The following very strong, very revealing letter was published in the Irish Examiner last Saturday.
Beware third party rules on mortgage transfers
“In our view, the code could potentially slow the increase in mortgage arrears in Ireland, and may allow lenders to start repossession proceedings sooner.
“We view this as a credit positive for the senior notes in outstanding residential mortgage backed securities.”
The important line is the second one. Your mortgage was sold to third parties by your bank. These third parties are hedge funds, insurance companies, etc.
These are the senior note holders. Your bank was paid in full for your mortgage by these institutions. Your bank now acts as a debt collector for these third parties. Basically, they bought your promise to pay from the banks.
The Irish Central Bank rules clearly state that a debt cannot be sold on to third party investors without your consent. If it was then the debt is null and void.
The next question to ask yourself is was your mortgage sold on to investors? The answer to this question is the same as the one about the bear, the woods and toilet facilities he used.
So unless you received a letter stating your mortgage was no longer owned by your bank then your mortgage is null and void.
This is just another example of the multi-layered fraud that continues daily in this country, all perpetrated by the suited and booted ones.
It will continue until you no longer give your consent.
If all nations are in debt and all citizens are to be forced into lifelong austerity to pay off “their” creditors then the most important question in the world becomes:
Identifying the creditors and asking why they have precedence over the lives of people who did not create this problem.
Think clearly about this for a moment
“Austerity” means your lives and your children’s lives will be less free for decades. Since all nations are “in debt” then their must at its core a group of private creditors benefiting from this situation.
Government’s everywhere have the moral right as representatives of the people to weigh and balance private citizens rights against those of a small minority of other citizens. . It is moral and right for the governments to identify the core group of private people hiding behind all the debt shell entities who are supposedly “owed” money by these countries citizens.Those citizens likely never voted for the debts anyway.
Austerity for millions is not an acceptable situation for for the ordinary Citizen why should he recognize, take on the ill borrowed, non voted, “debts” of others . Why is it the politicians serve the interests of the “creditors” rather than the people they are purported to represent.
Millions of people should not be forced into a lifelong form of loss of freedom (which is what “Austerity” really means on an individual level for each citizen) as a result of putting false debts unto the backs of their governments.
So folks time to get off your ass and make your Government work for you
Tony Rochford hasn’t taken food for 11 days – but insists he will not end his strike unless the property tax is repealed.
A MAN who today enters the twelfth day of his hunger strike against the property tax has admitted he does not expect to survive for much longer.
Tony Rochford, who turns 45 next week, has been on hunger strike in opposition to the new tax since last Monday.
Rochford has lost nine kilograms (about 19 pounds) since his strike began – surviving only on water and black coffee – and is continuing to lose weight as he refuses to end his protest.
He believes his home is now worth about €280,000, making it liable for an annual property tax of €495.
He claims, however, that his mortgage lender refuses to enter into any negotiations with him, because he and his wife had already been given a moratorium on their repayments – which has since concluded – and because he has not entered into significant arrears.
With laws that make foreclosures almost impossible and a financial sector stuffed full of bad loans, the Emerald Isle’s problems might only just be getting started
Among the many nasty side-effects of the European debt crisis, bigotry’s return to pleasant conversation may be the least-commented upon, and the nastiest.
Granted, few actually say Germans are power-hungry, anal-obsessed skinflints. And it’s only usually hinted broadly that Spaniards are hot-blooded, undisciplined spendthrifts; and Greeks shiftless tax-dodgers. Those people, you know?
Likewise, Ireland’s debt-fueled housing boom and banking bust–which eventually dragged the entire country under–is often dressed in ethnic livery. The Irish went on a bender and they’re dealing with the hangover. They’re guilty, have confessed their sins and willing to years of painful austerity budgets as penance.
That last bit, the submission to painful remedies demanded by foreign authorities, has earned Ireland something of a starring role in the ongoing European morality play: that of “the good debtor.” (“Greece has a role model and the role model is Ireland,” Jean-Claude Trichet, former chief of the European Central Bank, famously said back in March 2010.)
