Q3 Mortgage Arrears Statistics

The latest update of the mortgage arrears statistics has been published by the Central Bank.  See here.

For the first time since the series began the total number of PDH accounts in arrears shows a quarterly fall (142,892 to 141,520).  This is a result of the slow-down in new arrears cases seen in recent quarters.  The situation of those in existing arrears continues to deteriorate with another significant increase in the number now 720 days or more in arrears (28,860 to 31,834). 

The outstanding balance on mortgages in arrears is €25.6 billion, of which €18.9 billion are in arrears of 90 days or more.  The total amount of arrears rose from €2.02 billion to €2.17 billion.

The total amount of PDH mortgage debt continues to fall and is now at €108.5 billion, compared to €118.6 billion when the series began in September 2009.  Capital repayments on existing loans are offset by new lending so the rate of capital repayment over the past four years has been substantial.

Interest-only or other reduced payment options remain the most utilised restructuring options though the number of accounts these were applied to fell from 44,805 to 37,643 over the quarter.  In relation to the overall drop in the number of PDH mortgage accounts in arrears it should be noted that restructuring through arrears capitalisation increased from 13,627 to 16,146 accounts.

In the Q2 data it was reported that there was 254 permanent interest rate reductions for PDH accounts.  Today’s release says that just 16 accounts now have a permanent interest rate reduction applied to them.  The number counted as having a temporary interest rate reduction increased from 870 to 1,426.

The number of split mortgages rose significantly from 306 to 1,154 over the quarter.  Term extensions remain the most used permanent restructure increasing from 14,630 to 15,447.

There are now 6,325 in ‘Other’ restructures (up from 2,300 in Q2).  This category “mainly comprises accounts that have been offered a long-term solution, pending the completion of six months of successful payments.”  Many of these are likely to be split mortgages agreed during the quarter which will move into that category on successful completion of the probation.

At the of September there were 80,555 restructured PDH accounts and 78.9 per cent were deemed to be meeting the conditions of the restructure.  There were 76 forced repossession in the quarter and 133 voluntary surrenders.

Data on the Buy-to-Let sector is also included in the release.

147 replies on “Q3 Mortgage Arrears Statistics”

If we want to know why there has been a double digit growth in dublin house prices there is a major clue in these stats.

There are currently about 3-4 thousand houses for Sale in Dublin.
There are 31 thousand houses nationally that are 2 years or 720 days in arrears.
If even 20 % of these are in Dublin and they were put on to the market the size of the supply would go from 3 to 9 thousand.
Surely this would have a huge impact on prices.
Current calls for tax incentives for empty nesters would not be needed if the government told the state owned banks to get on with it.
It would also let Enda keep his promise yesterday not to allow new property bubbles.

It is starting to look like ‘Make Your Mind Up Time” for the Central Bank on this. There is a clear trend towards polarisation with improvements in the early arrears picture and, as EM suggests above, at the other end further consolidation for those accounts with several years of arrears. Llots of property that is being kept off the market while it must be the case that an aweful lot of it should have been re-posessed long ago.

Perhaps a few CBI officials should join the scrum on a Saturday at a few open viewings in order to get over their timidity at the possibility of a bit more supply hitting the market. It really isn’t going to tip the balance in the ECB stress tests by starting a new downward price spiral.

On “owner occupier”:

“Longer-term arrears continued to increase, however, as the number of accounts in arrears over 360 days reached 59,844 at end-September, equivalent to 7.8 per cent of the total stock of PDH mortgage accounts. All of this increase was driven by accounts in arrears of over 720 days, which now constitute 22.5 per cent of all accounts in arrears, and just over 60 per cent of arrears outstanding…..the value of accounts in longer-term arrears over 360 days remains large, amounting to €12 billion at end-September.”

On “buy to let”:

“At end-September 2013, 20,272 BTL accounts, or 13.7 per cent of the total stock, were in arrears of over 360 days. The outstanding balance on these accounts was €6.1 billion at end-September, equivalent to 20.2 per cent of the total outstanding balance on all BTL mortgage accounts. Consistent with the trends in PDH mortgages, BTL accounts in early arrears fell by 4.4 per cent in the third quarter of the year.”

How likely are these to reach ‘sustainable solutions’ short of a sale, without being a Mickey-take on currently frustrated would-be buyers?

Patrick H doesn’t want to obtain a reputation for being ‘responsible’ for reposessions and who can blame him (though “not believing” in the concept of strategic default is a bit of an intellectual stretch), but there are many younger, prudent people particularly in the Capital, who are unable to find a house to buy while there are unresolved arears of several years in many cases, few of which can, or perhaps should, eventually avoid a sale to a willing buyer.

Not pleasant stuff, but the days of tiptoeing around a fragile property market because of potential effects on the banks’ balance sheets ought to be over and it is for the CBI to call time.

A lot of people paid prices over the odds during the boom due to land bank hoarding. And now the next cohort is paying over the odds because of the hangover from the boom and the inability or unwillingness to address the Gordian knot of mortgage failure. Vested interests never go out of business in Ireland.

40,426 BTL accounts were in arrears at end-September. 62 repossessions over the quarter.

How many people had to vacate a rental property over the last quarter because of problems making the rent? And where was Patrick Honohan when the evictions (forced or voluntary) were taking place? Where was the media wondering where those people are now? – Sleeping on friends sofas? Their kids sleeping God knows where?

The most appalling prospect of all – how many people were evicted from BTL properties where the landlord is in arrears? And what are the landlords doing with the rent?

The squeaky wheel gets the grease.

@JF how many deadbeat BTL delinquents are trousering rent supplement or whatever it’s called there,whist milking their cash cow and providing shoddy sub standard accommodation.Cut off the blood supply to the patient,make them produce certs that they current with mtg before any more govt. subsidies to the landed gentry.


Did you know the S23 wheeze included houses in Monkstown among other prestigious locations?

From my perspective the situation is getting worse. The numbers may not be getting worse, but the worst solution is being favoured more, and it seems every effort is being made to shelter BTL, simply by not divorcing that sector in terms of a solution.

BTL in arrears over 720 days: Number 11597, Value 3.7 BN: Repossess.
PDH in arrears over 720 days: Number 31834, Value 6.7 BN: OO to Rent.

It is unconscionable that both groups should be considered as homogenous, in terms of the ‘solution’ of repossession being offered.

It has been argued that the State simply does not have the money to fund a OO to Rent scheme. That is not the case. In the case of AIB and PTSB, it is simply a paper transaction. The State buys the house from the bank at current market value less 20%; we assume that the bank has reserved the house down to at least current market value. The State therefore takes an asset from the banks and reduces the book value of its shares in the bank by an equivalent amount. No loss to the State. The only loss to the bank is if they have not reserved houses over 720 days to market value less 20%!

Such a solution allows(OO) families to remain in the homes, with no disruption to schooling, jobs etc. The State commits to take vacant possession at the end of 25 years or on the death of the current tenants, and of course there would have to conditions to prevent abuse. The converted tenants pay rent based on current council rent criteria.

Such a solution would be a humane way of dealing with a situation that has the potential to rip both families and country apart.

Those who for ideological reasons would abhor such an idea, should be asked to put a lifetime cost on an OO eviction crusade involving a minimum of 30,000 OO households, acknowledging in such a calculation that the ‘State’ will have to pick up the tab, in housing, schooling, job loss and health loss, for those evicted, as well as the legal and policing costs involved with adversarial repossession.

But perhaps it is precisely the potential of enormous legal fees that is fueling the eviction crusade.

I don’t suppose there’s any way of knowing what proportion of BTL mortgages in arrears are still collecting rent…

I’m not really getting the argument that failure to repossess houses in arrears and offer them for sale is restricting supply and boosting prices. There are X number of houses in Dublin and Y number of families who need homes. Re-possessing or not re-possessing does not change X or Y. What gives? As we know to our cost the supply of credit is also a big factor but does re-possessing homes have any effect on that?

One thing that does make sense is that anyone who bought a home during the period of approx 2002-2007 will have difficulty trading up because they are in negative equiity and will remain so for several years. That would imply a shortage of demand for more expensive second homes that these folks would normally be chasing, i.e. the higher end of the market might remain a bit depressed for longer.

@Ernie Ball,there is a category,no really I’m not making this up,under restructuring for essentially a put option by people over 18 who could read,called payment moratorium.Its not like these greedy gamblers had enough exposure to resi via their PPR,oh no double or treble down,and why not it’s a one way bet with little or no consequences.The epitome of a “house money” play on future prices,if they go up you win if they go down,you still don’t lose the income stream or the gaff.

In fact you can simply divert that rent from paying the mortgage,to support the private school fees,pay for some retail therapy get a tan,whatever you like its Ireland land off no consequences unless you a frontline PS worker:)

There are 261 or 53,183,000 off free money no strings attached,I hesitate to call them mortgages in this category paying sweet f.. all,can only assume no rental income I mean there is no way not even in Ireland that they are income producing or rented and get a payment moratorium…..

One way to know Ernie is by the precipitous collapse and continuing weakness in rents,the simply vast numbers of empty apartments idly sitting wasting away,it’s almost sad landlords holding showings/open houses and no one turning up….

Ernie it’s a national disgrace and will strongly discourage international banks and financial institutions from lending or entering a screwed up idiotic mortgage market,where the collateral is ring fenced by financially illiterate politicians and central bankers.After KBC is finished hovering up as much deposits as it can,they up almost 1bil recently I expect them to exit.They just whacked JR replaced him with one their own,in my opinion to prep for an orderly wind down.

@Joseph Ryan – here is a better solution than yours that is just as realistic. It deals with mortgage distress but also with other sources of income distress. At the end of each month, everyone in Ireland has their salary paid into a common pool, and then the money is paid out fairly to everyone in Ireland, taking account of everyone’s individual work contribution, but also their housing, medical and education needs, etc. That would eliminate all unfairness whereas your proposal, which is no more or less realistic than this, only deals with one source of unfairness. Why hasn’t anyone thought of brilliant solutions like yours and mine before! It must be because people are so narrow minded.

Dublin prices rise 15% while the level of national mortgages issued is less than it was 39 years ago when the population was just over 3m.

Factors such as land use, Ballymun syndrome and nimbyism are in play besides low stock on sale.

Some 10-year BTL interest only mortgages have until 2017 for capital payments to kick-in.

AIB and BoI plan to have 2,600 hired by the end of the year to work as BTL rent receivers.

@ Michael

Re Ballymun syndrome

The high prices of the boom pushed a lot of middleclass housebuyers to the sticks and deep into working class territory.
There were pincer movements deep into Finglas, for example. When the tide went out a lot were left with negative equity. The “gentrification” process is suspended but location, location, location could revive it.

Letter in the paper today. (not from me, although i agree largely with the sentiment)


As for skeptic01’s question, there are many houses that would be repossessed and the people inhabiting those houses would have to live somewhere else. Yes, there’d be rotation in the market, but there’s also housing stock to rent out there. Just not necessarily always in the nicer parts of town.

What’s happening now is an injustice on a grand scale. Irish-style injustice, you might say. Protect insiders, screw the rest.

There’s a hole in the bucket, dear Enda, dear Enda

– Bank stress test results not being released.
– Arrears still grotesque
– Repossessions still non-existent
– No ESM to bailout the banks

Then fix it, dear Mickey, dear Mickey, dear Mickey,

– Extend CGT exemption until end of 2014
– Increase DIRT on savings
– Take a credit union and turn it over to a bank
– Preference shares -*nod* *nod* *wink* *wink*

When all else fails, do a Cyprus.

You have to be some kind of gullible moron to allow yourself be painted into a corner like this by the banks.

The banks are using the arrears issue to ransom the government – making them consider option like a bail-in to fill the obvious hole in their balance sheet.

The banks know that the political optics of repossessing homes is far greater than the financial logic of recovering arrears – so both the politicians and the bankers play the game of extend-and-pretend and hope someone else is in the hot seat when the SHTF.

