This is despite a loophole in the law blocking repossessions.
A new report estimates that lenders have issued legal proceedings to take properties off up to 44,000 borrowers.
These are made up of residential and buy-to-let properties, according to calculations contained in a new report by Davy Stockbrokers.
An analysis estimates that what it calls non-cooperative borrowers number between 23,700 and 43,700.
Letters threatening legal action have been sent to these borrowers.
And there are fears that large numbers of properties, particularly buy-to-lets, will be repossessed.
Ulster Bank said that up to a third of its property owners in arrears were making no payments at all. The bank said it would not hesitate to repossess in these cases.
Strong demand for family-type homes and the presence in the market of large numbers of cash buyers mean that a flood of newly repossessed properties can be absorbed.
A number of banks were also likely to keep repossessed properties on their books, take the rental income and slowly release them on the market, Mr Mac Coille wrote. Changes in the law to restore the right of lenders to repossess properties have been passed by the Houses of the Oireachtas and are expected to become law soon.
Davy reckons that arrears will keep rising this year, with large numbers of homeowners struggling to repay largely due to income decreases rather than job losses.
For large numbers of borrowers in trouble the mortgage repayments are so high they represent more than half of their income, Davy reported, citing unpublished Central Bank studies.
A separate MABS (Money Advice and Budgeting Service) report found that distressed borrowers had just €777 a month left, after paying for utilities, food and childcare. But the mortgage was around €500 a month.
Banks will have to write down up to €11.5bn of mortgage debt. Most of this will be in the form of split mortgages where part of the mortgage owed is put to one side, and in most cases will probably have to be written off at the end of the mortgage term.
But one-third of borrowers are in such a bad financial position that a debt writedown will not work. These are mainly buy-to-let investors.
Half of investor mortgages are paying interest only. Despite this, almost 30,000 out of 150,000 buy-to-let mortgages are in arrears.
IF THERE IS one topic that I get asked questions on more than any other it is in the area of bank deposits, the Deposit Protection Guarantee Scheme (DGS) and Deposit Interest Rates. The first answer I always give is that we should worry about the areas we can control, and ignore things that we cannot control.
Reading and discussing economic and investment updates seems to have replaced past discussions on property values and everyone seems to have an opinion on the Bank Guarantee, Euro Stability, Yen Devaluation and German Government Bond Yield. In reality, the investment world is very simple, but investment managers, stockbrokers and economists make their living from selling fear, greed and excitement in equal doses!
€150 million is on deposit in Irish banks
To set the scene, there is over €150 billion on deposit in customer deposit accounts in Irish Banks as of February 2013. This figure has been steadily falling ever since the banking crisis began in the summer of 2008, but is still a significant figure.
At that time, the Irish Government introduced the Eligible Liabilities Guarantee (ELG) which covered all deposits and some bonds in Irish covered institutions, in their entirety. I won’t cover the merits or otherwise of this blanket guarantee, or whether they were forced into it by higher powers. However, the ELG did give Irish depositors some comfort that all of their hard earned savings were fully guaranteed by the Government, and at the end of the day, the European institutions.
This comfort was taken away at the end of March when the ELG expired and we reverted to the historic guarantee. This guarantees €100,000 per institution. Therefore any individual who has a deposit with a covered institution with a balance under €100,000 can take some amount of comfort in a government guarantee.
If you’re lucky to have over €100,000, you should protect it
This does cause some confusion for individuals with multiple accounts, as the guarantee is per ‘institution’ not per account. For example, if an individual is lucky enough to have a savings deposit with AIB for €100,000, and also a portion of their pension on deposit with AIB for another €150,000, these accounts are taken in aggregate and only €100,000 of the combined balance (€250,000) is guaranteed)
Most sensible individuals are now rightly worried about the security of their cash and how to mitigate all the risks associated with savings and investments at the moment.
While I don’t personally believe the European Institutions or the Irish Government will default on their guarantee, recent news in Cyprus has, at least partially, brought this possibility into focus. It is clear that spreading deposits around the guaranteed banks and keeping exposure to any one bank below €100,000 is the obvious way to reduce this risk to a minimum
The threat to people’s deposits
Since banks have had some success with recent bond issues and seem to be stabilising, deposit rates have fallen significantly. There were wide spread offers during the summer of 2012 for 5 Year Fixed Deposits earning over 5 per cent. The best rate on the market as of the time of writing is now 2.75 per cent (excluding specialist accounts with Danske Bank).
