Ireland, where repaying your mortgage is optional

maggy_thatcher

seamus wrote: »

So if you have a mortgage of €300k on a property valued at €200k, the bank take a €100k equity stake in the house and the homeowner's mortgage drops to €200k, so they can afford the repayments and continue living in the house. When the house is sold or the owner dies, the bank takes their €100k.

If they took €100k off the mortgage, they own 33% of the property at this point, not a fixed €100k amount. Why would the bank be entitled to a fixed €100k back upon sale? I would've thought that they would be entitled to 33% of whatever the sale price is.

"when the owner dies" - normally when a property is part owned by multiple people, the ownership transfers 100% to the remaining owners, it doesn't pass through the estate - what would happen here? Would the bank become sole owners of the property?

Similarly, what control would the bank have for blocking the sale? Say the owner wants to sell the house for €250k - the bank would only get €82,500 back from its €100k investment in the property (leaving the "owner" €166,500 to repay their mortgage and/or trade-up - potentially still in negative equity) - presumably it would object to the sale and cause all kinds of complex issues.

Villa05

MMAGirl wrote: »

If only there was some way for customers to take the banks to the European court for price gouging or something like that. Unfair profits taken from people locked in and way way above the ecb rate.
Better legal minds than mine must look into this though. Might be impossible

On this, for once, the banks are right. Would you lend a stranger a loan for an asset where you have to jump through so many hoops to get the asset back if the borrower fails to pay back the loan.

I feel that the banks are not charging enough, and those responsible are the Irish people who tolerate/demand this and the Government that implemented it. Investment mortgages will be cheaper than Residential mortgages before long.

This is going to end in financial disaster for a alot of people.

Anynama141

MMAGirl wrote: »

If only there was some way for customers to take the banks to the European court for price gouging or something like that. Unfair profits taken from people locked in and way way above the ecb rate.
Better legal minds than mine must look into this though. Might be impossible

Presumably you'd support the guys on trackers who are paying less interest than the banks are to borrow having to stump up extra too? The Irish taxpayer - through the banks - is effectively subsidising everyone on a tracker mortgage to the the tune of hundreds of millions of euros.

Villa05

Anynama141 wrote: »

Presumably you'd support the guys on trackers who are paying less interest than the banks are to borrow having to stump up extra too? The Irish taxpayer - through the banks - is effectively subsidising everyone on a tracker mortgage to the the tune of hundreds of millions of euros.

I would not, they have a contract and as long as they are honoring it, they keep there tracker.

The responsibility for the losses here belong with the Irish people because they voted for idiots who made the stupid decision of bailing out the banks and paying off bondholders in full.

Anynama141

Villa05 wrote: »

I would not, they have a contract and as long as they are honoring it, they keep there tracker.

The responsibility for the losses here belong with the Irish people because they voted for idiots who made the stupid decision of bailing out the banks and paying off bondholders in full.

Indeed. I wonder though whether MMA girl wants some people to be wriggle out of legal contracts but not others.

iMyself

Anynama141 wrote: »

Presumably you'd support the guys on trackers who are paying less interest than the banks are to borrow having to stump up extra too? The Irish taxpayer - through the banks - is effectively subsidising everyone on a tracker mortgage to the the tune of hundreds of millions of euros.

That's a myth. Here are the current Euribor rates:

http://www.euribor-rates.eu/euribor-mortgage.asp

the banks are borrowing at next to nothing...

Anynama141

iMyself wrote: »

That's a myth. Here are the current Euribor rates:

http://www.euribor-rates.eu/euribor-mortgage.asp

the banks are borrowing at next to nothing...

Who is lending to the banks at Euribor rates? Nobody?

Villa05

cookie1977 wrote: »

it depends on the type of population that goes to mabs. The data is not from all of those in arrears but rather from those in arrears who went to mabs. Ergo the data population is skewed that way. That may or may not affect the outcome but it has to be considered.

Joe Duffy is doing a telethon (or ratiothon) on this all week, one sided as f... of course. He had a lady on from the phoenix project who do similar work to mabs and oddly enough the age profile of the people coming to them mirror the MABS survey. Statistical blip, I suppose....

15 minutes in roughly http://www.rte.ie/radio/utils/radioplayer/rteradioweb.html#!rii=9%3A20189208%3A0%3A%3A

Blackjack

iMyself wrote: »

That's a myth. Here are the current Euribor rates:

http://www.euribor-rates.eu/euribor-mortgage.asp

the banks are borrowing at next to nothing...

www.youtube.com/watch?v=l74083zafAM

iMyself

Anynama141 wrote: »

Who is lending to the banks at Euribor rates? Nobody?

