Move on to the 19th of August 2011 it seems needs must when the devil drives!

“The country’s banks have been pressed on the need for debt forgiveness in recent weeks. AIB chairman David Hodgkinson has admitted there needs to be an “industry-wide, government-supported approach” for debt forgiveness.

Well, well gentlemen. Who would have guessed certainly not the expert group.

make any difference?

Cite tag, what does it do?

1. People should be allowed to carry Negative Equity with them provided that they do not increase the amount of Negative Equity in a new house.

This could be done arious ways and could be tweaked.

e.g. If a person’s house is worth €100K and their mortgage is for €150K, then, if the person can get loan approval for €450K based on his income, he should be able to buy a house with a value of €400K. Requirements for deposits could be considered but I think they should be light.

2. First-time buyers and single property owners of apartments that have 50+% of their value, or which there is no market for (because they are part of an unfinished estate or otherwise) should have recourse under their mortgages capped at the value of the property plus €35K or 20% of the current valus of the property.

The banks should allow them out of their mortgage for a certain amount which they could pay towards with increase payments of in a lump.

Additionally or alternatively, these purchasers should also be allowed to swap their property and move their mortgage to another property (NAMA or privately owned) of similar value (assuming schemes were fully finished and occupied) which the same bank holds a mortgage over for a developer which the developer is not servicing. This is to allow mobility and to consolidate apartment owners into viable developments. The other blocks should be sold, demolished or put to alternative use. The bank would still have charges over two apartments/properties and the borrower would only own one property.

Here’s some thinking captured in a document dating to 2002 post establishment of IFRSA:

“A single panel will achieve more than two separate panels. It is wrongly assumed that the interests of industry and consumers are diametrically opposed. On most issues, a very broad level of agreement would be reached. …If there is a substantial minority view, then the panel can publish that as a minority view..”

And more recently “Irish banks are very well regulated. Irish banks are very sound” mid Sept 2008

That’s certainly odd, Hugh.

P.

Here’s another good one from Aug 2007.
“”I would invest in AIB or Bank of Ireland rather than putting money on deposit with them.”

Let’s see, how did that work out?

Aug 2007 (NY ADR Prices, not ISEQ)
AIB, above 50
BOI, above 70

Feb 2010
AIB, about 2.8
BOI, about 5.5

Wow, you’d have been better off buying a house.

Mind you, this kind of view was the consensus in Ireland at the time. It’s only a small problem that it was WRONG.

But hey, when did anyone in Ireland lose credibility by being wrong?

“It would be wrong to ring-fence the home and mortgage and do a debt settlement on the other debt. Permitting such a proposal would encourage people to allow their other debts to expand in advance of applying for debt settlement while making normal capital and interest repayments on their mortgage.”

“Calling it “the family home” in some way confers a sacredness on it. We should not be doing this. If people lived a very high lifestyle and are now overborrowed, then they have to pay the price.”

“People buying their first home have very big expenses in the first few years. I recommend that they start with an interest-only mortgage. ”

“Paying interest only, means that you have more money with which to adjust to the life of home ownership. If you are in the housing market for the long term, which most people are, then what happens in the short-term to prices is not very relevant.”

“For those, interest-only in the first few years of their mortgage makes sense. They don’t have to blow the repayments saved on new cars and drink. They can use it to improve their home. They can even save it elsewhere to rebuild a savings fund.”

“There is an old-fashioned idea that mortgages should be paid over 20 years and people should start contributing to a pension at age 21. These ideas need to be challenged and reviewed from time to time.”

“IF YOU are investing in property, you should take out an interest-only mortgage, unless you are not on the top tax rate. In particular, you should always pay off your home mortgage before making any capital repayments against your investment property. You should borrow the maximum amount possible, bearing in mind the usual warnings about borrowing to invest. If you have an investment property, you should have an indefinite interest only loan. In other words, you should never pay it off while you still own the property.”

now just have to wait for their findings with a total absence of market based solutions.

http://irelandafternama.wordpress.com/2010/02/26/iceland-and-ireland-are-not-only-separated-by-one-letter/

http://irelandafternama.wordpress.com/2010/02/25/the-view-from-iceland/

agree with the formula but

you have not taken credit card debt into your equation!!

The weird thing is - we used to have all those rules! They should gently slid away somewhere…never could figure out where…

(1) max mortgage duration = 20 or 25 yrs
(2) max LTV = 80%, or maybe 85%
(3) max mortgage = 4/5 gross incomes

Ahh now, Hugh, you’re forgetting the sterling work he did as head of the consumer panel of the Financial Regulator. Remember all those warnings they issued about the overheated housing market, the availability of easy credit, and the dangers of interest-only mortgages.

At least, according to my evil twin on Bizarro-World.

Yes. Pragmatism and Clean the House ……….. otherwise, long term depression and entrepreneurial stagnation. The Zombies, of course, will fight this. In previous thread on this I suggested that this could be done and dusted by June ……….. hope springs eternal (-;

You are right. The key is bankruptcy. I wrote something on it here (eeek! link whore - first time ever - but it is relevant http://www.irishtimes.com/newspaper/opinion/2009/1125/1224259392865.html)

A committee is one thing. Let’s see if they *do* anything.

Houses of ill repute are probably the only ones generating a positive cash flow.

..spose it depends on who’s gettin scrude!

Why? Is it a house of ill repute?

If not, are they taking any houses of ill repute onto their books?

Or is Willie O’Dea the only person who knows where the houses of ill repute are?

Ooops - gone a bit off topic.

..er … shouldn’t that be the ‘RED’ light (-;

http://www.irishtimes.com/newspaper/breaking/2010/0226/breaking7.html

The press release also talks about “keeping families in their home” as “a social and economic priority”.

What strikes me is that there is likely to be a significant minority of families in serious negative net worth, who for whom the importance of resolving their insolvency far outweighs the importance of keeping their existing home. These need access to an efficient insolvency resolution regime that allows them to emerge from under the weight of debts including their mortgage, but also gives them confidence that they will not end up homeless or in impermanent or poor quality accomodation if they take this path.

There’s no shortage of housing in the country, so there should be no fundamental barrier to guaranteeing suitable housing to those who go through a properly constructed insolvency regime in good faith.