This return, after DIRT is deducted, will only just beat inflation and I see this as being a larger threat to people’s deposits over the long term than any short term default risk. However, inflation never gets the headlines and is an invidious threat which is hard to understand in the short term.
The only true way to protect you from risks is to be widely diversified across a whole range of asset classes. €150 billion on deposit in Ireland would indicate to me that we are over-invested in cash at the moment, just as we were over-invested in property and Irish Equities in 2007.
Diversifying is the only way to protect your cash
In the long run, well managed and well protected portfolios never have too much in any one asset class. I would recommend assistance from a professional (ideally from a Fee Based Financial Advisor) before deciding exactly how to invest in a widely diversified portfolio but it’s the only way to truly protect against all the threats to our wealth and wellbeing in the current economic environment.
My biggest fear for Irish Investors and any of those individuals sitting on large deposits is that as the interest rates keep falling, they will become more and more restless. Equity markets have been on a fairly steady bull run since the market bottom in March 2009. The US indices are at or above all-time highs and this strong short term past performance might tempt some of these depositors to finally leap back into the markets.
I don’t know what is going to happen, but I would be nervous about equity markets at their current valuations and can easily see a correction in the second half of 2013. As markets keep going up, the risks of this correction keep getting larger and I just hope Irish depositors don’t’ get caught out by the markets again.
In summary then, the only way to reduce risk is to diversify. At a minimum this diversification should be across all the guaranteed banks, and for funds with a long term focus, diversification into other asset classes is ideal.
David Quinn is the Managing Director of Investwise.ie. Established in 1988, Investwise is the trading name of Fitzpatrick Morris Financial Services Limited. With years of experience in the financial industry, they offer independent services and advice on a range of financial matters.
The quite wonderful Gavin Kostick of Fishamble Theatre has a comment on Irish Economy which is too good to linger there… It’s super.
And Draghi came down from the mountain with two tablets of stone.
(1) Thou shall love the god of the market. Thou shall have no other god before it.
(2) Thou shall have no other engraved image except the Euro. There shall be no other image on thy coin, for I run a jealous central bank
(3) Thou shall not take the name of the Euro in vain or speak slightingly thereof, for those who seek to destroy confidence will not be held guiltless.
(4) Thou shall work all of the days, excepting none, for this is the will of the free market. And you shall remember that you are a debt slave as you once were in Egypt.
(5) Honour Germany and France and the contract they made in their betrothal at the altar of the European Coal and Steel Community: for these are your mother and father to whom you must be obedient.
(6) Thou shalt not kill the bondholders.
(7) Thou shalt not commit adultery with other nations, neither the Russians nor the Chinese, nor any other nation against which we set our face.
(8) Thou shalt not steal deposits with high interest, low tax or any other wiles against which we set our face.
(9) Thou shalt not falsely accuse the ECB of running a tyranny, or threatening to implode your banks, being subservient to German interest, nor any other false witness against them.
(10) Thou shalt not covet a living possessed by your neighbours, but rejoice in the purification of your impoverishment.
Can you trust International Banking?
Judge for yourself
Just a quick look at recent developments
Standard Chartered accused of exposing the US to terrorists, drug dealers, and weapon dealers by hiding $250 billion of transactions with the Iranian government.
Deutsche Bank admits Libor involvement.
Germany’s biggest bank faces regulatory action after admitting complicity in rate-fixing scandal along with Barclays.
HSBC ‘allowed drug cartels to launder money’
Early July –details of Barclay’s bank/ *Libor’s scandal started to emerge (rate fixing)
The governing bank of England was also aware of this illegal manipulation.
In Canada – participants in the Libor scandel include the Canadian branches of the Royal Bank of Scotland, HSBC, Deutsche Bank, JP Morgan Bank, and Citibank, as well as ICAP (Intercapital), an interdealer broker.
USA- In the USA regulators were focusing on Bank of America Corp., Citigroup Inc. and UBS AG in their probe of Libor’s rate manipulation.
Goldman Sachs has not yet faced the music for cooking the books of Greece.
This manipulation allowed the Greeks to falsely comply with the requirements for Euro zone admission.
Will they ever be sanctioned and if not why?
What you will understand from the above is all the major banks are involved in illegal rate fixing.
