I imagine 'Constitutional Protection' is the same regardless of who's doing the foreclosing...?
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I imagine 'Constitutional Protection' is the same regardless of who's doing the foreclosing...?
G
genki33
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This notion that the constitution could be used in such cases is a complete red herring. The protection afforded the family has it's roots in the "Catholic ethos" of the original constitution writers.
Has nothing to do with private property. The case wouldn't have a leg to stand on.
Has nothing to do with private property. The case wouldn't have a leg to stand on.
It sure would! But you have to assume that any Credit Analysts worth their salt would have done the research on the Irish RMBS sector and would know that repossessions in Ireland are incredibly uncommon.
But the point is that the ultimate bondholders don't really come into the equation - the banks would have to repackage the debt (at higher levels)and call/redeem the existing bonds. So the big hedgefunds don't care - it's the Irish banks (and therefore Irish consumer) that will take the hit.
If it were true it would cause the mother and father of credit crunches. Secured lending would be impossible.
fatmanknows
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Ain't no Lawyer but I don't believe the Family Home protection covers a home from repossession by any mortgage holder. I do believe it . covers the home from being used as security unbeknownst to one of the spouses. I also believe that the security on a family home would not be valid unless the mortgage holder proved that the mortgagees obtained independent legal advice before allowing a charge upon their home.
In the years to come I think there will be many many unavoidable repossessions of homes - owner occupiers and investments alike.
In the years to come I think there will be many many unavoidable repossessions of homes - owner occupiers and investments alike.
You could also argue that under protection of the family "as the natural primary and fundamental unit group of Society", they do not actually need to own a house, just have a dwelling to live in. I'd say that Rent Supplement and RAS would cover the states obligations as set down by the constitution.
I'm not saying that banks can't repossess - of course they can, but they are incredibly reluctant to since there could be some kind of challenge through the Courts. They would much rather reorganise/restructure the mortgage than repossess the house.
Am I reading too much between the lines here BigM; are you hinting that credit analysts may have 'gone easy' on risk weighting for Irish RMBS debt? not factoring in our cultural and constitutional abhorrence of being put off the land, so to speak.
BOI seem quite adamant that they'll turf you out if you don't come up with the juice, maybe its hot air. This issue could be dynamite.
[broken link removed]
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fatmanknows
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A property ain't much of a security if it can't be realised without some mega challenge in Court. Our legal system is very similar to that of UK - and they repossesed left right and centre in the early ninties there. Unfortunately, we'll soon get to see with regularity how the system works here.
liteweight
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I believe you're right here. Everyone taking out a mortgage is warned that their home might be at risk. I'm not a lawyer either but I'm sure lenders don't state this on all documentation for the good of their health.
Nevertheless, the last time I discussed this with a solicitor, I was told that it takes about 2 years to actually repossess a family home and lenders prefer not to do it. Again, not for the good of their health, but because of the long, drawn out process!! Investment properties are much more clear cut.
If the market crashes here then there will be repossessions wholescale, I believe. When this happened in London it was catastrophic for many but as usual, good for some, who deliberately set out to buy houses that had been repossessed...held on to them for 10 years and made a killing.
Not at all - some of my best friends are credit analysts!! Although sometimes I wonder if they actually do anything more than simply read Moody's and S&P reports.
And the link makes it clear that the banks prefer to restructure the loan rather than repossess. Of course, if the market tanks as much as some on this thread expect and people end up with 50% negative equity they might indeed opt for option (b) and head off to Oz/US...
(b) Repossession of a property may come about by voluntary agreement with the lender, through abandonment of the property by the borrower without notifying the lender, or by Court Order.
Exactly my point - I've discussed this with several solicitors/barristers and they all reckon that banks would steer well clear if at all possible because of the timescales involved (not because of the bad PR - who likes banks anyway?).
I think that if anyone thinks that an Irishman or woman will meekly be put out of their homes on the instructions of the agents of 'foreign interests' is either a foreigner or a very, very, very poor student of Irish history. The depth of feeling, the historical resonance imagine it.
A reluctance to foreclose would put bank earnings under even more pressure in a downturn. I wonder if short activity is building in Irish bank shares as the signs of a weakening property market are becoming more prevalent.
N
Neffa
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I hear both these arguments a lot in Ireland as part of "it's different here" pitches. I disagree with both of them.
On the first point, the absolute rate of interest is pretty irrelevant imho. It is all about affordability, not the absolute rate. Yes, UK rates were at 15% at the end of the crash period, but affordability rather than interest rates per se was the problem -affordability was going above 40% of net income. The prices themselves relative to income were lower than we have in Ireland today but because the IR's were so high, the net income percentage was high.
As many commentators have reported, we are now at the limit of affordability in Ireland, even though our base rate is 3.25%. So you could argue we are in a worse position, not a better one.
Second, 120% mortgages were certainly not readily available to everyday punters. 100% mortgages were but IO and other "exotic" forms of financing were not commonplace. BTL was also very rare.
My recollection is that 100%+ mortgages were marketed after the crash so people could "buy" their negative equity and move out of their homes.
D
Debtwish
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More evidence of higher rates to come next year.
Industrial production in Germany increasing.
http://www.bloomberg.com/apps/news?pid=20601009&sid=apt5l7KIlaF0&refer=bond
Will the media be warning homeowners?
Industrial production in Germany increasing.
http://www.bloomberg.com/apps/news?pid=20601009&sid=apt5l7KIlaF0&refer=bond
Will the media be warning homeowners?
liteweight
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I'm sure this attitude might change though if more and more stopped paying. In the main lenders prefer to negotiate...might let you pay interest only, or take a 'holiday' on payments until your finances stabilise. In the former case, they're making a profit on the interest anyway, and in the latter, they keep adding interest ,which lengthens the term of the loan. In either scenario they can't lose. If they have to repossess and it takes 2 years, presumably they are paying for the money they lent you in the interim period i.e. for the length of time it takes them to actually repossess the house! They get it all back when house is sold of course but I'm sure they'd prefer money in the coffers now rather than later!
Banks might have a real problem if too many stopped paying at the same time i.e. in a housing crash.
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