Love, Ulster


23/6/2012. Ulster Banking Crisis

Ulster Bank to sell off 900 distressed home loans as part of bigger €2.5 billion portfolio (RTÉ)



“It should also be stressed in the interests of candour that there is seemingly an ideological preference amongst much of the judiciary to uphold the practices of banks and vulture funds, in a misplaced belief that this is necessary in a functioning market or ethically preferable to avoid moral hazard.

“Such viewpoints betray scant understanding of the plight that ordinary people find themselves in and flow from a class-driven lack of empathy.”

Barrister David Langwallner and the housing crisis

Taking Housing From Scandal To Right (Village Magazine)

Thanks Fluffybiscuits

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42 thoughts on “Love, Ulster

  1. Vote Rep #1

    “Ulster punishing those who can’t pay”

    Isn’t that generally what happens when you don’#t pay your debts?*

    * this is not condoning the selling loans in arrears to vulture funds which is cowardly in the extreme. Are RBS getting ready to pull the plug on Ulster bank?

  2. Harry Molloy

    All of the mortgages are 2-3 years in arrears. Just adding a relevant point.

    1. newsjustin

      Yeah. It’s people who won’t pay, and often won’t even discuss payment, not those who simply can’t.

  3. Eric Cartman

    If you can’t pay, you don’t get to stay in the house, this will free up a property for somebody who can pay to buy it. Also its not like we’re talking 1 or 2 months missed, we’re talking 18+ months.

  4. fmong

    “Typically mortgages of this kind are bought by foreign funds at substantial discounts.”

    The obvious question one would ask is was the chance to refinance their mortgage at this discounted rate offered to the home owners? and I suspect the obvious answer is “was it fupp?”

    Thanks Michael ‘Vulture Lover’ Noonan

    1. Harry Molloy

      Why would it when they’re in arrears for so long. It’s proven they’re unable or unwilling to engage.

      As for being sold to the Irish market, that’s a different argument. It’s not unusual to sell loan books, all banks do it for cash, just happens that this is a distressed loan book and that some action will likely be taken against the mortgages.

      Bottom line unfortunately is that if there’s no risk of losing your home then why would anyone pay a mortgage? The system falls apart then there’s no more building.

      1. fmong

        unable or unwilling to engage.

        Perhaps they’d be willing to and able to engage if there was a chance of offering a rate even just a little closer to the discounted rate offered to the vulture funds? If people took the deal UB would make a bit more money back.

        The current option is people will be more than likely evicted, end up in hotels being paid for by us, the tax payer, why lose money twice, once to the vulture fund, and again on paying for the evicted’s hotel bills twice, when there is a possible alternative that works for everyone*?

        The current model punishes the poor and rewards the rich, no bones about it

        *except the vulture fund

        1. Kieran NYC

          There have been numerous mortgage renegotiations around the country. I guarantee you Ulster Bank wouldn’t be selling them off at significant haircuts if they thought they could work with the homeowners to get any sort of decent payment.

          1. realPolithicks

            “I guarantee you Ulster Bank wouldn’t be selling them off at significant haircuts if they thought they could work with the homeowners to get any sort of decent payment.”

            You “guarantee” it, really? Whats the basis for this statement?

    1. Nigel

      Bit late after insulating the banks for the far more egregious and insane risks of giving out all those loans. Which were risks. So we’ve already shown a huge tendency to not stick to that. But hey, we’ll protect the loonies who took the enormous risk of giving out loan after loan after loan and come down heavy on the individuals who took out roughly one risky loan each as if the latter behaviour was the real crime here.

  5. Bruncvik

    I recently got a mortgage from Ulster Bank. At every step, we were warned about the consequences of not paying our mortgage payments. Throughout the process, the final mortgage amount changed four times. Even though the changes were minuscule, we always had to sign a new risk assessment statement, which listed the increase in payments if our interest rate went up a certain amount. We had to declare there that we understood the risks and would be able to pay the potential increase. Knowing our financial situation and our risk profile, we opted for a longer fixed mortgage than what AIB was offering.

