Noonan warns that people who own 21 properties will not be saved from eviction

I think that appears to be a very good summary of the situation Bronte.

The worst part of it is the abuse of the MARP process, people in genuine distress will now get that little bit less sympathy and have to deal with more scepticism.
 
On further reflection of this, if he had agreed to sell in 2009 he would presumably have received a better price. Now that this house is tainted (Ireland and eviction) it will be harder to sell so Kelly will owe more. Since 2009 he has made the situation far worse for himself. Now he owes the mortgage, the costs, 4 years of back payments, the security costs of the men minding the house (to keep him out), the bailiff's etc they are going to throw the book at him, particularly as he has assets.

I cannot for the life of me understand his standpoint. Do people in D4/Killiney think that banks will not take their homes when they have other assets. Is that people's actual thinking?
 
Bronte said:
The Kelly's actions were shameful and not the banks. They have stayed in a property that they were making no repayments on and abused the MARP process to do so. The mortgage is about equal to the property value. They had a choice of living in any one of 18 different properties. He said he could not move into the rented properties because of leases. Leases come up for renewal all the time, in addition one of the reaons that a landlord can move into a rented property is for his own use. As a landlord of many properties he of all people must be well versed on his rights as a landlord. He refused to sell the investment properties because he expected the bank to wait until property values go back to the level he purchased them at. He alerted the media to the eviction and played to the cameras. And people fell for it. I am sorry that anyone would get evicted but this case is not one deserving of sympathy. I thought the bailiffs did nothing wrong. The house belongs to the bank and the Kellys had many years of notice to leave in a dignified manner.
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An excellent summation of events & importantly the Kelly's increasingly marginalised position may prove a salutary lesson to others in " can pay , won't pay " situations .
 
This is an end result of thinking that New Beginnings and many politicians have encouraged by arguing that the “family home” must be protected. At some point Mr. Kelly must have decided to gamble that he had implicit protection for his home and decided against a more sensible strategy of reducing debt by selling assets including that home.

If the family home receives special treatment it’s an incentive for people to ensure that they concentrate their wealth and debts into that one asset.

It encourages risky behaviour. For example you’re worried you can’t maintain your current income – maybe where you work your company is slowly getting wiped out by competition, however your salary is good at the moment, if you listen to New Beginnings you should wade out and get the largest mortgage and most expensive home you can afford since if your income collapses – the taxpayer/ECB/Germans will pick up the tab.

I think the multiple properties isn’t really the issue here, there needs to be some very modest limit on how valuable a “family home” can be for it to remain untouched regardless of how many properties someone owns.
 
Bronte said:
On further reflection of this, if he had agreed to sell in 2009 he would presumably have received a better price. Now that this house is tainted (Ireland and eviction) it will be harder to sell so Kelly will owe more. Since 2009 he has made the situation far worse for himself. Now he owes the mortgage, the costs, 4 years of back payments, the security costs of the men minding the house (to keep him out), the bailiff's etc they are going to throw the book at him, particularly as he has assets.

I cannot for the life of me understand his standpoint. Do people in D4/Killiney think that banks will not take their homes when they have other assets. Is that people's actual thinking?
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What makes you say they have assets? They have 18 to 21 mortgages, but that doesn't mean they have any assets. If you're in negative equity and you don't have any assets, the best thing to do is stop paying your mortgage. You'll get a few years rent free which you can use to squirrel away the money you would have been giving as mortgage payments and you've got yourself a nice little nest egg at the end of it. Even better if you can get a few months of collecting rent on your 18 houses and not passing that on to the bank. You wouldn't care about falling property values as you're never planning on paying the money back - you just want to ride it out for as long as possible. If you have a 20year mortgage on a 2million euro house, your repayments maybe as much as €10,000 a month (depending on LTV ratio). If we assume he has the hasn't paid anything in the last three years, that means he's pocketed €360,000. No way if he had moved out in 2009 and sold the house he would have made a €360,000 profit.
 
Delboy I don't think we're allowed discuss the O' Donnell case as it's before the courts?

James if the Kelly's had the 10K to squirrel away then they had it to pay down the mortgage. When he took out the Killiney mortgage he must have believed he was in a position to pay it. But from where, that would be income from his profession or the rental on the other properies. It wouldn't make sense for someone in their 70's to have 18 mortgages, more likely these were used for income. But something other than property collapsing must have happened.
 
Bronte said:
James if the Kelly's had the 10K to squirrel away then they had it to pay down the mortgage.
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My point is that if you're in negative equity you're wasting money by paying your mortgage. You'd be better off not paying it and living rent free for as long as possible - unless you have some assets to lose if they come looking for their money back. You make more money living rent free than you will ever make my selling the property!

Bronte said:
When he took out the Killiney mortgage he must have believed he was in a position to pay it.
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Yeah, he bought the house pre-2007 thinking it was going to rise in value. It didn't and he stopped paying the mortgage.