Meanwhile, Ireland has no access to ESM, is refusing to reveal the results of its stress tests and is openly telling all and sundry that we’re fully funded (the Fianna Gael/Fine Fail mantra) for 2014 so no worries!

Fully funded to cover any bank losses? Or is there some other source suspiciously being eyed?

This is the price of not tackling the arrears issue!


It’s not a zero-sum game – if someone is renting instead of buying then they are paying money to a landlord. If that landlord is in long-term arrears and not paying the rental income to the bank, then the bank are losing out twice – once from not having the tenant buy the property and service the loan instead of paying rent and secondly by having a delinquent loan which is income generating but not for the bank!

bit off thread … post Thanksgiving

Tales of Ireland the Tax Haven: To Hell or to Arthur Cox

Joanne Richardson is stepping down as head of the American Chamber of Commerce Ireland. To mark the occasion the Irish Independent are providing the usual frothy interview. First all, she says that the level of US investment here is all about the tax regime:

“…but it’s no secret that the favourable tax regime makes it particularly appealing.”

Read on:

Spose a 2.5% levy on MNC profits, a dig out to the citizen_serfs, is out of the never posed question!

@Hugh Sheehy

Lose the aggression please – believe me it’s not productive.

The facts are that in most cases those in real OO distress are families with children in local schools and parents with local jobs – if they’re lucky enough to still have one.

Whilst your view has continually been a highly simplistic ‘to hell with them’ approach i.e. if they can’t pay for the nice part of town then move to a place where they can. The reality is most, if in fact the overwhelming majority, can’t move at all because last time I checked the unemployment rate was c13% so finding a job in Banaher when one’s children go to school in Crumlin for instance would be tricky to say the least and add in the additional costs of child care, social, educational upheaval, commute from Banaher to Crumlin for the parents would probably put the individual in a worse financial mess and the tab for such an experiment would ultimately have to be picked up by the State, yet again.

Forgive me but I find your ‘solution’ plain stupid. It’s simply not feasible to move, according to these numbers, c185k mortgage holders and families around the country – with the strong possibility of the added cost of such an exercise coming back onto the State. This is daft squared with bells and whistles on top.

I find your labeling to those in distress as ‘insiders’ as somewhat contradictory. I would have thought those on the inside would have by now found a ready made solution to exit their difficulties – the numbers suggest otherwise so I’m confused.

Since this issue has slowly and surely become our single biggest economic cancer the stance of the actual ‘insiders’ has been denial.

Denial of the real fact and that is the creation of this mess was a banking one – not a consumer led bubble but a credit led one and that error resides with the banks. The denial has been that the original lending decision made sense; it was legal and compliant and had Central Bank oversight. We all know this didn’t happen from about 2001 until the middle of 2008 but we have a Govt who’s intention is clear – avoid mentioning the war. The war being that the original lending decisions did not stand up to economic scrutiny (lending into property deals at rental yields significantly less than the prevailing risk free rate for instance, by the billion load) the CBI admitting that the Consumer Codes were not followed by virtually any lender and not to mention the remuneration practices within the banking/legal fraternity. I could go on, but you get the idea.

If you believe that the ‘solution’ to this banking led error is to have c185k mortgage holders shifted around the country to satisfy a current Dublin property market squeeze then dream on. Until we get a grand write off we stagnate on this issue. The issue is simply pricing, pricing and nothing other than pricing. Housing was priced incorrectly for the period as noted. The prices have now corrected and are still correcting in other parts – unfortunately the associated debts have to correct in tandem until the Govt realises this, the current solutions under the various Insolvency arrangements will only scratch the surface.



Delinquent mortgage holders can rent anywhere they fancy in Crumlin – why do they have to rent in Banaher? Their family doesn’t lose out on anything- they can use the same schools, go to the same job, mix with the same friends and enjoy all that Crumlin has to offer for the rest of eternity. If being in arrears is ‘stressful’ they should deal with the source of the stress. Of course many people in Ireland have an allergic reaction to renting but the solution to that is another debate.

“I would have thought those on the inside would have by now found a ready made solution to exit their difficulties”

Those on the inside do not want to exit their ‘difficulties’ – living rent free is a feature of their plan, not a glitch.

@ JF

How right you are!

We all know what caused the problem. It does not take a genius to work it out. The question is one of an equitable contribution by all involved to its resolution. This cannot include the taxpayer gifting underwater home owners ownership of houses that they decided to buy – no one forced them to do so – with a loan they can no longer service.

The emotional argument about “putting families out in the street”, coupled with the political calculations of those public representatives playing on it, risks that this may yet still happen.

Hell freezes over: I agree with Johnny Foreigner, DOCM, and Hugh Sheehy.

It doesn’t matter whether it was the banks or the mortgage holders who are at fault. What matters is that people are being 100% subsidised by the state to stay in homes they cannot or will not pay for.

Whatever about owner-occupiers: surely we can all agree that BTLs in mortgage arrears should be repossessed forthwith and put on the market.

Plus 1. It is also a highly regressive subsidy to the better off in the case of the BTL anyway.

Henceforth let the historic agreement above be known in honour of the shopping calendar as the “Black Friday Agreement”.

The hand of history is on our shoulders…..the common-sense-train is evidently leaving the station…..will Patrick Honohan get on it?


If you insist, one might refer to the role of academic economists in completely missing the largest real estate bubble in the history of the universe… and then having the temerity to continue commenting on said market… only to miss the upturn. A sort of reverse Midas touch.

Mood music on the platform loudspeakers:

“The Central Bank has suffered its latest set back with the resignation of Fiona Muldoon, the high profile head of Credit Institutions & Insurance Supervision at the bank. She hit the headlines last year when she compared top bankers to surly teenagers, for their failure to get on top of the mortgage crisis.

It is the latest in a string of resignations at Dame Street. The Financial Regulator Matthew Elderfield stood down earlier this year and has since taken a job at Lloyds Banking in the UK.

The Central Bank’s chief economist Lars Frisell confirmed that he is leaving to take up a job at the IMF, earlier this month.”

“Central Bank Governor Patrick Honohan said she had “great vision” and “was a real agent of change.””.

One wonders – enough “vision” to spot that “real change” wasn’t going to happen?

@paulr thanks,lashed over the CB site looking for a statement it’s a bit innocuous,but these numbers/statement just came out.I know I know the US is different comparisons are somewhat invalid,but the performance of loan mods sans principal reductions is mixed.

“Director of Credit Institutions and Insurance, Fiona Muldoon, said “We are now starting to see some signs of progress in addressing the significant issue of mortgage arrears. The audit process, while highlighting some key issues which require attention, shows evidence of long-term loan modifications being offered to borrowers who are no longer able to afford the original repayment requirements. The latest data on mortgage arrears is also encouraging, with indications that the level of new arrears cases is declining and an emerging pattern of stabilisation in the numbers generally.
“We expect that lenders will continue to progress and develop their approaches to ensure that future sustainability targets will be achieved. With indications the banks are now offering long term sustainable solutions to customers, the Central Bank continues to encourage meaningful engagement between lenders and borrowers.”

This should focus some minds,thats some reclassification against a backdrop off an improving resi mkt. get your check books ready !

“• The KBCI Loan book has been reassessed in view of EBA / ESMA and upcoming AQR*, in addition to the Central Bank of Ireland Guidelines (May 2013) and implementation of the Mortgage Arrears Resolution Strategy (MARS). As a consequence of this, KBCI expects additional provisions (c.€510m) due to the reclassification of €2.0bn restructured mortgage loans from non-impaired to impaired. There will also be provisions (c.€161m) for corporate loans due to a more conservative outlook on future cashflows and collateral values, given the slower than expected recovery in Ireland.”

Or the high priced signings bought in the transfer window are migrating to better contracts in bigger clubs. How would you deduce that these outsiders made a significant contribution. Did ME clean up or sweep under. What did Lars produce?

@Gregory Connor (6.17am)

“@Joseph Ryan – here is a better solution than yours that is just as realistic….”

Allow me, in response to your dismissal, to repeat the essence of my proposal, and its cost.

“PDH in arrears over 720 days: Number 31834, Value 6.7 BN: OO to Rent.”

As the houses would be transferred to State ownership at approx 50% of mortgage value, the maximum cost of the assets transferred to the State would be €3.5 BN. As at least 50% of the houses are AIB/PTSB, the net cash cost to the State of my proposal would be approx 1.5 -2.0 billion. This, to sort out 31834 households, does not seem excessive, and in addition the State is left with a potential rental income stream, albeit a small one.

I have not seen anywhere any estimated cost to the State for the suggested solution of repossession and eviction.

But perhaps this is not about cost at all.

Let me also say that I agree somewhat with your suggestion that there is a suspicion of ‘borrower run’ on mortgages, but I believe that it mostly affects BTL, which should be subject to repossession in any case, with some incentives for repossession with tenants retaining occupancy.
The proposal I outline is for OO only and would, imho, weed out a significant amount of the ‘strategic’ defaulters, by insisting on the OOs becoming tenants. Many ‘strategic’ defaulters would think long and hard before signing away ownership, and in some cases a good chunk of equity with it.

NAMA, after a very bad start, when it concentrated on firesales, has now managed to capture a rental income of almost of €1.5 bn pa on assets of <30BN. It is now doing extremely well, even if some of the salaries and expenses are very objectionable. A spend of €30BN.

In light of the NAMA spend of €30 BN, that a proposal for the State, to spend ~2BN to resolve the clearly dysfunctional housing arrangements of over 30,000 OO households, should be met with ridicule, sounds strange to me. Because even after fuller consideration, it seems to make excellent financial as well as social sense to me.

Of course, my proposal does not fit with the mood music on this thread, but so be it. I believe it is in the best long term interests of the country.
So I will remain on the platform, as the OO repossession train pulls away, and will be very happy not to board that particular train.

[PS for the record.
I am an OO private sector worker (NACE code 2312) with no mortgage and no BTL property, so I have no personal axe to grind in this matter. ]

@Tull,from an outsiders perspective the move to a more multi cultural and diverse environment in the CB and DofF was very welcome.The lack of diversity and herd mentality is oft quoted as a significant contributor to the prior regulatory environment.
I did read a few off FM’s speeches and was not exactly over whelmed by her speech writing shall we say,but in general terms more diversity assuming candidates are qualified should be welcomed.
I’ve made a few jokes on here encouraging more repo.’s in D4 to avoid suggestions that I have a “agenda” the reality is nothing would entice me back,even a free gaff:)
Is if possible to assume a mtg in Dublin perhaps then I may consider it,given that I won’t have to pay it!
So I do think the current exodus is a big loss and requires a decent explanation,it’s not exactly an easy sell in comparison to the bright lights of London or New York.
A much leaked draft PAC report highlighted again this issue,how’s that banking enquiry coming along,statue of limitations expired yet….

@John G

You might want to take a look at this:


Its a very brief thread. The documents it links to from the DoF are no longer available. In them, there were two contradictory statements, one after the other, that went something like this:

* International candidates are welcome.
* Candidates who are invited to final interview will have the option of demonstrating proficiency in the Irish language at a seperate oral interview should they wish. This interview will count for up to 6% of the candidates final score.

So in other words, these are jobs for locals – unless you foreigners think you are at least 6% better than the strongest Irish speaker!

I’m amazed this is still going on.

@ HS: “there are many houses that would be repossessed and the people inhabiting those houses would have to live somewhere else.”

Such as? Ever move house? Not exactly a bunch of laughs, is it? Bad enough if its a voluntary move. Just try to imagine what it would be like if you HAD to go. School friend of mine is in that position. Move: all options expired. His car battery failed recently. Had no money to replace. Got a charity call. Family stress levels are above 99%. You would not wish it on a dog.

“Yes, there’d be rotation in the market, but there’s also housing stock to rent out there.”

