, often as a result of sustained payments over the years, may find themselves facing repossession by banks eager to reclaim that value.
"We are in danger of creating a system in which those who are behaving themselves get the worst treatment and those who are behaving badly are apparently rewarded," said Ross Maguire of New Beginning.

A spokesman for the Irish Banking Federation said: "Repossession is not about positive or negative equity – it's about a mortgage that has become totally unsustainable.

In other 'news', Dublin 'asking prices' up 12% and the media are encouraging fools in massive debt.

lima

khards wrote: »

In other 'news', Dublin 'asking prices' up 12% and the media are encouraging fools in massive debt.

A question is why Independent isn't taking the lead on this 'asking price rise' noted by Journal.ie and their other company Daft.ie? You would have thought they would have jumped at the chance of making a big deal about asking price rises ( that are due to restricted stock )

murphaph

khards wrote: »

Banks 'target homes with value for repossession'

The statement was made by a group with their own agenda of course and is purely speculative at this stage. We don't know how each bank will proceed tbh. The CB should be monitoring this stuff and if banks are unfairly selecting cooperative people with equity over strategic defaulters then action should be taken.

gaius c

lima wrote: »

A question is why Independent isn't taking the lead on this 'asking price rise' noted by Journal.ie and their other company Daft.ie? You would have thought they would have jumped at the chance of making a big deal about asking price rises ( that are due to restricted stock )

Oh but they did.
"Surge" FFS

jay0109

So 35% of arrears of 90 days + are 'strategic' arrears. Looks like Prof Gregory Connor has being vindicated.

I wonder will the 'debt forgiveness' brigade update their mantra's to cover this or just conveniently ignore it!

The repossessions need to start asap

cookie1977

jay0109 wrote: »

So 35% of arrears of 90 days + are 'strategic' arrears. Looks like Prof Gregory Connor has being vindicated.

I wonder will the 'debt forgiveness' brigade update their mantra's to cover this or just conveniently ignore it!

The repossessions need to start asap

The bank said:

The bank also said 35% of those who are in arrears of 90 days or more were not making any payments on their mortgages.

Some of which will be strategic but not necessarily all.

jay0109

ah come on....some the 35% cannot afford to even pay a couple of quid each month to try and make it look like they're 'engaging' with the bank!!!!