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Ireland world champion of mortgage defaults


patslatt

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Apr 11, 2007
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See Welcome to Ireland, where mortgage payments are apparently optional – Quartz

The level of Irish mortgage defaults and arrears as shown in the chart in the link above is vastly higher than even Greece's. One estimate is that about a third of this is strategic defaults by home owners who could afford to pay.

Given the huge backlog of mortgage defaults to be processed,new legislation that corrects a technical flaw in the legal right of banks to reposses houses in mortgage default will set off a massive wave of repossessions. Mortgage loan restructurings will make little difference,going by US experience of extremely high failure rates of restructurings.

Irish folk memories of 19th century mass evictions of impoverished potato farmers from their one or two acre lots still create public sympathy for people facing evictions from their homes. This could make it very difficult for the government owned banks to proceed with repossessions.However, the government has little choice: it has its marching orders from the Troika and the banks need to raise money from selling off repossessed houses if they are to fund new mortgage lending and new loans.
 

DuineEile

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14,939
See Welcome to Ireland, where mortgage payments are apparently optional – Quartz

The level of Irish mortgage defaults and arrears as shown in the chart in the link above is vastly higher than even Greece's. One estimate is that about a third of this is strategic defaults by home owners who could afford to pay.

Given the huge backlog of mortgage defaults to be processed,new legislation that corrects a technical flaw in the legal right of banks to reposses houses in mortgage default will set off a massive wave of repossessions. Mortgage loan restructurings will make little difference,going by US experience of extremely high failure rates of restructurings.

Irish folk memories of 19th century mass evictions of impoverished potato farmers from their one or two acre lots still create public sympathy for people facing evictions from their homes. This could make it very difficult for the government owned banks to proceed with repossessions.However, the government has little choice: it has its marching orders from the Troika and the banks need to raise money from selling off repossessed houses if they are to fund new mortgage lending and new loans.

The problem won't be getting the properties back, the problem will be preventing a flood of keys being flung back at the lenders. Once this bottle is opened, the banks will go bust. Again.



D
 

ManInTheArena

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Joined
Feb 21, 2013
Messages
2,604
See Welcome to Ireland, where mortgage payments are apparently optional – Quartz

The level of Irish mortgage defaults and arrears as shown in the chart in the link above is vastly higher than even Greece's. One estimate is that about a third of this is strategic defaults by home owners who could afford to pay.

Given the huge backlog of mortgage defaults to be processed,new legislation that corrects a technical flaw in the legal right of banks to reposses houses in mortgage default will set off a massive wave of repossessions. Mortgage loan restructurings will make little difference,going by US experience of extremely high failure rates of restructurings.

Irish folk memories of 19th century mass evictions of impoverished potato farmers from their one or two acre lots still create public sympathy for people facing evictions from their homes. This could make it very difficult for the government owned banks to proceed with repossessions.However, the government has little choice: it has its marching orders from the Troika and the banks need to raise money from selling off repossessed houses if they are to fund new mortgage lending and new loans.
Interesting article, though some of the conclusions seem to be a little shaky. And, based on his article in the Irish Times, the 35% strategic default figure seems to just have been made up by Gregory Connor.
 

Hewson

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Apr 29, 2009
Messages
8,338
See Welcome to Ireland, where mortgage payments are apparently optional – Quartz

The level of Irish mortgage defaults and arrears as shown in the chart in the link above is vastly higher than even Greece's. One estimate is that about a third of this is strategic defaults by home owners who could afford to pay.

Given the huge backlog of mortgage defaults to be processed,new legislation that corrects a technical flaw in the legal right of banks to reposses houses in mortgage default will set off a massive wave of repossessions. Mortgage loan restructurings will make little difference,going by US experience of extremely high failure rates of restructurings.