True. But folk might just want to reside close to their family (grandparents esp), or work, or schools, or shops. You know, like! And some rental stock is hardly fit for human habitation. But who cares?

@ JF: I opine that you may need to imbibe a tincture of Emotional Intelligence. Dunne’s Stores are having a 50% off. They are open until Mid-night!

@EB: “What matters is that people are being 100% subsidized by the state to stay in homes they cannot or will not pay for.”

The state is NOT subsidizing anyone Ernie. Its US – the taxpayers and their dependents. And WE are NOT subsidizing private financial businesses? You know, the ones whose senior execs actually caused the mess? I do not see many of those critters standing in line for a welfare handout – do you? Or being evicted?

You’re right BWSr: I should stay in a rental property for the rest of my life so that somebody else can avoid the horror of moving out of a house that they’re not paying for…

Also: yes, the state is subsidising those people. And it is subsidising those who caused the mess. Both should stop.

@Grumpy,ta had a look,I did make quite a few comments on the rather surprising choice of poacher turned …they had be removed but in fairness an explanation was emailed by the mod,given your libel law’s,a bit churlish of me to even mention it.
The new fella at DofF from davy’s must be a fluent speaker cause he needed all the points he could get,it certainly can’t have been based on track record shall we say:)

Off-topic, but if there’s a mod with an interest in the pension fund industry – the one that is being haircut by the government, that is – this might be of interest:

“Ms Burton said the pensions regulator has accepted the ESB’s pension funding proposal for the period to 2018.

“In fact, given that many pension funds have suffered losses during the financial crisis, my general understanding is that the ESB pension fund is actually one of the best funded pension funds in the state,” she said.

As for much of the rest…


I am more interested In competence than racial profiling. The old CB and DOF was clearly not fit for purpose so change was good and opening up to a broader gene pool is brilliant. But one has to look beyond nationality. As I look at Elderfield, under his watch the discretionary non payment of mortgage ballooned out of control. Then he left to be succeeded by Ms Muldoon. She came from a Bermuda reinsurance background with a segue into life insurance. She did not seem an obvious fit as a head of banking regulation. As for Lars, I am completely at a loss to ascertain any impact, other than improving the pagination of CB reports.

@Tull,recent speech on international nature off banking,it’s a little unsporting to single these people out.They all left,myself I would think somewhat out of frustration at the govt. stance on mortgage debt.
Newbridge CC was handled quite well all things considered,here’s himself on the future off banking in ireland chilling comment….oops there goes the IFC…

“Without such separation, extremely prudent and active management is needed to avoid trouble in systems with large banking sectors. One can even imagine devising macroprudential policies to be put in place to prevent expansion of banks’ balance sheets beyond a certain scale, putting the onus on authorities to determine what is the optimal size and structure of the country’s financial sector – not an enviable task.”

JG ,
No evidence that ME & FM favoured faster resolution . If anything pace of resolution & loss recognition has picked up after former has departed shores.

@Tull,without modern bankruptcy insolvency legislation the impact was draconian,most observers figured that would be the catalyst.
More important how’s the toy show…crazy over here for Black Friday…off for a few well earned..,after supporting the US economy all afternoon,expect a major uptick in retail sales,achieved by herself!
Given BL’s link above maybe I should ask her to pop over…..


“The public has some profoundly mistaken beliefs about the key economic and social facts of Irish life, according to a poll conducted by Ipsos MRBI for The Irish Times.

The poll shows most voters have little understanding of the where the bulk of taxpayers’ money is spent and about who in society pays most of the tax. In particular voters are ill informed about the cost of the political system by comparison with the cost of welfare or public service pay. ..

Asked how much a person must earn a year to be in the top 10 per cent of income earners the average response was €150,000 when the correct answer according to the Revenue Commissioners is €75,000.

Probably the most startling result was that when people were asked which group receives most from the public purse in terms of direct payments almost half said politicians with the other half equally divided between welfare recipients and public servants.”

Maths is a real national weakness, innit.

@Brian Woods. Yes. I’ve moved house many times. Chasing work, usually. It’s no fun. What’s your point now?

@Yields or Bust. I’ve shown no aggression, simply consistently reiterated a point that justice is not being served by the current policies. This isn’t a nice situation, but perpetuating injustice is not an approach I approve of. Sorry if you disagree.

Meantime, 31000 houses more than 720 days in arrears (a number I can barely believe is true) and house prices and rents are rising. Young families, like the letter writer above, being locked out.

@ HS: Thanks. You know then. Now try it when you’ve been ‘chased out’. Its even un-funnier. And that’s before the mover has to find the money to move. It does cost. And if’n you’re income constrained already? It goes on and on and on. Only the lucky (and plucky) families survive that sort of social upheaval. I know only one family who successfully managed it (a significant downward, cum horizontal migration) two decades back, though they came badly unstuck in 2007. Stuff happens!

@ EB: “Both must stop”. Agreed. Its getting a handle on the HOW is the political predicament. There are two of us in this: us, the citizens and them, the politicians, both of whom have a somewhat deluded idea about the origin and nature of our incomes. Until those in charge (the decision makers) can extract themselves from their Cargo Cult mentality – its every woman for herself!

@Brian Woods Snr,I’m sure the new family will be equally as nice,hopefully they a bit more socially responsible and pay their bills.
Failing to do that and ignoring the writing on the wall renders it difficult to conjure up much empathy,when was the last mortgage pmt again….
But agreed my own kids often ask about their grandparents.

@Gavin Kostick,thanks it may be on the RTE player,it’s a tradition that unfortunately my own kids won’t get due to the chronic mismanagement of the economy for aeons,plus the rather bizarre and weird election choices constantly made.
I had heard the “flying fairy” was also popular,over here it’s the new game consoles.
Appears you are almost ten times as likely in NI to have your home repossessed.

“Judges handed out 677 orders during a three-month period between July and September – a significant rise on the 562 orders issued for the same period last year.”

@ brian Lucey

I don’t think I can let you away with that nonsense!

Maybe the majority of those of us that actually understand the level of economic mismanagement and bank misregulation no longer feel it necessary to trumpet the grave failings at the the DoF, Central Bank, FR. In any event in the current political and economic trauma unit it has been made abundantly clear to us that such complaining will not be entertained. We even have the governor of the CB on record saying, he is “not interested in naming names” or matching names to the various elements of the systemic failure. Is’nt it nice to be a theorist? Don’t make yourself look silly trying to defend the indefensible or you will end up looking a bit like a Willie O’Dea without the mustache. They have not got a leg to stand on. The blame game is over. The definitive report will only be allowed to take place after the statute or limitations has well and truly run out.

However in the court of public opinion they have been found guilty, self serving and totally incompetent many, many times over. Nyberg page -vii- called them “the enablers” but that was being polite, after all they were paying him. Moving Cardiff to the court of auditors was another cover up job as was loosing files pertaining to the late Brian Lenihan’s role in the whole debacle. Basically, hoping that they would conveniently disappear into the ether as they were thumbed through by family members seeking to protect his legacy. You can fool some of the people some of the time but not all of us all of the time. I believe, there is more than a ring of truth, to Joseph Ryan’s throw away comment, that there is far too much legal money to be earned from evictions, PIP’s PAP’s , PUP’s etc to stifle such an oncoming gravy train would be a major crime against the legal eagles.

“THE Department of Finance has been lashed in an unpublished report compiled by the Public Accounts Committee (PAC)”.


Of course, the thesis or “mood music” as JR called it, on this thread, is of a slightly menacing nature. The usual “I’m all right Jack pull up the ladder” suspects are out in self congratulatory force. Nobel Laureate winning economist Stiglitz has previously recognised NAMA as a piece of “criminal enterprise” and has also been amazed at the Irish pursuit of (selective) austerity, very selective austerity, with the fervour of some religious cult. When the 24bn of pre borrowed money runs out the coy rambling accusatory back slapping will also come to an abrupt end and I look forward to looking at all the sheepish faces. Of course the tune the mood music will be much more sombre then.

Steve Keen the Australian economist, is on record as saying, recapitalisation of Irish banks should have been accompanied by corresponding write down’s on the relevant loans. Of course, this would not have left those with the write downs swinging in the breeze and hostages as is the preferred solution chosen by the enablers and government. Funny that nobody bar one person above recognises the social melt down that the chosen solutions are going to have.

You know what’s truly depressing? The reaction of those whose ideology led them to cheer for ever lower levels of financial regulation in order to unleash the capitalist beast in all its glory when, inevitably, that beast chews up everything in its path: “it was the regulator’s fault!” “where were the authorities?”

First the authorities are parasites and dead weight to be removed from all transactions between “free” parties. Then the authorities are still parasites because they didn’t insert themselves enough.


A fact that appeals to me is one I heard the brave Colm regaling his audience with about 3 years ago in the Royal Irish Academy. Mr. McCarthy diverging from his written script of which I believe I have a copy, mentioned that his own pension scheme “was a Ponzi” scheme. If he really believes this and I believed him then he is very silent about it since then. That night, he also alluded to the fact that much of what Quango’s do, were functions that were previously carried out by some government department or other and that it was his belief, that those quango’s should be closed down and that the departments that had been “hollowed out” be again made responsible for performing those duties. That got me thinking. Were the office holders paid less for doing less work? If they were paid the same for less work that amounted to a hidden salary increase.

@ Ernie
It is simple. The authorities had a job to do. They were paid to do those jobs. They failed to do them while still drawing down huge salaries and clocking up valuable pension rights. Now those same authorities are trying everything in their power to recapitalise banks at the expense of those who bore the brunt of their failed regulatory regimes. Those who are behind in their mortgages are presumed to be non paying tax payers, almost non citizens. They become or are suddenly viewed as “invisible citizens” by those who in my mind have a very, very, nasty agenda but who have run out of words to hide their treachery behind.

@ DOCM: “There is nothing more deceptive than an obvious fact.”

[Arthur Conan Doyle]

All that is true, Robert. However, I’m willing to bet that you were among those calling for light-touch regulation in the name of a belief in the infallibility of the market. It was all the rage back then, of course. Those who promoted it now generally fall into two camps:

1) those who blame the regulators, etc. for the crisis despite the fact that the regulators were doing exactly the sort of thing these hypocrites wanted;

2) those who double down on their laissez-faire ideology and claim that the problem wasn’t that we allowed financial capitalism to become too freewheeling, that we drank too much of the neoliberal kool-aid; it was that we didn’t allow it to become freewheeling enough, we interfered with it and that is what brought our downfall.

Sometimes people go from (1) to (2) and back again in the space of a few minutes.

@ Robert Browne

I stick religiously, or at least try, to the issues under discussion rather than any extraneous matters. CMcC identifies two such issues (i) the dysfunctional planning system and (ii) the equally dysfunctional mortgage financing system. The two combined make for a very sad situation.

The government has choices to make in relation to both. If it fails to make them, there will certainly be a rapid, and entirely false, bubble in house prices in certain areas of Dublin coupled with a possible sudden deterioration in state finances.


I referred to the “odd” not the “obvious” fact.

To quote H. L. Mencken.

“For every complex problem there is an answer that is clear, simple, and wrong.”


Well you may believe that you stick religiously to threads but like the great believers of the major religions it appears you decide what is worth believing (discussing) and what is not.

This thread was about mortgage arrears and you diverted it to planning issues which you believe are relevant. At the end of the day everything is related to everything else. I read the link and McCarthy’s piece, but did not find it particularly illuminating. Planning is still being manipulated there is a mortgage famine. Is that not stating the obvious? In my mind C McCarthy when he talks about the economy being “bust” etc tries to be the straight talker, someone who will make it clear to the man in the street what is going down. However, he always comes firmly down on the side of the establishment. He is a tried and trusted establishment player, a safe pair of hands for any government report into the indefensible. There is a bit of the nascent revolutionary about said Colm but unfortunately his revolutionary zeal is limited to repairing, tiny fragments of the system according to his own insider credo. It is like having a malignant DNA strand of millions of base pairs going seriously out of whack and trying to tackle the odd gene at random here and there.

