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

gaius c

Then they are greasing their margins on the materials. There is no good reason for our build costs to be so wildly out of whack with our EU trading partners.

handlemaster

gaius c wrote: »

Then they are greasing their margins on the materials. There is no good reason for our build costs to be so wildly out of whack with our EU trading partners.

That's the Irish mentality to ripoff the next guy. The Irish friendlyness is in words only. If it can be stolen it will if it can be over charged it will if its not theirs they will break it.

indiewindy

2000 houses where the landlord is getting rent paid to them but not passing on the money in the form of mortgage payments to their lenders have had rent receivers appointed. These properties should all have been repossessed years ago.

handlemaster

indiewindy wrote: »

2000 houses where the landlord is getting rent paid to them but not passing on the money in the form of mortgage payments to their lenders have had rent receivers appointed. These properties should all have been repossessed years ago.

Banks sleeping on the job no dought

Villa05

More than 49,000 mortgages had been restructured by Irish banks by the end of October, according to data from the Department of Finance.

The latest Mortgage Arrears Data shows that 49,032 mortgages on principal dwellings had been permanently restructured by the end of the month - 3,855 more than by the end of September.

More than a quarter of cases involved arrears capitalisation, where some or all of the arrears owed are added to the principal with a view to it being paid off over the lifetime of the mortgage

So permanent restructuring involves taking a non performing loan and increasing it with the arrears built up to date, thus increasing the repayments and this has been done in more than 25% of cases. We sure are on the road to recovery
http://www.rte.ie/news/business/2013/1212/492473-mortgage-arrears-restructuring/

Villa05

Interesting analysis from Constantin Gurdgiev showing that over a quarter of mortgages are in trouble,............. yet prices are increasing 15% p/a in some areas.

Is there anyone out there that does not think that this is an absolutely ridiculous situation

Michael Nonan reckons that "we can't go mad again".
http://www.rte.ie/news/2013/1213/492576-bailout/

Ah well......

What do we know from official sources: Total mortgages outstanding: 915,746 per CBofI (composed of 768,136 principal residences-linked mortgages and 147,610 BTLs), of these:

Total mortgages in arrears: 181,946 per CBofI (composed of 141,520 principle residences and 40,426 BTLs)

Restructured, not in arrears: 56,186 (composed of 43,034 principal residences and 13,152 BTLs)

Repossessed homes - we have no numbers for aggregates repossessed - neither the CBofI, nor Department of Finance report these on any regular basis. But in Q3 2013 we had 1,566 properties in repossession (1,050 residences and 516 BTLs). These are properties held in possession by the banks. We do not know how many they have sold since the beginning of the crisis.

Voluntary surrenders - we have no data on these from any official source, but the properties that are surrendered and are still in the possession of the banks are aggregated into (3) above.

So, with incomplete information on (3) and (4), to-date, the extent of the crisis is for all types of properties:

181,946 in arrears + 56,186 restructured, not in arrears + 1,566 repossessed and surrendered = 239,698 accounts or, ca 26% of all accounts outstanding.

And the number is growing...

http://trueeconomics.blogspot.co.uk/2013/12/12122013-measuring-mortgages-crisis-in.html

kennyb3

Villa05 wrote: »

Interesting analysis from Constantin Gurdgiev showing that over a quarter of mortgages are in trouble,............. yet prices are increasing 15% p/a in some areas.

Is there anyone out there that does not think that this is an absolutely ridiculous situation

Michael Nonan reckons that "we can't go mad again".
http://www.rte.ie/news/2013/1213/492576-bailout/

Ah well......



http://trueeconomics.blogspot.co.uk/2013/12/12122013-measuring-mortgages-crisis-in.html

The banks will continue to do very little as long as Draghi continues to throw money at them at 0% or close to. It's only when ECB rates start to increase will you see some action. Of course they aren't going to realise losses when they can sit back do nothing, and hope prices continue to rise in the interim therefore reducing the losses to be realised. This will continue until Mr.Draghi dictates otherwise.

indiewindy

kennyb3 wrote: »

The banks will continue to do very little as long as Draghi continues to throw money at them at 0% or close to. It's only when ECB rates start to increase will you see some action. Of course they aren't going to realise losses when they can sit back do nothing, and hope prices continue to rise in the interim therefore reducing the losses to be realised. This will continue until Mr.Draghi dictates otherwise.

It is a very expensive process to try to repossess a house in Ireland, if the legal obstacles were not made deliberately very expensive and time consuming then a lot more houses would be released onto the market. Not all banks with non-performing loans are Irish owned.

lima

indiewindy wrote: »

It is a very expensive process to try to repossess a house in Ireland, if the legal obstacles were not made deliberately very expensive and time consuming then a lot more houses would be released onto the market. Not all banks with non-performing loans are Irish owned.