But this overlooks a few uncomfortable details. Ireland’s homeowners are the European and perhaps the world champions in not repaying mortgages. The country’s national debt has increased fourfold in about as many years. Its banking system is being kept afloat by borrowing from Europe. And while a change in the law may soon force the banks to start cleaning up their balance sheets, nobody is quite sure how bad a mess they will find there when they do.
Welcome to Ireland, where the hangover is in fact just beginning.
In the last few years, a staggering number of Irish homeowners have simply stopped making mortgage payments. The Irish central bank says that at the end of December 2012, 11.9% of Ireland’s mortgages were late by more than 90 days, up from September’s 11.5%.
And the truth is probably even worse. The chart above, which was produced by Deutsche Bank using Moody’s data, pegs the percentage of Irish mortgages that are three months late somewhere closer to 16% in September. S&P analysts argue that 25% of Ireland’s home loans are in some kind of trouble, either behind on payments, or in foreclosure, or in forbearance, which is when the bank just isn’t collecting payments. (We’ll get to why later.)
Why? To be sure, things are tough in Ireland. The recession has driven unemployment from less than 5% at the end of 2007 to more than 14%. Incomes have crumbled.
But Greece is in an even worse economic crunch. Unemployment is at 27%. The economy has shrunk by 25% since the end of 2007. Newly impoverished people are turning to firewood because they can’t afford heating oil. And even so, the amount of Greek mortgages in late-stage arrears was only 5.1% in November, according to Fitch Ratings.
What’s going on here?
Safe at Home
The simple answer is that Ireland is one of the hardest places in the world to drive a family from its home. Though thousands aren’t paying, repossessions of Irish homes remain “negligible relative to the level of arrears,” according to a recent report by Moody’s analysts.
The most recent update on repossessions from the Irish central bank shows that during the entire fourth quarter of 2012 only 38 houses were repossessed by court order. At a pace like that, it would take more than 620 years to get through the backlog of nearly 95,000 mortgage accounts that are at least 90 days behind on payments.
The chart to the right is a look at the levels of problematic loans–that is, loans in arrears–in Ireland and neighboring Britain. In Ireland, repossessions are effectively non-existent.
In fact, Moody’s analysts note that the number of Irish delinquent on their mortgages shot higher in 2012, just as political discussions centered on the possibility of a large-scale debt forgiveness plan. (It never materialized.) Moody’s suggested that the increase was driven–at least in part–by some who are gaming the system. “The current dearth of repossessions and the recently proposed personal insolvency legislation is starting to result in higher defaults due to moral hazard,” the analysts wrote.
That’s financial-speak for “people think they can get away without paying their mortgage because they know they’re not going to lose their house.” Gregory Connor, a professor of finance at the National University of Ireland in Maynooth, estimates that about 35% of those who have fallen into arrears on their mortgages have done so “strategically.” That is, they can afford to pay, but just aren’t.
Birthplace of the Boycott
There are any number of explanations for the dearth of Irish foreclosure. For one thing, Irish courts ruled in July 2011 that Ireland’s recently revamped foreclosure law contains a massive loophole. Long story short, the judge found that the law allows lenders to foreclose only on mortgage loans made after Dec. 1, 2009, when the new law went into effect. After the judgement, arrears shot higher.
The legislature could fix the the problem by passing a new law. But it hasn’t (although one is expected soon). And that’s likely because any Irish politician introducing such a bill would be brave indeed, given long-standing antipathy towards foreclosure and evictions among the Irish public.
After all, modern Irish patriotism first coalesced as a revolt against unfair evictions during the so-called land wars of the late 1800s. The period gave Ireland some of its earliest and most enduring political heroes–Charles Stuart Parnell, Michael Davitt–and villains, such as Charles Boycott, an unpopular, English-born magistrate and collector of rents from Irish tenant farmers. He gave his name, or rather he had it given for him, to the method of organized, non-violent shunning of which he was the subject until he was ultimately driven from the island.
Ancient history? Perhaps. But the notion of the sanctity of the family home still carries considerable weight in Ireland. In fact, the inviolability of a citizen’s dwelling is laid out starkly in article 40, sub-paragraph 5 (pdf, p. 158) of the constitution. So present is Ireland’s unpleasant history with eviction that Irish prime minister Enda Kenny felt compelled to give it a nod when he introduced a new personal insolvency bill last year. “There is probably no time, since the Land War, when the Irish people have felt so stressed, so anxious about their home and their family’s future security,” Kenny said. Given such historical and political backdrops, it shouldn’t be a surprise that Ireland’s legal and regulatory system is, as Moody’s put it in a euphemistic moment, “borrower friendly.”
