Tag Archives: mortgage

House-on-percentage-points

Behind with your mortgage payments?

RTÉ Radio One’s Today with Sean O’Rourke reporter Valerie Cox visited the Phoenix Project a centre for distressed borrowers in Portlaoise this morning.

There she met elderly couple Cheryl and Joe.

Valerie Cox: “Cheryl and Joe’s situation has put them in pure fear. They took out a mortgage 14 years ago of €115,00 but they both lost their jobs and they couldn’t pay it, they now owe €93,000 and they are both on social welfare, but here’s the thing they are still paying €450  a month into their mortgage, they should be paying €680 and this means that they’re left with very little money. This is how they’re living…”

Joe: “We have the social welfare, but that’s going to, that’s been going to it”

Cox: “So how much have you got left to live on?”

Cheryl: “Just €20 or €30 Euros a week, that’s all that’s left.”

Cox: “And do you pay for your food out of that?”

Cheryl: “Yes. That’s it.”

Cox: “So how do you manage, what do you buy?”

Cheryl: “Well, I buy basics, Tea, milk bread I can cook from small cheap food you know I make it stretch because we live in the country, everybody cooks.”

Cox: “What would a particular dinner be?”

Cheryl: “Mince anyway and potatoes. We have our own vegetables, a few vegetables. Valerie, we don’t have a dinner during the week. We have it at the weekend.”

Cox: “What do you survive on?”

Cheryl: “Bread, and fruit, because we have apple trees, we had loads of apples this year, and vegetables.”

Cox: “And what about fixed charges this year like the property tax, how are you going to manage with that?

Joe: “Coming up, we have to cut back on something else, something goes to one side till the property tax is paid, then make it up along again…”

Cox: “But sure there’s no room to cut back there.”

Cheryl: “I honestly don’t know in March how we’ll pay it. I didn’t answer the letter yet, I just don’t know, and the water, I haven’t, I don’t even want to know about the water.”

Cox: “And what about Christmas, now?”

Cheryl: “No. What Christmas? There is no Christmas. No, I don’t care about Christmas any more. It doesn’t feel like… I’m sick of Christmas at this moment in time. You’d think you had just money to hand out for everything, the television never stops, the shops are at it, it’s everywhere, I hate it now at this moment.”

Joe: “Yeah, Christmas now is a thing of the past for us, we don’t have money to enjoy it any more Years ago in the building and everything you had a few pound there to get a few presents here and there but that day is all gone. “

Cheryl: “I’d just like to hold on to the house, to be honest, that would be a present.”

Listen back here

Meanwhile…

Valerie Cox: ‘This is Bill, he’s got 5 children he’s 54 years old, and he made a major mistake, Sean, during the boom years by investing 100,000 Euro in bank shares, and borrowing the money from the bank to buy them. Now, his mortgage is 480,000, it should be costing him 2800 a month and he’s paying 600, he’s still in a job but at much lower wages, and you’re also going to hear Dave Kavanagh in this piece.”

Bill: “I’m paying as much as I can pay and it just doesn’t seem to be enough.”

Cox: “And what do you do with the rest of your money, the left-overs? What’s your lifestyle like?”

Bill: “Very meagre. I don’t go out drinking, or I don’t know how long it is since I was at a cinema or anything like that, I’m quite happy to live the way I’m living but there’s definitely nothing extra nothing extra at all.”

Cox: “Bill is probably, he’s coming from a new class of people, if you like, who are in danger of losing their homes.”

Dave Kavanagh [Phoenix financial Planner]: “Bill is a professional person and we’re finding it very hard to get traction with the bank, full financial information has been sent in, seeking a meeting with the bank and we haven’t been successful a yet. In one particular call the bank were very, very rude, we sought the transcript of the tape and I’d advise anyone who has a similar experience to seek that part of the meeting, you should seek particular transcript because it can be very useful in defending yourself.

Bill: “I have been affected mentally by this whole scenario and my family has as well. I went to my doctor a month ago and he listened to me and he decided he would write a letter to this particular bank. Within a month of that I got a letter to say they were referring my case to a group of solicitors in Dublin and within a week of that, last Monday, I got a letter to say they wanted vacant possession of my home within 7 days so the letter about me being on the edge obviously had no effect on anybody, they came along and put the boot as far into me as they could, with telling me that I’m to be out of my home, gather up my possessions and they would even allow me do that and go, I don’t know where, I would do that with my family.”

