Tag Archives: Mortgage Arrears

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This afternoon.

The Citizens Information Board HQ,  Townsend Street in Dublin.

Tánaiste and Fine Gael Minister for Justice and Equality, Frances Fitzgerald, Minister for Social Protection, Leo Varadkar attend the rebooted launch of Abhaile.

Abhaile offers free mortgage arrears funding information, advice and possibly tay.

Ryanair livery anyone?

Above from left: Ita Mangan Chairperson of CIB,, Frances Fitzgerald, Leo Varadka and Angela Black, Chief Executive of CIB.

Meanwhile: AIB Plans To Sell Off Thousand Of Home Mortgages (Sunday Business Post)

Leah Farrell.Rollingnews

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This morning.

The Central Bank of Ireland has released the residential mortgage arrears and repossession statistics for the third quarter of 2016.

The Central Bank writes:

The number of mortgage accounts for principal dwelling houses (PDH) in arrears fell further in the third quarter of 2016; this marks the thirteenth consecutive quarter of decline. A total of 79,562 (11 per cent) of accounts were in arrears at end-Q3, a decline of 3.1 per cent relative to Q2 2016.

The number of accounts in arrears over 90 days at end-September was 56,350 (8 per cent of total), reflecting a quarter-on-quarter decline of 2.1 per cent. This represents the twelfth consecutive decline in the number of PDH accounts in arrears over 90 days.

Buy-to-let (BTL) mortgage accounts in arrears over 90 days decreased by 2.4 per cent during the third quarter of 2016. At end-September there were 14,518 BTL accounts in arrears over 720 days, with an outstanding balance of €4.3 billion, equivalent to 18 per cent of the total outstanding balance on all BTL mortgage accounts.  There was an increase of 5.4 per cent in the number of BTL accounts where a rent receiver was appointed; this follows on from an increase of 1 per cent in the previous quarter.

Residential Mortgage Arrears and Repossession Statistics: Q3 2016  (Central Bank of Ireland)

Meanwhile…

In Saturday’s New York Times, Liz Alderman reported:

The Tobun family never missed a rental payment on their modest brick rowhouse in eight years. But in February, the couple, who have two young children, received a letter warning that they would be evicted when their lease expired. Forty of their neighbors got the same notice.

When they went to investigate, the tenants, in the working-class suburb of Tyrrelstown, discovered a trail that led all the way to Wall Street.

After Europe was ravaged by a financial and economic crisis, the giant investment bank Goldman Sachs snapped up huge swaths of distressed debt in Ireland, including the loans of Tyrrelstown’s developer in 2014. The developer [brothers Rick and Michael Larkin, of Twinlite] now wants out of the rental game and is selling the properties. As the owner of the loans, Goldman will reap a large portion of the proceeds.

Goldman has nothing to do with the possible evictions here. But because American banks have played such a large role in Europe’s housing recovery — and have made huge profits in the process — they have become the main target of a growing backlash among homeowners and renters.

“Somehow, these funds have gotten involved in our community,” Funke Tobun said. “They’re profiting, but it’s the people who are being made to suffer.”

Wall Street has become the biggest new landlord in Europe, as American financial firms have swept into cities, suburbs and towns to take to advantage of the fallout from the worst economic downturn since World War II. In the last four years, Goldman Sachs, Cerberus Capital Management, Lone Star Funds, Blackstone Group and others from America have bought more than 223 billion euros’ worth of troubled real estate loans around Europe, nearly 80 percent of the total sold.

The firms have made the usual calculation: buy distressed investments on the cheap during tough times, betting that the outlook will eventually turn and riches will follow. And the firms are paying little or no tax, by employing complex strategies that often involve subsidiaries with no operations or staff.

The huge profits and dubious tax strategies have made Wall Street a major object of frustration and anger, as people grapple with evictions and higher mortgage payments. In some cases, the Wall Street firms are passive players, the money men behind the landlords, developers or banks that are exerting force. In other cases, they are direct participants taking action.

…Ireland is now enjoying a robust recovery. But growth has been fueled partly by financial maneuvering, and the real underlying gains are far from even. More than 5,000 people have been left homeless by the crisis, with the government subsidizing many in shelters.

Mrs. Tobun does not have many options. She does not want to move farther out, since it would mean changing schools for her son who has special needs. A nearby rental is too expensive. Rents in Ireland have risen around 20 per cent since the crisis as home construction dried up after the bust.

…Like other Wall Street players, Cerberus came into the country quietly, creating a local subsidiary under a different name and setting up a complex and extensive web of interconnected businesses.

There are the 13 subsidiaries in Dublin, all with Promontoria in their names. They have no employees and no offices. They are all registered to the same address on Grant’s Row, a letterbox near Parliament. Those subsidiaries, in turn, are subsidiaries of holding companies in the Netherlands, more than 110 of which had the Promontoria name.