Great to hear a lot of properties were repossessed in Q3. Fingers crossed the banks will put them on the market so that it will be a step towards a normal market.

Villa05

MORE than 1,000 people have already begun the process of being declared bankrupt -- just seven days into the new bankruptcy regime...............
It means that fears of a flood of bankruptcies, dismissed out of hand by the Government when the legislation was going through the Dail, is now a reality.

http://www.independent.ie/irish-news/more-than-1000-apply-for-bankruptcy-29839144.html

I suppose if you lost your job, this is the only way out under the current system.

handlemaster

Villa05 wrote: »

http://www.independent.ie/irish-news/more-than-1000-apply-for-bankruptcy-29839144.html

I suppose if you lost your job, this is the only way out under the current system.

So if you lose your job your commitments to paying your debts are exonerated !!!

Villa05

handlemaster wrote: »

So if you lose your job your commitments to paying your debts are exonerated !!!

Bankruptcy is not exoneration...... although nothing surprises me in this country anymore

lima

Villa05 wrote: »

Bankruptcy is not exoneration...... although nothing surprises me in this country anymore

I take it these people will have to sell their homes, yes?

Tigger

lima wrote: »

I take it these people will have to sell their homes, yes?

no, they will pay off their mortgage at a rate that's less than most people pay in rent for a similar home. because home ownership is seen as a right here.

don't know how i feel about it really, i'm glad that people will be put in a better situation but it irks my sense of fair play.

Villa05

lima wrote: »

I take it these people will have to sell their homes, yes?

Thats what happens in sane countries

jay0109

gotta keep families in their homes at all costs:rolleyes:
F those families that bought the small starter houses in the boom times, not buying into the hype. They can now stay stuck in those houses.....thats the price you pay in Ireland for showing prudence when the cash is being thrown around.:(

cookie1977

The media posts and comments on here surrounding repossessions dont necessarily tally with official figures:
PDH/PPR first

During the third quarter of 2013, legal proceedings were issued to enforce the debt/security on a PDH mortgage in 1,830 cases. Court proceedings concluded in 361 cases during the quarter, and in 89 of these cases the Courts granted an order for repossession or sale of the property

In other words only 20% of repossession cases initiated were dealt with in the quarter and of this only a quarter of concluded repossession cases ended with the house being sold or repossessed. Hardly a glut now.

There isn't as clear info in BTL properties but:

A total of 62 properties were taken into possession by lenders during the quarter, of which 31 were repossessed on foot of a Court Order, while the remaining 31 were voluntarily surrendered or abandoned.

So while we dont know the total number of BTL arrears issued with legal proceedings the numbers repossessed on foot of an order seem very small and again there is no evidence of mass repossessions.

http://www.centralbank.ie/polstats/stats/mortgagearrears/Pages/releases.aspx

Villa05

The imf are retaining an office in dublin, maybe we can repay them out of extortionate rents

lima

Tigger wrote: »

no, they will pay off their mortgage at a rate that's less than most people pay in rent for a similar home. because home ownership is seen as a right here.

don't know how i feel about it really, i'm glad that people will be put in a better situation but it irks my sense of fair play.

I thought they would have to sell the property and go into a payment plan to pay of a certain amount of the leftover before getting away with paying the rest of it.

Do they get a free house at the end of this?

Glenbhoy

lima wrote: »

I thought they would have to sell the property and go into a payment plan to pay of a certain amount of the leftover before getting away with paying the rest of it.

Do they get a free house at the end of this?

I haven't read the details of any actual arrangements if they are out there, but this link provides a decent illustration:
https://www.isi.gov.ie/en/ISI/PIA%20step%20by%20step%20example%20-%20Revised%20August%202013.pdf/Files/PIA%20step%20by%20step%20example%20-%20Revised%20August%202013.pdf

Each case will be dealt with individually etc, but in general it seems to be the case that the PIA essentially gives you 6 years of breathing space and a write-off of whatever your bank agrees to of your outstanding debt.

For example, say I owe 300K on a mortgage and 50K in credit card debts, my income is 3K per month and my property is worth 200K.

