PTSB 'not in a position' to cut mortgage rates

Brendan Burgess

Brendan Burgess

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[broken link removed]

Mr Masding said that PTSB is impacted by the high level of mortgage defaults in Ireland.

"It is an unfortunate fact that people who do pay their mortgage do have to pay a bit extra to make up for the historically high number of people who can't or won't," he said.
 
Brendan Burgess said:
[broken link removed]

Mr Masding said that PTSB is impacted by the high level of mortgage defaults in Ireland.

"It is an unfortunate fact that people who do pay their mortgage do have to pay a bit extra to make up for the historically high number of people who can't or won't," he said.
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He should give it a break.

All the banks are/were in the same position.

Maybe PTSB customers cant pay their mortages due to the high rates they are having to pay

It looks like he is just looking for excuses at this stage.
 
Brendan Burgess said:
[broken link removed]

Mr Masding said that PTSB is impacted by the high level of mortgage defaults in Ireland.

"It is an unfortunate fact that people who do pay their mortgage do have to pay a bit extra to make up for the historically high number of people who can't or won't," he said.
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That looks like a fair summary of the factual position to me. The levies imposed on banks don't help but the level of unresolved mortgage arrears is the key cause of high mortgage rates.
 
Sarenco,

Ptsb like other lenders sold Standard Variable Rate Mortgages on the clear understanding that SVR rates would follow Market rates.

Now because of their poor business model, they find themselves (ie us) in a position where they are scrambling to recoup money.

Unresolved Mortgages of course hit them hard , but it is patently unfair to break a known contract with current SVR mortgage holders.

Does this mean that any organisation can willy-nilly change an implied contract? or do we have always to rely on the actual signed contract.

I have not seen current SVR Mortgage Contracts but I would be very surprised if they include (will follow market rates) rather than (may follow market rates)

It was always clearly understood that SVRs would follow market rates. It was not even an issue that they wouldn,t.
So if PTSB and the rest are now relying on the (signed) contract then in laymans terms they are stealing!
 
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Gerry Canning said:
Sarenco,

Ptsb like other lenders sold Standard Variable Rate Mortgages on the clear understanding that SVR rates would follow Market rates.

Now because of their poor business model, they find themselves (ie us) in a position where they are scrambling to recoup money.
Click to expand...

They're poor business model for Trackers...yes
Govt sponsored fatwah on repossessions though is not the fault of the banks
 
I believe Ross Maguire, of New Beginings, is going to take a test case to the High Court with regards to standard variable rate clause in terms of being an unfair term. Irish Indo did an article on it a few days ago.
 
Gerry Canning said:
Sarenco,

Ptsb like other lenders sold Standard Variable Rate Mortgages on the clear understanding that SVR rates would follow Market rates.

Now because of their poor business model, they find themselves (ie us) in a position where they are scrambling to recoup money.

Unresolved Mortgages of course hit them hard , but it is patently unfair to break a known contract with current SVR mortgage holders.

Does this mean that any organisation can willy-nilly change an implied contract? or do we have always to rely on the actual signed contract.

I have not seen current SVR Mortgage Contracts but I would be very surprised if they include (will follow market rates) rather than (may follow market rates)

It was always clearly understood that SVRs would follow market rates. It was not even an issue that they wouldn,t.
So if PTSB and the rest are now relying on the (signed) contract then in laymans terms they are stealing!
Click to expand...

[In the tone of an exacerbated mother to her five year old son]

"I'm afraid life isn't fair, Gerry". :(

It really doesn't matter what was in the minds of the parties at the time they entered into a contract - it's the terms of the contract that matter. Our market economy simply wouldn't be able to operate if the position was otherwise.

What makes the Millars case so interesting is that the mortgage contract, unusually, contained an express reference to interest rates changing in line with "market conditions". People can reasonably disagree about the precise meaning of this phrase but it at least opens a plausible line of argument along the lines that you suggest.
 
Looks like there is going to be a serious confrontation

I will refuse Noonan's calls for cheaper mortgages - PTSB boss

Asked directly whether he would refuse a request from Finance Minister Michael Noonan, the bank chief executive replied; "Yes; but not bluntly." He added that he'd tell Mr Noonan that he'd "prefer if you didn't ask me questions about the running of my organisation."

