Irish Mortgage Arrears: An Economic Mystery

This post was written by Gregory Connor

Irish mortgage arrears, particularly in the buy-to-let sector, are very high by international standards, at 8.8% for principal private residence mortgages and 17.9% for buy-to-let mortgages as of the third quarter of 2012. It is not all bad news, Ireland also has an extremely low rate of repossessions; there were a total of 79 judicial repossessions in the third quarter of 2012, consistent with the general trend over recent years. The Irish repossession/arrears rate is perhaps the lowest in the developed world. Notwithstanding that good news, the mystery of why arrears are so unusually high needs to be tackled.

The United States of America provides a natural laboratory for understanding mortgage lending and repayment behaviour since each US state has its own separate legal framework, with limited federal intervention. Gerardi, Hansen and Willen perform a careful statistical comparison between easy-repossession US states and difficult-repossession US states; this comparison might be relevant since Ireland currently has a “very difficult” repossession system due to the Dunne judgement of 2010.  Define the arrears rate as arrears/loans and the repossession rate as repossessions/arrears. Summarizing the Gerardi, Hansen and Willen evidence together with the current situation in Ireland:

  • Easy repossession US states have high repossession rates and low arrears rates
  • Difficult repossession US states have low repossession rates and high arears rates
  • Very difficult repossession Ireland has a very low repossession rate and a very high arrears rate

No obvious pattern explaining the Irish experience comes to mind, but more research is called for.

Often in economic analysis it is useful to “drill down” and consider individual cases in order to understand incentives and behaviour. Compare the hypothetical cases of two equivalent small business owners, one in the USA and one in Ireland. Each has invested in a half-dozen buy-to-let properties paid for via mortgages at a local bank. In each case, the small business is currently under strain and the business owner must make difficult decisions about whether to go into arrears on his buy-to-let mortgages. The Irish business owner knows that if his loan arrears build up there is a 1/20,000 chance that the buy-to-let properties will be repossessed. Also, in keeping within Financial Regulator guidelines, the Irish business owner will receive letters and up to three phone calls a month from his loan manager cajoling him to clear the outstanding balance and offering him a range of loan restructuring solutions. The otherwise-equivalent US business owner knows that if arrears build up there is a 99/100 chance that the properties will be repossessed. He receives only one phone call from his bank manager, telling him that if the arrears balance is not cleared in the next ten days the buy-to-let properties will be immediately repossessed and sold at auction. Why is the US bank manager so much more successful in preventing the build-up of buy-to-let arrears than the Irish bank manager? Are Irish bank managers not being sufficiently creative in the loan restructuring solutions that they offer to customers? Perhaps the Irish Financial Regulator should mandate that all loan managers pass a certified Communication Skills course. Something needs to be done to encourage Irish banks to confront the growing arrears problem more effectively, like their US counterparts.

Even taking account of Ireland’s very difficult economic environment, the level of mortgage arrears is very high by international standards, particularly in the buy-to-let sector. It is not all bad news, since Ireland also has one of the lowest repossession rates worldwide. The mystery of why mortgage arrears are so unusually high requires more economic analysis but the riddle will eventually be solved, given time.

29 Responses to “Irish Mortgage Arrears: An Economic Mystery”

  1. grumpy Says:

    I wonder Gregory, if there might be more effective communication after investment by the ESM?

    That could be an equally mysterious characteristic.

  2. zhou_enlai Says:

    Some observations:

    1. The fact that the banks would have to recognise losses fully upon repossession is important. The imperative of keeping the banks technically solvent and meeting capital requirements is possibly dominant.

    2. If the illiquidity of our distressed property market has led to a reluctance on the part of banks to repossess property, then this creates a vicious circle. The banks have starved the property market not only of funding but also of housing stock. There has been no effective policy to make the banks “jump together” in terms of making funding available leading to an effective mexican stand-off

    3. It is probably more profitable to keep a borrower as a debt slave than to repossess. The costs of maintaining and letting properties are high. It is cheaper to have a borrower provide these services at no cost once the rent is being remitted to the bank.

