Restructures to be ripped up ???

[CorkHome2022]

Saw this while looking at today's news online .
I have always thought that things like Split and Warehousing of mortgages was not a great idea as a friend of mine in the Motor Industry when selling cars and arranging finance saw quite a few people thinking that the ARA was a licence to go back to the Celtic Tiger Era type of borrowing all over again as they took it that the repayments on the mortgage being reduced by 50% would last forever and even some people thought that the Warehoused part was effectively being written off .
The pillar banks were forced to sell off these mortgages with ARA solutions but now with the interest rate rises and general inflation there going to be a sizable number of people getting into bother with arrears again , if your on an ARA and get into arrears again will the Vultures rip up your deal and go for possession ??? You can be sure of it , now the property prices are peaking and no sign of them falling so what better time to go for the maximum return on their investment after all they get the money back and clear the property and the workload that goes with administration of the mortgage off their books also .
50000 represents a significant percentage of the Vultures loan books and is a very quick win for them .

What are the solutions ?? I dont know but I think that for the government to throw money at it in the way of Interest Relief is the wrong one as it just shifts the burden of paying the exorbitant rates charged by the Vultures onto the tax paying public and will do nothing to reduce the rates being charged and the more relief available the higher those rates will become.

https://extra.ie/2023/05/08/news/mortgage-debt-deals-danger

 

[Right Winger]

Is there a particular reason restructured arrangements are more vulnerable to "vultures" ripping up the deal than normal unrestructured mortgages. Would the same rules, including MARP protections, not apply on all cases?

 

[ClubMan]

I have always thought that things like Split and Warehousing of mortgages was not a great idea as a friend of mine in the Motor Industry when selling cars and arranging finance saw quite a few people thinking that the ARA was a licence to go back to the Celtic Tiger Era type of borrowing all over again as they took it that the repayments on the mortgage being reduced by 50% would last forever and even some people thought that the Warehoused part was effectively being written off .

Extremely anecdotal. But I'm sure that some people will always be profligate no matter what info or warnings they're given... I don't see that as a reason to throw the baby out with the bathwater though?

 

[Brendan Burgess]

I have always thought that things like Split and Warehousing of mortgages was not a great idea as a friend of mine in the Motor Industry when selling cars and arranging finance saw quite a few people thinking that the ARA was a licence to go back to the Celtic Tiger Era type of borrowing all over again as they took it that the repayments on the mortgage being reduced by 50% would last forever and even some people thought that the Warehoused part was effectively being written off .

The vast majority of people who got split mortgages fully appreciate the problems of deep mortgage arrears and have done everything possible to avoid going into arrears again.

In general, split mortgages were only offered to people who maintained payments on their mortgages, so I would say a lot of the car buyers were not offered split mortgages.

Bank of Ireland and AIB did not sell their split mortgages, so there are no vultures involved.

The former customers of ptsb and the banks who left the market are most vulnerable to having their splits renegotiated.

However, as Right Winger pointed out, anyone with a mortgage is vulnerable to increased rates. But the non-tracker mortgage customers of the vultures are particularly vulnerable.

Brendan

 

[CorkHome2022]

The vast majority of people who got split mortgages fully appreciate the problems of deep mortgage arrears and have done everything possible to avoid going into arrears again.

In general, split mortgages were only offered to people who maintained payments on their mortgages, so I would say a lot of the car buyers were not offered split mortgages.

Bank of Ireland and AIB did not sell their split mortgages, so there are no vultures involved.

The former customers of ptsb and the banks who left the market are most vulnerable to having their splits renegotiated.

However, as Right Winger pointed out, anyone with a mortgage is vulnerable to increased rates. But the non-tracker mortgage customers of the vultures are particularly vulnerable.

Brendan

As I understand it the Split Deals have built in reviews after a number of years so the PTSB deals can be revisited and changed by the Vultures

 

[Brendan Burgess]

The AIB split is a permanent split and is not subject to review.

The ptsb split must be reviewed at least every 3 years. In practice, ptsb was not reviewing them, but the vultures are.

However, if the split is still appropriate, they probably won't change it too much.

Brendan