Banks in Ireland compare with troubled Italian banks in EU colour charts of non performing loans

Watcher2

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Those loans in arrears are no longer assets of PTSB, so they don't affect the liquidity and solvency of the bank and the banking system.
My mortgage was once with the EBS. It was securitised (sold) but I still kept paying the EBS. I assume PTSB will remain the collection agent. What kind of fee is paid for this service or is it part of the (discounted) price sold? So, while it gets the bad loans off its books, it still has staff administering the collections and remaining debt. This, therefore, is a cost to the business.
 


gerhard dengler

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Those loans in arrears are no longer assets of PTSB, so they don't affect the liquidity and solvency of the bank and the banking system.
I agree. The loans (assets) are no longer on PTSB's books and the impairment that was there no longer applies to PTSB's books.

If I can't repay a loan, whether it's to repay PTSB or Mars, is immaterial to my own circumstances.
I still owe and someone is owed.
 

HarshBuzz

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My mortgage was once with the EBS. It was securitised (sold) but I still kept paying the EBS. I assume PTSB will remain the collection agent. What kind of fee is paid for this service or is it part of the (discounted) price sold? So, while it gets the bad loans off its books, it still has staff administering the collections and remaining debt. This, therefore, is a cost to the business.
It's built into the securitsation structure, there's a fee for adminstering receivables.

Most mortgages are securitised, it's an entirely legitimate thing to do.
 

HarshBuzz

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A useful footnote to the CB report that should ease some minds that appeared to be troubled last night:

Non-bank entities comprise regulated retail credit firms and unregulated loan owners. Unregulated loans owners include owners of mortgages not regulated by the Central Bank of Ireland, that have purchased mortgage loans secured on Irish residential properties. The Consumer Protection (Regulation of Credit Servicing Firms) Act, 2015 was enacted to ensure that relevant borrowers, whose loans are sold to third parties, maintain the same regulatory protections they had prior to the sale.
 

Watcher2

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It's built into the securitsation structure, there's a fee for adminstering receivables.

Most mortgages are securitised, it's an entirely legitimate thing to do.
I'm not talking about its legitimacy. My point is the cost of the ongoing administration and who bears it. When you say it's built into the securitisation arrangement, does that mean that the price paid includes the future costs or is there an agreed fee that gets paid into the future until the loans are repaid/extinguished? If there is no ongoing fee paid for the admin, that makes the securitisation arrangement even worse because the banks have to pay the employment costs of those staff for essentially nothing given that the loans are sold off at large discounts.
 

HarshBuzz

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I'm not talking about its legitimacy. My point is the cost of the ongoing administration and who bears it. When you say it's built into the securitisation arrangement, does that mean that the price paid includes the future costs or is there an agreed fee that gets paid into the future until the loans are repaid/extinguished? If there is no ongoing fee paid for the admin, that makes the securitisation arrangement even worse because the banks have to pay the employment costs of those staff for essentially nothing given that the loans are sold off at large discounts.
The banks wouldn't securitise mortgages if it didn't make sense for them. Read this wiki article on MBS, it's pretty comprehensive.

In terms of receivables administration (which is what you're talking about), as I have said, it is baked into the pricing.
 

Watcher2

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The banks wouldn't securitise mortgages if it didn't make sense for them. Read this wiki article on MBS, it's pretty comprehensive.

In terms of receivables administration (which is what you're talking about), as I have said, it is baked into the pricing.
Ok, so just that it is 100% clear, if the loans are worth say 100 million, they get securitised and sold for say 50 million. 5 million is agreed for the future administration on the receivables so a total of 55 million is paid to the Irish banks for that loan packet.

Therefore, anytime we see these deals, the price is not for the loans but the loans and the future administration costs of the receivable. Are these admin costs based on straight forward administration or are non standard activities included say for non standard cost recovery which these loans inevitably will bring?
 

clearmurk

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Let me make this really simple.

The only types of entities who extend credit (including mortgages purchased on the secondary market) to Irish consumers are those regulated by the ICB.

Excluding backstreet illegal moneylenders, which we're clearly not talking about here.
Such naivety from the lying banker.

Paypal operates quite happily here without regulation by the Irish Central Bank. What a wonderful world it is for large US MNCs.
 

HarshBuzz

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Ok, so just that it is 100% clear, if the loans are worth say 100 million, they get securitised and sold for say 50 million. 5 million is agreed for the future administration on the receivables so a total of 55 million is paid to the Irish banks for that loan packet.

Therefore, anytime we see these deals, the price is not for the loans but the loans and the future administration costs of the receivable. Are these admin costs based on straight forward administration or are non standard activities included say for non standard cost recovery which these loans inevitably will bring?
Generally pricing is done on a series of assumptions.

Both default (non-payment) and its opposite prepayment (i.e. early) risk is built into the structure of the deal. Collections\Administration fees are also agreed.

From the point of view of the borrower, nothing changes. Your mortgage is still with the bank and you deal directly with them.
 

HarshBuzz

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Such naivety from the lying banker.

Paypal operates quite happily here without regulation by the Irish Central Bank. What a wonderful world it is for large US MNCs.
Who exactly is Paypal extending credit to? Take your time now.
 

gerhard dengler

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Such naivety from the lying banker.

Paypal operates quite happily here without regulation by the Irish Central Bank. What a wonderful world it is for large US MNCs.
Many companies possess banking licences. Several of them provide credit to Irish customers. Many of the motor car sales and distribution
companies offer loans/credit. Supposedly this credit industry is authorised and supervised subject to Irish Central Bank regulations.
 

HarshBuzz

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Any payment services provider is in the credit provision business, and is required to be regulated domestically. Keep up the lying.
keep up the blatant ignorance :p
 

Watcher2

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Generally pricing is done on a series of assumptions.

Both default (non-payment) and its opposite prepayment (i.e. early) risk is built into the structure of the deal. Collections\Administration fees are also agreed.

From the point of view of the borrower, nothing changes. Your mortgage is still with the bank and you deal directly with them.
Yep, exactly. The loan book is sold but the administration, for the remaining term of the longest loan, is conducted by the bank. The costs might be baked into the discounted purchase price of the bad loans but I bet the ongoing costs sit as normal on the books of the bank. The costs in the purchase price, how are they treated in the banks accounts out of interest?
 

HarshBuzz

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HarshBuzz

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Yep, exactly. The loan book is sold but the administration, for the remaining term of the longest loan, is conducted by the bank. The costs might be baked into the discounted purchase price of the bad loans but I bet the ongoing costs sit as normal on the books of the bank. The costs in the purchase price, how are they treated in the banks accounts out of interest?
Like any other costs. Mainly staff time.
 

clearmurk

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Give us a link to where Paypal are offering loans in Ireland.
Any payment intermediary takes on credit counterparty risk in the processing of transactions though the various chains of accounts. No formal consumer lending involved. They are subject to domestic regulation (if the Central Bank of Ireland chooses to act).

To make it simple for you

- I make a purchase for 100 euros on-line at mid-night
- I tell Paypal to pay the vendor, using funds from my bank account
- Paypal makes the payment immediately to the vendor's bank
- But my bank is gone offline - maybe some batch processing window - or maybe their fraud software generates a false trigger
- Now Paypal is down 100 euros until my bank decides to pay up.

Who is Paypal extending credit to? Be sure to ask your lying mates before replying.
 

Watcher2

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Give us a link to where Paypal are offering loans in Ireland.
apologies, if they dont provide them in ireland. i just remember seeing somewhere that paypal offer loans. i couldn't be arsed looking for evidence in ireland.
 


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