He also told TDs and senators that new customers may get cheaper mortgages than existing customers because the markets regard the new borrowers as a lower risk. Questioned about whether Permanent TSB could lose good customers who pay their mortgages to a cheaper competitor, Mr Masding said "we are spending a lot of time reflecting on this issue" and said the bank was "developing a strategy".
 
Brendan Burgess said:
Looks like there is going to be a serious confrontation

I will refuse Noonan's calls for cheaper mortgages - PTSB boss

Asked directly whether he would refuse a request from Finance Minister Michael Noonan, the bank chief executive replied; "Yes; but not bluntly." He added that he'd tell Mr Noonan that he'd "prefer if you didn't ask me questions about the running of my organisation."

He also told TDs and senators that new customers may get cheaper mortgages than existing customers because the markets regard the new borrowers as a lower risk. Questioned about whether Permanent TSB could lose good customers who pay their mortgages to a cheaper competitor, Mr Masding said "we are spending a lot of time reflecting on this issue" and said the bank was "developing a strategy".
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Isn't that the chief executive saying publically he's going to tell the de facto owner of the bank not to ask questions about the running of the organisation...
 
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This is just crazy.We the owners of PTSB should not ask questions.
I await the governments response.Opposition parties go for it.
 
Sarenco.

I agree {life isn,t fair} . If it was we wouldn,t need this conversation!

However , please find me even ONE Bank Official who sold or believed SVR Mortgages did NOT follow Market Rates and I will concede the signed Contract bit.

Why not ask the Banker in your neighbourhood ,would they stand up in court and under oath deny that they understood SVR,s were to follow Market Rates?
Why not ask your neighbour Mr Banker to give an affidavit to the effect that he/she sold SVRS on the clear verbal contractural understanding that SVR follow market rates.
Anything less than this , would your neighbour the Banker not be a thief?

I find it strange that if a young thug steals a handbag we jump up and down , yet we don,t put pressure on our neighbours on an ongoing travesty to act honourably.

ps. I do not have a mortgage.
 
It will be interesting to see how new beginnings get on with their court case. The ongoing situation whereby it is very expensive, difficult and near impossible to repossess homes has been very profitable to them.
 
PTSB reducing rates in response to government pressure, direct request from the shareholder, would in my opinion be a case of Fraudulent Preference - putting other senior creditors (depositors & bondholders) at risk for the benefit of the shareholder.

Additionally, would Noonan's interference with PTSB's operations not breach the EU Competition rules governing state aid?
 
Gerry Canning said:
Sarenco.

I agree {life isn,t fair} . If it was we wouldn,t need this conversation!

However , please find me even ONE Bank Official who sold or believed SVR Mortgages did NOT follow Market Rates and I will concede the signed Contract bit.

Why not ask the Banker in your neighbourhood ,would they stand up in court and under oath deny that they understood SVR,s were to follow Market Rates?
Why not ask your neighbour Mr Banker to give an affidavit to the effect that he/she sold SVRS on the clear verbal contractural understanding that SVR follow market rates.
Anything less than this , would your neighbour the Banker not be a thief?

I find it strange that if a young thug steals a handbag we jump up and down , yet we don,t put pressure on our neighbours on an ongoing travesty to act honourably.

ps. I do not have a mortgage.
Click to expand...


And while Sarenco is looking for that, can you find me ONE Bank Official who believed the following clause was valid and enforecable

"WARNING:YOUR HOME IS AT RISK IF YOU DO NOT KEEP UP PAYMENTS ON A MORTGAGE OR ANY OTHER LOAN SECURED ON IT."

Furthermore, can you please define "Market Rates"
 
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Gerry Canning said:
Sarenco.

I agree {life isn,t fair} . If it was we wouldn,t need this conversation!

However , please find me even ONE Bank Official who sold or believed SVR Mortgages did NOT follow Market Rates and I will concede the signed Contract bit.

Why not ask the Banker in your neighbourhood ,would they stand up in court and under oath deny that they understood SVR,s were to follow Market Rates?
Why not ask your neighbour Mr Banker to give an affidavit to the effect that he/she sold SVRS on the clear verbal contractural understanding that SVR follow market rates.
Anything less than this , would your neighbour the Banker not be a thief?