The last paragraph of the article is where he was heading from the first sentence and he finally arrived, when he said, that family homes should be subjected to Capital Gains Tax. It is another attempt to hit the punch drunk owners of family homes in the solar complex while they are still reeling from the various attacks or else it is an attempt to say property tax and water taxes only? You don’t know how lucky you are? It is called a preemptive strike. During the boom they were sold over inflated houses that were completely miss priced. In some cases they were charged 9% stamp duty for the luxury of changing homes. Then with tens of thousands in negative equity “they” decided to bring in a property tax, another idea from the stable of ideas from the likes of Mr. McCarthy and one that could be conveniently dumped at the door of both FF and the Troika . I suppose to link back to his idea on “Ponzi Pensions” the man is only trying to nail down the taxes that will fund the unfunded pensions, trying to prevent the collapse of the house of cards and houses are hard things to hide.

Perhaps, that is another reason why people in the PS ran out waving cheque books and debit cards in the air saying property tax is good. They know, at the end of the day, the property revenue stream is going to be critical in meeting pension payments. Property will be squeezed until the pips squeak. It will be used to fund pensions used to pay nursing home bills used to help children who are in serious financial trouble. Imagine a couple who cannot afford to live in a house of a certain size trying to trade down to a smaller house in order to get some equity to fund their lives and perhaps medical bills? His solution? Tax the GAIN? One thing I can safely say is that there will be very little property left over to hand on to the next generation. This economy is not growing it is treading water and has created serious headwinds in the future which will all but stifle any prospects of growth, there is only one thing left for the state to do and that is confiscate any equity that is tied up in property.

@ Ernie

You would loose your bet. My biggest concern during the bubble years was the loss of culture, the squandering of everything that our ancestors fought for. I did not agree with bringing in 1,000,000 plus people into the county between 2000 and 2012. I believed that we had/have become obsessively fixated on money and in particular property. I abhorred the lack of standards in building. I had meetings with the City Manager trying to prevent the high rise agenda that was all the rage. I told the then manager, who now has been promoted for his failures at DCC to CEO of Irish water, that his policies were going to break Dublin City Council. They did.

I still have my own minutes of that particular meeting and what was discussed the ground covered. At the end of the private meeting I was told, ‘I don’t think we are going to convince you Mr. Browne of our High Rise agenda’. I said. “no” gathered my notes and left. That particular building which was to be higher than Liberty Hall was eventually turned down by An Board Pleanala and the state was saved the loss of another 10 million because a few determined people who got together as indeed they did in Ballsbridge with the Dunne, developer driven madness, to stop stop it in it’s tracks. If that had been started there would be a massive, rat infested, hole in the ground in the middle of Ballsbridge full of stagnant water with the main protagonist declared bankrupt in two jurisdictions.

@ Brian Lucey

I always preferred Cormac who never comes across as someone who is trying so desperately to be a smart ass. Have a re-read of your paper on the soft landing, eh?

@Hugh Sheehy

But surely two wrongs do not make a right.

The wrong perpetrated on consumers who were suckered into buying with easy credit terms and the constant barrage of cheer leading politicos, economists, national agencies, international agencies at the time is now you believe replaceable by an equal eviction wrong.

The sole solution offered to the same consumer, who at the time of purchase was largely completely ignorant of the credit and banking fiasco behind the scenes, is to turf them out of houses because ‘buyer beware’ is the only law that now seems to matter, despite all the wrongs that we now know that went into forming the mispricing of the market for approximately 10 years. Tell me we can do better than such a ham fisted ‘solution’.

Please tell me that our imagination stretches beyond evicting families because they cannot genuinely afford to pay the bank bondholders, the austerity taxes in addition to their own crazy mortgages or else I’m bound for lifelong depression at our ineptitude.


Oh, please. Nobody was suckered into buying anything. You make it sound like buying a house is an impulse buy, like picking up a packet of crisps at the supermarket till.

Whether or not the market was “mispriced,” these people entered freely into a contract. Did they not realise that the value of property can go down as well as up? Did they not realise that if they failed to make payments, their “home” could be repossessed?

The alternative to repossessions is that you let people stay in houses they cannot afford and the state subsidises them. On what grounds? That they “own” them? They don’t. That they have possession of them? That’s legitimising squatters. There is no area of commerce where one can claim that the market “mispriced” the goods and that therefore I should keep them for free or some price that I like better.

And the effect of letting them stay in houses and not repossessing is that we get another bubble as demand outstrips supply.

You know, I’d also like to live in a house I cannot afford. Should the state subsidise me? What’s the difference? You seem to forget that for every winner in this game, there’s a loser. You want current property squatters to win and current renters who would like to buy to lose. But don’t pretend that the latter wouldn’t be losing out in your scheme.

You haven’t said anything about the BTL squatters. What’s your view on that? Were they also victims of mispriced goods?

Colm McCarthys suggestion is ‘The government should announce that capital gains tax will apply, from today’s valuations, to any future house price appreciation in excess of consumer price inflation’

So any surplus over and above (todays evaluation + future inflation) is taxed. I for one think this is a great idea. We should be looking to keep specuators away from property, not entice them in with high rates of DIRT and capital gains exemptions. We could use the property tax valuation (+10%?) for the ‘current valuation’ – simples.

We should make future mortgage lending non-recourse while we’re at it. It should result in more expensive credit and cheaper property (once all these cash buyers have dried up).

@Inequitable Austerity,I hope revenue is going to treat foreclose/repo of BTL as a deemed sale and and claw back the taxes especially section 23.Any mortgage forgiveness in that category should be considered income and taxed.

So like more non non recourse than now,for BTL it should be no different that say a CFD or an expensive toy,similar to a margin call,exotic car,boat,non judicial and fast tracked,cut the overpaid judiciary and legal eagles out.

You miss skip divert rental income defaulted immediately,few days to cure then thanks very much,sorry it don’t work out,property on the market next.I would lockbox rent on all future BTL deals,insert SNDA language into mortgages.

Why should the current and future generations have to endure more expensive credit,why is that a good thing ?

@ Inequitable Austerity

You may think it is a great idea but then I am sure you have not thought this out. When people buy at price 5X and sell at price 2X will the state then allow them to set their losses off against tax liabilities? Will the state allow those who are still paying back the money they had to borrow to fund the stamp duty on property to write off those amounts against property tax? No! Your losses are your losses but your profits are most certainly not your profits they are potential state largesse to be confiscated.

First of all announcing that Capital Gains tax would henceforth apply to PPR’s is crossing yet another rubicon of state confiscation. The next election will be fought on issues such as taxing family homes, taxing water, and failure to achieve even one cent being written off our national debt. I am talking about written off not the can kicking exercise of converting PN’s to bonds the last of which will be redeemed in 2053 when Noonan will already be dead two decades and Brian Lehihan over dead 40 years. Mr. Kenny is on the record of the Dail as having said property tax was both “immoral” and “a vampire tax”. Of course it goes without saying he was in opposition then and he is so much wiser now.

How can a government apply yet another tax to the current panoply of taxes being applied to family homes? Take the usual situation where a family are trying to upgrade to a larger house? Why? Because they now have a larger family? It happens you know. They sell their home and for their troubles are taxed? The money they are hoping to use to manage a move is suddenly seized by the state. They may as well man the sky with drones and monitor what used be ‘our’ property 24/7/365 to make sure we don’t improve our property and not declare it. Of course we will always have people in our midst who think that confiscation is a good idea and usually their is some agenda that persuades them greed is good.

Why not make all mortgages non recourse right now, since the valuations put on properties were done by experts from a panel demanded by the bank but paid for by the mortgagee. What they are really saying is, that these people were experts when they were making the valuation but the non expert the person taking out the mortgage must assume all risks. The banks are experts too at lending and assessing risks or so we were led to believe. So all the experts walk away and the non expert is left holding the can?


As I have asked other people, does your policy of largesse also apply to renters. If they stop paying do they get to stay in the “family home” too, paid for by others? Or if the house they’re living in gets “repurposed” from BTL to PPR (tossing them out but making it harder to repossess from the so-called owner), where will you be?

As rents rise or as families run our of money to pay rent, will you be there?

Allow me to express doubt about your activity levels in those other situations.

Meantime, we have an ongoing market manipulation, apparently deliberate.


At what point did the market begin to “misprice” houses? Are you also calling on those who sold between that point and the crash to give back some of their ill-gotten gains?

In many parts of the world ,evicting people who do not pay their mortgage is considered to be an essential part of the rule of law.

In many parts of the world turning hoses on peaceful protesters is seen as an essential part of the rule of law.

Brian are you squirting everyone with the same emotive hose?

There are almost 12,000 buy to let mortgages more than 2 years in arrears, and these statistics along with their comparators abroad are visible from abroad. Meanwhile, we have a central bank governor who, so far as I have noticed, does not really want any reposessions – not even BTL, in principle – but acknowledges that, unfortunately, they may be unavoidable in some circumstances.

Surely these BTL arrears are ridiculous.

@Overseas Commentator

“In many parts of the world ,evicting people who do not pay their mortgage is considered to be an essential part of the rule of law.”

Jean Claude Trichet, former president of the ECB, insisted that what many consider “an essential part of the rule ” be set aside or else a ‘bomb would go off in Dublin’. His purpose was to ensure that his large creditor pals who had lost their investments, be paid in full.
Paid in full, by some of the people, now being measured up and lined up for eviction.

Perhaps Trichet, on foot his reported utterances, could be described as an ‘overseas bombinator’.

“Surely these BTL arrears are ridiculous.”

They are. But it is highly unlikely that the tenants are the intended beneficiaries of that ‘ridiculousness’.

@Robert Browne
“It is simple. The authorities had a job to do. They were paid to do those jobs. They failed to do them while still drawing down huge salaries and clocking up valuable pension rights. Now those same authorities are trying everything in their power to recapitalise banks at the expense of those who bore the brunt of their failed regulatory regimes. Those who are behind in their mortgages are presumed to be non paying tax payers, almost non citizens. They become or are suddenly viewed as “invisible citizens” by those who in my mind have a very, very, nasty agenda but who have run out of words to hide their treachery behind.”

To my knowledge, the only issue of national importance that caused the top level of the PS to get together and speak with one voice, was the threat that their bonus payments could be removed in December 2009.
Lenihan, who at that time learned that he had the same terminal illness as his father, caved in.

@Brian Lucey:

Now that you mention the PS on a thread on mortgage arrears, I hold my hand up and blame the PS. Why?
What is government /PS policy on mortgage arrears? I confess that I do not know. Noonan has mentioned something about the banks getting on with it, whatever it is. The governor shakes a stick from afar at the banks, while his front row seems as dysfunctional as the ECB board.
So I blame the PS, in the broadest sense particularly the politicians and senior PS. It is about two years (?) since Clinton felt it necessary to tell us that mortgage arrears was the biggest issue facing the country.
Two years later, do we have a clear policy on this issue?
Not to my knowledge. Its a bit like the bubble period; there is a serious social and economic issue at stake, but we have no clear policy in relation to dealing with it.
When the ‘let the banks’ deal with solution fails this time, will it be another systems failure? Will we all be to blame? Again.

@ Overseas commentator

You, like many, seem to conveniently forget or maybe want to forget the provenance of this crisis? It’s as if tens of thousands of Irish mortgage holders deliberately set out to defraud the banks and loose the roofs from over their own heads while at the same time being screwed for the Ponzi schemes the banks ran? Hence ,they must be held to account and evicted! God bless the simple world you live in.