Irish folk memories of 19th century mass evictions of impoverished potato farmers from their one or two acre lots still create public sympathy for people facing evictions from their homes. This could make it very difficult for the government owned banks to proceed with repossessions.However, the government has little choice: it has its marching orders from the Troika and the banks need to raise money from selling off repossessed houses if they are to fund new mortgage lending and new loans.
Some people are choosing to pay off unsecured debt, such as credit cards, over mortgages because failure to do so can cause more instant hassle than the longer-term problems mortgage default brings. It's not that they don't want to pay, they're just prioritising.

And that's only in some instances.

For the mjority in arrears the sleepless nights are still there. While there may be an issue with strategic default, the reality is that in Ireland, unlike other countries, giving your home bck to the lender doesn't clear your debt. You'll have no home but you'll have the millstone of debt around your neck until you pay it off or move abroad and never come back.
 

Shqiptar

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Mar 18, 2012
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There were two other threads about this story but since I can't find them.....ar aghaidh libh.
 

'orebel

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Is there any sign of an introduction of the rule where the mortgaged property is the collateral for the loan?
 

Analyzer

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Feb 14, 2011
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All that is missing now is media cheerleaders to extoll the population to "celebrate" this "achievement of the modern Ireland".

Does this mean that we are significant again in the world's eyes ?

Maybe a knowitall in a quango might talk about "pride" and the "green jersey", and "punching above our weight" ?
 

Hewson

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Anyway, we're into our fifth year of this crisis, pumped billions into our banks, taken tax hikes, pay cuts, extra levies, higher unemployment and emigration on the chin and STILL both banks and government are either avoiding or fiddling around with the issue of mortgage default.

This issue should have been prioritised at the same time as bank recapitalisation, since both issues are inseparable. Instead we have lenders threatening the very people whose taxes went to save their worthless skins.

The government never plucked up the courage to kick ass in the banks. An indication of just who calls the shots in Irish society.
 

'orebel

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Anyway, we're into our fifth year of this crisis, pumped billions into our banks, taken tax hikes, pay cuts, extra levies, higher unemployment and emigration on the chin and STILL both banks and government are either avoiding or fiddling around with the issue of mortgage default.

This issue should have been prioritised at the same time as bank recapitalisation, since both issues are inseparable. Instead we have lenders threatening the very people whose taxes went to save their worthless skins.

The government never plucked up the courage to kick ass in the banks. An indication of just who calls the shots in Irish society.
Ah now be fair. We're introducing a scheme of personal insolvency which will only last eight years and the banks will have a veto on who qualifies.
What makes you think they're calling the shots?
 

Mad as Fish

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Dec 6, 2012
Messages
24,449
See Welcome to Ireland, where mortgage payments are apparently optional – Quartz

The level of Irish mortgage defaults and arrears as shown in the chart in the link above is vastly higher than even Greece's. One estimate is that about a third of this is strategic defaults by home owners who could afford to pay.

Given the huge backlog of mortgage defaults to be processed,new legislation that corrects a technical flaw in the legal right of banks to reposses houses in mortgage default will set off a massive wave of repossessions. Mortgage loan restructurings will make little difference,going by US experience of extremely high failure rates of restructurings.

Irish folk memories of 19th century mass evictions of impoverished potato farmers from their one or two acre lots still create public sympathy for people facing evictions from their homes. This could make it very difficult for the government owned banks to proceed with repossessions.However, the government has little choice: it has its marching orders from the Troika and the banks need to raise money from selling off repossessed houses if they are to fund new mortgage lending and new loans.
From the article -

They’re guilty, have confessed their sins and willing to years of painful austerity budgets as penance.

WTF is this journalist smoking?!
 

Analyzer

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Feb 14, 2011
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46,201
From the article -

They’re guilty, have confessed their sins and willing to years of painful austerity budgets as penance.

WTF is this journalist smoking?!
Well, according to Ming Flanagan, many Irish journalists go for substances that Ming himself would not touch.

The delusional side-effects are to be expected.
 
Last edited:

Taxi Driver

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Jan 8, 2011
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What explains the Irish line in this chart from the article?