    I understand that people may get into financial difficulties without wanting to, and may not be able to pay in time. However, UB has been going out of their way to warn these people about the risks and had them take a look at what they could afford. They were also given an option to lock in their payments for a number of years. And if the mortgage owners were holding the house for an extended period (given that 95% of the properties are over 2 years in arrears and 88% over 3 years), they may have repaid enough or have seen a high enough growth in their property values that they could potentially resell the house and walk away with a large enough lump sum for a down payment for a smaller property. And I don’t think UB is stupid enough to go for lower reimbursement, if they could work out a better deal with the mortgage holders than the vulture funds (who are just as much vultures towards the banks as they are towards the mortgage holders). Try as I might, I can’t find sympathy for people who were financially irresponsible despite multiple and very explicit warnings, are unwilling to downgrade and unable to reach a compromise with the bank.

    1. some old queen

      Although I would concede that Ulster Bank was one of the more prudent during the monstrous credit wave from Germany otherwise known as the boom, there is a simpler explanation. Those home owners are heading for eviction and it is damaging to the bank brand, so they sell them off.

      The tax payer picks up the tab (again) as these people become homeless. The free market doesn’t do empathy and that includes ‘accidental’ landlords who are having a really nice time right now.

  6. MoyestWithExcitement

    On a tangent, for the craic like, if I pay, say, 100k toward my house and then my house is taken off me, shouldn’t I get my 100k back? Or a proportion of the sale?

    1. Harry Molloy

      If you actually own the house outright I’m thinking you should get what it was sold for

      1. MoyestWithExcitement

        OK. I’ll reword it. I borrow 200k from “you” to buy a house, pay you back 100k over time but then get into a position where I can’t guarantee I can pay the rest back for the foreseeable. You decide to take the house from me instead of those payments. Shouldn’t I get my 100k back if you’re taking the 200k asset off me? Or at least give me 50% of what you sell it for?

        1. Harry Molloy

          I couldn’t possibly comment without knowing the details of the agreement, i.e. the mortgage, but see what you mean

    2. Eric Cartman

      no. Until a loan is paid in full, the money is “dead” so to speak.

      When a bank sells your mortgage , they sell the asset for the remainder cost of the mortgage to make it move quickly. A lot of the time they get a lower amount than this so take a loss.
      When they reposes properties where the amount outstanding is far below the value of the asset the banks make a profit, and will use that profit to offset the losses on the above scenarios.

      In general, the repossession process is a losing scenario for banks, but it cleans up the balance sheet. If they thought they could make money by keeping the loans, they would.

      Keeping unprofitable loans on their books gives banks a bad credit rating and doesn’t let them borrow money. If banks didn’t sell to “vulture funds” they wouldn’t have the credit to give people who actually can pay mortgages.

      I don’t know why people are going mad about this. If the banks didn’t do this , the housing shortage would be much worse.

  7. Jake38Supply,

    The abject failure to deal with mortgage arrears has been, and continues to be, a major feature of the delusional no-consequences for your actions corner of Irish public discourse. New Land League my h*le.

  8. Jake38

    The abject failure to deal with mortgage arrears has been, and continues to be, a major feature of the delusional, no-consequences for your actions, corner of Irish public discourse. New Land League my h*le

  9. Eamonn Clancy

    These are the muppets who borrowed way too much, drove up prices and help cause the crash. Many of us didn’t borrow because we worked out the simple maths as to what could happen if there was a crash.

    1. Nigel

      Banks are supposed to be good at math and yet they still shoveled out the loans. Almost as if the real problem lay at the systemic institutional level rather than at the individual borrower level. Guess who’s going to end up bearing the brunt, one way or the other.

  10. Peter Dempsey

    “Two-thirds of the portfolio are comprised of commercial loans, mostly lent to small businesses that had engaged in some property development.”

    seems to imply that the family homes and personal mortgages are just a small portion of this loan sale.

    1. Yeah, Ok

      Also sounds like a lot of them are the local gobsh1te businessman with a few bob who decided he’d hop on the “property developer” gravy train during the boom; the Galway races, villa in Spain, flat in Bulgaria cohort.

  11. Twunt

    How is the that so few in Ireland can draw the link between low repossession rates and high interest rates. One group is actually paying for the others refusal to pay.

    1. jack johnson

      Of course – like private health insurance pays for public health services no doubt. The reason why interests rates are high is because of the continued greed of banks and the lack of backbone in the political establishment – absolutely nothing has been learned from the financial crisis and now we’re back to square one when in another few years the exact same scenario will unfold again.

  12. ModerateScale

    A mortgage being two or three years in arrears can (so I have read) mean that someone has missed a payment two or three years ago and the bank refuses to accept that missed payment later.

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