Draconian Measures in the Banks - 90 day foreclosure limit?

[onq]

A spoke to someone today who suggested that there may be a 90-day limit on foreclosures coming into force in the banks.

My understanding is that instead of working with people to try and find a way through this current wasteland of terror we find ourselves in, the banks are coming down hard.

By this I mean in situations where people aren't getting paid what their owed, but where monies are recoverable, the banks are pulling the plug after 90 days with no payments.

If we had a legal system that could offer redress to creditors withing 90 days and allow our society to function be dealing with the thieves and criminals who are keeping monies owed in their accounts, then we might all have a chance.

But our courts don't work that way - it takes months, years sometimes to recover monies owed - but not for the banks it seems.

I'm not commenting on whether this is a good or a bad thing in terms of Bank Governance - but its a disaster in terms of going concerns screwed by thieves and criminals who aren't paying their debts.

Can anyone comment on this as a matter of urgency?

We've heard it said that these are unprecedented times and this is why we must shovel billions of fiture taxes into the banks.

But if the banks succeed in short term policing of accounts actions like these there will be no future salaries and wages from which to levy taxes.

Its seems utterly wrong that the banks are applying the law and good practice principles now so vigorously to others, having flouted them so wantonly themselves.

You can argue that two wrongs won't make a right, but in this case, applying Roberts Rules of conduct to this current debacle - authored and administered by the banks - will certainly make matters worse.

This policy suggests that the banks are only thinking of looking after their accounts, that this is a small limited world they work in composed of suits and computers.

But they cannot be let take that view, because all we have done in Government for 18 months is prop up failed companies - the Banks - with taxpayers money.

Now, when it comes time for hard decisions, it appears that the banks chose to forget how closely linked to the electorate they are.

If they send more people to the dole queue, the cost to the state will redouble on the cost to the bank of helping to keep them in business and the courts have a role to play in making those with money honour their debts.

ONQ.

 

[Brendan Burgess]

If we had a legal system that could offer redress to creditors withing 90 days and allow our society to function be dealing with the thieves and criminals who are keeping monies owed in their accounts, then we might all have a chance.

This is the big problem. Creditors find it difficult to get paid. If someone refuses to pay you, it's often not worth pursuing them. This is where you and ISME and others should be directing your fire. Force businesses to pay promptly. Bring in a "Commercial Court" for small payment disputes and make debtors pay the costs of bringing them to court if the award is against them.

I wouldn't really blame the banks too much for not lending to small businesses.. Many businesses have failed. Many sectors - law and construction are becoming a lot less viable. We have had ten really profitable years with 12.5% Corporation Tax. if someone needs to borrow now, it suggests that they have squandered away the profits built up in recent years.

The [broken link removed] is now set up. They had ads in the paper yesterday. So if you get refused a loan and you are refused on appeal within the bank, you can appeal to them and they can make a recommendation.

My guess is that telling them "I am owed loads of money but my debtors won't pay" won't be a basis for them recommending to the bank to lend you the money.

Brendan

 

[onq]

"We went from lending money - to selling money. That was the problem."

That's from a banker who in his fifties is looking at losing his job later this year.

But even that wasn't the problem.
Easy credit wasn't just easy - it was practically forced into your account.
It became a torrent and for some the problem was where to put the money, because the bank went from shrewdly assessing the recipients of its credit to simply giving anything out in any amount and trusting that relatively naive people would put it to good use and invest it wisely.

The banks disavowed their previously stringent lending policies in favour of a "sure these guys know what to do with money - lend it to them" - attitude.

Put simply - without the banks pressure feeding money onto our economy, we couldn't have been able to run up large debts.

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In retrspect, this lending without oversight was as disastrous as the sub-prime debacle in America, although it had less well defined default parameters.
However these parameters were there to be seen by anyone with eyes in their head.
Leveraged debts that only made sense with interest rates at historical lows would statistically blow up in peiple's faces once the interest rates rose.
Returns on investments that could only come good if asset values kept increasing at double digit rates was clearly not sustainable for more than a few years.
Yet the banks didn't dribble money into this, they forced it in under pressure, trying to match "shareholder value" offered by the most profligate of them all, Anglo Irish Bank.
What price "shareholder value" now as a measure of a company.
That only measures its value to those who buy and sell shares and those to faciliate them.
Its not a sign of underlying intrinsic value based on sound banking practices.

And now we see that the Bank who looked like an also-ran BOI may be the only Irish Bank to escape effectively being nationalised.

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" if someone needs to borrow now, it suggests that they have squandered away the profits built up in recent years."

This notion that everyone made loadsamoney and/or squandered it all during the Tiger years seems to be an unfounded assumption that deserves to be refuted.

If people were making so much back then that they can continue to pay staff and run a business with reduced income now, what level of profitability does this suggest they achieved during the boom years?

An outrageous level of profit, that's what.
A poor value service, an exploitation of the client or the public.
Are these the kind of people you're suggesting we should all have been Brendan?
Given the overcharging for goods and services that I have seen and still see, that simply isn't a comment you should stand over.