Let me remind you. First off, DoF, FR, ICB ignored the problem and denied it existed. Then, they admitted there was a problem and sprung a bailout on the country. Then, they again denied that there was a banking problem, next they contradicted themselves and admitted that the NPRF might have to be raided after all,. Why? Well, to recapitalise the banks, the ones they had just told us did not need to be recapitalised. Then we were told the reason the banks needed to be recapitalised was to avoid nationalisation. Then, shortly after, they started to nationalise the banks one by one accept for one bank BOI which the sheep dogs were lucky enough to single out and for some strange reason turned out to be the best investment Wilbur Ross ever made. Some folks say he was allowed to profiteer at our expense because the government were desperate to avoid the debacle of all six financial institutions being “nationalised” but that’s another story.

From one of Kelly’s missives;

“Patrick Honohan gave “an extraordinary interview” to Bloomberg on 28 May last year, giving assurances that “the two big banks, would be fixed by the end of the year. I think it’s quite good news the banks are floating away from dependence on the State and will be free standing”.

Honohan’s miscalculation of the bank losses is the costliest mistake ever made by an Irish person.

With Ireland’s reserve fund enough to keep us funded until this summer, Brian Lenihan was in a strong negotiating position when he initially refused to countenance an EU/IMF bail-out last November
but that position was blown out of the water by Honohan’s admission on Morning Ireland on 18 November that Ireland would need a bailout of “tens of billions”.

The IMF proposed reductions of €20bn on unguaranteed bonds totalling €30bn and Lenihan apparently told the IMF team: “You are Ireland’s salvation.”

However, the pesky Yanks vetoed such reductions – US treasury secretary Timothy Geithner, the man who sanctioned €13bn of payments from State-owned AIG to Goldman Sachs, “believes that bankers take priority over taxpayers”.

The EU/ECB were also insistent on all debts being repaid in full. The IMF wanted major haircuts. The Irish negotiating team sided with the EU/ECB – prompting one IMF staffer to describe the Irish as “displaying strong elements of Stockholm Syndrome”.

Of course none of this, burn the mortgages holders has anything to do with covering up the massive mistakes that were made and continue to be made? The PI legislation only covers 1:7 one in seven, distressed mortgage holders that need to participate in the process, that’s according to Grant Thornton. Then, we have the legal profession admitting that they believed the process would sort out less than 1:10 one in ten of distressed mortgages. This so called “solution” was rolled out after how many years of careful planning by the DoF, ICB , Dept of Justice, Finance Minister and government executive? A “solution” that handed a veto to the same people that marched into government buildings to tell the government that they were solvent and only had a little liquidity problem? While down the road we had people in Anglo pulling figures out of their “arse” for the FR and ICB?

Oh! but there is one plan that many academics believe will work and that is eviction! Indeed, sure they have all read the history books, “Eviction” is always your man, when it comes to sorting out Ireland’s little financial problems. Matters not a whit, whether it is the Crown or the Irish Free State that is carrying them out. By God yes! Eviction! That’s your only man, only game in town!

@ grumpy

That’s politics for you!

From today’s Sunday Times (front page).

“A high-level group led by Martin Fraser. SG at the Department of the Taoiseach, is conducting an audit of property in Dublin to work out who owns residential land, who has planning permission for housing and what type of building is planned at each site.

It will use this information to ensure suitable development land is not being hoarded by developers who are waiting for property prices to rise. The government will also seek to reverse planning permission for apartments in some instances and insist on family homes being built”.

This says it all really (including the contradiction between the need to raise housing densities and the insistence, for political reasons, on the supply of “family homes”).

Fair play to you for being able to figure what the Oracle of Dame Street means . That ability puts you at Deputy Guvvnor level. Apart from that you are spot on. Failure to move on these white collar rent seekers is a national disgrace.

This all boils down to how we use our scarce resources. In a fantasy world of unlimited resource and no opportunity costs I’d have no problem with helping out people who are genuinely struggling with their mortgages. But we don’t live in that world. And there are plenty of other groups who are far more deserving of the limited resources we have. People who are saving for a deposit but have very limited access to mortgages and see house prices rising again. Young people forced to emigrate. People who can’t afford the rent.

Whatever about the causes of mortgage defaults it is hard to deny the following:
1. The people involved have to take at least some personal responsibility for a bad financial decision.
2. These people have already benefited greatly from decisions taken by the State – and those decisions have harmed the economic interests of others.

I’d challenge anyone who is in favour of continuing the current policy to demonstrate that this is not a regressive policy. It is a process of actively transferring resources to an economically privileged group and away from younger and poorer citizens.

This Indo article is interesting


“Mr Hall revealed that debt forgiveness is now commonplace, as banks take a more “realistic” view of their customers’ abilities to pay back what they owe.
“We have made many arrangements with banks where debt has been written off. It’s happening on the ground already. Nobody wants to shout it from the roof, but it is happening,” Mr Hall told the Sunday Independent.
“There is a massive cohort of people in middle Ireland who owe too much money but with some realistic restructuring will be able to pay off most of their loans without losing their family home.”
Details of a tiny number of debt forgiveness deals that have been made public so far suggest banks are agreeing to writedowns of between 60 per cent and 70 per cent.
However, sources involved in negotiations with banks say lenders are typically agreeing to allow distressed homeowners to split their mortgages if they can afford to pay up to 80 per cent of their home’s current market value.
One source told the Sunday Independent: “Basically, the banks’ criteria is that if you have a €400,000 mortgage worth €200,000, you have to repay the equivalent of €180,000 – that equates roughly to a 60/40 split.”
An insider said the so-called “exiting banks” are most likely to cut deals to let borrowers off a share of what they own. Exiting banks are lenders that have decided to pull the plug on future lending in Ireland and are now mainly focused on managing their exit from the country.

Are these banks setting a precedent for the pillock banks ?

@ JF

What current policy? If you can identify it, it would be of great assistance. There is none that I can discern other than to let the present situation fester in the hope that a solution will arrive by way of a general economic upturn.


“let the present situation fester”

That is the policy. Not doing something can be a policy just as much as doing something. If we decided to make it illegal to evict private tenants who do not pay their rent that would constitute a policy.


“There is a massive cohort of people in middle Ireland who owe too much money but with some realistic restructuring will be able to pay off most of their loans without losing their family home.”

Hopefully they get to keep the family car, the family Sky package, the family holidays, the family private health insurance, the family private schools as well as the family home. And isn’t it great to live in a country where families without a family home have to shell out to keep other families in their family home.

“This says it all really (including the contradiction between the need to raise housing densities and the insistence, for political reasons, on the supply of “family homes”).

We just finished knocking down the Ballymun flats and there are many low level 5/6 storeys high Dublin city Corporation, flats barely 40 years old that are being boarded up all over the city.

You see the problem now is, that many of the early Zoe shoe box type developments, some as small as 330 square feet, are…well, falling apart. There are numerous developments where developers have gone bankrupt with blue prints of buildings gone missing and, as we know, the government are afraid to carry out audits on such developments for fear of the truth being revealed.

There are management problems in the vast majority of apartments built over the last 12 years. People not paying management fees for one reason or another and “fighting funds” being run down to zero. Then, there is the little problem of having to pump the water through leaking pipes when someone flushes the toilet in the high density apartment block. In one development near me, which we stopped, DCC wanted to hand a section of the Victorian sewer system over to a developer who would then be responsible for any problems in the future. So residents would now be trying to chase down the bankrupt developer, down Peter Kelly’s court room, when the sewage is coming up their toilets? This is not atypical.

I have no problem with experimental high rise developments, “land mark, iconic buildings” as the planners liked to call them, once the infrastructure is there to sustain them and once they are built to a decent standard. However, Dublin between the canals, has experienced enough vandalism for the moment.

Oh and btw there is no such thing as a high level group at the Dept of the Taoiseach carrying out an audit of sites and planning permissions. A planning permission cannot be altered just because the powers that be start to realise they have made major errors. Who says they are “high level”? Themselves? Sounds implausible to me, just another talking shop I can assure you. The problems that need to be solved are not being solved and they are going off at an almighty tangent.

@ Robert Browne

On your last paragraph, I agree. But the story simply confirms a point that was made by Colm McCarthy and obvious to anyone with eyes to see; planning in the Dublin urban area is non-existent.

Such planning would include adequate building standards and legislative arrangements for their management. Cities all over the world manage to to do it; why not Dublin?

The earlier article by him makes the equally obvious point that there is no such thing as a free lunch. The government has left itself with zero room for manoeuvre on the fiscal, and ipso facto, the banking front. It is as simple as that.

@DOCM: Thanks. Yeah, stuff can get a tad complicated. Wonder if we will ever get the facts – the true ones. The one that sticks out for me is the reckless lending into the residential housing bubble, even though interest rates at the time were ‘normal’. Now they are near zero and … …

This mess has a long way to run. And lots of stupid folk are going to pay dearly for their foray into the murky world of the FIRE economy – the RE part.

@DOCM,you can have the best or worst planning system in the world but without capital it’s pointless.The banks are not lending for speculative development,a few smaller infill sites will get built.

@Robert Browne,it’s easy enough to malign developers but Dublin and Ireland will have no one left with expertise to build anything.I though the plans for Ballsbrige were great,lots off vision and it was mainly UK banks that got burnt on that one.If it had off gotten off the ground someone would be finishing it out today,so I strongly disagree with your premise,Ballbridge is still a rat infested hole,ugly buildings,Dunners plan was terrific,lots off style and it pi**ed off all the neighbors making it even better:)

Oh but there is such a thing as a free lunch and many, many people in this country can attest to such a phenomenon including the brave CMc himself. But, what is at issue here is that there is definitely no such thing as a free lunch for everybody, only for certain people. That is what is being fought out.

During the boom the planning authorities prioritized mining the building industry for developer contributions. These contributions were used to fuel salary inflation, grade inflation, pension inflation and job inflation. Extracting money took precedence over everything else and bear in mind, that no planner in DCC or anywhere for that matter has ever been sacked for giving planning permission for any of the disasters that pepper the landscape of the city. Just look at the Priory Hall example.

Henning Larson, Dunne’s architects flew into Dublin and headed for city hall where they were scheduled to meet with Jim Barrett the then Dublin City Architect. They showed him 3 different models. A 32 storey, 38 storey and 42 storey model. Mr. Barrett sucked his thumb and after a long silence declared “I believe the 38 storey model is the most elegant solution”. Indeed, the most elegant solution considering that Sean Dunne had paid 280 million or whatever it was for the site. Developer led nonsense and the prospect of massive planning contributions, two birds being killed with the one stone an elegant solution indeed, but then it all exploded and the dream of Knightbridge in Ballsbridge had to be postponed indefinitely.

@Bryan Lucey,Joseph Ryan and Robert Browne

As Colm McCarthy shows in the Independent ,unpaid mortgages will be paid by the taxpayer or the bank depositors (probably both).
How do you expect to recover some of those mortgages if there is no repossessions?
Ireland can hardly afford a new banking crisis (or the prolongation of the previous one).

@Robert Browne,what’s your point so far you have had ample space to make it.

You are vehemently against eviction,yet Sean was effectively evicted not only from his home but his country by small minded individual’s.He’s broke living in Greenwich,trying to support a young family.

He paid an awful lot of taxes employed a lot of people and is getting hounded over a few bob…why to pay the bond holders you despise ?
You appear strongly opposed to high rise development despite the horrid impact sprawl has had on Dublin,and reams of studies reports showing for many many reasons it’s way more efficient than semi d boxes in a cull de sac.

If Ballsbrige had gotten a shovel in the ground it may have gotten stopped correct,but another developer would buy it today and finish it out releasing at todays prices some pretty nice affordable gaffs-what’s going to happen too that site now?

@ John Gallaher

I made two attempts to answer you but comments seem to be disappearing now!

@Robert Browne,phew 🙂
Regarding Sean,he’s not crying in his cornflakes blaming the regulator the banks.He vacated his family home rented it out handed the rent over to the bank,he manned up took responsibility and would like to provide for his family.
He’s not suddenly found a long harbored nationalistic streak,hanging a tri color outside the gaff and supporting SF blaming the “system”.
Nope off to work,the misses it turns out must have learnt a thing or two shes proven to have quite the eye for a good deal.Hiring people spending money at the builders providers….but no way he could have done that in Ireland he’s actually very talented,driven,ambitious.