You Really Owe It to Yourself
But historical roots or not, Ireland’s arrears mess is a real problem. It means somebody lent money and is at increasing risk of not getting it back. So who might not get paid back if Irish homeowners continue on their current path of flaky repayment? Here, things get a little bit circular.
You see, during the boom years Irish banks made the bulk of house loans that are now going bad. But the Irish government–that is, the taxpayers–now owns a large share of those banks, thanks to the roughly €64 billion ($82 billion, or 40% of GDP) it has poured into them since 2008, according to S&P analysts. So in a sense, Irish homeowners owe this money to Irish taxpayers, who are one and the same.
But wait, there’s more.
You see, Ireland itself didn’t just happen to have €64 billion lying around. It had to borrow it. Here’s what that did to Ireland’s debt-to-GDP ratio, which has surged since Ireland issued a blanket guarantee on bank deposits and debt in 2008:
High Irish debt levels spooked the markets, as investors lost faith Ireland would ever be able to manage under the burden. Ireland ultimately had to itself be bailed out by a €67.5 billion line of credit from the “troika” (the ECB, the IMF, and the EU) on Nov. 28, 2010. And in a sense, that means that some of the risk of Ireland’s derelict homeowners is being born by its European neighbors.
Nor did Ireland’s bailout mean its financial system was magically returned to the good graces of the markets. Its partially nationalized financial institutions still depend largely on borrowing from central banks to keep the lights on. The banks post some of their assets as collateral and get cash in exchange. Here is a chart of ECB lending to Irish banks, and you can see it surging as Ireland’s financial crisis worsened. It has fallen quite a bit over the last couple of years. But there were still €61.88 billion in ECB loans out to banks in Ireland at the end of February.
The Europeans Have Noticed
Ireland’s European lenders–the EU, the IMF and the ECB–know that the surge of bad mortgages is exposing them to increasing amounts of risk. And they don’t like it. In fact, in their latest report card on Ireland’s bailout program, they laid out steps the Irish government had to take to update the loophole in the 2009 foreclosure law, the one blamed for holding up foreclosures and repossessions. Those changes to the law are to be made “so as to remove unintended constraints on banks to realize the value of loan collateral.” In other words, the troika is telling Ireland to make it easier for banks to repossess and sell properties. Irish legislators are expected to pass a revamped law removing the loophole this summer.
So What’s the Real Risk Here?
Nobody really knows.
Despite the fact that the Irish government yanked a ton of toxic assets out of Irish banks and put them into a “bad bank” known as the National Asset Management Agency (NAMA), and despite the fact that the Irish government has stuffed about €64 billion into the bank’s cash cushion, “the Irish banking system has not yet fully stabilized,” wrote Moody’s analysts in a January report. Short version: Irish banks own a ton of bad mortgage assets. (See the chart to the right.) But these are just the bad loans that we know of. Some think the true position of Irish banks may be even worse.
Some suspect it’s not just legal haziness keeping foreclosures low. Irish banks may also dragging their feet on restructuring or foreclosing. That’s because if they dealt with those problem loans by foreclosing or restructuring them it would, through the magic of accounting, transform hazy “problem” loans into real losses. In fact, there’s a well-documented history of banks procrastinating on recognizing bad loans in the aftermath of financial crises. Such widespread “evergreening” of bad loans was an insidious side effect of Japan’s financial collapse in the early 1990s.
And even if Irish banks do start dealing en masse with problem loans, it’s unclear how it could play out. On the one hand, it could mean more people in Ireland start to pay their mortgages, for fear of losing their homes. But a large wave of bank foreclosures could also “throw up evidence of under-reserving by banks as they start to close out some nonperforming mortgages,” according to a January report from Standard & Poor’s banking analysts.
In other words, it could reveal banks to be in worse financial shape than everyone thought. By extension, Irish taxpayers, the Irish government and its European rescuers would have to admit they face more risk than they knew. That would be a major embarrassment for both the Irish government, as well as its euro-zone sponsors, which have built up Ireland’s reputation as a debtor nation doing everything right.
