AIB appearing before Finance Committee tomorrow - not ruling out rate cuts

Brendan Burgess

Brendan Burgess

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Starting with AIB tomorrow

Brendan

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I heard back from Kieran O'Donnell last week and he said he would be asking questions. I did direct him to yourself Brendan if he wanted any specific info.
 
Excellent reddan.

He is on the committee and is up to date on the issues. He asked good questions before.

Brendan
 
AIB will not rule out mortgage rate cut but defends stance

AIB will defend its policy on standard variable rate mortgages but will not rule out a rate cut when it appears before the Oireachtas Finance Committee tomorrow.


RTÉ News has seen details of the opening address to be made by the bank's CEO, David Duffy.


He will link interest rates to high levels of mortgage arrears.


Mr Duffy will say default rates mean it is more risky for banks to lend in Ireland than in other countries in Europe.
 
And I would bet my svr mortgage that the line "we continually keep our rates under review" will be spouted out by one or more of these bank officials!!!
 
RTE 9pm news have confirmed that Duffy will link high SVR rates to internationally abnormal level of arrears/lack of repossessions.
The word is finally starting to get out....someone has to pay for those in houses that haven't paid as much as €1 in years and years.

Imagine the outcry if a hundred thousand renters tried it on like this...the Govt wouldn't be calling Landlords in before committees asking them to do the decent thing!
 
About time - while SVRs have a complaint this is the first time one of the players had acknowledged what the issue is. Unsecured lending should be at unsecured rates. Hopefully we can start to move on
 
It will be fascinating to see how the committee members react to this reported statement of the obvious from David Duffy.

It's bizarre to me that simply pointing out the direct link between the high cost of credit and high levels of unresolved default is somehow newsworthy.

Will this trigger a change in the current policy of resolution deferral and discouragement?
 
EBS have this week refused cuts to mortgage holders who have 30% loan to value and no default or arrears history whatsoever.
 
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AIB say that risk-based pricing of mortgage rates is legitimate practice; basically they chose to underwrite bad loans and are now passing the risk premium on to other borrowers. This certainly was not explained to many SVR mortgage holders at point of sale .....otherwise any reasonable consumer would have elected to take a tracker. Are we looking at a colossal mis-selling at point of sale scenario here ?
 
so Peter pays his high SVR now to cover the losses made by Paul's arrears/non payment but who covers the loss from Peter when his high SVR pushes him into arrears?

seems like a short term'solution' to a long term problem to me
 
So Irish risk due to the inability to enforce arrears on the non performing portion of their book translates to a 400bps premium across their mortgage book indiscriminately? Sounds like a good way to run a business...
So what happens when the rates go back up, are we looking at 6%, 7%, 8% factoring in this premium? Whats the point in having a credit bureau, savings history, deposit, LTV etc when the whole market is branded as high risk by default.
These arrears have already been written down and relate to a period when the wrong loans were given to the wrong people on a grand scale, which god willing won't be repeated in my lifetime.
I am just not convinced of the Bank's explanation, this is a lazy and exploitative solution to a legacy problem which current and future SVR holders are paying for.

Hope the committee gives 'em hell.
 
Mr Duffy to link {high interest rates to arrears}

1. Did we not put in 20,000,000,000 into AIB to take care of default/arrears positions?.
2. Are AIB not now into small profit?.

If it is a case that ongoing arrears are turning AIB unprofitable , then 20,000,000,000 was not enough.
If it is a case that ongoing arrears are covered by 20,000,000,000 then AIB are simply screwing Standard Variable Rate (SVR) mortgage holders.

I am with you Delboy in asking why someone who hasn,t paid a brass farthing in years should still have a house, but that is not this issue.

Cormacol. I think all unsecured lending is at a much higher rate.
 
Just back from registrar listing cerca 60 repossesion cases heres a statistical some one should ask AIB ,,, would cerca 70% of cases listed today in Trim Circut court for an EBS entity be explained by EBS holding an mortgage indemnity bond which is only worth something in event of repossesion. Would the fact EBS hold such bonds explain the inordinately high correlation to legal proceedings and the high number of legal cases being taken by EBS which are not reflective of its overall percentage of mortgage market?
 
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