That’s an excellent article by Kelly, even if it is as depressing as hell.
And to think, it wasn’t that long ago the government thought their biggest economic problem was the naysayers damaging consumer confidence :lol:
spot on. copy that and send it to B. Cowen, Kildare St, Dublin 2.
In reality, our fate was sealed with the guarantee. that’s on a macro level.
on a more personal level, defaulting on your mortgage is a slow process, most of the mortgages in arrears are being restructured to interest only or reduced payments. the ones you hear about in court are all sub prime, having taken loans from vultures like Start and GE, who aren’t covered by the moratorium. The BoI, AIB customers will be front-loaded due to the number of people who are building up arrears during the moratorium. These guys may suddenly have the life support switched off, triggering the banking / sovereign collapse Kelly is talking about.
the guys who default will in all likelihood be dealt with using an updated bankruptcy process, something less medieval than the one seanie fitz went through. i’d imagine that’ll be one of the top priorities for the next government. FF can’t discuss it since it’s politically toxic. 200,000 is a sizeable minority, but with elections imminent they can’t afford to piss off the outstanding majority who want to see somebody (anybody) pay for this.
According to Central Bank statistics - the total number of outstanding residential mortgages in Ireland at the end of September 2009 was 791,634.
The total amount outstanding was €78.6 Billion Euro.
That equates to just under €100,000 per mortgage account.
I dont see how he reckons 200,000 people will default on their mortgage when the average amount is a €100,000.
Also since these figures are for Sept 2009 and since no one is taking out a mortgage at the moment but those who can are aggressively paying them back its fair to see that this figure is actually lower than €100,000 at the moment.
Funny how lads on here are so keen to go with the most negative outlook. Whatever is predicted people love to go a step further. ‘85bn? will be closer to 100bn I’d say’. Now maybe these posters are expert economists who have studied the figures in detail but I’d doubt it.
Obviously yer man Morgan Kelly seems to have a good track record and is someone to be listened to but the likes of us have no business making projections on thing like what bank bailouts will cost surely?
Has anyone seen a good article on what the realistic best case scenario on the current crisis or a good way out of it?
narrow that down to mortgages approved in the last 10 years and see what the figure is.
i doubt there are many 20 year old mortgages in arrears, since the monthly repayments are much less than a tiger mortgage
given the explosion in credit, and the larger monthly repayments, and the tendency to get a mortgage close to (or indeed more than) what you could afford, i’d say the average arrears figure is far higher than 100k.
Possibly but theres a big difference between arrears and default TE. I’d also be optimistic or stupid enough to believe we’re nearly at the end of it unemployment wise so hopefully the amount in arrears wont increase.
Another thing to consider is we aren’t on the hook for IL&P who have about 19% of the market.
Nor do we have to worry about KBC (10%), or NIB (5%). EBS who have about 10% as well will be taken over by Americans or IL&P by the end of the month.
So we’re on the hook for maybe 60% of the shit. Which of course is still a massive figure but something he hasn’t alluded to in the article.
One more thing is the Irish mentality that bankruptcy is only when all other options are exhausted.
I know if I was thick enough to buy a 600k apartment now worth 200k the bank wouldn’t be long getting the keys in the post.
[quote=“Julio Geordio, post: 518419”]
One more thing is the Irish mentality that bankruptcy is only when all other options are exhausted.
I know if I was thick enough to buy a 600k apartment now worth 200k the bank wouldn’t be long getting the keys in the post.[/quote]
That’s a fairly glib way of looking at it in fairness, what about people with families, they have to have a roof over their heads…
What a state of affairs. How many effective bad debt agencies do we have now - NAMA, Anglo, INBS will hardly trade again, AIB it seems too are up shit creek. Will BOI survive or need more government funds?
What is done is done now unfortunately so I think the following should happen. NAMA to takeover over Anglo and INBS. BOI and AIB merged and NAMA to take another hit of their bad debt. The government to take an equity stake in new merged bank and try to get one bank on a sound footing at least.
Also, the immediate liquidation of a host of these ghost estates, commercial property etc. Take what we are given. The property market in Ireland is still artificially higher than it should be at present.
Sure you’d rent a much nicer place for a lot cheaper than your mortgage. The banks wouldn’t even pursue you I’d say.
If the banks didn’t pursue you I’d say the job would be oxo alright…
Social housing. I’d agree if someone really can’t meet the repayments fuck it emigrate and give the bank the keys. They did it in the UK back in the 1980s . Good few simply took anything that wasn’t tied down in the house, threw the keys in the letterbox and fucked off.
That’s all fine KIB man but if you give the bank the keys you still owe the money, you would want to be prepared to live a hand to mouth lifestyle in another country, the banks will look for their pound of flesh, if your advocating a hand back the keys scenario the bankruptcy laws have to be updated and even if they do update them peoples credit rating will be fucked.
In all fairness KIB man I don’t have a better solution but I not in favour of people just being able to throw the keys back to bank to avoid your responsibilities.
There is fuck all social housing available in the country, also a large proportion of people who worked in the construction industry would be deemed to have been self employed and therefore would not qualify for social welfare.
All the good doorways are taken up for accomodation, people with kids etc., can’t really just throw the keys in the letterbox and fuck off…
One thing they need to do straight away is to stop this nonsense of having banks falsely competing with eachother for solvency that just doesn’t exist in the real world.
Anglo, AIB and BOI have all had huge cash injections from the State to buy off their loans. The non NAMA bank IL&P didn’t get a cash injection but got some stern advice from the government that they needed to improve their deposit to loan ratio. So all the banks are offering big money on deposits to try and get more cash in the door to keep up their solvency but the fact is that there’s only so much deposit cash in circulation in this country. Compelling those banks to compete with eachother and all the associated advertising and administrative costs is just nonsense. The interest rates should be flat and determined by the government and remove this false idea of competition. In reality the country doesn’t improve its financial standing a single cent from all this competition. What leaves AIB just goes to BOI etc. We’re just pretending the banks are in real competition and can actually all improve their standing simultaneously.
Deposit cash is leaving the country on a massive scale in recent weeks because of the sovereign issues and I’m not sure the extent of this has been realised yet. The Irish banks are actually veering towards having another liquidity crisis.
The sentiment in Europe towards Ireland is so bad at the moment. The deposits are only flowing one way alright and I’ve seen more drastic examples of that in the last few weeks than at any time in the last 2 years.
Is money on deposit in the bank safe bandage ?? I find it hard to accept the state guarantee considering the state is all but insolvent
It didn’t seem to effect the ones that returned from the UK in the 80s anyway. If you can’t make the repayments what else can be done. Lads over here with huge debts back at home don’t seem to be living hand to mouth anyway
I’d have my doubts if there is a shortage of social housing in the country. I know Galway City council had a surplus of property recently. If the councils just lowered the rates they
paid private landlords it would be a start. It ain’t as if the landlords will get a better price on the private rental market at the moment.