The Bottom Line
But the growing pile of defaulting home loans holds other risks for Ireland. For one, it’s choking off the flow of capital to the economy.
Let’s remember why we even bother putting up with banks. They’re supposed to be good at doling out capital efficiently. They take the unused savings of society and channel it toward productive uses–at least in theory. But if banks coming out of a financial crisis start practicing widespread forbearance and evergreening of loans, they become less and less efficient at their job, because so much of their capital is tied up in bad loans instead of getting put to good use.
That’s part of what’s happening in Ireland right now. You can see, mortgage lending has pretty much collapsed.
Now, lending would logically fall after a financial crisis triggered by too much debt. But it will have to stop falling before the domestic economy starts growing.
That’s why Ireland must overcome its anti-eviction tendencies and clear the backlog of bad loans. And it’s not just the homeowners that will feel the pain through necessary foreclosures and repossessions. Banks must fess up to their losses and restructure bad debts.
It won’t be pretty or easy. But for the Irish government–so often dominated by the European powers that bailed the country out–it’s one of the few areas where it can still act. As for the European officials who have built Ireland’s painful austerity push into the “model” response for troubled European countries? They’re going to have to admit even supposedly virtuous Ireland is having serious difficulties making austerity work.
MAYBE THE LOW turnout in the children’s referendum is not that surprising. There comes a time when people – having been respectful, patient and tolerant – have to say enough. We as citizens are taking a significant amount of pain for the wrongdoing of banks, bankers and regulators. When a government cannot mobilise its people to vote for child protection , maybe – just maybe – the biggest alarm should go off.
ranslate what the bank is offering you – no advice, just translation. MABS provides an excellent service but that’s because their staff are dedicated and trusted by the public, not because of the leadership shown by the minister or the Citizens Information Board. Only creditors including banks have benefited from this inaction.
Now we are given the Insolvency Bill, which is being promoted as our saviour. Vested interests both politically and professionally will welcome the Bill, but its extremely difficult for debtors to achieve any real protection within the Bill. The banks have a veto and there is no independent oversight of the decisions a bank might make. As a senior figure in the Central Bank has suggested, banks are like teenagers. I say it might not be advisable to leave teenagers in a free house unsupervised.
This Bill will also promote the tiering of debtors, where professional insolvency practitioners will naturally select those who can pay for insolvency services and leave those who cannot to fend for themselves. As currently presented, in order to apply for bankruptcy you will have to jump over more hurdles than there are in an Olympic race track.
There is a need for expert assistance to be available to mortgage holders to ensure their interests are protected in relation to dealing with banks and other creditors. The failure of Government and banks to deal with this crisis has made a difficult situation becoming close to unmanageable. With figures for the third quarter due out soon showing those in arrears the time has come for action.
I with others who feel equally strongly are working through a new organisation the Irish Mortgage Holders Organisation to advocate on behalf of debtors, to work to bring long term solutions and systems to over indebtedness and to allow this great country move forward.
David Hall was one of the co-founders of New Beginning in 2010. In July 2012, David and other concerned citizens established the Irish Mortgage Holders Organisation (IMHO) to help consumers tackle the increasing burden of personal debt. In addition to IMHO, David owns and runs Lifeline Ambulance Service. David also founded the Make-A-Wish Foundation in 1992.
Survey reveals who gets it in the neck
Rises in the cost of living have slowed – but not for everyone. Pensioners and the over 50s are being clobbered while people on benefits and young families are escaping much of the pain of higher prices. The Sunday Independent/KBC Bank reveals whose living standards are hit hardest and who’s dodging the bullet.
The over 50s
Cost of living up 3.3 per cent in a year
National average up 1.2 per cent
The over 50s have escaped many of the most severe aspects of the crisis with job losses and negative equity more concentrated among the 20-30 age group. However, living standards have been hit and for many, pensions have also declined sharply.
Our cost of living survey highlights how this section of society is being pummelled. They are not enjoying the benefits of cheaper mortgages. Instead they are being hammered by the massive rises in insurance – health up 15.9 per cent, car up 4.8 per cent. Energy costs are spiralling, up 9.1 per cent. Driving is dearer too, with fuel costs rocketing.