Those that did make some profits may already have seen their retained profits spent keeping their businesses afloat or trying to develop new products or trying for market repositioning to get any kind of business through the door.

When these retained profits run out, with the normal routes of credit denied, these businesses will more than likel fail.

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We certainly didn't make huge profits - here's why.

#1 Even during the good years, we had people who didn't honour their debts.
We chose to walk away because the current legal system offers cold comfort and significant risk.

#2 We didn't spend extravagently, apart from choosing to live in Ireland.
I was talking to a client the other day and she said she and her husband, who was recently made redundant coming up to the birth of her last child, were thinkign back over the past ten years.
There wasn't one year they felt free of money troubles or didn't worry about money - we were the same.

#3 The cost of living here was high. When I went down to the local Spar and saw a packet of Hob-Nobs for €3.00 I realised where the money was going - its was simply the cost of living in Ireland.

#4 We hadn't put up our prices on some work since the Euro changover.
Many other forms came into our market for medium sized work and we found we were competing against engineers and draughtspeople for business.
We always tried to give competitive quotations to our clients - that was why they came back and still are, albeit in smaller numbers, with less work and offering lower fees.
Many of them are one bad deal or cancelled order away from bankruptcy themselves.

#5 Now were are seeing people forced to quote a below-cost rates to maintian turnover, with the result that companies have found another way to fail - giving poor service and leaving work unfinished while the go, giving others a bad reputation they don't deserve.
Some are caling this a "new order" or "value for money" - I call it what it is, exploitation.
And its still going on.

#6 And the reason our net indebtedness has grown in the last 18 months is that we have spent most of our savings/profits just keeping us afloat - we've actually reduced our loan over the period, but we've spent our cash reserve.

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We lived in Ireland.
Its cost - and still costs - a lot to live here.
That's where the money went and where its going.

There are few signs that costs of food, clothing, rent [in real terms] petrol, car prices - whatever! - are being driven down to match the purchasing power of an economy with 400,000 people out of work.

And now the dirt is about to hit the fan, first for those companies being bankrupted by the criminals who owe them money, the skulking thieving scumbags out there.
The 90-day limit - which I note no-one has commented on yet - will force these firms to close.

Then the raising of the interest rate will scupper the rest.
Leveraged loans not backed 100% by cash will collapse the rest of the economy - due to the banks attitude.

Why are you suggesting I and the SME's have any power to say something a government will listen to - you're the one on the Expert Group, Brendan.

I'm not posting to your website for the good of my health.
I'm doing so in the hope that you might comment to government..
But it may be too late by then, and we'll have no Government - we'll all be gone.

Never mind the Unions - if we don't all pull together on this one, we'll see Ireland Inc go to the wall.

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If anyone wants to take Brendan's advice and make representations to government their e-mails are on this page.

[broken link removed]

Go to the section marked:

List of Email addresses for TD’s of the 30th Dáil as a group:

Highlight and copy all the e-mails.

Paste into the address line of your e-mail.

Hit "return" and this will make each comma-separated mail address be read as a single address.

Hit "send".

Make a cuppa tea - you deserve it.

Your e-mail programme or Anti-Virus may not allow you to send more than 50 e-mails at a time - tell it to make an exception, or send them in groups of fifty.

Make your voices heard at least, whether or not notice will be taken of you, or any action follow on.

How did I know about the page?

I sent my e-mail, an edited and expanded version of the Original Post to this thread, earlier today.




ONQ.

 

[onq]

In case the long post above obscures the main points - they are these.

Firstly, and because many people depend for their jobs on following instruction from higher ups, I am not having a go a loan officers or branch managers here.

They follow orders from management, management which has the responsibility to make and see policy implemented.

If management hadn't given authority to lend in a profligate manner to the branches and set targets for them to meet, this wouldn't have happened.

All branch managers I have dealt with are acutely aware of their customers ability to repay a loan.

The detachment seems to have emanated from the boardroom or elsewhere.

At this point fingers are pointing towards Goverment.

That having been said:

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Bankers are the professionals here.

If I as an architect offer professional advice that people rely on and suffer some form of loss or injury thereby - whether its verbal or written advice, or information contained in a drawing - they can seek redress.

Our banks and a light touch regulator - "light"in accordance with government policy - have ruined our economy.

So the people who have, are and will suffer due to the banks' incompetence are not able to seek redress, but have to bail them out?

At the same time as we see the principle actors in this failure still running the government, getting paid ministerial salaries and wages?

While key players walk away with more money because its under a "contract"?

If I fail to discharge my fiduciary responsibility to third parties I owe them - I don't get to cite "contract" at them - I get sued.

We need retrospective AND RETROACTIVE legislation to deal with the crimes all these people have committed against the Irish taxpayer.

And no, I don't want to see them shot - I want to see them live.

Villified, cast into the outer wilderness where they belong, never to be employed in the financial sector again as long as they live and living in a tent somewhere.

With the rest of us!