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

cookie1977

What do you mean by debt forgiveness in relation to BTL's though. In my mind I think that if a BTL mortgage is unsustainable then repossess and let the bank sell. If there's a shortfall between sale and mortgage and the person can't pay then write off the shortfall. I'd also point out too that this example of a person with "property investments" is not the majority of BTL's. In fact I suspect (speculation here and I'd be delighted to be refuted) that most BTL owners are individuals who kept their stater property to rent out for a pension in the future rather than some mogul.

I'd prefer them to start repossessions with BTL's immediately as I don't agree that the banks would run out of cash. I don't think there huge need for debt write off on PDH/PPR's if you resturcture effectively. You can also start proper mortgage restructuring of PDH/PPR's at the same time with debt for equity swaps and such.

Strategic defaulters should also be dealt with seperately. OT but I'd agree with pulling state subsidies from private schools.

Villa05

Another contributor to that primetime show in "mortgage distress" was George Mordaunt - Google his name!

gaius c

Villa05 wrote: »

The same guy is a bit aggrieved at talks of the state pulling subsidies to fee paying schools :mad:

This is my point about dealing with residential first, if we don't this person will get debt forgiveness before the householder in genuine distress



http://www.thepropertypin.com/viewtopic.php?f=4&t=55376&p=689494&hilit=irish+times#p689494

That's a fair point. Using up our scarce resources on BTL first might mean there's nothing left in the pot for when we have to deal with PPR's.

cookie1977

Noonan wants banks to offer half of mortgages in arrears new deals by the end of the year or they'll face fines.

The Government and the Central Bank have unveiled unprecedented measures to tackle the mortgage arrears crisis.
The steps put greater emphasis on writing down debt, while acknowledging some borrowers will have to volunteer to surrender possession of properties.
Banks will be forced to reach sustainable solutions with 20% of borrowers in arrears by the end of July.
That figure will increase to 30% by the end of the third quarter of 2013 and 50% by the end of the year.

http://www.rte.ie/news/2013/0313/376398-government-mortgage-arrears/

In the Central Bank's definition of a sustainable solution, it includes repayment of "a revised principal sum" - in other words some of the debt being written down if the bank offers a deal to a customer.
The Central Bank hopes to increase the use of split mortgages.
This would see a home loan divided into two parts, with the customer paying the first part and the second part would be parked without interest accruing in some circumstances.
In some cases the second part would be written off at the end of the term of the home loan.
However, it would be up to individual banks to determine if this would be appropriate.

If banks fail to restructure loans they will have to write-down the loans to value of the loan to repossession value of the property.
That will require banks to set aside more capital for loans in arrears.
The measures will cover AIB, Bank of Ireland, Permanent TSB, Ulster Bank, KBC and ACC.

Seems reasonable to me. and as Elderfield says below, if the right properties in arrears are repossessed I dont see a big issue with these proposals:

Financial Regulator Matthew Elderfield told a press conference this afternoon that he expects repossessions to "rise significantly".

lima

cookie1977 wrote: »

Noonan wants banks to offer half of mortgages in arrears new deals by the end of the year or they'll face fines.



http://www.rte.ie/news/2013/0313/376398-government-mortgage-arrears/





Seems reasonable to me. and as Elderfield says below, if the right properties in arrears are repossessed I dont see a big issue with these proposals:

Angry that theres not more talk of repossessions, and there is talk of debt forgiveness, but I expected as much from this place. The
irish truely are a race with only themselves in mind. As soon as they can they will start the whole property thing again and f*ck it up for another innocent generation.

cookie1977

They're saying that repossessions will rise significantly. Yes admittedly this is from a low base. I resent the idea that we (does that include you?) are a nasty race.

Cuddlesworth

If that's followed through with, especially the half hearted part about "volunteer to surrender possession of properties" I can see the number of strategic defaults skyrocket.

cookie1977

Cuddlesworth wrote: »

If that's followed through with, especially the half hearted part about "volunteer to surrender possession of properties" I can see the number of strategic defaults skyrocket.

