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Ireland, the global champion of mortgage arrears


sheehan

Well-known member
Joined
Jun 21, 2010
Messages
891
There is definitely some wrong and something going. The startling difference in mortgage arrears between Ireland and the rest of the crisis ridden countries shows that the policy of the government on banking loans and mortgage arrears is clearly not working. How come all the PIGs have the late mortgage arrears rate of no more than 4% whereas Ireland ("We are not Greece") has the rate at more than 13% and growing. This doesn't make common sense and suggests that the so-called "strategic default" may be playing a big role?

• 25% of Ireland’s home loans are distressed (S&P)
• 11.9% of Ireland’s mortgages late by more than 90 days (Irish Central Bank)
• Deutsche Bank believes its closer to 16%
• 35% of mortgage arrears are “strategic non payments” (Gregory Connor, Maynooth University)

Welcome to Ireland, where mortgage payments are apparently optional – Quartz
 

SilverSpurs

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Joined
Nov 27, 2009
Messages
5,550
There is definitely some wrong and something going. The startling difference in mortgage arrears between Ireland and the rest of the crisis ridden countries shows that the policy of the government on banking loans and mortgage arrears is clearly not working. How come all the PIGs have the late mortgage arrears rate of no more than 4% whereas Ireland ("We are not Greece") has the rate at more than 13% and growing. This doesn't make common sense and suggests that the so-called "strategic default" may be playing a big role?

• 25% of Ireland’s home loans are distressed (S&P)
• 11.9% of Ireland’s mortgages late by more than 90 days (Irish Central Bank)
• Deutsche Bank believes its closer to 16%
• 35% of mortgage arrears are “strategic non payments” (Gregory Connor, Maynooth University)

Welcome to Ireland, where mortgage payments are apparently optional – Quartz
If your neighbour gets away with not paying his mortgage then why should you pay. this is the moral hazrd of debt relief. :|:|:|
 

pippakin

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Joined
Feb 22, 2010
Messages
9,665
I think its because its feared too many repossessions might destabilise the govt and our bankruptcy laws are designed to be punitive, which gives people no incentive to start again at least not here. I wouldn't be surprised to find some properties have been abandoned, not that that will help much a poor credit rating will follow anyone.

Repossessions must start soon and property must be allowed to find its natural value, which isn't much, when that happens FG will be lucky if they don't get tarred with the FF brush, as for Labour they are already dead in the water.
 

Telemachus

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Joined
Apr 8, 2004
Messages
6,565
Website
en.wikipedia.org
Another banking funding crisis will occur before the Arrears issue is addressed.

The government only do reactive politics.

There are people living in homes up and down the country on interest only arrangements who will never work again, never mind pay off the balance of their mortgages.
 

ManInTheArena

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Joined
Feb 21, 2013
Messages
2,604
The old Strategic Default chestnut again.

There are many reasons for our high arrears rate including:

Draconian bankruptcy regime - people will hold on long after the writing is on the wall, when, in another country, they would have declared bankruptcy

High home ownership rates - people in Ireland bought houses that couldn't afford them because of our national property obsession (promoted by the then government). In other countries, many of these people would have rented rather than bought.

The banks in Ireland are allowed to pursue you even if you give up the house, literally to the ends of the earth, so no point in handing back the keys, like in many other countries.
 

DuineEile

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Joined
Aug 29, 2010
Messages
14,939
The old Strategic Default chestnut again.

There are many reasons for our high arrears rate including:

Draconian bankruptcy regime - people will hold on long after the writing is on the wall, when, in another country, they would have declared bankruptcy

High home ownership rates - people in Ireland bought houses that couldn't afford them because of our national property obsession (promoted by the then government). In other countries, many of these people would have rented rather than bought.

The banks in Ireland are allowed to pursue you even if you give up the house, literally to the ends of the earth, so no point in handing back the keys, like in many other countries.

What he said.





D
 

Analyzer

Well-known member
Joined
Feb 14, 2011
Messages
46,201
Time to break out the bubbly. Let's all celebrate. Let's all get on board and feel proud.

Another first for the modern Ireland. We need to praise ourselves for courageously embracing this trend, and quickly surpassing others for whom we were lagging behind for so long.

We are even punching above our weight, it seems.
 

Howya

Well-known member
Joined
Feb 29, 2012
Messages
1,690
There is definitely some wrong and something going. The startling difference in mortgage arrears between Ireland and the rest of the crisis ridden countries shows that the policy of the government on banking loans and mortgage arrears is clearly not working. How come all the PIGs have the late mortgage arrears rate of no more than 4% whereas Ireland ("We are not Greece") has the rate at more than 13% and growing. This doesn't make common sense and suggests that the so-called "strategic default" may be playing a big role?

• 25% of Ireland’s home loans are distressed (S&P)
• 11.9% of Ireland’s mortgages late by more than 90 days (Irish Central Bank)
• Deutsche Bank believes its closer to 16%
• 35% of mortgage arrears are “strategic non payments” (Gregory Connor, Maynooth University)

Welcome to Ireland, where mortgage payments are apparently optional – Quartz

You might want to consider the different reasons behind the various sovereign debt crises - Ireland had a combination of a property bubble and unsustainable governement expenditure. Greece afaik had much more of the latter and very little of the former. Therefore, you wouldn't expect to see the same mortgage arrears.
 

Taxi Driver

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Joined
Jan 8, 2011
Messages
4,296
I'm pretty sure this graph was discussed when the article was published nearly a month ago.