The structure has helped Cerberus profit in Ireland…

Wall Street Is Europe’s Landlord. And Tenants Are Fighting Back (New York Times)

90380184-190380180From left : Justice Minister Frances Fitzgerald, Minister for Finance Michael Noonan and Environment Minister Alan Kelly at government buildings

RUN!

This afternoon

The media launch of new measures to combat the mortgage arrears crisis including the removal of the bank veto on settlements, extending the mortgage-to-rent scheme and giving MABS [The Money Advice and Budgeting Service] an additional role to act as “a friend to those in mortgage distress”.

Mmf.

Cabinet approves mortgage arrears plans (RTÉ)

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Further to the mortgage arrears crisis.

A finger-wagging warning from history.

“I think right now the world thinks more of Ireland than many Irish think of their own country. There’s not a single person who knows anything about the global economy who lives outside of Ireland who has a moment’s doubt that you will recover from this, the question is, how quickly and how. So I will resist my normal temptation to be almost maudlin every time I come here and try to say some very specific things.

This country made a big macro-economic decision when you made up your mind that you would save your financial structure and not be seen as defaulting on your debt, and I’m sure it made a lot of people mad because they thought we’re helping people who profited out of our misery. It was the right decision it made people want to be here.

Now you have one more big economic decision which,and I just got briefed by your leaders on it and it’s the same decision America had to make but you’re way here further than we are down the road.

You’ve already decided you’re not going to throw many homeowners out of their homes but when you carry around as much unresolved debt as we have and you have because your own people are afraid to spend, they actually save more which is a personal virtue but a collective problem in a downturn in which interest rates are virtually zero and there’s not enough demand.

So even if you recapitalise the banks, they’re reluctant to lend and people are reluctant to borrow.

The only way to do it is to deleverage the economy, so the government has come a long way on this and they are looking at a variety of options, there are fifteen ways to do that in which people who have to make a little sacrifice now to deleverage and to work out the mortgage terms whether you lengthen the term of the mortgage or whatever you do to clean this debt up can get it back on the back end as the value of housing goes up and the country returns to full health.

I know that they’re dealing with it so when the decisions are made and proposals put forward just remember this, this depends on whether you want beat the five-year average.

Japan spent two trillion dollars on infrastructure projects the good ones by the way which will add to its long-term productivity and help it for 30-40 years into the future kept a lot of people working, they had a 20% personal savings rate but when their banks collapsed in 1990, a decade later they had not yet returned to a full-employment high-growth economy because they could never find out how to deleverage and work through all this debt. so without even knowing the details of what they’ll wind up proposing, I support it, because there is no perfect solution, someone will be disappointed, somebody has to give a little today to get tomorrow.

But I’m telling you, I want you to beat the five years, and you can read, you don’t have to take my word for it, you can go down to any of the university libraries and dig out old economic tomes, you can go back five hundred years, it takes five years to get out of these things, or ten years, because it’s always politically difficult to deleverage when you’ve got excess debt.

But if you don’t then even the best Irish entrepreneurs, particularly those that have markets in Ireland, have to get up every day with chains on their legs so that’s the first thing I want to say, I’m for it and I want to know what they’re going to propose but if it helps you to accelerate this you’ll be doing something that most countries do not have the sense, the courage or the political will or ability to do, then the United States has to do it too if we want to beat the five years.

Bill Clinton [starts at 9.10] addressing The Global Irish Economic Forum, Dublin , October 2011.

There you go now.

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burgessGorse Hill, Killiney (top) earlier this month and Brendan Burgess (above)

Bring it on.

Sez controversial Financial advisor Brendan Burgess:

Here we blame the bank and not the borrower. Banks have to comply with a complicated and bureaucratic Mortgage Arrears Resolution Process – proposed incidentally by an expert group of which I was a member. We place all the responsibility for solving mortgage arrears on the lender. We absolve the borrower of all responsibility saying that they are in arrears “due to no fault of their own”. We throw our hands up in horror at the very mention of the possibility of repossession.

The result? While most people have continued to pay their mortgage, a minority have exploited the situation. When these people realised that there was no effective sanction for not paying their mortgage, they tried to get away without paying. Some 30,000 people have now built up over two years of arrears. Some of these have done their best to pay what they can, but many of them have taken advantage of the lack of any effective sanction and made little effort to pay.

Well-meaning debt campaigners have done these borrowers no favours whatsoever as they have just encouraged the borrowers to avoid reality and to delay facing up to their problems. They have given these borrowers false hopes of debt write-downs. If these borrowers had addressed the problems early on, many could have got back on track. But many have now left it too late and will lose their homes.

Hardcore.