@JG: re your 9.40 pm: “… but Dublin and Ireland will have no one left with expertise to build anything …”

This cannot be correct. I could phrase it differently, but I’m likely to have my comments sequestered if I did.

As for building – whatever, in Dublin City. Follow the continental model. Increase the number of residents who live locally. Some of Dublin’s oldest residential streets are veritable deserts after nightfall. Negative tax incentives might work. How-and-ever.

Such a scheme might put a few ‘snouts’ out of joint. But I fancy they would quickly conjure up an alternate set of money troughs. They seem very adept at trough building, then shitting all over the place – except near their own residences – that is. Perhaps that’s what passes as entrepreneurship these days.

The value of a property adjacent to mine went from 320,000 to 3.2 mil in the space of 7 years. Same old house. Same old neighbourhood. Same old everything. So what increased in value then? The 0.18 acre site?

There are many, many talented folk who could build fine properties. They appear to be honest folk.


Lets try some numbers:

Current market value of properties >720 days: 3 billion max.
‘Lost’ lending margin of that amount 2% (if lucky) 60 million pa.
Cost of rehousing (to State) existing owners(30K*10K) 300 Million pa., [As these people cannot / will not pay mortgages, one assumes that they have no income?]

Legal fees for evictins: 30,000 * 10000 = 300 million.

Expected Loss on vandalised vacant properties, assuming 25% will be damaged to extent of 50,000 each:
= 30,000 * 25% * 50000= 375 Million.

Social cost of dislocating 30,000 families. Unquantifiable.

I am sure some people will come up with figures to prove that a full scale eviction program is an out and out winner.
But a winner for whom?
Lets see the figures.

@ JG

“He paid an awful lot of taxes employed a lot of people and is getting hounded over a few bob…”

He stretched for the stars and
he knows how it feels
to reach too high
too far
too soon


And he has a few issues around dopamine
While the pixies have to clear it all up

@Ernie Ball

“..At what point did the market begin to “misprice” houses? Are you also calling on those who sold between that point and the crash to give back some of their ill-gotten gains?.”

If you read any of the long run asset valuation series (based on about 110 years of data in our case) which is produced by Credit Suisse and the London Business School on a country by country basis for the past number of years it will indicate that ‘risk’ assets i.e. all except long run Govt bonds exhibit a premium over Govt bonds (or proxy equivalents) by an average of c2.5% to 4% over the long term.

The 10 year RoI Govt bond returns over the past 110 years (and proxy equivalents) suggest nominal returns of about 3.5% to 4.5% and therefore risky asset should return about 6% to 8.5% nominal, over the longer term. Fully appreciate that trends come and go and newer paradigms are established etc but based on what we know these are the numbers.

In the period 2001 to 2008 residential property returns in the RoI broke the above rules and for the years 2005 to 2007 (early 2008) certain parts of country in terms of pricing went off the charts.

In D4 and D6 for instance in 2006 some residential deals went though at equivalent Gross rental yields (they measurement of property returns) at about 1% or very slightly over this level. On a net yield basis this would have returns yielding less than 1%. At the time ‘risk free’ returns in terms of the Irish Govt 10 year bond was yielding about 3.2%. In other words the market was telling you – take no risk at all and get 3.2% on your money (nominal) but take all the risk God ever imagined and get oh 1% i.e. get 68% less in returns for taking more risk than one could shake a stick at. Please tell me where the world suddenly changed from low risk low return to extreme risk but even lower returns ??

Based on the above I can claim with 100% certainty that the property market was mis pricing the risk inherent in the asset class and consequently the price it was charging for such assets.

The sad reality is that the IMF was making such noises back in 2002 when returns on RoI property assets began to move away from their long run trends which is a yield of c7.5% to c8% longer term, on average. Unfortunately we had to wait until 2008 to realise the extent of the error and countless billions later.

The other fact, and it is a fact, about the property market is that it is credit dependant i.e. it doesn’t really have life without access to credit. We know that since the early 1960s until late 2008 between 95% to 98% of all residential property transactions conducted in the RoI would not have happened without the aid of a 3rd party lender. Banks and lending institutions supply the oil that keeps this market alive, they allocate credit to it daily, they follow its trends and analyse its effects on people’s cash flow daily and as a consequence can and do determine its price.

Banks and lenders generally always have the option to say no to any property deal because if the price being asked doesn’t look right against long run value trends they can step away – what happens if enough banks see things in that light ? You guessed it – prices fall to a level at which long run trends are reestablished – precisely what is now happening and why I believe the last thing we have at the moment is a bubble in prices in Dublin.

Bubbles in property markets happen for two reasons – credit is widely avaiable and allocated stupidly and rents stabilise or fall against a rising price environment. Neither of these are currently part of the mix. Credit is extremely scarce and rents are rising – in Dublin.

People giving money back after a deal is done at the wrong price is as likely as Leitrim winning the All Ireland. It ain’t going to happen. The point being is that a huge chunk of the cash transfer to the seller at the time was newly created bank credit that was issued and thrown at a property deal where the long run metrics referred to above were most likely breached. The blame for that error resides with the lending bank etc etc.

Call it as you like this is bank credit created pricing error that can only be fixed in writing off the stupid initial allocation – most commentary outside of that fact with regards to this problem is largely irrelevant.

@Brian Woods,Snr that type of opinion contributed to the mess,the really good ones know how to navigate the inevitable capital market cycles.They sell at or close to the top off the market to people with “can do” attitudes.Good that it still prevails,which is why the BTL shower need to learn about leverage.

@Seafoid,none of the major irish RE developers asked or requested to have their loan socialized by an inept govt.
Read you own link above would ya…

@YoB it’s a HOME I thought not an investment,which is it….PPR are non income producing.

@Joseph Ryan,there have been papers/studies linked on here before illustrating that unfortunately non payment,if gone unchecked with no consequences can be contagious.

@ JG

I was in India for the fag end of the Great Moderation. Most of the high flyers of those years ended up the same way. Vijay Mallya, Anil Ambani etc- debt was the magic and when it dried up they came back down to earth. Genius is leverage in a rising market. What’s the name of that Brazilian X dude who has just declared the largest bankruptcy in South American history?
Dunne had the same thing. He reminds me of something out of a Greek tragedy .

Leverage is fine behind closed doors between consenting adults but it’s not right to shaft the whole country when the dream dies. Sure the mop up was cack handed


This seems to be the default. But It’s all about managing exposure and bringing the money “home” and he couldn’t do it. Same goes for Sean Quinn BTW.

@Seafoid,from you own link-the banks working with their customers,this is how it should and does work in most modern societies,instead inept civil servants politicians and bankers decided to intervene.
Why is NAMA hoarding sites restricting supply,they were supposed to be a commercial enterprise the second coming,that was the argument used to justify their existence.

If they were truly a commercial enterprise they would be shut down.

“An insider said the so-called “exiting banks” are most likely to cut deals to let borrowers off a share of what they own. Exiting banks are lenders that have decided to pull the plug on future lending in Ireland and are now mainly focused on managing their exit from the country. ”

There was a lack of capital market expertise a lot of them were self made straight off the sites,giving PG’s and drunk on the cool aid too.
Dublin will be a lot duller boring and uninspiring without them,sure it got a bit excessive towards the end but some nice buildings were built.
What are the yank carpetbaggers going to do with their profits,still staffing up in London….

@ JG

“Sure it got a bit excessive towards the end but some nice buildings were built”.


Tearing the arse out of it has a proud history in Ireland.

I’ll always associate SD with this neo 18th century picture


I think most of the people involved in the blow up were out of their depth. That goes for the regulators, the CS, the pols and of course the developers. Most of the decisions made were poor. When TSHTF Ireland ran out of options. There were no decent choices.

How to manage the energy the Dunnes etc have is the issue. They can do great stuff but you need proper systems in place and Ireland doesn’t have those systems.

There is a line in the Gaelic Song “Coilin Phadraic Sheamuis”

“Agus imigh leat thar sáile anon,
Mar a bhfaighidh tú luach do shaothair. ”

Go abroad
where you’ll get the value of your labour

And that what Dunne has to do at least until Ireland comes back to equilibrium


“..@YoB it’s a HOME I thought not an investment,which is it….PPR are non income producing…” Jesus wept.

How in Gods Holy Green earth can the value of any asset be priced without taking into account its earning capability and in the case of house/home/dwelling call it as you like, that is its rent earning capacity. Otherwise you’re down the road of location, location , location balony.

In the case of property its rent stupid – and rent only. Nothing else really matters. Find a similar house in the area that is being rented or five or six to be safe with similar characteristics and there’s your proxy to start the valuation process of your own house.

Had this basic rule and the metrics above been used as intended by our beloved banks we would all be in a very different economic place today. Sadly we know to our severe cost that they didn’t.

And yes you are correct a PPR is not an ‘earning asset’ that is why it is incorrect to call the current LPT a ‘property tax’ its nothing of the sort – its an income tax under a different name because the last time I checked my house didn’t have an ATM attached to the side of it.

@YorB your moniker indicates that you appear to understand yields and the valuation process…..which incidentally is an art form not a science as it involves crystal ball gazing.

So you are suggesting that the prevailing rental level should be multiplied by the inversion off your ‘yield’ to achieve the market or fair value price.

are all ‘yields’ uniform ?

is positive leverage a factor in the yield-in other words if buyer A can borrower at less of a spread than borrower b,or is cost of capital to buyers irrelevant?

is your yield unaffected by the amount of leverage available,assuming its positive to different buyers?

does your yield capture say planned major changes/improvements-a new Luas stop.

is the vacancy factor,shadow inventory,planed new construction included?

the ‘number’ you keep harping on about is rather simplistic and more suitable for a box of crayons and the back off a matchbox at than an investment decision.

the most important number is your ability to afford the home,not what you could maybe possibly rent it out for if you vacated and eh moved to eh where ?

people need to stop thinking about their home as an investment with some imaginary made up ‘yield’-who uses your valuation method in what field is it common?

@ John
Dunne is hardly slumming it in Greenwich….What about the missing 50m or so? His wife just spent a few hundred K on their (large) basement…gym, swimming pool, etc. Seems that she has no shortage of funds…..
The inability of NAMA to get to the bottom of property, etc transfers to developers’ wives is another discussion altogether.

@Paul W,no charges pending nor will there ever be just irish BS.Part of a smear campaign to deflect attention,all whispers,rumors,finger pointing,nothing but fishing expeditions by NAMA.Sniffing around the WAGs knicker drawers looking for baubles,would they ever get on with it,build something.
Add some value somewhere please.

Paul W its quite a litigious business,attracts ambulance chasers,cranks and crackpots.Creditors can get a bit childish,partners too its quite normal to put a few bob into trusts when the market is good,take a few chips off the table for a rainy day.Once you have a ‘deep pocket’ you become fair game.

Anyone with a pulse and a track record, naturally and as part of tax/estate planning has some f**k you money and why not….bankers panic easily.


No doubt the yield model can be as simplistic or as convoluted as one desires and my excel spreadsheet could have any amount of elements adding or subtracting from the numbers – that really is not the point.

The point is that when all the actual deals are looked at over a long period there are some long term trends that do emerge – precisley why a lending bank in 25 to 30 year deal should ONLY ever consider the long term trends.

Whilst I have no doubt some parts of the country may from time to time exhibit some demand surge for one reason or another the fact remains that over the longer term these things tend to even out and long run trends emerge no matter where one lives.

What happened in the period 2001 to late 2008 was that the long run trends were simply ignored in every part of the country. Not a corner of the country was treated any way differently – all property boats were rising at the same time and all were heading in the same direction at pretty much the same rate when one looked at the market as a whole. No asset market in the history of mankind has ever exhibited such characteristics but the RoI property market we were told was different. Horse shit I say.