    4. In the USA all borrowers have access to decent insolvency regimes, and in some states mortgages are non-recourse (i.e. the banks just get the property on foreclosure). Therefore the banks cannot treat borrower as bonded debt slaves like in Ireland. In the USA borrowers will ultimately want to get their lives back on a sustainable financial footing and can force the situation forward when things becoem hopeless.

    5. Over the past 4 years, the Courts have shown themselves to be relatively ruthless in enforcing commercial debts. They have generally not granted debtors relief on foot of technical legal defences or because of failures by banks to apply proper procedures. Also, most borrowers cannot afford to challenge applications by banks. Therefore, the legal hurdles to foreclosure are unlikely to be significant.

    6. There are two types of titles in Ireland. Type A, where the title is made up of title deeds (”Registry of Deeds Title”), and Type B, where the title deeds have been surrendered to the state and a simplified title record ia maintained by the state (”Land Registry Title”). The Dunne judgment only applies to Type B titles. Approximately 40% of all titles are Type A title. Therefore the Dunne Judgment is clearly not mainly responsible for the discrepancy. Indeed, it is hardly even statistically significant as it can be observed that there were still very few repossessions where that barrier to repossession did not apply. This is reddest of red-herrings.

    7. The banks may not have the administrative capacity to impose mass repossessions. One might say that things got out of control during the frenzy of the property bubble. Banks have expended a huge amount of their resources and manpower reviewing and identifying the loans and security that they hold, work which would not have been necessary of all had been processed properly at the time the loan was extended. This exercise was probably necessary before large scale repossessions were pursued. There is rumour that repossessions of business properties will increase substantially this year.

    8. Cultural or psychological factors may be at play. One can only surmise that many bank employees are ashamed of the irresponsible, reckless and predatory behaviour of banks in promoting the property bubble which has led to national ruin. Certainly the rest of the population feels they should be ashamed. Accordingly, they may find it personally distasteful to recommend or pursue contentious repossessions.

    9. The statistics only refer to forced Court ordered repossession. Many repossessions and sales at the bank’s direction occur voluntarily in Ireland without any Court Order. There is very little incentive for those borrowers subject to non-recourse mortgages in the USA to co-operate. It is easier to put the keys in the bank’s letter box and to let them sort matters out. The converse applies where it is a full-recourse mortgage. Your ultimate liability will likely be reduced if one co-operates in implementing the banks wishes as otherwise the bank’s legal costs may be added to your debt. It is not clear if court orders are required in the USA where a borrower subject to a non-recourse has surrendered the keys to the bank. Accordingly we cannot say if the statistics are comparing like with like.

  3. Paul Ferguson Says:

    There may be some mystery as to why Ireland is an anomaly when it comes to excessive mortgage arrears and low level or repossession.

    However there’s no mystery as to why there’s a huge mortgages arrears problem.

    Under the present system, money doesn’t come from being printed. Rather it comes from bank loans since banks create the money for the loan by simply crediting the borrower’s current account.

    Banks also ‘delete’ the money they receive as settlement of debt by simply debiting the debtor’s current account.

    Under this system what’s in circulation is the principal, or partial principal, of every recent loan. However what’s owed back is the principal plus compound interest.

    Although banks only ‘delete’ the principal of a loan repayment and ultimately the interest is respent into circulation it’s still impossible for all loans to go according to plan.

    Would it not be better to have a system whereby permanent money is issued and banks would lend existing money only? Under such a system it would be entirely possible for all loans to go according to plan thus eliminating the root cause of the mortgage arrears problem and indeed many of our social problems.

  4. Gregory Connor Says:

    @Zhou Enlai – thanks for the thoughtful comments; here are my quick responses. My response is at the end of each numbered point.

    1. The fact that the banks would have to recognise losses fully upon repossession is important. The imperative of keeping the banks technically solvent and meeting capital requirements is possibly dominant. My response – I agree with this entirely.