Rate fixing means, you Johnny Citizen gets cheated out of money and the bankers get fat bonus payments
* the London inter-bank offered rate
The Fraudulent Traveller
This rather silly senator appears to be hell-bent on setting a senate record for difficulties with the law. Let us have a look at her track- record. She took her plumber take her to court rather than pay him what he was owed. Had planning permission for a two-story garage refused? She went ahead and built it regardless of the law. Officials recommended demolition of the building due to blatant flaunting of the planning process. However, a “higher” up “official” granted her retention. I wonder if this could be maybe a close by senior say like in Mayo. In early July, this woman received a fine for not having road tax on her Merc c180. She stated that this was an oversight on her part. In Late July fined €100 for not having a train ticket. The very same senator receives €2,424 a month in travel and accommodation expenses. One might say a nice little earner when you do not pay your road tax or train fares. Jesus’ lads but you cannot beat the old gravy train. Some neck on this woman but then again, rules and regulations only apply to the serfs. It might be interesting to check out her overnight accommodation expenses to see how they stack up. Between oversights, lack of foresight and poor visual vision one wonders how this woman can even find her way to the senate let alone claim expenses.
To compound all this nonsense Fine Gael issued this gobbledygook as a damage limitation exercise.
Senator Healy Eames boarded the 6.50am train to Dublin in a rush, at Athenry station yesterday morning (Thursday). She did so on the understanding that she would be able to purchase a ticket on board, as she had previously done on recent occasions. An officer approached her from the revenue protection unit on board who asked her for ID. She produced her Seanad ID card. She offered to buy a ticket as normal. He told her she could not buy a ticket from him and fined her €100.
It appears the true heirs to the Feeling small party are well and truly on board the gravy train.
Daddy says Skippy won’t be going back” to face the prospect of jail in the Republic. Daddy says he has no chance of getting “fair play or justice” because of the corrupt way the authorities have handled the Quinn case. Daddy says Young Skippy is under a lot of pressure, and he deserves our sympathy. If daddy Quinn has evidence of “the corrupt way the authorities handled the case,” then perhaps he might share the information with the Gardai. Let us all remind Daddy Quinn that the entire nation witnessed dear little Skippy on video lying through his teeth. Let’s jog the memory of the old Quinn a little further and say “Sir” you son was given every chance to comply with the law but failed to do so. He skipped court and did a runner. The sheer arrogance and smug self-righteousness by the Quinn family of their wrongdoing defies belief. Hopefully at the end of the day they will all end in Jail. —————————————————————————————————————————-
Are you Ready to be a Bonded Serf?
What the major political parties will not tell you is there is no way forward from the current economic crisis except a doomsday scenario. Are they preparing for it? Yes is the answer. The current system is to be replaced by the new political credo of “Economic serfdom” which means welcome to P.I.G.S. party feudalism. The middle classes and working classes will shortly cease to exist. What this means is that 95% of the population will become bonded serfs to the privileged. Future generations will be born into economic slavery to serve the Elites. They will be controlled by the enforcers of the vested interests until released by death from exhaustion having procreated to keep the supply system going. The Royalty of Banks, the Royalty of Global Business, and the Royalty of Unelected Leaders are now your governors such is your destiny.
The billion barrel oil find off the Cork coast
Hurray, hurrah we are rich once again. Twenty-five per cent of the corporate profit is our cut, however; there are two points to note. They can write off exploration costs against tax. The twenty-five per cent can increase to forty depending on the profitability of the field. This is a red herring, as the number crunchers will ensure this never happens. I guaranteed we will get **** yet once again. It looks like we are destined to remain Kings of the Sardine industry. Now that chap Chavez begins to look rather interesting. Just how did he do it, perhaps time for a government junket to Venezuela?
Mario Draghi the man who pulls the fiscal strings in Europe. Does he represent the people of Europe? Not on your life, he has one interest and that is to take care of his friends in Banking. Consider the following.
2. Worked for Goldman Sucks
3. Former Governor of the Bank of Italy
4. Worked for Italian Treasury
5. Worked for the Bank of International Settlements
6. Worked for the World Bank
Does this look like the CV of a trustworthy man? Be assured he will not work in your interest but he knows how to stir it up. Yes the very same man who insisted we pay penal interest rates for the bailout.
€6000.00 per head per month to the Quinn family
children while people on the Dole starve
The High Court has approved the payment of monthly living expenses €30,000 to the five adult children of bankrupt executive Sean Quinn and three spouses. Well now, you know if your low income nobody gives a toss about you. No social welfare means test for the boys as you can see the elite look after the elk.