I contact a PIP who arranges a PIA for me. They take into account my outgoings and allow me, say 1.5K per month to live on, the other 1.5K will be used to service my PIA, if my creditors agree to it.
My credit card providers agree to accept 500 per month for 6 years and agree to write-off the remainder of the debt. My mortgage provider agree to accept 1k per month for the 6 years and will write-off, say the negative equity portion (100k in my example above) and not charge any further interest over the 6 years, thereafter, I will have to repay the remaining 200K less my 72K repaid over the 6 years.
Bear in mind that the mortgage lender can pretty much always veto the deal if they want.
I'm not sure if that makes any more sense, and I'm not even sure if that's how it works....

The_Conductor

And in addition- if the future value of the property increases and you sell the property- the lender reserve the right to that portion of the loan that was written off (aka its more accurately described as 'parked' rather than written off- as it is a secured debt).

The credit card company- or any other holders of unsecured debt- would likely be unhappy with arrangements- as obviously the secured debt holder would have call on secured assets present.

The intention is not to allow the person get a house free- its to allow them to clean their slate in the set period, and start anew. Its based on the Swedish model.

Villa05

Does one keep the utility value of the house in bankruptcy?

The_Conductor

Villa05 wrote: »

Does one keep the utility value of the house in bankruptcy?

Its hard to see how/why they would.
They're being given a clean slate- why should they concurrently be subsidised?
Then again- it is Ireland........:(

lima

Well this points to good news:

http://www.irishtimes.com/business/sectors/financial-services/repossessions-for-one-in-five-mortgages-in-arrears-says-fitch-1.1629996

I may put off my impending active search for another 6 months.

who_ru

lima wrote: »

Well this points to good news:

http://www.irishtimes.com/business/sectors/financial-services/repossessions-for-one-in-five-mortgages-in-arrears-says-fitch-1.1629996

I may put off my impending active search for another 6 months.

if losses are of that magnitute and lets face it they could be much higher than that, BOI has been told to allow alomost another 2bn euro for losses both commercial and residential, I can't see how AIB/PTSB can get by without further bank recapitialisation down the road.

jay0109

lima wrote: »

Well this points to good news:

http://www.irishtimes.com/business/sectors/financial-services/repossessions-for-one-in-five-mortgages-in-arrears-says-fitch-1.1629996

I may put off my impending active search for another 6 months.

Did'nt Fitch say this time last year prices would fall here by another 20% They got that one wrong so far

I think the problem with Fitches is that they are applying rational thinking and economics to the data in Ireland.....but this is Ireland where slieveen politics and half ar5ed policies and fudged solutions are the order of the day.
So there'll not be 2.6k repossessions next year, never mind the 26k

lima

jay0109 wrote: »

Did'nt Fitch say this time last year prices would fall here by another 20% They got that one wrong so far

I think the problem with Fitches is that they are applying rational thinking and economics to the data in Ireland.....but this is Ireland where slieveen politics and half ar5ed policies and fudged solutions are the order of the day.
So there'll not be 2.6k repossessions next year, never mind the 26k

Hopefully it'll get noticed by the Trioka and they will stay here longer, we need them to inject sense into this place

gaius c

jay0109 wrote: »

Did'nt Fitch say this time last year prices would fall here by another 20% They got that one wrong so far

I think the problem with Fitches is that they are applying rational thinking and economics to the data in Ireland.....but this is Ireland where slieveen politics and half ar5ed policies and fudged solutions are the order of the day.
So there'll not be 2.6k repossessions next year, never mind the 26k

Herbert Stein's Law: "If something cannot go on forever, it will stop,"

The fact that the state has diverted so much effort into defying the inevitable just means that it's going to be so much more painful when it does stop.

cookie1977

jay0109 wrote: »

Did'nt Fitch say this time last year prices would fall here by another 20% They got that one wrong so far

I think the problem with Fitches is that they are applying rational thinking and economics to the data in Ireland.....but this is Ireland where slieveen politics and half ar5ed policies and fudged solutions are the order of the day.
So there'll not be 2.6k repossessions next year, never mind the 26k

I think you're right. We're looking at a government and a banking system that wont even go after the low hanging fruit of BTL's and you expect the same people (with both local and national elections coming) to suddenly go after homes of families?

I'm not commenting on the rights and wrongs of this but simply that I do not see how this will happen. We've been talking about gluts since March 2013 and instead we're now seeing house price rises (which shock horror fitch, is due to supply and demand, albeit cash buyers predominantly) and people on here suddenly expect things to go about turn and we get mass repossessions?

If we couldnt get that to happen while the troika where here proper, how do those now saying it will happen see it happening prey tell? Remember all politics is local!

Daith

cookie1977 wrote: »

If we couldnt get that to happen while the troika where here proper, how do those now saying it will happen see it happening prey tell? Remember all politics is local!

Yeah agreed. Take people from the family home? Madness and political suicide