College-age children are a major burden with third-level costs up 6.6 per cent and rents rising 1.5 per cent. Even going out to a restaurant is more costly, rising 1 per cent on last year. Staying in isn’t much better, as Downton Abbey is dearer – digital TV is up 3.6 per cent. Pets are also 4 per cent more expensive
Cost of living up 2.7 per cent in a year
National average up 1.2 per cent
Having suffered less than most in the early years of the downturn, pensioners are now feeling the pain. Since October 2011, the cost of living for pensioners has risen at more than double the national average.
Retired citizens have been clobbered by more expensive food bills over the last year, with potatoes up 18.8 per cent, tinned fruit rising 13.4 per cent and flour up 6.2 per cent. Although chocolate prices pogoed last month, they are down 0.5 per cent on the year.
Pipe tobacco prices have leapt 7.9 per cent in the year, however a bed time snifter is marginally less pricey. Gardening costs and plants are 6.8 per cent cheaper.
Pensioners are less likely to have big mortgages and have missed out on savings from falls in interest rates. They are also being savaged by the jump in health insurance – up 15.9 per cent and the price of heating and lighting. Home heating oil is up 13.4 per cent in the last year.
Cost of living up 0.7 per cent in a year
National average up 1.2 per cent
People living in rented accommodation have missed out on much of the relief caused by the drop in mortgage costs, particularly tracker mortgages, over the last year. Rents have risen 1 per cent over the last year. Rising electricity, gas and other fuel costs have hurt.
Although food prices have risen, the cost of off-licence beer and spirits has fallen by up to 3.2 per cent. Footwear and shoe prices are more than 3 per cent cheaper.
Heading off to see the latest James Bond movie Skyfall will cost a little bit more, with cinema prices up 1.5 per cent but reviewing it on Twitter is cheaper as smartphone tariffs and other communication costs are 3.6 per cent less.
Cost of living up 0.6 per cent in a year
National average up 1.2 per cent
Any cuts on benefits will hurt but not as badly as they might, as the cost of living for most people on welfare has risen at just half the rate of the national average. It has increased though, up 0.6 per cent in a year.
While food and drink prices rose by 1 per cent over the last 12 months, certain categories experienced heavy price hikes. Cornflakes and breakfast cereals are 4.7 per cent dearer, with sausages, rashers and other pork products up 6.4 per cent. Baked beans and other processed vegetables are 2.2 per cent more expensive.
Public transport costs have zoomed ahead by 0.6 per cent. Bicycles are 3.6 per cent cheaper. Lighting and heating bills are dearer. Clothing prices are up 1 per cent while jewellery, clocks and watches are 2.7 per cent cheaper.
Local authority rents are down 1.6 per cent.
Cost of living down 0.1 per cent
National average up 1.2 per cent
Children who stay living with their parents long into their 20s and 30s are on the pig’s back, as their cost of living fell over the last year.
Without exposure to mortgage or rents, these people have much higher levels of disposable income. Heading out to Krystal or nightclubs is generally cheaper with prices falling 4.8 per cent. But going down the pub is dearer, with beer prices up 1.7 per cent in licensed premises. Restaurant prices are up 1 per cent with weekends away also dearer as hotel costs have risen 1.1 per cent over the last year.
Digital music players, smartphones and touch-screen tablets are exceptional value, with prices falling 9.5 per cent.
Looking trim is cheaper too, with gym costs and sports participation fees tumbling by 5 per cent. Sports equipment is also down 1.8 per cent. Books are better value, although the latest glossy celeb magazine is 1.5 per cent dearer – which means you’ll miss the debate over whether or not Twilight star Kristen Stewart was wearing pants.
The middle classes
Cost of living down 1.6 per cent
National average up 1.2 per cent
Tax hikes, pension relief cuts and a bucketload of stealth taxes are going to make the leafy suburbs look like the aftermath of a slasher movie.
But the former “Tiger cubs” are doing quite well this year, with their average cost of living falling by 1.6 per cent against the national average rising 1.2 per cent. The 18.1 per cent fall in mortgage interest costs has had the biggest impact, magnified by the fact that many of these people have large tracker mortgages.