Bronte said:
It wouldn't make sense for someone in their 70's to have 18 mortgages, more likely these were used for income.
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Why not? Leverage up and make more money. Does it make any more sense for someone's in their 70's to need the rental income from 18 properties?
 
Bronte said:
The Kelly's actions were shameful and not the banks. They have stayed in a property that they were making no repayments on and abused the MARP process to do so. The mortgage is about equal to the property value. They had a choice of living in any one of 18 different properties. He said he could not move into the rented properties because of leases. Leases come up for renewal all the time, in addition one of the reaons that a landlord can move into a rented property is for his own use. As a landlord of many properties he of all people must be well versed on his rights as a landlord. He refused to sell the investment properties because he expected the bank to wait until property values go back to the level he purchased them at. He alerted the media to the eviction and played to the cameras. And people fell for it. I am sorry that anyone would get evicted but this case is not one deserving of sympathy. I thought the bailiffs did nothing wrong. The house belongs to the bank and the Kellys had many years of notice to leave in a dignified manner.
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DerKaiser said:
I think that appears to be a very good summary of the situation Bronte.

The worst part of it is the abuse of the MARP process, people in genuine distress will now get that little bit less sympathy and have to deal with more scepticism.
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Superb summary Bronte

DerKaiser

This is the real cost of the Kelly's abuse of the process. Is it any wonder that lenders are so suspicious of borrowers?
 
If someone had told me a month ago that Occupy and SF would be advocating the position that it is morally right for the Irish taxpayer to use funds (which could otherwise be used for health, education and welfare) to subsidise a professional landlord to the tune of an estimated €14,000 per month, I would have questioned their sanity.

With 21-ish properties, these guys are more likely than not to be in the top decile of income in the country - the same group that SF/Occupy would advocate a super-tax on. So, they want to tax this couple more, while subsidising them 14k a month!
 
Brendan Burgess said:
Superb summary Bronte

DerKaiser

This is the real cost of the Kelly's abuse of the process. Is it any wonder that lenders are so suspicious of borrowers?
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Well put, Bronte. As an aside, may I add that the people who bought in Priory Hall-who, in my opinion are far more deserving of public and media support- have received nowhere near the equivalent amount of air time and media attention as this couple.
 
Swyper said:
If someone had told me a month ago that Occupy and SF would be.... etc etc
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Whatever about the Occupy movement, I don't see any evidence for dragging SF into this (I am not a SF supporter, but I can't see where this association is coming from. See above).
 
AgathaC said:
Well put, Bronte. As an aside, may I add that the people who bought in Priory Hall-who, in my opinion are far more deserving of public and media support- have received nowhere near the equivalent amount of air time and media attention as this couple.
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To be fair, the Priory Hall story was exhaustively covered by the media, and continues to be. The Kelly story looks dead in the water already.
 
extopia said:
To be fair, the Priory Hall story was exhaustively covered by the media, and continues to be. The Kelly story looks dead in the water already.
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I don't agree. I think that the Priory Hall people are being brushed under the carpet-in the hope that they might just go away- and they are far far more deserving of sustained public and media attention than this pair.:confused:
 
I agree completely with that. I'm just saying that Priory Hall is a significant media story and has not been ignored.
 
JamesMorgan said:
Why not? Leverage up and make more money. Does it make any more sense for someone's in their 70's to need the rental income from 18 properties?
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Trying to understand where you are coming from James. The leveraging up might make sense when you start out as a young man, but don't see how this makes sense for someone in retirement. You are saying that he leveraged (took equity out of supposed capital appreciation) to purchase a large property portfolio in the expectation that property would go even higher and he would then sell and realise the gain. Did he not invest the large profits they made in Germany into property. What you are describing is a house of cards set up.

Also surely he needed a large income. Used to a certain standard of living that goes with living in a 4 million euro house in Killiney (not sure of purchase price). By your logic this income was to come soley from selling property for a profit. Maybe you're right, at one stage he had 21 properties reduced to 18 so maybe that was what he was doing. Another case of celtic tiger madness.
 
They own 13 flats in London as well as their 21 properties in Dublin according to the Irish Times

[broken link removed]

Brendan
 
extopia said:
Whatever about the Occupy movement, I don't see any evidence for dragging SF into this (I am not a SF supporter, but I can't see where this association is coming from. See above).
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Hi Extopia

Both Mary Lou McDonald and Richard Boyd Barrett expressed concern about the eviction. They are simply coming from the populist angle "eviction = bad banks exploiting the people".

Fair play again to Noonan and Kenny for supporting it. It's disappointing to see that Gilmore was unable to take the right stand here. It is an inevitable consequence of his mantra "no one should ever lose their family home".
 
Brendan Burgess said:
Both Mary Lou McDonald and Richard Boyd Barrett expressed concern about the eviction.
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I don't agree. Their comments, as I understood them, were circumspect at best. Did I miss direct comments from MLMcD and RBB in sympathetic support of the Kellys?
 
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