Kavanagh: “The legal process is really to frighten people. They believe it drives behavior and drives performance and when a borrower receives a legal letter and when they see they have seven days to leave their house inevitably first of all when a person picks themselves up from the floor they have to do something about it but when the bank hasn’t followed any due process, when they haven’t followed the code where people are entitled to a fair hearing and that your case is fairly looked at, in Bill’s case here none of that has happened.”

O’Rourke: “Right, so there we have Dave Kavanagh again outlining what can happen and, with him, Bill. You spoke to a barrister, as well, Valerie?

Cox: “Yes. Now, Paul Comiskey-O’Keeffe, he’s a barrister with the Phoenix Project and he’s quite new to Phoenix, he told me he thought he knew what it was all about until he joined Phoenix.

Paul Comiskey-O’Keeffe: “I thought from practice at the bar that I understood how bad the problem was in the country. I have a number of mortgage cases that I’ve done in the past and that I do regularly now but, when I came here, the amount of more people who will never make it to a solicitor’s office to get help became so apparent to me. The other thing that became apparent was, the lack of humanity that was going on, and it sounds dramatic but the first, the other analogy that came to mind was that this place feels like a refugee camp for economic or financial refugees. Every case that comes in here is very simple. It’s about a debt. If people don’t pay it, it is inevitably going to get legal. The sad thing is that if no solution is found somebody will live in the house for the price that many people who coming in here can manage to pay but it will be a different person paying it to a different bank rather than the person who calls it a home.”

Cox: “That seems terribly unfair.”

Comiskey-O’Keeffe: “It is ubiquitous in that every single case has that hallmark and in the real world the house will be sold to someone else who’ll buy it at market value. So many cases here it can be said the present loan to value is 80% You can say loan to value ratio is 80% but Banks are not prepared to finance their current customer, the person who calls it a home at 80%. But someone else will come along after the ‘For Sale’ sign has gone up and done that exact same thing with a different bank.

Cox: “What about people who get all those bank letters and phone calls? Do you think some people are giving up too easily?”

Comiskey-O’Keeffe: “They don’t do anything is the problem. The ostrich approach is as effective as heroin in making you forget your problems and just as addictive because it is the perfect solution to something that doesn’t have a solution. It doesn’t achieve anything though. Unfortunately, you have a lot of people here and when they come in the door you can see the stress etched on their face. Usually it’s a combination of smiling and crying when you’re shaking their hand and seeing them out, because they’ve started to deal with it and they’ve started to understand it’s not necessarily as bleak as they thought.”

 

90304653(Christine Lagarde and Enda Kenny at the G8 meeting in Fermanagh)

Do you know what have a tracker?

The IMF would like to remove your tax relief.

The idea is that savings from taking mortgage tax relief [about €1,200 per couple] off those on trackers would be used to subsidise the banks for the losses being made on these products, although how this would work is not fully explained in the IMF report.

 

It’s OK.

It would only affect around 500,000 mortgage holders.

Everyone stay cool.

Homeowners on trackers ‘should lose tax relief’ (Charlie Weston, Irish Independent)

(Laura Hutton/Photocall Ireland)

Did you know on on October 15 more than 100 cases were filed in the High Court suing various mortgage providers?

Us neither.

From Debtoptions:

 We believe the bankers have broken the law by their practices, resulting in widespread ruin in Ireland as businesses close, mortgagors default, families are evicted from their homes, our young people are forced to emigrate and, tragically, many people turn to suicide.This situation has been caused by the banks, and we will take them to task through the courts to put right their wrongs.

Irish authorities are considering moving unprofitable home loans into strengthened non-core units within banks as proposals to strip them from lenders run into difficulty, a person with direct knowledge of the matter said.

The government has been in talks with its aid partners on transferring these loans to a so-called asset warehouse to make the banks easier to sell in the future.

Instead, the state may urge transfer of the loans into clearly-defined separate units, similar to the approach taken by Royal Bank of Scotland Group Plc, said the person, who asked not to be identified as the matter is still being considered.

Thanks DD

The Mortgage War has officially begun.