Education is a much larger bill, with third-level costs up 6.5 per cent and the posh private school up 2.5 per cent. Private healthcare is up 15.9 per cent and insuring the Beemer is 4.8 per cent dearer.
Getting a spot of botox is dearer with outpatient costs up 0.2 per cent. However, cosmetics and skincare prices are down 4.4 per cent. Hairdressing bills rose sharply last month but are only up 0.1 per cent in the year.
Filling the house with the latest gadgets is better value, with computers and laptops now 14.2 per cent cheaper and televisions down 8.4 per cent. However, filling up the Land Rover Vogue costs a staggering 11.5 per cent more. At least, hiding assets abroad is more affordable. Air fares have fallen 1.6 per cent.
Cost of living down 2.2 per cent
National average up 1.2 per cent
Young couples with kids appear to be doing rather well, with their cost of living dropping over the last year. The bulk of this fall is due to an 18.1 per cent drop in mortgage interest costs. A new people carrier or other type of car is down 1.1 per cent but fuel prices are up over 11 per cent.
While mortgage bills may have been reduced, food prices have risen by 1 per cent, with some kids’ foods rising spectacularly. Orange juice is up by 6.3 per cent and fizzy drinks by almost 4 per cent. Jam has risen by 1.6 per cent and crisps by 2.4 per cent. But pizza is 4.8 per cent cheaper.
Shoes, hoodies and PJs are around 1 per cent dearer. Washing machines and dishwashers are more affordable though, dropping by 1.7 per cent.
But looking after the kids is not so onerous. Pre-school costs have risen 0.2 per cent and childcare bills are flat. Dental fees have fallen 0.1 per cent, with doctors’ fees down 0.3 per cent. With Christmas approaching, getting the latest toys or games is 5.1 per cent cheaper than last year.
Cost of living down 5.4 per cent
National average up 1.2 per cent
The big picture for first-time buyers sucks. Negative equity is a crippling problem and house prices have fallen close to 60 per cent in five years. But there is a bit of good news.
The cost of living for first-time buyers has tumbled this year. Around 60 per cent of all mortgage stock are trackers, with far higher levels for more recent loans. Mortgage interest costs have dropped 18.1 per cent in the last year. Home insurance bills are down by 4.9 per cent and maintenance costs are 0.8 per cent down.
TVs and multimedia equipment is 8.4 per cent cheaper, with furniture falling by 6.3 per cent. Glassware, tableware and other knicknacks are also better value with gardening equipment down 3.3 per cent.
Kenny accepts latest interest rate hike difficult – but won’t stop it – National News – Independent.ie
But he refused to step to block the second hike by AIB in two months.
The State-owned bank announced last week it would be raising its interest rate by 0.5pc to 4pc – two days after the bank paid €1bn to senior unsecured bondholders.
The move affects the bank’s 70,000 variable-rate customers, will see already-struggling homeowners coughing up an extra €1,222 a year for a standard €200,000 mortgage. Fianna Fail leader Micheal Martin said the rate increase will “bleed the ordinary householder across the country”.
Mr Kenny said the decision was made by the AIB board.
Mortgage arrears scheme
Fine Gael Councillor Michael Murphy has welcomed the Government’s provision of free, independent financial advice for homeowners in difficulty with their mortgage. Ah, hem Michael what you fail to highlight is this scheme will only be available for a fraction of those with mortgage difficulties.
The scheme is no more than waffle and hot air. It will solve little or nothing already time to bin it.
Ireland a Review
Ireland has been an astonishingly corrupt society with rampant political criminality at the top of Government and zero accountability since the 1960s… it’s the spoofer, the wide boy, the unscrupulous chancer and con man that have thrived.
I really begin to think that as a nation we enjoy this purgatory called Ireland.
Kenny wants to ‘squeeze maximum’ out of deal
Next, he will want to squeeze water out of a stone. Maybe a true son of Fin M’Coul somehow I doubt it more like the fairy at the end of the garden.
Yes, Prince of Vested interest I will do all you ask.
Secret donor promises €500,000 to help Quinn’s legal action against the former Anglo Irish Bank.
Could this be somebody with property abroad? Maybe rather close to the family. Will the donation be legal, will it be taxable?