    2. If the illiquidity of our distressed property market has led to a reluctance on the part of banks to repossess property, then this creates a vicious circle. The banks have starved the property market not only of funding but also of housing stock. There has been no effective policy to make the banks “jump together” in terms of making funding available leading to an effective mexican stand-off. My response – I agree with this entirely.

    3. It is probably more profitable to keep a borrower as a debt slave than to repossess. The costs of maintaining and letting properties are high. It is cheaper to have a borrower provide these services at no cost once the rent is being remitted to the bank. My response – I agree with this entirely.

    4. In the USA all borrowers have access to decent insolvency regimes, and in some states mortgages are non-recourse (i.e. the banks just get the property on foreclosure). Therefore the banks cannot treat borrower as bonded debt slaves like in Ireland. In the USA borrowers will ultimately want to get their lives back on a sustainable financial footing and can force the situation forward when things becoem hopeless. My response – I agree.

    5. Over the past 4 years, the Courts have shown themselves to be relatively ruthless in enforcing commercial debts. They have generally not granted debtors relief on foot of technical legal defences or because of failures by banks to apply proper procedures. Also, most borrowers cannot afford to challenge applications by banks. Therefore, the legal hurdles to foreclosure are unlikely to be significant. My response – I do not think that this is a fair assessment in the case of property mortgage debt, although it might apply to other classes of debt.

    6. There are two types of titles in Ireland. Type A, where the title is made up of title deeds (”Registry of Deeds Title”), and Type B, where the title deeds have been surrendered to the state and a simplified title record ia maintained by the state (”Land Registry Title”). The Dunne judgment only applies to Type B titles. Approximately 40% of all titles are Type A title. Therefore the Dunne Judgment is clearly not mainly responsible for the discrepancy. Indeed, it is hardly even statistically significant as it can be observed that there were still very few repossessions where that barrier to repossession did not apply. This is reddest of red-herrings. My response – what proportion of bubble-period mortgages fall in these two categories? This point seems weak to me but I do not have legal expertise and experience.

    7. The banks may not have the administrative capacity to impose mass repossessions. One might say that things got out of control during the frenzy of the property bubble. Banks have expended a huge amount of their resources and manpower reviewing and identifying the loans and security that they hold, work which would not have been necessary of all had been processed properly at the time the loan was extended. This exercise was probably necessary before large scale repossessions were pursued. There is rumour that repossessions of business properties will increase substantially this year. My response – I predict that if and when repossessions increase sharply as these rumours indicate, the arrears rate will fall sharply.

    8. Cultural or psychological factors may be at play. One can only surmise that many bank employees are ashamed of the irresponsible, reckless and predatory behaviour of banks in promoting the property bubble which has led to national ruin. Certainly the rest of the population feels they should be ashamed. Accordingly, they may find it personally distasteful to recommend or pursue contentious repossessions. My response – perhaps, but these Irish “cultural” arguments are too easy and I do not think they are as reliable as others believe. The behaviour of BTL investors and bank managers has more to do with raw financial calculation and less to do with cultural history.

    9. The statistics only refer to forced Court ordered repossession. Many repossessions and sales at the bank’s direction occur voluntarily in Ireland without any Court Order. There is very little incentive for those borrowers subject to non-recourse mortgages in the USA to co-operate. It is easier to put the keys in the bank’s letter box and to let them sort matters out. The converse applies where it is a full-recourse mortgage. Your ultimate liability will likely be reduced if one co-operates in implementing the banks wishes as otherwise the bank’s legal costs may be added to your debt. It is not clear if court orders are required in the USA where a borrower subject to a non-recourse has surrendered the keys to the bank. Accordingly we cannot say if the statistics are comparing like with like. My response – the US state-by-state statistic are available but difficult to amalgamate and the Irish statistics are often unavailable. So you are correct it is difficult to reliably compare like-for-like matched on all characteristics.

  5. What Goes Up... Says:

    To solve the mystery you have to start asking with the right question.

    Wondering why arrears are so high or repossessions are so low will lead you astray.

    The question you have to answer is “What’s in it for me?”