That is why my ‘crayon’ like simpictity may read overly simplistic to you but my friend one has to walk before one runs – sadly our banks were sprinting long before they were out of nappies and their mal investment punts now look similarly juvenile. Whilst you may believe that a simple yield model would not have prevented happen was did in fact happen, I disagree. I worked in these institutions during this time and believe you me rental yields were rarely if ever considered or discussed – the repayment capacity of the borrower was the only show in town, all else was secondary.

The problem with that argument is that the bet by the bank is on the individual and not the asset, this is daft place to be as a secured lender as the sole basis of the security is a sound valuation technique we now know sound valaution techniques were not high on the banking agenda.

Sometimes simplicity is in fact genius.

@ jg: “the ‘number’ you keep harping on about is rather simplistic and more suitable for a box of crayons and the back off a matchbox at than an investment decision.”

Its simplistic precisely because it is so easy to comprehend and calculate – provided you know what the ‘going rentals’ are in your neighbourhood. Absent this data, you call up a local agent (as I did) and ask, “What would be an appropriate monthly rental for this property – as it is presented?” You’ll get your answer in less than 30 seconds. Alternatively, for a small fee they will actually visit, and provide you with a written estimate of rental.

There is absolutely no need for crayons nor matchboxes. Though I would recommend a basic calculator if you feel a tad challenged in the math department.

I have no intention of renting my home, nor do I consider it an investment – except in a quite general sort of way. However I have to provide the Revenue Commissioners with a self-assessment for the so-called Property tax which is, as YoB has clearly explained, a bog-standard tax on my income.

My relatives, friends and neighbours were ‘shocked’ when I explained what I was doing. They had (stupidly) valued their homes at yields approximating 3%. Whilst I used 7%. I’m interested to see whether the Revenue will ‘chase’ me on this. If they do, they had better have a watertight explanation.

It would be more enjoyable if there were more contributors who were as vociferous in their condemnation of the bank executives (as they are of stressed borrowers) who were in charge from 1995 until 2008. And were equally demanding of a full public accounting as to how those crass lending decisions were made and monitored. Would that be too much to ask? Seems so.

@YorB we utilize an even more simple system,in fact chalk and a bit slate works,its called the price per square foot.
The point i was making is that your cash on cash number is simply a tool no more no less useful than any other future prediction.
A good explanation here:)


I agree with the idea of rental yields guiding mortgage approvals. It is simple as you say. It is also exactly why the blame has to be shared with the purchaser. These are private transactions entered into freely. Ignorance is no more a defence here than it is in any other legal contract. It’s not that people had the wool pulled over their eyes – they helped pull it down themselves.

The State has come to the rescue of one group of consumers and decided everyone else can go to hell. If you trained in a construction trade over the period 2005-2008 you seriously mispriced the value of that training in Ireland. Should the State compensate you for all the earnings you missed out on over the last 5 years? Why not? The current policy is you are shown the route to the airport and if you ever get to fly back for a brief visit to see your FAMILY you’ll be met by a social welfare inspector who suspects you are fiddling the dole.

Good post upthread on the future cost of credit to innocent punters. The boom saw many properties sold to those who could not afford them. 40 year mortgages because 25 year mortgages were deemed too expensive. As if an extra 15 years is cheaper. If there is no control over lending risk and there are no repos then credit will have to be more expensive.

@ jg: John, its a damn mathematical model. And we know how those do not work so well – yes? You write up a nice techie spiel, put some mathy stuff in it – for gravitas, and all and sundry are going, “Ooh, aah Paul McGrath.” Won’t wash! Real, factual data is what is needed, not statistical estimates. Might do for a Masters.

Most folk are mesmerized and flummoxed by numbers – esp statistics. They behave irrationally. In effect, they’re seduced. Works a treat!

I’ll stick with my Mark I yield factor – until it is shown to be either faulty or inappropriate. Is that possible? Possibly.

@ JF: “These are private transactions entered into freely. Ignorance is no more a defense here than it is in any other legal contract.”

True. But there is such a thing as asymmetric information. And house purchasers are rarely either well informed or rational consumers. Most only purchase once, twice or thrice in their lives. A lender makes, perhaps, 50 or more each week (in the good times). And the lenders are supposed to be the ‘experts’. Some experts! They wrecked perfectly good businesses – in short order.

The original lending model predicted a default rate of 1% – or less. Hence any ‘evictions’ were few, and justified. But with the default rate over 20% – and rising. That’s real political trouble in anyone’s books.

@ jg: John, this mess is going to end badly, like very badly. But when, how and for whom I have not clue. Maybe the Hunger Games will provide the clue! Night!

Ah @jg, although a shovel was never put to Ballsbridge by Sean Dunne, at least its stores in 2009 preserved a modicum of decency when Gayle
*hit back at claims that she had compared her new venture to discount stores Aldi and Lidl and argued that she had never attempted to portray the shop as “a discount store*
No wonder he’s not crying into the flimmin’ proverbial cornflakes…
Back in Dublin these days…things are moving 🙂

@Brian Woods Snr,the last link is called The Eurozone Profiteers A CorpWatch Report,its pretty good report quick read.

Regarding your choice of yield,starting point should be 10 year ‘gilts’ add say 200 basis points for liquidity/costs of transaction,adjust downwards for the garden:)
Yield comps here,ya gonna need them.

The comparison approach or $/sq.ft is what rev. will utilize,back in the day i worked for them in London as an expert witness in capital gains tax disputes/cpo’s-we normally won!

We had the best comp.’s always,i will take a look at the irish rev. valuation guidelines but pretty sure your approach will not qualify based on a quick read.

@Dorothy Jones-hi DJ whats the story with the new building regs-April next year ?
Is BREGS forum still going,what’s the word amongst the Starchitect’s like yourself:)

Once again a thread disappears into irrelevance while logic and sense is ignored – just as my question about protecting renters is ignored. Renters are a great “canary in the coalmine” in the family home debate. Attitudes are quickly seen and understood.

If the mortgaged houses are worth something then the banks can either recover money against the mortgage from their current inhabitants (note, not their owners) or can repossess the house and rent the house or can repossess it and sell it. (there are other options, but let’s keep it simple)

If the mortgage holder/inhabitant can’t even vaguely offer as much money as the other two options then the bank has a duty to act. It’s probably often even in the inhabitants best long term interests to get this over and done with too. How many families have been living in misery and storing up huge trouble for their future physical and financial health by sitting in a crappy situation for several years? Lots, I fear.

The current approach taken by many seems to be that the “family home” needs to be protected so that the house’s current inhabitants have essentially no obligation to compete with the other two (or any) options…despite the fact that this prejudices this interests of the broader taxpayer and the other families that are disadvantaged by the locking up of supply and the likely contamination of the whole mortgage market.

If there are cases where the inhabitants can almost match the other possibilities I suspect that the banks will end up leaving them where they are. Repossessions are a hassle for everyone. But tens of thousands of houses more than 720 days in arrears? And essentially no repossessions?

Who’d issue a mortgage on a house in that legal context? Where recovery is near impossible?

And who ends up retroactively and unwillingly indemnifying house buyers who made “bad price decisions”? The wrong people. If you could prove (and you couldn’t) that there was no widespread understanding that we were in a bubble then the current approach still penalises the wrong people.

And don’t start me on the implications of much of the dialog for labor mobility. Once people buy a house they can never move, apparently. Ever. Heaven help our flexible labour force.

@Hugh Sheehy,would that be say like after 100 posts ?
Perhaps you would care to expand on this then I’m intrigued….who does all this work a bank employee ?
What does “recover money” exactly entail…..
Why not use an example,say one BTL and a OO one for illustrative purposes,I promise to engage with logic and sense can you ?

“If the mortgaged houses are worth something then the banks can either recover money against the mortgage from their current inhabitants (note, not their owners) or can repossess the house and rent the house or can repossess it and sell it. (there are other options, but let’s keep it simple)

If the mortgage holder/inhabitant can’t even vaguely offer as much money as the other two options then the bank has a duty to act. It’s probably often even in the inhabitants best long term interests to get this over and done with too. How many families have been living in misery and storing up huge trouble for their future physical and financial health by sitting in a crappy situation for several years? Lots, I fear.”

@ Hugh Sheedy

“Repossessions are a hassle for everyone”. LOL has to be the understatement of the year! Darling I hate to have to inconvenience you but we have a hassle coming up! aka “eviction” It’s the way you tell them Hugh!

@ All

Just to remind everyone of the farcical approach to having our voice heard in Europe and why we are discussing evictions.

After being hailed as an exciting new FG candidate and “banking expert” this is what happened.

“I paid for myself to go as part of a parliamentary delegation to the finance committee in the Bundestag in Germany. I was embarrassed there by the deferential timidity of my colleagues here who were afraid to tell the truth. It was unbelievable. The Chairperson of the Bundestag finance committee was startled when I explained that if the German people were asked to bear the equivalent of €75 billion on the German scale, which would be €1.2 trillion, they would not believe it. The Chairman of the Oireachtas Joint Committee on Finance, Public Expenditure and Reform, asked me to tone down my comments and not to tell them because we are the good boys. It is pathetic.”

Sorry, that should have been Hugh Sheehy. Not that it matters maybe it is better I use the wrong name.

@ John Gallaher

To think that this lot are supposed to be representing the best interests of the Irish people is perverse in the extreme. They are an embarrassment. The fees they are earning must be astronomical.

“While living in Ireland, Killilea had no real estate development experience,” the State-owned loans agency says in the filing. “Rather, she was a columnist for an Irish newspaper.” Strange the way she has morphed into quite the developer since landing on American soil? She must have got some very good advice from the Editor of the Irish Times on how to go about cracking the American Real Estate market?

They barely stopped short of calling her a savant. Of course any of us who have ever lived with a spouse would never learn anything from them regarding their business endeavours, all of which according to NAMA take place in a perfect vacuum.

“Once again a thread disappears into irrelevance while logic and sense is ignored ”

Call Alice
I think she’ll know

@ HS: Hugh, could you please get a ‘grip’ on the actual problem. What you write is fine and dandy for a residential mortgage situation which existed two, maybe even three decades ago: defaults were few and far between and repossessions rare. Little sympathy was extended. How-and-ever.

During the last five decades our economies have undergone a massive metamorphosis – they have become financialized to the extent that debt is the principle and final product – produced when you sell credit (make a loan). Now this is fine and dandy – for a while. But since debt (usually) increases faster that folks’ incomes (which are used, in part, to pay back their debts) then eventually a real debt crisis must occur – its as inevitable as the ebb-and-flow of the tides. The bottom-line on this is that the emission of fiat credit must be subject to continuous controls and regulation. This is, and has been, strenuously opposed by financial interests. If they cannot emit copious amounts of fiat credit – their economic surpluses are small. Now that would not do, would it? So, observe what has actually occurred: the end result. Like what you see? Its dreadful.

So, we have now entered the world of income restrained persons. This is the matter that needs resolution. Repossessions do what? They sure as hell do not solve a situation of restrained incomes, do they? They may settle the residential ‘market’. But in a quite negative manner. Most commentators seem to want to avoid the hard thinking about the economic, political and social consequences of a significant level of repossessions of private residential property. Monorail thing comes to mind. The lending frenzy which has brought us to this bad place was predicated on what level risk (ie: % defaults)? None? Some? What? Debt may be regarded as a legal obligation to repay, but what about the obligation of emitters of fiat credit? They conjure up credit like the Immaculate Conception – then demand that they ‘own’ something, which had no prior physical existence. Nice one boyze!

But ordinary folks’ incomes are semi-real. And no-one of substance seems interested in attempting to explain how folks’ incomes are generated and how they need to be sustained on an upward geometric trend – just like debt. [Its not possible, by the way]

I’d like some answers about the lending practices (into the Irish residential property market) from those Irish-based banking execs who caused this financial, political and social disaster. None are forthcoming, so far anyways. Now I wonder why?

