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in trouble the mortgage repayments are so high they represent more than half of their income, Davy reported, citing unpublished Central Bank studies.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.
Really, it is not so much a matter of Whatever Happened the Banks, so much as whatever happened the banks? The first question is asked by boring people in the pub who have read all the disaster books and will explain the whole banking collapse to you if you stand still long enough.
But then there is a larger grouping: quieter, frequently older and yet more furious. This is the group which is asking: whatever happened the banks? These are my people: we live in the lower case.
We’re unfashionable, often technologically ignorant and our schedules allow us to go to our local branch of the bank during the day. And our local branch of the bank couldn’t think less of us if we had come to rob it. In fact it would think a whole lot more of us if we came to hold up the bank with sawn-off shotguns.
The banks have spent large sums on preventing bank robbers swanning in and out of the premises at will. They have installed a double-door security system, they’ve thought that much about them.
Your customer, on the other hand, is regarded as a nuisance and strongly discouraged. Some time ago, at a secret meeting, the banks declared war on us.
Inside your modern bank nowadays is a cavernous space with nothing in it but a couple of machines, perhaps a television and a person whose job it is to wrangle the customers into submission by asking you what you want to do. Then they tell you that you can do it online.
Then you tell them that you don’t want to do it online. Or that you don’t know how to do it online. Or that you have concerns about security online.
Then they direct you to the cashier section – once the heart of any bank. There is one cashier. There is a queue. You queue. That is , if everything goes well.
A friend of mine rebelled. He was in a city-centre branch at lunchtime, 14 people were in the queue and one cashier’s hatch was open. He refused to tell the man who was trying to break up the queue what his business was. His business was private.
“I had a bit of a Larry David moment,” he says. He rehearsed the last couple of years of bank history in this country and told the bank employee that, as things had turned out, he would have been better putting his money in the attic.
“You know how it is in these situations,” he says modestly. “ You become a bit of a folk hero.” The other 13 people in the queue started to talk about how that member of the bank staff was “here every lunchtime” . Because the banks want you at home, doing all their clerical work for them online. It’s simple really.
I know the name of the man with the last old-fashioned bank book in Dún Laoghaire. The bank has tried for years to get it off him but he won’t surrender it – and this man is a bit of a computer whiz and could do online banking if he wished.
Still, the screws continue to tighten on your inconvenient live customer who is, as we all know, a loser.
A local businesswoman ran down to open an account in a local bank. She had a cheque for €5,000 with her and all her documentation. “A lady with a clipboard gave me someone’s card and said we could make an appointment for Thursday.” This was Tuesday. Thursday is this businesswoman’s busiest day. She went elsewhere.
Or take bank transfers as one mad and exotic example. Bank Of Ireland won’t do them – since October 2012, the bank’s head office said in an official statement. The statement, which was kindly and swiftly issued at my request, said Bank of Ireland is “committed to communities nationwide” and staying in them when other banks leave.
All I wanted to do was send a small sum to a German company. “Oh we don’t do bank transfers,” said the customer wrangler, who never did volunteer his name. “Under €3,000. You can do that online.”
I left the bank. Then I went back into the bank. What about other banks? I asked. Surely they do bank transfers. The customer wrangler said he didn’t know.
A colleague has a similar experience in Galway. “I hadn’t been in a bank for ages,” she said – she is not a member of the Resistance. She owed someone €500 and her bank told her that it was “ not possible to do a bank transfer to another bank. You have to do that online.”
My colleague had no problem with that. But she was required to register her mobile phone number online. It was going to take five working days for the activation code for the mobile phone to be issued. It was then going to take two working days for the transfer itself to be cleared.
In the end my colleague handed the woman to whom she owed money a cheque. She asked the customer wrangler what happened with older customers, or in areas of the country where there is no broadband coverage.
It’s like this: the taxpayer bailed out the banks. In return the banks’ live customers are being hunted down like dogs. All we are saying is – give peace a chance.
It will be next week when we are set to finally get Sean Dunne’s financial statements which he is required to submit to the US bankruptcy court, and because it is the US, these are public documents and will be reported on here; there is much anticipation, though presumably it will be old hat to NAMA, to which Sean has previously provided a statement of affairs.
Meantime, we can bring you exclusive pictures of Sean’s home as set out in his bankruptcy filing – 526 Indian Field Road, Greenwich, CT 06830. Taken yesterday from the chopper – no, there were no speakers blaring out Wagner – and from a height of more than 800 feet so as to comply with local privacy laws, the pictures show an expansive home set in its own grounds in the enclave of Belle Haven in Greenwich Connecticut.