    The failures in the banks will sit on their well padded wallets and ask themselves these question - Why chase arrears? Why repossess? What’s in it for me?

    Chase arrears? Why bother - the taxpayer will fill the hole.
    Repossess? Why bother - the taxpayer will fill the hole.

    Get €21 Billion in a bailout? First priority… put €1 Billion in the pension scheme.

    What’s in it for me?

    Why should the inept, useless wasters in the bank do any work when they get free money for doing sweet FA?

  6. zhou_enlai Says:

    @Gregory Connor

    Thanks for the responses. The following may be of help:

    5. I agree that this bears further examination. Quantification of legal costs could be undertaken by the banks if they attempted more repossessions. I suspect that there would be many cases where the borrower would consent. One problem might be the Judiciary’s overweenign encouragement and entertaining of lay-litigants to the detriment and expense of the opposing litigant who has employed lawyers. A countervailing factor in favour of banks is that solicitors practising private client legal work are under pressure to make their work pay and accordingly are unlikely to take on weak cases without certainty that the client can pay.

    6. If 40% of titles are Registry of Deeds, which I designated Type A, then it is likely that this percentage or slightly below is reflected in the residential mortgages. Title must be converted to Land Registry title (Type B) in certain counties upon sale. The role out of compulsory registration for private property was as follows:

    Carlow Meath and Laois - 1st January 1970
    Longford Westmeath and Roscommon - 1st April 2006
    Clare, Kilkenny, Louth, Sligo, Wexford and Wicklow - 1st October 2008
    Cavan, Donegal, Galway, Kerry, Kildare, Leitrim, Limerick, Mayo, Monaghan, North Tipperary, Offaly, South Tipperary and Waterford - 1st January 2010
    Cork and Dublin - 1st June 2011

    The main point to note is that compulsory conversion to Type B title did not come in for most counties until October 2008 being two years after the peak of the property bubble (Oct 2006 per Rogoff & Reinhardt), and Dublin and Cork were still omitted.

    William Fry estimate 40% Registry of Deeds (Type A) title here:
    http://www.williamfry.ie/publication-article/repossession_of_property_in_loan_default.aspx

    By contrast the Land Registry estimate 90% Land Registry (Type B) title here:
    http://www.landdirect.ie/eng/About_Us/Land_Registry/Land_Registration_in_Ireland/

    I cannot verify either but experience suggest to me that the Land Registry’s estimate is totally bogus.

    If we accept the 40% as being more accurate (which I do) then the figure would be slightly below this to account for those sales of Type A title properties which took place in counties where conversion to Type B Title was compulsory upon sale and particularly those where it was most recently compulsory (Longford Westmeath and Roscommon).

    8. I agree this is uncertain. However, making this point did allow me to make the point that banks behaved irresponsibly, recklessy and predatorily. I consider my desire to make that point at every opportunity to be somewhat representative of the national psyche :)

  7. Brian Woods Snr Says:

    @ GO’C: “Very difficult repossession Ireland has a very high arrears/loans rate and a very low repossessions/arrears rate”

    Arrears will always be high where they remain continually unpaid for extended periods - and usurious penalty charges are also levied. What’s the purpose of levying these additional penalties if the borrower cannot even make their ordinary payments? Aversion therapy, Inquisition-style?

    If all Irish residential property (for full-time occupation by the owner) were non-recourse, I fancy the repossession numbers would be low - and voluntary surrender high.

    However, none of these problems would have arisen (in their number and form) but for the reckless, irresponsible and predatory behaviour of the lenders (and our equally culpable financial regulator, CB chairman, and government and opposition parties). And there appears to be little political appetite to either investigate or to remediate. Utterly shameful.

    @ zhou: Excellent comments. Thanks.

  8. Yields or Bust Says:

    @GC

    You say..