WANTED Peter Darragh Quinn If you know the whereabouts of this man please inform the Gardai. Do not approach this man as he is carrying a large amount of lethal coinage
Sean Quinn: Well-known figures who rallied to support
bankrupt tycoon run for cover
PROMINENT figures from GAA and television yesterday ducked for cover when asked to comment on their involvement in a rally supporting fallen tycoon Sean Quinn.
They included Tyrone manager Mickey Harte, left, and former Meath star Colm O’Rourke, right, in the middle is that insufferable clown father Brian D’arsey. These three were among those who marched in Ballyconnell, Co Cavan in support of the Quinn’s. One wonders if the these three attention seekers ever gave a thought to the poor tax payer
Former Bank Chairman arrested on Fraud Charges
Sean Fitzpatrick made “no comment” when he was charged with 16 counts contrary to Section 60 of the Companies Act. The charges allege that before it became nationalized, he permitted the bank to “give unlawful financial assistance” to 16 named individuals for the purpose of or in connection with a purchase by the same people of shares in the then Anglo Irish Bank Corporation Plc. It is claimed the alleged unlawful financial help to buy shares was given between July 10 and July 17, 2008 to 15 people. These include the so-called “Maple Ten” group of Irish Investors and several members of Sean Quinn’s family – and from July 17 until July 30, of the same year, to Patricia Quinn, the wife of now bankrupt quarry tycoon Sean. Among the names on the charges is Sean Quinn Junior, jailed last week by the High Court for contempt of court for hiding €500m of property assets from Anglo, now called the IBRC. Also included in the names of people who allegedly got financial assistance to buy shares in the bank are: Colette Marie Quinn, Aoife Quinn, Ciara Quinn, Brenda Quinn, property developer Patrick McKillen, Seamus Ross, Brian O’Farrell, John McCabe, Gerard Maguire, Patrick Kearney, Gerard Gannon, Gerard Conlon, Sean Reilly and Joseph O’Reilly.
Still At Large
The Bankers Story
The capital of Rotten Island Bud Nil was an ancient and revered city. However, in keeping with the wealth and affluence of the times the city councillors renamed the city “Wonderland.” Somewhere between Never Neverland (North side”) and the inner sanctum of Wonderland there is a sector called” Forever Wonderland’.” This neighbourhood is the financial heart of the nation. In this district, lived a wealthy young banker. His notable attributes were a craving for attention, a bad memory, and a chequered career. He treasured the radiance of other inducements and was a frequent visitor to Feckerland the area of dance, revelry, alcohol, and Chateaubriand. Parochially, friends and acquaintances, knew him as “Disney” Fitzfiddle. Men did travel across the length and breadth of the land to win the friendship of “Disney.” He loved a good story from waiting recipients of fiscal credits, borrowers, whose habitual wrongdoing he totally ignored. In his own words, he stated, I was big. Some came and said “Disney” can you lend me 10 million quid, and I’d say. Sure, no problem at all, we can do it without recourse to Peter and Paul for you know I am a man who can lend without rancour. Let us go for a ride in the Bentley and lunch at the “Incidentally” and later tarry awhile in Dick Gentlys (a well-known brothel). Alas, the good days, now I am but the evil pantomime villain, who only borrowed a handy hundred million. Look at who elevated me, aren’t we all cronies of the Dons of the Feeling Smallers. Why did you know? I even had the occasional game of golf, with the nation’s esteemed Boss, the great incompetent Mr. Buttocks, the pillar of lies and good-byes. Agreed, I may have moved a few loans around a bit, temporarily mislaid them, perhaps duped an auditor or two. Had an odd incriminating letter gone missing here and there? Aha, but my God, me self and “The Little Drummer Boy” good times we had. Now they say I am bankrupt with only three million quid to live on. Understand lads; for me, the attraction was the crack of the fiscal flimflam. Never mind we can bank on ‘Sinister House’ to direct the department of “Fiscal Make Believe” to clear up this Disney quicksand No, no regrets, sure was the problem not global, in all sincerity nothing to do with me.
In the next issue of “Misebogland” the truth behind the
– Finally some information concerning Misebogland is the leading newspaper on the Island of Rotten Island. For those of you who are unaware Rotten Island is a mirror image of the Island of Ireland that happens to exists in a parallel universe. However, as you become familiar with the Misebogland, you will note and observe that there are subtle differences due to mutations that have occurred over the course of time. For example, the Irish Language has disappeared. The current Prime Minister Dame Enda is an outrageous transsexual.