No-one was home yesterday, and indeed it emerged in the High Court in Dublin this week that Ulster Bank has been experiencing what were described as “difficulties” in serving bankruptcy papers seeking to make Sean bankrupt in Ireland. A red sedan was visible in the front forecourt though the property has three garages on one wing. Sean is understood to be still driving the Lexus SUV and Gayle, what NAMA described as a “luxurious” Cherokee.
The house is presently listed for sale by Sotheby’s International with an asking price of USD 8m (€6.2m). It sits on 2.5 acres. Sotheby’s says it has “a double-height great room w/fireplace, gourmet kitchen, formal dining room, family/theatre room, double offices. 8 bedrooms including a master suite w/marble bath, 3 dressing rooms, & balcony. First floor staff quarters. Lower level gym, storage space, laundry area, & bonus room. Pool, hot tub, & pool house w/full bath. Association private beach.” It has 24/7 security (no, not an alarm silly but a man in a sentry box). The property is owned by Alex and Irina Knaster who live in Kensington, west London.
During the Christmas 2004 tsunami in Asia, it was remarkable that there were so few mass animal deaths, and there is a long-held belief that animals can sense disaster ahead of human beings. Likewise, banks with their fingers on the pulses of households’ and businesses’ financial performance and prospects might be expected to have an unusually perceptive grasp on the economy; with a pattern emerging of banks exiting or considering exiting the State, this doesn’t augur well for our medium term economic prospects.
Next week we should get the Q3, 2012 results from Belgian-owned KBC bank which just a few weeks ago was strongly protesting that it didn’t have plans to exit from the Irish market. Industry speculation however is that KBC has had a lousy Q3,2012 in the Irish market and that its residential mortgage book in particular continues to deteriorate at an alarming rate. Insiders thought there was something of the bank “protestething” just a little too much recently, and that a partial or total exit may also be on the cards. The single reference to Ireland in KBC’s presentation to analysts on 8thOctober 2012 was noted with curiosity by some.
Towards the end of last week, there was unverified speculation in Dublin that Ulster Bank, owned by troubled British banking giant, Royal Bank of Scotland was considering an exit from the Irish market. Ulster Bank has already been flogging loan portfolios in an obvious bid to reduce its exposure in the Irish market, but the fear is that a more substantial action is afoot. Nothing came of the speculation, but the bank’s actions will be scrutinised closely in future, to see if a more radical exit is on the cards.
Today however, we actually get a definite announcement. Danske Bank, whose local bank brands are called Northern Bank in Northern Ireland and National Irish Bank in (the Republic of) Ireland, has published its Q3,2012 results which continue to show severe deterioration in its Irish loan book, though the pace of decline has eased. Danske has announced today that “the non-core Ireland portfolio will be divested” Looking through the Danske Irish financial statement for Q3, 2012 it looks as if there’s about €3bn of non-core lending in Ireland plus €2.5bn of core in the Republic and €4.8bn in Northern Ireland. There are €1bn of non-core deposits and €2bn of core deposits in the Republic and €5bn in Northern Ireland. So today’s announcement represents a major disposal though we await details of how and when the disposal will be made.
Bank of Scotland (Ireland) and Halifax are already in the process of running down their Irish loans, partly using the asset manager Certus. This follows the announcement of the exit from the Irish market of the two Lloyds-owned units in 2010.
ACC Bank, the Irish unit of Dutch-owned Rabobank said in June 2012 that it had no plans to exit the Irish market, this despite running up four years of losses, and needing a bailout of €930m from its parent operation in Holland.
We will shortly get mortgage arrears data from the Central Bank for Q3,2012 and for the first time should get detailed information on Buy-To-Let mortgages alongside the traditional data on Owner-Occupier mortgages. BTL is especially expected to show signs of crisis, the picture with Owner-Occupier mortgages is less clear with a slowing-down in the rate of deterioration recorded in Q1 and Q2, 2012. Commercial property continues to decline at an annualised 10% and it may be too early to claim the residential market is stabilising. Unemployment remains elevated at close to 15% and economic forecasts for 2012 and 2013 are trending downwards.
Maybe some banks do have a sixth sense.
via NAMA Wine Lake.
via NAMA Wine Lake.
Top management in both AIB and Bank of Ireland are reading the Old Testament to get them out of the current economic crisis.
Apparently, they have heard it’s where prophets are to be found
If you are looking for a loan please do not walk into the bank with a copy of the New Testament as it is viewed with suspicion