 

friendlyfire

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Joined
Sep 8, 2011
Messages
2,544
What shocked me recently that house buyers are doing cash deals,this is probably going on all the country.A few weeks ago a guy from work went to buy a house and was told that someone had bid €150,000 cash so that was that..... game over.

Now we are told we are bust, no wealth left....this is bulls*it the golden circles have reappeared!
 

Sister Mercedes

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Joined
Dec 19, 2011
Messages
20,663
50% of Buy-To-Let mortgages in Ireland are in 3 months+ arrears. But that percentage of properties are not vacant. So there must be a huge number of Landlords who have a tenant paying rent, but the Landlords are not using that rental income to pay the Mortgage. But we can't talk about them, because you can't talk about important stuff in Irish Media.
 

Shpake

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Joined
Oct 17, 2012
Messages
5,374
What shocked me recently that house buyers are doing cash deals,this is probably going on all the country.A few weeks ago a guy from work went to buy a house and was told that someone had bid €150,000 cash so that was that..... game over.

Now we are told we are bust, no wealth left....this is bulls*it the golden circles have reappeared!
You mean dealing out the loot in 10 and 50 and 100 Euro notes down on the table? I excuse my lack of expererience and naivity.
... but as long as he has a witness and gets a receipt and the vendor checks to make sure the notes aren't home-made.... it's one way of doing things. Or do you simply mean not making use of a mortgage or building society?
 

Sister Mercedes

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Joined
Dec 19, 2011
Messages
20,663
What shocked me recently that house buyers are doing cash deals,this is probably going on all the country.A few weeks ago a guy from work went to buy a house and was told that someone had bid €150,000 cash so that was that..... game over.

Now we are told we are bust, no wealth left....this is bulls*it the golden circles have reappeared!
For every person who bought a property at crazy prices, there was a person who sold a property at crazy prices. Some of them then bought another property, some bought shares, and some just put it in the bank.
 

IbrahaimMohamad

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Joined
Feb 5, 2013
Messages
4,226
50% of Buy-To-Let mortgages in Ireland are in 3 months+ arrears. But that percentage of properties are not vacant. So there must be a huge number of Landlords who have a tenant paying rent, but the Landlords are not using that rental income to pay the Mortgage. But we can't talk about them, because you can't talk about important stuff in Irish Media.
How can any multi property investor hope to get a debt write down unless they are in arrears?

Those greedy enough to buy overpriced property could never bear missing out on a debt write down.

Investors are hoarding their rent rolls hoping to hold a wad to use to make a settlement or to fund an escape to a new Country.

They no not want to pay back all they borrowed and are positioning for a deal!
 

carruthers

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Joined
Apr 30, 2008
Messages
4,197
What shocked me recently that house buyers are doing cash deals,this is probably going on all the country.A few weeks ago a guy from work went to buy a house and was told that someone had bid €150,000 cash so that was that..... game over.

Now we are told we are bust, no wealth left....this is bulls*it the golden circles have reappeared!
At the 150K level it's hardly the Golden Circle crowd. Could just be someone who has been waiting for a floor in the market.


When the Developers shake the Florida sand off their feet and come home tanned and fresh out of bankruptcy looking for bargins, then you'll know it.
 

carruthers

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Joined
Apr 30, 2008
Messages
4,197
How can any multi property investor hope to get a debt write down unless they are in arrears?

Those greedy enough to buy overpriced property could never bear missing out on a debt write down.

Investors are hoarding their rent rolls hoping to hold a wad to use to make a settlement or to fund an escape to a new Country.

They no not want to pay back all they borrowed and are positioning for a deal!
I very much doubt there will be write downs for investors. It would be lunacy.
 

friendlyfire

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Joined
Sep 8, 2011
Messages
2,544
You mean dealing out the loot in 10 and 50 and 100 Euro notes down on the table? I excuse my lack of expererience and naivity.
... but as long as he has a witness and gets a receipt and the vendor checks to make sure the notes aren't home-made.... it's one way of doing things. Or do you simply mean not making use of a mortgage or building society?
Not monopoly money or iou's straight up cash,I was told about this a few months ago by a friend who during the boom was buying and selling house's (one of the few that got out intact).He has his ear to the ground and knows whats going on,even though he is not at that the game.... he hears whats happening around the scene.
 

Raketemensch

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Joined
Apr 11, 2009
Messages
3,128
What shocked me recently that house buyers are doing cash deals,this is probably going on all the country.A few weeks ago a guy from work went to buy a house and was told that someone had bid €150,000 cash so that was that..... game over.

Now we are told we are bust, no wealth left....this is bulls*it the golden circles have reappeared!
You are easily shocked. Some people have spent many years saving all their excess instead of borrowing fortunes for new cars and kitchens all the way through the boom. What this has to do with golden circles I'm not sure.
 

Raketemensch

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Joined
Apr 11, 2009
Messages
3,128
Not monopoly money or iou's straight up cash,I was told about this a few months ago by a friend who during the boom was buying and selling house's (one of the few that got out intact).He has his ear to the ground and knows whats going on,even though he is not at that the game.... he hears whats happening around the scene.
Umm, I think you misunderstand what buying a house for 'cash' means. It means not needing a mortgage, it doesn't necessarily entail a van piles with boxes of used notes. Except maybe in Limerick.
 

EUrJokingMeRight

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Sep 28, 2009
Messages
11,840
Yay! Go Ireland.
 
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