A BANK OF Ireland customer has secured a settlement on mortgage debt allowing her to repay the bank €18,000 – at a rate of €250 a month for six years – to settle an outstanding debt of €170,000. The settlement means she will not have to repay the remaining €152,000 but she will be prohibited from borrowing for six years and faces a €120,000 judgment if she fails to make the repayments.This is one of the first settlements of mortgage debt to come to light in which one of the country’s main banks has written down mortgage debt to a level the borrower can afford to repay.

BoI Agrees €152,000 Mortgage Write-Down With Dublin Nurse (Simon Carswell, Irish Times)

(Eamonn Farrell/Photocall Ireland)

Oliver writes:

I don’t have a mortgage and I don’t know this couple. But I’m wondering where are we going to draw the line in relation to condemning people on their mortgage debt?
While a couple who bought 21 properties might not elicit sympathy, I don’t think it’s right to use them as a scapegoat for our mortgage debt crisis either.

I certainly didn’t feel comfortable watching them being dragged from their home, albeit palatial and being paid for by the taxpayer. And while I can understand the feelings of anger being hurled at them, I feel it’s dangerously distracting taxpayers’ attention from what we should really be debating – and that is the bank guarantee and debt forgiveness.


We all know banks were throwing cash at people during the boom. I was earning €21,000 in 2003 and was constantly getting letters from my bank (Bank of Ireland) telling me I was approved for a substantial mortgage.


A guy on [RTE’s] Frontline earlier this week admitted he was given a loan worth 10 times his salary with no questions asked. We don’t know what this couple’s earnings, or company profits were – so we don’t really know what their income was relative to those loans. 

And more worryingly we don’t know what rules IBRC, or NAMA, are following, if they’re following any at all, as neither are under FOI. So who is to say who next will be evicted? And how can we know if it’s a fair move? How can we know others who perhaps ‘should be evicted’ aren’t?

In November 2010 [Economist] Morgan Kelly predicted a Mortgage War between those who took out mortgages and those who didn’t.

He said:  “The gathering mortgage crisis puts Ireland on the cusp of a social conflict on the scale of the Land War, but with one crucial difference. Whereas the Land War faced tenant farmers against a relative handful of mostly foreign landlords, the looming Mortgage War will pit recent house buyers against the majority of families who feel they worked hard and made sacrifices to pay off their mortgages, or else decided not to buy during the bubble, and who think those with mortgages should be made to pay them off. Any relief to struggling mortgage-holders will come not out of bank profits – there is no longer any such thing – but from the pockets of other taxpayers.

He also said: “If one family defaults on its mortgage, they are pariahs: if 200,000 default they are a powerful political constituency. There is no shame in admitting that you too were mauled by the Celtic Tiger after being conned into taking out an unaffordable mortgage, when everyone around you is admitting the same.

“Ireland faced a painful choice between imposing a resolution on banks that were too big to save or becoming insolvent, and, for whatever reason, chose the latter. Sovereign nations get to make policy choices, and we are no longer a sovereign nation in any meaningful sense of that term. From here on, for better or worse, we can only rely on the kindness of strangers.”

(Eamon Farrell/Photocall Ireland)

Tracker mortgages have become “golden handcuffs” for 400,000 householders who cannot trade up or down without sacrificing the blue-chip loans that automatically benefit from European Central Bank (ECB) interest rate cuts.

Banks and building societies are refusing to transfer tracker mortgages if the customer wants to move house — even if the new property costs the same or less than the original home on which the tracker mortgage was approved.

Instead they must pay off the tracker and go on to a new variable-rate mortgage.

Homeowners Are Trapped By Their Tracker Mortgages (Independent)

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Financial Regulator Matthew Elderfield has told banks to stop increasing standard variable rates on mortgages.

In a meeting with the chief executives of the banks, he is understood to have told them that if they do not comply they will face imposed restrictions on their ability to increase rates. The demands came earlier this week when Mr Elderfield held talks with the top six mortgage lenders.

The negotiations were with the CEOs of AIB, Bank of Ireland, EBS, Permanent TSB, Ulster Bank and KBC. It is understood the Regulator is concerned that rising costs for those on standard variable rates is adding to the problem of mortgage arrears.

Banks told to stop raising mortgage rates (RTE News)