    8. Cultural or psychological factors may be at play. One can only surmise that many bank employees are ashamed of the irresponsible, reckless and predatory behaviour of banks in promoting the property bubble which has led to national ruin. Certainly the rest of the population feels they should be ashamed. Accordingly, they may find it personally distasteful to recommend or pursue contentious repossessions. My response – perhaps, but these Irish “cultural” arguments are too easy and I do not think they are as reliable as others believe. The behaviour of BTL investors and bank managers has more to do with raw financial calculation and less to do with cultural history…

    Your response is wrong at every level. I was in a local branch thew other day talking about this very subject. To say that that the bank staff are ashamed as to what went on is the understatement of the year.

    This is particularly true because in many cases the local branch was cut out of the lending decision and it was referred ‘to Dublin’ and the black box brigade allowed loans to proceed where local managers and staff would have said no to such loans every day of the week. Now its the local staff that are bearing the flak when things have gone wrong - hardly surprising that they now feel agrieved and unwilling to push the reposession button when they had little or nothing to do with the original lending decision.

  9. Yields or Bust Says:

    @GC

    At a broader level - the lending error here rests almost entirely with the banks - they mis priced property for about a decade (any basic yield analysis tells us that) and as a consequence loans/mortgages attaching were simply mis sold. This is the inconvient truth which you seem all to willing to bypass and forget. Its as if you believe the actions of the banks with thieir customers were in some way isolated cases and the banks actions on the broader economy can be somehow swept under the carpet. It can’t.

    The normal ‘out’ clause for somebody in mortgage distress is to sell the property and trade down to a price point that they can live with. Given the housing polution that the banks allowed to happen right under their own very noses it is simply daft to even work on the basis that credit agreements in the 2002-2010 period are worth the paper they were written on.

    Normal banking practices assume a significant level of prudence in the lending decision - banking liciences assume this to the norm, not the exception. For about a decade prudence was the exception and given that fact (all the banks went bust lest we not forget) enforcing anything within credit agreements signed within the 2002-2010 period is in my view morally very suspect.

    In normal cases where repossession is the obvious method to get to the end game the bank in question can at the very least come to the table knowing that it was simply unlucky in banking on a losing bet. In Irelands case the ENTIRE BANKING INDUSTRY was at fault. This is not the place to start in making comparisons with so called similar countries. Nothing is similar to what went on here. Reboot and rethink your analysis.

  10. DPO Says:

    Anecdotally the biggest factor at play with Irish BTL portfolios is tactical defaulting. With property market declines having wiped out the prospect of investors ever successfully selling properties at a premium to the related mortgages, and ionterest rates being stepped up by the banks, there is no skin in the game for investors. The incentive then is to trouser the rental income and go into arrears on the debt. This has two benefits for the BTL borrower:

    - the prospect of diverting the maximum amount of rental income (in many cases collected in cash) prior to the inevitable foreclosure; and
    - ensuring the loan is regarded as distressed by the lender, increasing the prospect of a discounted payoff, or some other kind of debt forgiveness.

    Unfortunately it seems the banks have no interest in appointing rent receivers or other measures to stamp out this kind of abuse.

  11. John Corcoran Says:

    How many prices has a property ?
    http://www.irishexaminer.com/opinion/letters/a-question-of-valuation-220487.html

  12. John Corcoran Says:

    And it came to pass that the angel David appeared to Herod in 1998/1999/2000/2001/2002/2003/2004/2005/2006 and 2007 and told him”beware brother Herod a property disaster will happen ,you must take all the children into the desest to protect them from this curse” but unfortunately the auctioneers denied the angel David and told Herod ” beware of this devil David come party with us”. Guess what Herod did?
    http://www.youtube.com/watch?v=vzNO4u8AU3Y

  13. Aisling Says:

    Start Mortgages/ The end.

  14. Aisling Says:

    Start Mortgages v Gunne (not Dunne) when bubble properties disproportionately changed hands in recent years and thus the 40% figure cannot hold water. Older properties which did not change hands are less likely to be in arrears (or even subject to a mortgage).