Unemployment? No.
Tax increases? Maybe.
Interest rates? Possibly. (SVR v Tracker)
Mortgage type? Maybe. (IO v Repayment)
Household income? Probably not.
House prices? Maybe.
Mortgage size? Maybe.
Repossessions? Maybe.

It is a huge difference to explain.
 

Telemachus

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en.wikipedia.org
Irish folk memories of 19th century mass evictions of impoverished potato farmers from their one or two acre lots still create public sympathy for people facing evictions from their homes. This could make it very difficult for the government owned banks to proceed with repossessions.However, the government has little choice: it has its marching orders from the Troika and the banks need to raise money from selling off repossessed houses if they are to fund new mortgage lending and new loans.
The difference of course Pat is that evictions in the 19th century were mainly of tenant farmers and other renters. This time its of BTL would be landlords and people who accepted massive loans by banks here to get "on the ladder". In many cases ironically it will be lanlords moved in on, almost the opposite of what happened in the 19th century.

I know of at least three people who will never ever pay the full principle of their mortgages, arent making any payments whatsoever but continue to be allowed to live in the homes they acquired or "built" with the banks money.

Either the banks werent given enough money in the bailout to write down these losses and take equity and or flog on the properties or the banks are sitting on the cash, either way the government should have acted some time ago.
 

Mad as Fish

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Well, according to Ming Flanagan, many Irish journalists take stuff that he would not dare touch, based on the delusional side-effects caused.
Perish the very thought that the finest of the fourth estate would dare contemplate contaminating the purity of their souls with hallucinogenic substances, so I guess they must just be born into a parallel orbit. From further down I note this voiced as a complaint-

The simple answer is that Ireland is one of the hardest places in the world to drive a family from its home.

I would of said that's something to be quite proud of, it demonstrates that there is a little humanity left in the world after all.
 

ManInTheArena

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Perish the very thought that the finest of the fourth estate would dare contemplate contaminating the purity of their souls with hallucinogenic substances, so I guess they must just be born into a parallel orbit. From further down I note this voiced as a complaint-

The simple answer is that Ireland is one of the hardest places in the world to drive a family from its home.

I would of said that's something to be quite proud of, it demonstrates that there is a little humanity left in the world after all.
Careful - don't mention humanity - remember moral hazard.....the world-ending danger of moral hazard is far more important than humanity. Apparently.
 

Mad as Fish

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24,449
What explains the Irish line in this chart from the article?



Unemployment? No.
Tax increases? Maybe.
Interest rates? Possibly. (SVR v Tracker)
Mortgage type? Maybe. (IO v Repayment)
Household income? Probably not.
House prices? Maybe.
Mortgage size? Maybe.
Repossessions? Maybe.

It is a huge difference to explain.
I wonder if you could explain how you come to conclude that unemployment and household income are not factors in this? They are at the very core of the problem.
 

ShoutingIsLeadership

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Jan 17, 2011
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Interesting article, though some of the conclusions seem to be a little shaky. And, based on his article in the Irish Times, the 35% strategic default figure seems to just have been made up by Gregory Connor.
Yes. He used the USA (where they have non-recourse mortgages) as the basis for his 'calculations'. As is typical, this figure he has pulled from his rear end, is now taken as a fact-basd assessment of the situation in Ireland, by a host of media outlets.
 

Taxi Driver

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I wonder if you could explain how you come to conclude that unemployment and household income are not factors in this? They are at the very core of the problem.
Are they not problems in other countries as well. Do you think the unemployment and household income deteriorations in Ireland are worse than those in Greece/Spain/Portugal?

The point is to explain the difference, not the level. So why is Ireland "off the chart"?
 

harpsman

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I wonder if you could explain how you come to conclude that unemployment and household income are not factors in this? They are at the very core of the problem.
The unemployment rate among people in arrears is quite low.
 

Howya

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Feb 29, 2012
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Is there any sign of an introduction of the rule where the mortgaged property is the collateral for the loan?
No chance of that ever seeing the light of day - the banks write the rules don't you know:mad:
 
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