Want to solve arrears crisis? Make repossession faster and cheaper (Brendan Burgess, Independent.ie)

(Photocall Ireland)

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Page 7 of the Central Bank of Ireland’s Residential Mortgage Arrears and Repossessions Statistics: Q4 2014 report, out today

A new report from the Central Bank, detailing figures in relation to Ireland’s residential mortgage arrears and repossessions for the last three months of 2014 is out.

It states the number of overall number of mortgage arrears cases fell by 7,523 over the period, while the number of mortgage arrears cases involving people who’ve been in arrears for over 720 days has risen by 294.

In relation to legal proceedings and repossessions, the Central Bank reports:

“During the fourth quarter of 2014, legal proceedings were issued to enforce the debt/security on a PDH [Private Dwelling House] mortgage in 2,543 cases. Court proceedings concluded in 721 cases during the quarter, and in 314 of these cases the Courts granted an order for repossession or sale of the property.”

“There were 1,393 properties in the banks’ possession at the beginning of the quarter. A total of 429 properties were taken into possession by lenders during the quarter, of which 123 were repossessed on foot of a Court Order, while the remaining 306 were voluntarily surrendered or abandoned. During the quarter 222 properties were disposed of.”

“The number of properties in possession at the end of the quarter was also impacted by reclassification issues affecting 12 PDH accounts. These issues mainly reflect the reclassification of PDH accounts as BTL [Buy To Let] accounts. As a result, lenders were in possession of 1,588 PDH properties at end-December 2014.”

Huh?

Right so.

Residential Mortgage Arrears and Repossessions Statistics: Q4 2014 (Central Bank)

Previously: Meanwhile, In Limerick

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Fianna Fail finance spokesperson Michael McGrath this afternoon

This afternoon

Ahead of a Dáil debate on Fianna Fáil’s Family Home Mortgage Settlement Arrangement Bill.

A bill that proposes removing the bank veto on “proposals to restructure a family home mortgage through the personal insolvency process”.

FF Finance spokesman Michael McGrath explains

“The banks have really ramped up repossession actions in recent times. The rapid rise in house prices in 2014, particularly in the Dublin region, has given them the opportunity to substantially reduce the losses they would face from selling a home in mortgage arrears.

Banks are using a variety of tactics including direct court action as well as selling off parts of their loan book, a method that essentially amounts to outsourcing of repossession

.As it stands, in the absence of a significant legislative initiative, the 37,484 people in arrears for more than two years are at a very high risk of losing their homes. That is why we are appealing to the government to accept the legislation we are bringing forward today to give families a fair chance to put in place a restructuring arrangement that will allow them to stay in their home. [Under current legislation repossession proceedings must be commenced by civil bill]

In 2014 a total of 8,164 civil bills for an order of possession were lodged in the Circuit Court. In general these cases are heard by the county registrar. While there are excellent county registrars throughout the country, their role is essentially procedural and it is not a suitable mechanism for dealing with what is essentially a very sensitive matter of an action to repossess a family home is.

Last week in the Seanad, Minister Kevin Humphreys stated “if all of these cases were to heard by a member of the Judiciary, it would have significant resource implications for the courts.”

He essentially accepted that the massive wave of repossession actions the state is witnessing cannot all be heard at circuit court level denying families an opportunity to put their case forward.

At the moment the Insolvency Service of Ireland is being completely underutilised. Fewer than 1,000 cases were processed in the first year when it was expected to be 15,000. We would utilise the insolvency structure that is already in place in order to allow people who have fallen in to arrears on their mortgage to get an order specifically relating to the family home….”

FIGHT!

Dail To Debate FF Bill To Remove Bank Veto (Fianna Fáil)

(Mark Stedman/Photocall Ireland)

 

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*jitter*

Results of the most recent stress tests on the banks are released on Sunday.

In the meantime…

What Goes Up writes:

You posted a graph (about Ireland’s mortgage arrears reality) from me last June. I’ve updated it (top ) for the first half of 2014 – and the story continues not to be pretty: I’ve also charted the “Number of mortgages in arrears” figures from the Central Bank – as people assume that the amount of arrears of 180-days+ would simply grow without necessarily more people going into default – the second graph (above) shows that not to be the case..

I think it’s safe to say if any of the Irish banks pass the stress tests on Sunday – then either they have performed amazingly over the summer… or else the stress tests were less than rigorous!

Central Bank’s figures here

BPFI figures here

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Gulp.

WhatGoesUp writes:

“Having failed to buy into the Michael Noonan hype that Irish banks were on the road to recovery, I decided to go off and look for myself at the numbers.What I found was not the picture as imagined by the Minister of Finance. What’s more, in reality, the picture is actually worse than presented here:- The mortgage arrears figures are only for Primary Dwelling Homes (PDH i.e. family homes) – no Buy-To-Let (BTL) numbers are included, which are even worse.This is without looking at the SME lending/arrears disaster in the banks…”

Sources: Irish Banking federation, Central Bank