Where's your facts?

Villa05

Villa05 wrote: »

On this, for once, the banks are right. Would you lend a stranger a loan for an asset where you have to jump through so many hoops to get the asset back if the borrower fails to pay back the loan.

I feel that the banks are not charging enough, and those responsible are the Irish people who tolerate/demand this and the Government that implemented it. Investment mortgages will be cheaper than Residential mortgages before long.

This is going to end in financial disaster for a alot of people.

Wednesdays Joe Duffy
Woman on who handed back the keys to the bank stated:
"Why would you pay the mortgage on an asset that is collapsing in value"

No questions asked on this comment, so now I have to pay a TV licence to give strategic defaulters an outlet to promote their ideals. She goes on to complain that she can't get a loan anywhere and has to endure renting her current home now and says her situation is ironic.
http://www.rte.ie/radio/utils/radioplayer/rteradioweb.html#!rii=9%3A20189889%3A53%3A%3A

Villa05

AIB increasing their mortgage rates, while ecb considering cutting the base rate

Existing Residential Owner Occupier Standard Variable Rate will increase by 0.40 % from 4.00% to 4.40%

Loan to Value Variable Rates for Owner Occupiers will increase by 0.25%

Buy-to-Let Standard Variable Rate will increase by 0.40% from 4.95% to 5.35%

Tracker Mortgage Rates remain unchanged.


AIB has today (Wednesday, April 24th 2013) announced an increase in its variable mortgage rates by up to 0.40%, effective from June 5th, 2013.

http://www.aib.ie/personal/mortgages/mortgage_notice?c_id...ad...CachedYou

The downward spiral continues, as more and more fall into arrears, Banks increase rates to compensate which pulls more people into arrears

Skipper12

Does anybody have a breakdown/information on how many mortgages with AIB are currently in arrears/beyond the point of rescue/being paid on time every time without problem?

Just interested to see what peoples thoughts are on the latest increase on the interest rate.

"IF" there are massive numbers in arrears this latest increase makes their position even worse.

"IF" there are massive numbers beyond the point of rescue and currently not paying anything towards their mortgage this does not affect them at all.

"IF" there are people that are paying their mortgages on time every time, these would then seem to be the ones subsidising the other 2 groups.

3 BIG IF'S

Obviously this is very simplistic and I don't have any figures or facts. I'm just interested to hear the more knowledgeable posters thoughts on this.

cookie1977

Skipper12 wrote: »

Does anybody have information on how many mortgages with AIB are currently in arrears/beyond the point of rescue/being paid on time every time without problem?

Just interested to see what peoples thoughts are on the latest increase on the interest rate.

"IF" there are massive numbers in arrears this latest increase makes their position even worse.

"IF" there are massive numbers beyond the point of rescue and currently not paying anything towards their mortgage this does not affect them at all.

"IF" there are people that are paying their mortgages on time every time, these would then seem to be the ones subsidising the other 2 groups.

3 BIG IF'S

Obviously I am just thinking out loud here and don't have any figures or facts. Would be interested to hear more knowledgeable posters thoughts on this.

I dont think the info is available for specific banks on an uptodate basis but the CB stats cover total arrears/prearrears ppr/btl and are uptodate:
http://www.centralbank.ie/press-area/press-releases/Pages/ResidentialMortgageArrearsandRepossessionsStatisticsQ42012.aspx

Anynama141

Faimortgage rates wrote: »

Protest against AIB / EBS variable interest rate hike.
Is anyone interested in joining this campaign? Please email me at fairmortgagerates@gmail.com

Not really. Interest rates are still very low compared to what they have been in this country. I'm under 40 and even I can remember when they were well over 10%.

gaius c

Mortgage arrears to rise for another year

Rating agency predicts problem will peak in 2014

One quote in particular jumps out at me.

And a new survey has found that most people in mortgage distress have repayments so high they represent a third or more of their after-tax income.

Paying more than a third of your income on a mortgage is considered to be too high by experts, and likely to lead to financial problems.

A third of after-tax income is not "a pound of flesh" territory. There's clearly an element of opting not to pay going on here.

gaius c

Chief Risk Officer of Ulster Bank on RTE Drive Time earlier. Says that 35% of mortgages in 90+ days arrears are paying zero toward the mortgage. He pulled no punches that he believes a lot of this is strategic defaulting and UB will move to repossess on all of this category as soon as the legal loophole is plugged.

Looks like a third of mortgages in strategic default could be conservative.