I find it strange that if a young thug steals a handbag we jump up and down , yet we don,t put pressure on our neighbours on an ongoing travesty to act honourably.

ps. I do not have a mortgage.
Click to expand...


Again, it really doesn't matter what was in the mind of the bank official or the borrower at the time that the loan agreement was signed. Thankfully, it's only the cold words of the written contract that matter.
 
Andy836 said:
And while Sarenco is looking for that, can you find me ONE Bank Official who believed the following clause was valid and enforecable

"WARNING:YOUR HOME IS AT RISK IF YOU DO NOT KEEP UP PAYMENTS ON A MORTGAGE OR ANY OTHER LOAN SECURED ON IT."

Furthermore, can you please define "Market Rates"
Click to expand...
................

Well {home being at risk} doesn,t seem to mean a lot since there are very very few Repossessions.

Defining Market Rates is an unfair proposition.
In laymans terms (if it walks like a duck, quacks like a duck, looks like a duck) it is a duck.
I do not have to do a DNA test to prove it is a duck.
I think everyone lenders/borrowers clearly understand that rates move in line with general rates ie Market.
If it means that every type of agreement is solely on written contract business/commerce would die.
 
Gerry Canning said:
................

Well {home being at risk} doesn,t seem to mean a lot since there are very very few Repossessions.

Defining Market Rates is an unfair proposition.
In laymans terms (if it walks like a duck, quacks like a duck, looks like a duck) it is a duck.
I do not have to do a DNA test to prove it is a duck.
I think everyone lenders/borrowers clearly understand that rates move in line with general rates ie Market.
If it means that every type of agreement is solely on written contract business/commerce would die.
Click to expand...

Firstly,
Ok, So I take it you believe the "home is at risk" clause is just dressing - and the proof is in the pudding - repo rates.
However, if the "Home is at risk" notice is just dressing, then why isn't the "SVR clause" just dressing?

Secondly,
Defining "Market Rates" is the key to the SVR issue/argument.
Most commentators seem to want to define the "Market Rate" as "European Rates" for "similar products".
However,
(i) the Irish market is not linked to the European market. Euribor is no longer a reasonable benchmark for any of the Irish Banks as their cost of funds is significantly higher. As such the comparison with European Banks is incorrect - Irish ratings are still impaired - AIB = BB/Ba2, BoI = BB+/Baa3.
(ii) As evidenced by your disregard for the "home is at risk" clause - Irish media commentators/advocates are incorrectly comparing Irish Banking products with European Banking products. An Irish home loan is not the same as an English home loan, a Northern Irish home loan, a Belgian home loan or a Dutch home loan (you get the drift). In all these other countries, the lender is able to enforce their security (i) without political interference, and (ii) in a timely manner.
 
Andy, Sarenco, Brendan et al.

The night the Irish banks required a bailout, they effectively signed a Faustian Pact - whereby, 'political interference' became inevitable. The mismanagement of the banks by their own senior management coupled with light touch regulation resulted in the mess that has plunged the country into the crisis from which it has yet to emerge. The idea that the situation would somehow magically normalise if banks could move more rapidly to repossess distressed properties is at best a facile summation. After all, the majority of these properties are in negative equity and repossessing them will merely crystallise billions of euros of losses on behalf of the banks. How exactly will the crystallisation of billions of euros in bank losses result in the SVRs being reduced?
 
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I hear you and accept my (professional) knowledge of what Market Rates are is a laymans version.
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Irish Bank funds are (as I have read) significantly higher than N Ire,Uk ,Dutch rate, therefore it is reasonable to pass those (market) rates on, that is fair.
But from what I read the difference is widely higher than can be justified.
If I can have explained to me that the difference can be explained in large part by the rates Banks are charged in ROI for their mortgage,then I will readily accept that.
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{home at risk clause} thus fair has evidently been shown to be just dressing, and up to now ,that is a fact.
The SVR clause is not {just dressing}
What it was was a clear commitment and understood by lender and borrower to mean Mortgage Rates would largely move with Market Rates.
If as you tell me what I call Market Rates have moved largely in a fair trajectory then the SVR campaigners are doomed.
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Did I not hear most Banks use arrears/tracker rates as the main reason , not that their funding rates caused the high SVR rates?
If so Banks still need to explain.
 
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