Surely though an analysis of a strategic defaulters abilities to pay would negate any potential benefit to them? The MARP document requires a lot of detail on your income and expenditure and a lot of these new rules will require the mortgagee to be under the MARP process. And:

However, it would be up to individual banks to determine if this (debt forgiveness) would be appropriate.
If a new sustainable solution cannot be reached with the bank, the borrower has the option to use the personal insolvency arrangements, which will be operational in June.

lima

cookie1977 wrote: »

They're saying that repossessions will rise significantly. Yes admittedly this is from a low base. I resent the idea that we (does that include you?) are a nasty race.

Ok sorry I edited my post. it is a very emotional topic.

cookie1977

lima wrote: »

Ok sorry I edited my post. it is a very emotional topic.

As it is for those in arrears.

lima

FYI:

http://www.centralbank.ie/regulation/poldocs/consultation-papers/Documents/CP63%20Review%20of%20the%20Code%20of%20Conduct%20on%20Mortgage%20Arrears/Consultation%20Paper%20CP63%20FINAL.pdf

cookie1977

lima wrote: »

FYI:

http://www.centralbank.ie/regulation/poldocs/consultation-papers/Documents/CP63%20Review%20of%20the%20Code%20of%20Conduct%20on%20Mortgage%20Arrears/Consultation%20Paper%20CP63%20FINAL.pdf

that's still an open consultation document so it could change.

Although it does mention something that I favour:

Equity participation: means that the principal sum due on the primary residence is reduced, provided that a share in the borrower’s equity in the primary residence is transferred to the lender, or a third party.

Aswell as:

Such alternative
repayment arrangements may include:
a) an interest-only arrangement for a specified period;
b) permanently reducing the interest;
c) temporarily reducing the interest for a specified period;
d) an arrangement to pay interest and part of the normal capital element for a
specified period;
e) deferring payment of all or part of the instalment repayment for a period;
f) extending the term of the mortgage;
g) changing the type of the mortgage, except in the case of tracker mortgages;
h) capitalising the arrears and interest;
i) equity participation;
j) warehousing part of the mortgage (including through a split mortgage);
k) debt write off; and
l) any voluntary scheme to which the lender has signed up e.g. Deferred
Interest Scheme.

Cuddlesworth

cookie1977 wrote: »

Surely though an analysis of a strategic defaulters abilities to pay would negate any potential benefit to them? The MARP document requires a lot of detail on your income and expenditure and a lot of these new rules will require the mortgagee to be under the MARP process. And:

How much access does the MARP process have to employer details, social security records, salary statements, undisclosed bank accounts etc?

At what point with the existing 100k+ morgages in arrears, will each person be painstakingly investigated.

cookie1977

There is a limit as with any personal information (particularly when it's volunteered) but you do have to produce bank account statements. You declare the following:

I declare that the information I have provided represents my/our financial situation, and commit to informing my lender if my situation changes.

http://www.centralbank.ie/consumer/info/documents/industry%20standard%20financial%20statement.pdf

If you're found to be lying then you are not complying with MARP and cannot afford it's protections.

D3PO

cookie1977 wrote: »

There is a limit as with any personal information (particularly when it's volunteered) but you do have to produce bank account statements. You declare the following:



http://www.centralbank.ie/consumer/info/documents/industry%20standard%20financial%20statement.pdf

If you're found to be lying then you are not complying with MARP and cannot afford it's protections.

Im sure P60's etc mush also be provided. Ok other income streams like non declared rental income, contracters doing cash jobs etc could potentially be hidden.

No process is perfect, but if its clear that entering MARP and providing fraudelent detail will result in jail time then hopefully people will think twice about trying to pull the wool over everybodies eyes.

cookie1977

No, P60's are not required. It's a voluntary declaration which includes copies of bank account statements

Galego

The Government, as expected, has provided no solution, has stated the obvious and talks about more restructuring but fail to answer the simple question: “where is the money going to come from for all these restructured mortgage?”.

