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Mortgage end-game? Government 'plan' due at 2pm, today, 13 March 2013.


ShoutingIsLeadership

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Well, folks, today might be a bit of a mixed bag for lots of posters here.

We might finally be getting to the end of all the mortgage related threads on P.ie :) . And as one of the biggest culprits on the 'mortgage moan' front, I've decided to set up one last, hopefully consolidated, thread.

The price of an end to all these threads and moaning, might be an increase in your feelings of disgust, anger or frustration at what you might consider an over-reaction by the government, or the creation of a massive moral hazard.

Equally, this might be another big damp squib, and another can-kicking exercise.

Come 2pm, we should know all. One thing is for sure, this will be the main news tonight [unless a new Pope is elected, in which case RTE will clear its schedules for a lot of white noise about white smoke - hopefully the Vatican won't want that announcement to clash with a Champions League night, and will hold off until tomorrow].

I'll update the OP as and when the details are known, but in the meantime, here are a few hints:

One of those who has been briefed said: "The Government is not forcing the banks to write down one cent of mortgage debt.

"Instead, people in mortgage trouble will be offered to have half of the debt parked, or the term of the mortgage will be elongated, or the interest rate will be reduced.

"But the full burden of the debt will stay on people's backs."
Borrowers who genuinely can't pay will get debt deals from banks - Independent.ie

OP UPDATE (2pm): http://www.rte.ie/news/business/2013/0313/376503-new-measures-on-arrears-to-include-write-downs/

Banks will be forced to reach sustainable solutions with 20% of borrowers in arrears by the end of July.

That figure will increase to 30% by the end of the third quarter of 2013 and 50% by the end of the year.

The Central Bank has also published a new code of conduct on mortgage arrears.


Significantly, as part of the new targets for banks, regulators are openly asking lenders to include debt forgiveness if it is appropriate.

In the Central Bank's definition of a sustainable solution, it includes repayment of "a revised principal sum" - in other words some of the debt being written down if the bank offers a deal to a customer.

The Central Bank hopes to increase the use of split mortgages. This would see a home loan divided into two parts with the customer paying the first part and the second part would be parked without interest accruing in some circumstances.

In some cases the second part would be written off at the end of the term of the home loan. However, it would be up to individual banks to determine if this would be appropriate.

UPDATED at 2.12pm: Central Bank statement:

http://www.centralbank.ie/press-area/press-releases/Pages/CentralBankOutlinesAdditionalMeasuresonMortgageArrears.aspx
 
Last edited:

Crazy horse 6

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Dec 15, 2011
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I should put in another can kicking gif but i could'nt be arsed. We all know what this is, a PR exercise and nothing more.
 

hammer

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Maybe Noonan will turn around now and ask the banks to increase all variable rates now that he feels he can cut salaries.
 

ShoutingIsLeadership

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The agenda seems to have changed.

Increase profitability so the banks can be sold and the exchequer recoups as much as possible so we can put the proceeds back into the "pot" used to over-spend :(
I thought the ending of the bank guarantee and the reduced staff costs was aimed at avoiding imminent rate rises.
 

Happytolearn

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Kick the can - c'mon kick the can baby - kick the can - you're drivin me crazy .....
 

Mad as Fish

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I'm more inclined to think that this paves the way for more cuts in pay and SW. For those that rightly point out that reductions in income will force more people into arrears they now can pretend to have an answer.

Nothing announced/leaked so far that suggests the banks should also take a hit for reckless lending, it all sounds very one sided which is only to be expected.
 

hammer

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Kick the can - c'mon kick the can baby - kick the can - you're drivin me crazy .....
Sit tight.

2.5% property price increase per annum for the next 15 years will increase property prices by 44.8%
Go interest only and enjoy the capital appreciation :)
 

Keith-M

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Two years in government, so long overdue. First things first, for anyone who is in appears in the buy to let sector, just get the repossessions done asap. Work out mutually agreed solutions for those who are living in houses they can't pay for. if youy can't then again repossessions is the only way to go.

We've had too much interfering with the free market already (i.e. bailing out the bondholders). It's time to get real.
 

Ronjo

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Jan 9, 2013
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Had the previous Government come up with any ideas/solutions for dealing with this before the election?
 

Keith-M

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Had the previous Government come up with any ideas/solutions for dealing with this before the election?
Probably not, but the current government have been in power for two years, so they have to start thinking for themselves at some point and stop doing as the previous one did.
 

DuineEile

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Aug 29, 2010
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Sadly I don't expect any dramatic solutions.

We don't do radical in this country, but radical is what is needed.

Oh, and prosecutions. We need prosecutions of bankers and politicians, Nuremburg style.


D
 

Disillusioned democrat

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In the interim period of speculation, let me suggest that whatever we learn at 2pm will involve significant cost to the prudent and productive (the few) and some limited benefit to the feckless and lazy (the many) while creating a new layer of administration for the public/civil service (the guilty).

I think we've all seen this before and will see it again and again.
 

ShoutingIsLeadership

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I'm more inclined to think that this paves the way for more cuts in pay and SW. For those that rightly point out that reductions in income will force more people into arrears they now can pretend to have an answer.

Nothing announced/leaked so far that suggests the banks should also take a hit for reckless lending, it all sounds very one sided which is only to be expected.
I heard something on the radio yesterday, which suggested the following in relation to split mortgages.

Mortgage split in two, with interest set to zero on the amount not being serviced. Over time, debt in the parked element will be incentivised to be repaid by offering the borrower a writedown for each 10k that is moved to the performing element of the loan. For eaxample, on a 300k loan, 150 would be parked, and over time, if 10k was unparked, another 10k would be written off, etc.
 

ShoutingIsLeadership

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Jan 17, 2011
Messages
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In the interim period of speculation, let me suggest that whatever we learn at 2pm will involve significant cost to the prudent and productive (the few) and some limited benefit to the feckless and lazy (the many) while creating a new layer of administration for the public/civil service (the guilty).

I think we've all seen this before and will see it again and again.
What about the productive but unlucky, or the unproductive but lucky?
 
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