  15. Bunbury Says:

    A businessman I know has five BTL rental properties (3-4 bed semi-d’s in good rentable areas in Dublin) and has collected the rent for the past two years while not repaying the mortgages. He is using the rental income to pay down a separate loan on a different investment for which he had given a personal guarantee. The response of the bank (the one notorious for giving out loans on the flimsiest of evidence)? Several letters written with forms to be filled out and requesting a plan on how the arrears are to be addressed. These are duly filed in the waste paper bin. The only conclusion is that there is no will to seize the properties by the bank. My friend knows the properties will never recover from their current level of negative equity and is quite happy to surrender the keys and equally happy to collect rent in the meantime. We think the recalcitrance on the part of the bank is a combination of (a) not being in a position to recognise the losses on repossession; (b) possibly the more prosaic reason of not having any expertise in repossessions nor management having put a comprehensive plan in place for repossessing properties.

  16. Gregory Connor Says:

    The “Dunne” ruling refers to the ruling judge not the applicant.

  17. Yields or Bust Says:

    @GC

    As suggested above when the banking party to any property deal acts outside its market remit there should be consequences for the bank insofar as to how much it should be allowed to recover when the deal goes bad.

    In this regard the the ‘general principles’ of the Consumer Protection code as issued by the Central Bank are very clear - I quote

    ” A regulated entity must ensure that in all its dealing with customers and within the context of its authorisation it:

    2.1 acts honestly, fairly and professionally in the best interests of its customers and the integrity of the market…”

    There are another 11 General Principles where in virtually all cases these regulated entities which you continually believe are not doing enough to hasten the repossison process were in obvious breach.

    Aiding and abetting the ongoing polution of the the country with excess housing product for the years in question namely (c2002-2008) is in any mans language not in the best inteests of the customers or the integrity of the market. In fact its the polar opposite - you know it, I know it, the banks know it and the Regulators obviously know it. Given these clear market differences between Ireland and elsewhere (ALL the Irish and braches of the inetrnational banks operating here went bust) suggesting as you do that banks aren’t doing enough to give the repossesion numbers the kick they require is surely misguided at best and reprehensible at worst. On this one your’re wrong.

  18. zhou_enlai Says:

    @Aisling

    Plenty of houses with registry of deeds title changed hands during the bubble without any need to convert the title. I own one of them myself.

  19. John Corcoran Says:

    Ireland–A Democracy or a Propertyocracy?

    In a democracy power comes from the ballot box. Politics is like war,there are three things you need to succeed. The first is money,the second is money and the third is money.
    The group who provide the vast bulk of money which finances Irish politics is ,the cowboy builders,the cowboy developers and the property interests. They own almost all Irish politicians. The payback for this financing is — a corrupt planning system,no residential rates,mortgage tax relief,section 23/24 etc tax breaks, BES schemes,and feudal commercial property lease law i.e. upward-only rent reviews tied to long leases,which the sovereign signed up,on behalf of the taxpayers, and copperfastened it for all commercial tenants.
    Many of this group are alumnia of The Galway Tent School of Economics. The politicians look after themselves first-then their property interests. The public interest is irrelevant to the politicians –if they bankrupt the country –who cares?
    When Fine Gael and Labour did their u-turn on on their promise to grant all commercial tenants in existing upward-only rent review leases ,a rent review in 2011 –they were merely being consistent–looking after the interests of their bagmen. Follow the money it always leads to Leinster house.

    Welcome to Europe’s only Propertyocracy,home of the greatest bank and property crash in the history of mankind.

  20. Rich Says:

    @JC

    Reverand!

  21. Ernie Ball Says:

    It is not all bad news, since Ireland also has one of the lowest repossession rates worldwide.

    Can you explain why you think this is “good news” (or at least not “bad news”)? For those taxpayers who are priced out of the housing market, surely it is bad news that they are subsidising others to continue to live in housing that those others cannot afford while also artificially propping up the prices of the housing that they themselves (still) cannot afford.

    But this is typical of Ireland and, I daresay, the mindset that got us into this mess: the interests of property owners, even those indebted way over their heads, always trump the interests of those who do not own property and who can be relied on to help foot the bill for the former group. The extent to which increases in property prices are constantly trumpeted as “good news” stories in the media reflects this ideological bias. The fact that nobody in this thread even questioned the notion speaks volumes about the state of the Irish economics establishment.