Cuddlesworth

cookie1977 wrote: »

There is a limit as with any personal information (particularly when it's volunteered) but you do have to produce bank account statements. You declare the following:



http://www.centralbank.ie/consumer/info/documents/industry%20standard%20financial%20statement.pdf

If you're found to be lying then you are not complying with MARP and cannot afford it's protections.

But in the case of a strategic defaulter, they are very aware of the fact that they can pay but won't. So its unlikely they will disclose anything.

TBH, unless Revenue are involved in this, its a complete and utter farce and is simply a excuse to kick the can further down the road.

And not being afforded the protection of the MARP process belittles the fact that its next to impossible to eject people from their principal residence in this country.

cookie1977

True but there will be no deals about debt forgiveness without a complete opening of the books. No bank (as they have final decision) is going to just debt forgive on the basis of your word. The Standard Financial Statement that is filled out is only the process of entering MARP it is not debt forgiveness itself. It's to assess your current situation. If there's a strategic defaulter then it's also possible that their bank account details will show that. I think the strategic defaulters make up many outside of MARP. Those just not paying tehir mortgage

Cuddlesworth

Galego wrote: »

The Government, as expected, has provided no solution, has stated the obvious and talks about more restructuring but fail to answer the simple question: “where is the money going to come from for all these restructured mortgage?”.

Any non government owned bank is going to run from the mortgage market here straight away if debt write-downs become forced. If they haven't already.

Any government owned bank will have to be propped up further by the general tax payer due to the write-downs of debt.

cookie1977

Cuddlesworth wrote: »

Any non government owned bank is going to run from the mortgage market here straight away if debt write-downs become forced. If they haven't already.

Any government owned bank will have to be propped up further by the general tax payer due to the write-downs of debt.

That's pure speculation at present.

handlemaster

I dont see why people get so upset about repossessions. Ok the house was your home you can no longer affort it or maybe you could never afford it in the first place. Move on if it is so stressful. I think the banks everyone can aggree have done everything to help home owners in difficulity. There have been very little repossessions. I think this new move by the government will see repossessions among the people that just have never engaged with the banks and are basically free loading on the backs of the tax payers. The other section of repossessions I predict will be the people who completely over streached themselves.

Villa05

cookie1977 wrote: »

What do you mean by debt forgiveness in relation to BTL's though. In my mind I think that if a BTL mortgage is unsustainable then repossess and let the bank sell. If there's a shortfall between sale and mortgage and the person can't pay then write off the shortfall. I'd also point out too that this example of a person with "property investments" is not the majority of BTL's. In fact I suspect (speculation here and I'd be delighted to be refuted) that most BTL owners are individuals who kept their stater property to rent out for a pension in the future rather than some mogul.

I'd prefer them to start repossessions with BTL's immediately as I don't agree that the banks would run out of cash. I don't think there huge need for debt write off on PDH/PPR's if you resturcture effectively. You can also start proper mortgage restructuring of PDH/PPR's at the same time with debt for equity swaps and such.

Strategic defaulters should also be dealt with seperately. OT but I'd agree with pulling state subsidies from private schools.

- Writing of the shortfall = Debt forgiveness
- BTL's (for the purpose of arrears statistics) are people who took out BTL mortgages. They are not people who held on to there starter home. Those people would have retained there residential mortgage status to retain lower interest rate/tracker status. Banks were turning a blind eye to this practice, unlikely to in the future I suspect.

- "I don't agree that the banks would run out of cash"
Best laugh I had all day - Thanks

cookie1977

Villa05 wrote: »

- Writing of the shortfall = Debt forgiveness
- BTL's (for the purpose of arrears statistics) are people who took out BTL mortgages. They are not people who held on to there starter home. Those people would have retained there residential mortgage status to retain lower interest rate/tracker status. Banks were turning a blind eye to this practice, unlikely to in the future I suspect.

