Failure to repossess homes 'crazy'

Failure to repossess homes ‘crazy’ - Colm Keena → irishtimes.com/newspaper/fin … 13027.html

Ian Guider on Newstalk this morn described foreclosures as a “radical solution”. Not in the rest of the developed world, Ian.

Siege mentality setting in or editorial bias one wonders.

Comes across as editorial bias IMO… taking Newstalk this morning I’d nearly say the callers were prepared in advance or coached on what to say. They all pretty much said the same thing in terms of contacting the bank and making ‘an offer’. This ‘offer’ line seemed to feed the line of questioning which in turn dictated the discussion in general.
I’d be very surprised if there wasn’t an editorial decision on looking to frame this discussion in an over simplified way (with the last caller from Laois rather quickly being taken off air when it was clear he was going a little off message).
Not saying that they are framing the discussion to push the debt write off argument or some such… but much more likely that they have a very simplified scenario which they want to fit into a 30min time slot and be in a position to claim “we’ve looked at this issue in the past” over the coming months.

There would be lots of repossessions if the asset values covered the loans.

Per NWL, the stats show you are 24 times more likely to be repossessed in the UK than in Ireland.

namawinelake.wordpress.com/2012/ … ase-again/

Yep, that’s the nail on the head. Where is this magic asset appreciation going to come from?

Somebody somewhere is going to have to start cutting losses, or we’re going to end up with everybody owing to nama…and they don’t seem to be in the habit of disposing of assets

I hate to say it, for someone who didn’t buy into the bubble, but some sort of percentage write off seems inevitable

But how will it work?

  • Write offs for everyone of just those in “trouble”
  • get a write off and keep you SUV and 3 holidays a year, private schooling etc
  • will there be claw back if you get a write off and subsequently make a profit

Or put another way you have a 1,000 to 1 chance of being repossessed if you fall into arrears. (172,292 / 154)

Most disturbingly, I wouldn’t be surprised if people were dealt with commensurate to their station in life.

So, low wage earner in Lucan gets enough written off that they can keep the property and still afford a couple of pints a couple of times a month.

High earner in Sandymount gets enough written off that they can keep the property and still afford to keep the kids in Rock.

This is the kind of logic that pervades in this country. And I’m not making a class-warrior point here btw: as far as I am concerned the immorality in both instances is perfectly equal. My point is about brain-dead conventional wisdoms that grip official Ireland.

Not quite. Figures up to Q3 2012 from Central Bank
centralbank.ie/polstats/stat … istics.pdf

Total residential mortgage loan accounts outstanding - at end of Q3 2012 761,954 (Q2 2012 765,267)

Total mortgage arrears cases outstanding - at end of Q3 2012 which are:

  • In arrears up to 90 days 49,482 (Q2 2012 47,162)
  • In arrears 91 to 180 days 18,745 (Q2 2012 18,764)
  • In arrears over 180 days 67,401 (Q2 2012 62,271)

Total arrears cases over 90 days outstanding 86,146 (Q2 2012 81,035)
% of loan accounts in arrears for more than 90 days 11.3% (Q2 2012 10.6%)

Total arrears cases any day outstanding 135,628 (Q2 2012 128,197)
% of loan accounts in arrears for any day 17.8% (Q2 2012 16.8%)

Repossesions:
Residential properties in possession - at end of Q3 2012 944 (Q2 2012 944)

  • of which Residential properties repossessed on foot of an Order to date in 2012 156
    (Q1 65, Q2 44, Q3 47)

So for your figure it’s 135,628/156 = 1 in 869 chance

I was just being demonstrative and not intending to be too accurate, but appreciate the correction thanks.

Still they’re good odds, at the moment.

Yeah, I see the point you were making. Wanted to see the figures for myself anyway!

+1. The reason I believe this is that, outside of this forum, I’m yet to meet someone that really gives a toss. Folks don’t care that they are subsidising others living in larger accommodation, in more expensive locations. In fact, the issue doesn’t register at all.

Isn’t America different though? Can’t they just hand back the keys and walk away from their mortgages?

Only in some states AFAIK.

That depends on the state. Only a few states mandate non-recourse mortgages. But quite a few others allow recourse mortgages but make it a lengthy legal process for the bank so the bank is incentivised to permit a short-sale if the expected shortfall would not be enough to cover legal fees/time involved in pushing for a full recourse judgement.

Very true.
However there is a problem for the ‘Where’s my NAMA brigade?’
Arrears have occurred / are occurring for ‘strategic’ reasons. This is happening to such an extent that the banks don’t have the capital to perform debt forgiveness for the large cohort of borrowers in arrears.
In fact, the banks don’t have enough capital to manage the losses coming down the tracks and maintain prudent solvency levels.
We never hear of the Blackrock stress tests anymore, why? well its because the mortgage arrears and house price declines are overshooting their pessimistic case.

Our economy is in the toilet, the UK and European economies are not much better.
The banks don’t have the capital to do debt forgiveness on a large scale. The government needs to close the deficit. They won’t be able to input more capital to the banks or get more forebearance on the banks from our EU overlords.

If the ‘Where’s my Nama crew?’ were only a small cohort of borrowers maybe there could be debt forgiveness.
Arrears are at systemic levels (notwithstanding ‘the rate of increase in arrears is decreasing’).
The debt forgiveness ship has proved so popular, that their won’t be enough life jackets to go around.

So yes, the subsidising will continue, but there is an Iceberg ahead.

That report is here btw
centralbank.ie/regulation/in … ramme.aspx

Nope it doesn’t, there are plenty of mortgage free people calling for mass debt write downs as “it’s only fair like” neglecting to think that it’s them who’ll be paying for someone to live for free in a location they could only dream of