What now for Tracker Mortgages?

Gemlarkin

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What now for Tracker Mortgages?

Since our Banks funded Mortgage lending by lending several times the deposit base of the Irish Banking system and then resorted to the short term money market for funding. Who now will lend to our banks from the money markets?

Now the ECB and IMF are to lend to our banks at 5% for their capital. Is the low interest funding for the banks to be withdrawn at 1.5 %.?

Are the banks to keep funding tracker mortgages retailing at 1.5 to 1.75%?

I dont see their deposit base increasing anytime soon?
 


Cruffan

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I have a tracker with BOS- An English owned Bank.

I am not expecting any fallout.
 

Gemlarkin

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Not any Country with Banks as broke as ours

Does any other country have tracker mortgages?
Not any Country with Banks as broke as ours. As wages fall, taxes rise, and the property market falls further the security for the banks loans will diminish further. They will find it more difficult to borrow at low rates.

If they sold the tracker mortgage book it would probably only make 75% of its face value even if everyone could repay their tracker mortgage.

Since at least 15% will eventually default the tracker mortgage book is probably worth only 50% of its face value
 

Ah Well

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Am the proud possessor of Tracker Mortgages with an Irish Lending Institution and hanging onto same like a limpet ...

Now, if the Bank wants to go *pop* along with the Mortgages that's fine by me too
 

drjimryan2

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i too have a tracker +1.......

if the bank wants to call...i'm here...

contracts have 2 sides....
 

Luigi Vampa

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[ame=http://www.youtube.com/watch?v=l74083zafAM&feature=related]YouTube - Financial Regulator[/ame]
 

disgruntledcitizen

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this man and his .5% tracker are going no where, to paraphrase Charlton Heston, out of my cold dead hands will they take it.......
 

Skinner

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It is very likely that trackers will be popped, one way or another, over the next 2-3 years. Its also likely there will be a major change to bankruptcy laws too, so don't be surprised if in 4 years the entire property scene here will look radically different to its current distorted and disastrous state.

If the banks are owned by the state, and the state is paying 5% average interest on its loans, how long will trackers be allowed that essentially get a 2-3% subsidy from the state?

The IMF will not allow this to continue, they will want the state to pay them and not subsidize tracker mortgages.

I'm not saying whats right or wrong about the situation, just whats likely given how the entire rationale behind bubble lending practices have changed permanently.
 

riker1969

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It is very likely that trackers will be popped, one way or another, over the next 2-3 years. Its also likely there will be a major change to bankruptcy laws too, so don't be surprised if in 4 years the entire property scene here will look radically different to its current distorted and disastrous state.

If the banks are owned by the state, and the state is paying 5% average interest on its loans, how long will trackers be allowed that essentially get a 2-3% subsidy from the state?

The IMF will not allow this to continue, they will want the state to pay them and not subsidize tracker mortgages.

I'm not saying whats right or wrong about the situation, just whats likely given how the entire rationale behind bubble lending practices have changed permanently.
What about the legal situation. You cant on the one hand talk about legal obligations to Bond holders and on the other rip up legal contracts?
 

Perchance

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What impact will the rising ECB rates have? They were said to stay at 1% until 2012, but this week there were indications they may rise before then.
 

Skinner

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What about the legal situation. You cant on the one hand talk about legal obligations to Bond holders and on the other rip up legal contracts?
I'm not a lawyer so can't comment on legalities.
No doubt there would be an army of solicitors and barristers all too willing to challenge any changes.

Just pointing out the obvious from where I'm sitting, and accepting the reality of whats very likely to come down the line in the coming few years.

The IMF are here. Nothing will be cast in stone and anything can be changed in this new reality.
 

dresden8

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What about the legal situation. You cant on the one hand talk about legal obligations to Bond holders and on the other rip up legal contracts?
They did it with the public sector, just passed a law.

After that, fnck you and your tracker.

This government has form.

I'm sure the new one will take their orders from the IMF as well.
 

riker1969

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I'm not a lawyer so can't comment on legalities.
No doubt there would be an army of solicitors and barristers all too willing to challenge any changes.

Just pointing out the obvious from where I'm sitting, and accepting the reality of whats very likely to come down the line in the coming few years.

The IMF are here. Nothing will be cast in stone and anything can be changed in this new reality.
Im not saying you could be wrong but your argument is not that strong in terms of evidence or precedent thats all. Could be a tad alarmist that's all. I for one will give them back the keys of my investment property if my tracker goes. Not my home. They can have it if they like !!
 

Freedom front

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Does any other country have tracker mortgages?
Yes , I have lived in 4 different countries and they all had trackers, but would only allow you to borrow 3 times your salary

It seems a lot of reckless lending has gone on here
 

Decko

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Im not saying you could be wrong but your argument is not that strong in terms of evidence or precedent thats all. Could be a tad alarmist that's all. I for one will give them back the keys of my investment property if my tracker goes. Not my home. They can have it if they like !!
fair point well made

a contract is a contract

if they take away tracker then send them back the keys - good policy
 

drummed

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Oct 22, 2010
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don't panic here but banking365 won't let me into my account, site seems to be broken?
is it me or has boucher done a runner with my cash?
won;t get far with 15euro's
 

dalywise

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Feb 23, 2008
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I wouldn't assume anything or rule any move out about anything. Fianna Fail have bankrupted the country. Radical measures are necessary. DOn't rule out a constitutional change to allow more flexibity in everything, including contracts and tracker mortgages.
 

Gemlarkin

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The point about the trackers is that they are liabilities for the banks rather than a

The point about the trackers is that they are liabilities for the banks rather than assets. The banks are in negative equity on the trackers.

How can the banks afford to carry the tracker mortgages with their funding costs rising?

Half of the residential €140 billion mortgage book are trackers. plus a substantial portion of the €250 billion commercial loan book.

The trackers must account for a 30 - 50 billion hole in the banks
 

SeamusFrance

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Jan 27, 2009
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The point about the trackers is that they are liabilities for the banks rather than assets. The banks are in negative equity on the trackers.

How can the banks afford to carry the tracker mortgages with their funding costs rising?

Half of the residential €140 billion mortgage book are trackers. plus a substantial portion of the €250 billion commercial loan book.

The trackers must account for a 30 - 50 billion hole in the banks
Interesting data if you can validate it/provide a source ?. Seems a lot higher than any other estimate of Tracker percentages I've seen or heard.
 


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