- "I don't agree that the banks would run out of cash"
Best laugh I had all day - Thanks

Hello, I'm a BTL owner. When I bought my PDH/PPR I refinanced and have an investor mortgage on the BTL. I have an investment tracker too on the BTL at 1.5% above ECB. God I love know it alls.

gaius c

handlemaster wrote: »

I dont see why people get so upset about repossessions. Ok the house was your home you can no longer affort it or maybe you could never afford it in the first place. Move on if it is so stressful. I think the banks everyone can aggree have done everything to help home owners in difficulity. There have been very little repossessions. I think this new move by the government will see repossessions among the people that just have never engaged with the banks and are basically free loading on the backs of the tax payers. The other section of repossessions I predict will be the people who completely over streached themselves.

Did you see Geoff Scargill on Primetime last night? He seems to think that with a good show of outrage and screaming about repossession that he'll be able to get a debt writedown AND keep his five BTL properties?

S'all in the game bro.

lima

gaius c wrote: »

Did you see Geoff Scargill on Primetime last night? He seems to think that with a good show of outrage and screaming about repossession that he'll be able to get a debt writedown AND keep his five BTL properties?

S'all in the game bro.

The sooner stock starts to be released the better. The rest of us non-boomers who have come home from abroad to work in a particular sector of the economy where there is a skills shortage can then get on with our lives and buy our first homes not having to stress about the fact there are freeloaders hanging about in massive houses they were deluded enough to think they could live in in the first place!

cookie1977

lima wrote: »

The sooner stock starts to be released the better. The rest of us non-boomers who have come home from abroad to work in a particular sector of the economy where there is a skills shortage can then get on with our lives and buy our first homes not having to stress about the fact there are freeloaders hanging about in massive houses they were deluded enough to think they could live in in the first place!

You can do so now. Just because you dont like the current prices means nothing. No one is causing you this stress but yourself. Dont blame others for choices you cannot/will not make. I feel sorry for you to be honest.

StillWaters

cookie1977 wrote: »

You can do so now. Just because you dont like the current prices means nothing. No one is causing you this stress but yourself. Dont blame others for choices you cannot/will not make. I feel sorry for you to be honest.

I fail to undertake your indecision also. Sitting on your hands waiting for something that is not going to happen won't help you. Find a house you like and you can afford, and put in an offer. It's simple enough really. There is a Buying in 2013 thread on here with lots of advice and support.

gurramok

cookie1977 wrote: »

You can do so now. Just because you dont like the current prices means nothing.

The poster is justified at the frustration by the banks\govt of the holding back of stock in an effort to keep prices high and this is in a country which is in the hands of the IMF at the bankruptcy door. If there was transparency in a truly free market without govt intervention, this thread wouldn't exist.

lima

StillWaters wrote: »

I fail to undertake your indecision also. Sitting on your hands waiting for something that is not going to happen won't help you. Find a house you like and you can afford, and put in an offer. It's simple enough really. There is a Buying in 2013 thread on here with lots of advice and support.

From living in a number of other countries I can honestly say that there is little or no value in quality properties in Dublin right now. Therefore I believe a true value needs to be realized through the cessation of state intervention on mortgage arrears and repossessions. It is a wonderfully corrupt system in Ireland but because of:

A. The naivety of the Irish people in being sympathetic to people who made grown-up financial decisions and got burned

and

B. The sheer amount of people who got stung by the economy and therefore count as votes to the government

..f*ck all is being done to let the economy follow through with as normal a cycle as possible with regards to arrears and repossessions.

Again, I have no problem renting for the next year or more, in fact, renting is a normal thing in other countries, but is a bad word here. As soon as I find value in the property market again then maybe I'll spend some of my hard earned cash to invest in this country and we can get this place going again.