There is one, and only one very unpleasant solution: individual, corporate and state defaults on all property debts. Its called a Reboot. Yes, there will be winners, and there will be losers, but everyone will be better off! At least that what my International Trade lecturer always told us about Free Trade. Do you believe this? Well neither do I Hugh!


I have never suggested a complete write off or write down on crazy mortgage debt – my suggestion has always been that debt write offs should have some sort of model or basis to work to which would bring the property assets and debts back to a sustainable level. The sustainable level is best derived by utilising the use of a long run rental yields as a model valaution method and applying the write off to the associated outstanding debt.

It may be the case that in choosing the wrong educational option people may have lost out – but the property and lending markets are highly regulated (the last time I checked there were no regulatory checks surrounding your CAO options) and when a consumer engages with the proeprty market the minimum he/she expects (given that on average they do so once or twice in their lifetime) is relative competence by the so called experts on the other side. So stop comparing apples with oranges. The error here rests with the banks and no amount of fairness to all guff will change that annoying fact. The banks screwed up.

It is worth remembering that in almost all cases the property purchasing fraternity are novices and the least they can expect is the professionals sitting on the other side of the table know what they are talking about – we know the so called professionals hadn’t a clue, or at least the overwhelming majority of them were not wired to the underlying risks in the market and as a result it became the true definition of the blind leading the blind.

Suggesting that those in rental accomodation are bearing the brunt of this error is forgetting the fact that the distrssed mortgage holders have all lost mega amounts of hard earned and saved deposits to purchase in the first instance. In a market where it is proven beyond any reasonable or even a shadow of doubt that consumers well ill served by the so called Regulated professional involved – it seems bizzare, to say the least, that inflicting more pain on the same consumers is the way forward.

“It is worth remembering that in almost all cases the property purchasing fraternity are novices and the least they can expect is the professionals sitting on the other side of the table know what they are talking about – we know the so called professionals hadn’t a clue, or at least the overwhelming majority of them were not wired to the underlying risks in the market and as a result it became the true definition of the blind leading the blind.”

Most professionals are no different. They know things from their own experience and very few see the bigger picture. It hasn’t happened for 30 years so it can’t happen.

@ seafóid

“Once again a thread (on mortage arrears) disappears into irrelevance while logic and sense is ignored”

That about sums up the governments approach after 5 years does it not? We now have the ritual washing of hands and repetition of mantras, in the Dail, as a substitute for leadership and courage on this issue.

There is nobody running away from the mortgage crisis faster than this government.

Just speaking to someone in ‘Oirish banking’ who tells me they are expecting a reasonable size wave of people giving up the ghost and going into arrears after Christmas….. those that have tried to keep going until the end of the year – in the hope that something turns up – but now the savings have been sucked up paying the mortgage and TINA (but of course, the banks will paint them all as ‘strategic defaulters’) etc.

Stream of consciousness –
‘Our banks, and we now ‘own them’ – load in ‘shadow banking money’ onto their balance sheets – not real stuff at all, imaginary ‘weapons of financial mass destruction'(Warren Buffet) – from the very top echelons,they issue instructions to the ‘customer relationship’ people to shovel it out the door – big bonuses for all, not least for those at the top – gob shite borrowers easily persuaded to overpay for homes/properties here/Spain/Bulgaria etc – ‘shadow money’ disappears with U.S. ninja collapse and fraudulent Wall St. bankers exposure – private losses of Irish banks socialised to citizens – our ‘saved ‘ banks and their elite hangers-on rescued – they then begin the processes of screwing those same citizens, whose imposed indebtedness has rescued their sorry asses, for ‘real money’/cash money not ‘shadow banking money’ -no write downs, they’re reserved for the elites, no ending to debt despite the ‘revamped’ bankruptcy processes, you and yours are followed to the grave and add to all of this frontline services being dismantled, senior execs in the public and private sectors being protected by inflated salaries and ‘top-ups’, pols issuing platitudinous nonsenses, media refusing to report even minor anti-govt protests…..
‘Best little Country to do business in’ indeed!

@Robert Browne.
Yes, repossessions are a hassle. I simply choose a less emotive word than you might have to describe evictions. Of course there are also evictions of renters (who were paying their rent) where their ability to continue living anywhere near their former “family home” has been reduced due to the current artificial lack of supply. Again we see sympathy, and a gigantic market rigging exercise, for the goose but none for the gander.

As for your other points on debt being magicked into existence, it’s a different discussion.

@Yields.. With your nice scheme to reset house prices to sensible levels based on rental equivalents, do you plan to include an element that lets people who didn’t buy during the boom a chance to buy at what they were saying was a sensible price? I might be in favor of a world where everyone got access to housing at sensible prices, but what I see you proposing is a scheme for some people and not for anyone else.

Of course let’s not even talk about the socialization of all this unrecoverable mortgage debt your scheme would create. There are alternative uses of all that money (schools, hospitals, etc) but it seems that in your scheme the priority should be to indemnify people against the consequences of their own bad investment decision. It’s a classic “special interest” scheme.


My scheme would then have the very simple consequence – pay the reset amount or else vacate – no questions asked. Those currently renting would in theory be able to buy and pay mortgages at rates very close to current rental prices where houses are vacated as a result of non payment of reset amounts.

I don’t see where the inequality of the scheme arises aside from the fact that those in situ would have the right of first refusal, which one could argue they have earned by way of their initial deposit.

You’re suggesting again that ‘bad investment decisions’ lie at the heart of my proposal – once again I would posit that the residential property market is a credit driven one and largely rigged where pricing is effectively controlled by the lenders. Your so called ‘bad investment decision’ has to be seen in that context – if the price didn’t tick the sensible box on the day the deal was done what was a regulated lender, who is expert in their field (supposedly) actually doing ?

So this is not the same as a cash purchase of vegetables on the market square – there are checks and balances in this market to prevent consumers from making bad investment decisions but such checks failed utterly.

If you were to follow your thought process to its logical conclusion then the obvious question would have to be asked about the investment decisions regarding those who financed the Irish banks in the first case i.e. the infamous bondholders. It would seem logical that they should have had to face eviction i.e. the risk of non payment for their mal investment choice – we know however that this did not happen and their bill has landed on all our kitchen tables. Hardly sensible to now suggest that the capitalism bus should restart on Wednesday when it travelled via the Socialism village on Tuesday and pretend that Tuesday was a mirage.

The prime reason the bondholders faced non payment was because the market believed the ‘assets’ on the bank balance sheets were dross. Does it not now seem really stupid to cement these mis priced loans on the heads of property consumers when the capital markets have already given their opinion on them?

So forgive me if I’m a little less than enthusiastic for your plan to solve the current impasse through mass evictions whilst bemoaning the fact that the rules of capitalism are currently being bypassed. When viewed against the outcomes afforded our hedge fund friends in Singapore, Boston and elsewhere the current process of extend and pretend seems oddly enough reasonable. We know however that this is going to change as the banks try to shift to a higher eviction gear and this is where the real inequality will become visible i.e. one rule for the bondholders and another for the ‘let the buyer beware’ property consumer.

@ Yields
Since 30000 mortgages are in 720 days or more of arrears then your plan implies “mass evictions too”, no?

You either keep people in houses they’re not paying for and make someone else pay, or you don’t. If you don’t, they must leave. If you do, someone else doesn’t get to live there, despite the fact that they’re paying part of the cost of the first lot staying there. And if you tear up the idea that non-payment on a mortgage implies that “you may lose your home” then you damage the ability of others to get mortgages.

Then, your idea that deposits paid gives people right of first refusal ignores the fact that if some people hadn’t overpaid for property then the ones who didn’t or couldn’t buy at those high prices would be half way through a sensible mortgage by now. I could as easily claim that it’s all the fault of the irresponsible buyers and they should be preferentially made to leave since the renters had to rent all these years. There’s no nice solution to this problem. Don’t blame me for that. I’m just consistently pointing out that the commonly assumed meme of the “family home” is a plain old ruse. A self-interested piece of spin.

As for the idea that the bondholders shouldn’t have gotten their money back, I agree. Depositors above 100k, even. But that ship has already sailed, at least mostly. That injustice has been completed. Adding another injustice on top if that does not make the situation better.

And additionally, I reject the idea that there was no visibility or culpability on house buyers in the boom. There was lots of greed too. There was some fear as well, but no-one can reasonably claim that the bubbleness of the market was not well signalled. http://www.finfacts.ie/irishfinancenews/article_1015142.shtml is just one example. There are and were many many others.

Ultimately most of the motivation behind avoiding repossessions seems to be pure self interest lobbying. “Let me stay in this house I like but am not paying for”. I’d go for that deal if it was available. It shouldn’t be available.


“..And additionally, I reject the idea that there was no visibility or culpability on house buyers in the boom. There was lots of greed too. There was some fear as well, but no-one can reasonably claim that the bubbleness of the market was not well signalled. http://www.finfacts.ie/irishfinancenews/article_1015142.shtml is just one example. There are and were many many others..”

You’re misunderstanding me. I’m not suggesting there was no error at all on the side of the consumers but relative to the lender it is little league. My model valuation write down assumes the buyers are still left with a liability – and in many case large ones – but crucially based on reality.

As indicated many times the driver of this disaster is pricing – all roads eventually lead to pricing and nothing other than pricing. Pricing was lender driven not consumer led and consequently the overwhelming error resides at the door of the lenders, not the consumers. You obviously see this differently. I’ll agree to disagree with you – safe however in the knowledge that even the good people in Iceland are acknowledging that the pricing and debt error cannot be solved without utilising some sort of debt write off scheme. I’m in violent agreement.

The notion that we can somehow forget or ‘park’ a €70bn hand out – and return to normality as if it never occured – Bobby Ewing style, is quite frankly delusional – I think you know in your heart of hearts that this additional debt burden is having a massive impact on virtually every aspect of daily economic life and therefore suggesting a return to hard nosed capitalism in the case of distressed mortgage holders being a realistic route to solve this mess without some sort of mechanism to stare reality in the face seems to me as clueless as the original lending decisions.


The culpability of the lenders – or at least their shareholders – has been paid for. The shareholders were wiped out utterly. A certain Sean Quinn is a notable example. Gay Byrne another. (http://www.independent.ie/irish-news/byrne-reveals-his-pension-is-gone-26550526.html) The fact that the senior managers have been able to wander off with much of their wealth (and their bank funded pensions) intact is amazing and I’ve commented on that before.

And again, the downfall of the banks was unnecessarily projected onto everyone else. Resolution in a much better way would have been possible if the govt had reacted to the scenario warnings (albeit late) from the Dept of Finance in (IIRC) Jan 2008 or from the rest of the world a lot earlier.

As for the debt write off schemes, obviously there will have to be one. And we could agree that part or even much of the write off should be funded by people other than the Irish taxpayer. I have many suggestions for that. And you’re right, many borrowers are in houses that they will never be able to pay for and to pursue them to the ends of the earth for money they will never have is pointless and damaging. Even the current insolvency schemes are – from what I know of them – too complex and difficult. I don’t want to get into a debate on insolvency here. However, my general agreement here does not mean that people should have the right to continue to inhabit the houses they are not able to pay for just because they’re the ones in them today.

That’s the classic defence of insider privilege that corrupts societies. The trade union defence of benchmarked salaries is the same. The anti-tax position of farmers in Ireland is the same. The “family farm” meme is as corrupt as the “family home” meme. The state should not take sides against people who do not have in order to give favours to people who do have. If the state does decide to do that then it declares itself to be a corrupt institution and it has abrogated any moral rights whatsoever. We may, in fact, be past that point, but I’m hoping it’s not yet irrecoverable.

@ Hugh Sheehy

“Ultimately most of the motivation behind avoiding repossessions seems to be pure self interest lobbying”

There is a special word for that. Politics.

Property bubbles don’t grow out of thin air. They have a solid basis in reality,but reality as distorted by a misconception.

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