  22. grumpy Says:

    @Ernie

    I got the impression the remark you refer to and much else in the post was intended as sarcasm.

    Maybe GC could clarify, or insert suitable :roll: s :idea: s and ;-) s

  23. Mickey Hickey Says:

    Nothing happens until the healthily plump lady sings. The lenders initiate foreclosures and the follow through to repossession and disposal of the property (auction). It has not been in the lenders interest to dump more property into a market suffering from a distinct lack of demand. The under water owners are keeping the properties secure, heated and hopefully clean at no cost to the lenders.

    By dumping property on the market the lenders would first have to take a “loss”, then take responsibility for the property, then dispose (auction) of the property. Prices would be highly likely to drop if all lenders actively pursued repossessions. A renewed reduction in property values would necessitate another resuscitation by the Free (now becoming expensive) State backed by ECB/IMF who in turn would be backed by the taxpayers.

    Risks and more risks for the banks as they plumb the depths of national despair. If they get the next stage wrong they will be toast.

  24. Brian Woods Snr Says:

    @ MH: My slightly opinionated opinion of the mortgage mess is that it is craftily contrived to protect the reckless lenders (and their political support) who threw due diligence into the skip.

    A borrower who agrees a voluntary surrender of their home, can, and will be, pursued for some, or all, of the outstanding mortgage debt (after the lenders have sold the property at a discount). Any ‘loss’ to the lender will be ‘lost’ using hinkey accounting, before being passed on to the taxpayer - and the lender may even be eligible for a reduction in their tax liabilities! The lenders are not constrained in any way about ‘dumping’ property - other than the logistics of selling a property (it could take several months). Nor are they concerned about the condition or security of the property. These costs will most likely also be ‘passed on’.

    The whole business is so sordid that it is difficult to locate adjectives expressive enough to describe it.

    Residential property prices WILL decline, but over the living corpses of existing borrowers and taxpayers. I do not think your plump lady will be singing until sometime in 2015. We’ll see. When you think that the politicians and financiers can plumb no deeper - they do!

  25. John Corcoran Says:

    Korkie pies or Porkie pies?
    http://www.youtube.com/watch?v=tTqqOUsuSsQ

  26. John Corcoran Says:

    The Irish property professionals i.e. The Irish Society of Chartered Surveyors are having their annual dinner on thursday next 7th February 2013 at the Burlington Hotel. The event is sponsored by Independent Newspapers.

    These distinguished professionals would have provided most of the property valuations for the lay people who undertook the above mortgages. Hats off to a wonderful group of property professionals.

  27. Fungus the photo Says:

    NAMA and the excuse of a court decision enable fantasy economics to live in the land of the Leprechaun.

    The whole Fire sector has to be matched to business levels as have prices to a free market which has time and again been found to depend upon the availability of …. loan capital!

    As the banks of nearly all countries are insolvent, there will be no loans. Japanese mortgages last 100 years …. and the land value has been falling for near 25 years. They are now trying to recreate inflation by depreciation. They will fail.

    There are a lot of folks who are sensibly taking the income and not repaying. Moral hazard? The fish rots from the head. One country in the world has lost population every decade since 1840, because they pose a strategic threat to the CoL.

    You are now living in economic hell.

    Enjoy!

  28. Ronan Says:

    Is there actually any serious effort being made to plug the gap left by the Dunne ruling? It seems to me this would not be difficult to do. Why the delay?

  29. Gregory Connor Says:

    @ Zhou En Lai and others — an update on the coverage of the Dunne Ruling. At the (excellent) Irish Central Bank conference on property markets yesterday (13 February) I spoke to two senior Irish banking sector insiders. They both claimed that the effective coverage of the Dunne ruling is close to 100%. It effectively prevents all foreclosures other than for properties which were given “final warning” letters prior to 2010. This is only based on my discussions in casual conversation but given the absence of solid data it is all I have to go on.

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