The McNamara/Lowe case shows that the courts are imposing too lenient PIAs on lenders

cremeegg

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I’m amazed the judge can just decide what interest rate a bank can charge. And an interest rate no client of that bank can get. That’s like telling Dunnes Stores what price they may sell a bag of potatoes for.
Well they have been telling landlords what price they can rent three properties at for a number of years.
 

Brendan Burgess

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but exceptionally favourable terms based on their prior fame.
To be fair. I doubt that their fame has anything to do with it.

There have been other cases where the people were not known, so we didn't hear about them.

If you read the attached judgement, the judge refers to other cases which he used as precedent.

Brendan
 
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Palerider

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Excellent thread, fairly balanced but you are missing a bigger picture point....

Vulture funds have done very badly in this country, yes the high profile ROI stories are evident but there is a big set of heavy curtains that we don't see behind.....there are many more horror stories to come out yet, the funds have found that their model which works in other countries falls short here mainly due to the legal process, the cost of, the delays with and the uncertainty of the Court decision.

I'm not a flag flyer for vultures but they are a necessary part of a modern functioning lending market, when we make a mess again and in my view we are well on the way who will be there to hoover up the dross.
 

Brendan Burgess

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Vulture funds have done very badly in this country,
Hi Palerider

I wouldn't agree with this.

Take even the present case. How much did they buy that loan for? It was probably about €250k. So they are making a good return on it anyway.

There is still competitive bidding for bad loans so they must be happy with their experience so far.

Brendan
 

noproblem

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1. the sense of entitlement the parties had to continue to send their children to private school when they knew they could not afford it. The children are 19 & 21 according to a previous post. They applied for a PIP in 2016, and were unable to meet commitments in the 2 years prior (financial difficulties started in the early 2000's). Why on earth would someone who was bankrupt justify sending their kids to private school
It's possible relatives or similar paid the fees
 
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Brendan Burgess

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It's possible relatives or similar paid the fees
Belvedere College is a creditor in the PIA, so it appears that they paid them themselves at least some of the time.

And if the relatives are going to help with fees for a private school, would it not be a higher priority for them to help pay the mortgage?

Of course, in practice, it's not because they can get the mortgage written down.

Brendan
 

Dazzler123

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You read an awful lot about couples who cannot afford to have children. If i was in that scenario i would buy my house at the maximum i could afford and start having kids. If you can no longer afford the mortgage, it doesnt matter. You just need a brass neck and a PIP to get a writedown and a reduction in interest rate.

Yet more encouragement for strategic default in this country, while everyone else pays for it in higher interest rates.
 

Palerider

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Hi Palerider

I wouldn't agree with this.

Take even the present case. How much did they buy that loan for? It was probably about €250k. So they are making a good return on it anyway.

There is still competitive bidding for bad loans so they must be happy with their experience so far.

Brendan
Time will tell, I have had direct dealings with funds and have ex colleagues working within funds, they are not having as straightforward a time as you might think, their pipeline is mostly full, we are still scratching the surface and more stories will come out in time.

Their model to swoop, aggressively manage and then cash out in double quick time is not how we do things here in Crazyland.
 

Brendan Burgess

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their pipeline is mostly full,
I don't understand that? Can you explain?

One problem any lender has in Ireland is that the whole arrears management and legal process is so complex, that they cannot get the staff to handle it.

In the MacNamara's case, Tanager got a number of adjournments in order to prepare a response to the PIP, but never got around to it.

Brendan
 

Palerider

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They progress cases stopping on the brink of further progressively larger legal outlays with uncertain recovery timescales and amounts, this pipeline continues to fill as other files get to this stage.

There are files that have not had any real attention yet and these in time will back up this pipeline further before getting jammed in the court system.

People are not hearing from many of the vultures but their debts have not gone away, the number I hear is that most debt is purchased at 65-70% of a discount but I have no hard evidence of that, regardless they seek 100% in all cases and can be very challenging to make a deal with, I know this from representing people and have no desire to mediate vulture debts again.

You are correct about attracting the right staff to assist them, in my dealings few were deal makers and most impractical.
 
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Bronte

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100% agree.

But it's worse than that. The PIP set the interest rate and the judge approved it.

Brendan
That’s hilarious. That’s sarcasm by the way BB. Great analysis. Would love to know all the radio shows you were on in relation to this to listen back. I’m going to print out the judgement and have a read, fascinating stuff.

You ought to analysis the Ryan case too.

All this reminds me of Mrs. Cornflakes. Too surreal yet true.
 

gnf_ireland

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To be fair. I doubt that their fame has anything to do with it.
There have been other cases where the people were not known, so we didn't hear about them.
Apologies Brendan - that nearly makes it even worse !! The fact that those who are bankrupt can get a much better mortgage deal than those who struggle to pay, but make massive sacrifices to do so. So much for risk based lending and interest rate setting !

I am not against anyone keeping their house if they can afford it, and not against anyone who genuinely needs a write down getting one. But like a lot of people, I don't believe someone can afford the house if they cannot pay market rate for the loan. Its the rest of us, who pay our mortgage every month, who ultimately pay for this - not only for the past mistakes, but also the favourable terms they continue to receive.

Imagine a couple up to road from them, having saved like crazy for 5 years to get the deposit for a house while renting at the same time. The best the can afford is a house for 410k. At 3%, their mortgage repayments are the same - 1960 euro a month, except one lives in a 550k house subsidised by others, and the other has to stand on their own two feet and do it all themselves.
 

NoRegretsCoyote

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It is very unlikely that they will be able to pay this mortgage from their income
They are aged 59 and 56 now. They have not been earning much in recent years - or certainly not enough to pay €2,000 a month between them.

It is very unlikely that their careers are going to take off in their 60s and their 70s to enable them to pay the mortgage.
Does the ISI not have guidance for what consitutes a reasonable value for a home for two people? The median selling price of a dwelling in Ireland is about €250k. Why do they get to keep a house worth more than double this?

I have looked through this thread and all the media coverage. I cannot see any reference to the McNamaras' actual income over the last few years. I know barristers and musicians have volatile incomes. But are they not obliged to disclose their earnings to the court over the last number of years?

I am still none the wiser as to how they have accumulated over €2m in debt either. I can only speculate that Frank self-funded some orchestral tours which saw poor ticket sales. If this is the case then what he has is a lot of business debt, and the reporting should reflect this.

Finally, c 1992, the pair of them were in their late 20s/early 30s and on very good money in RTÉ. Absent serious financial mismanagement, this should have seen them pay off a mortgage by 40, rather than be faced with mortgage payments into their 70s.
 

Bronte

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Noregrets it looks like it was property speculation that caused the debts. Which is why the mortgage debt on the home is so massive.
 

Brendan Burgess

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gnf has pointed out in another thread how big the house is which I had missed completely.

The couple applied for planning permission in May 2005 to extend their already substantial three-bedroom family home into a six-bedroom residence.

The floor space at Park House, in Growtown, just outside Dunshaughlin, Co Meath, was to increase by two-thirds, from 435 square metres to 715 square metres, and there would also be a new entrance hall, drawing room and sun room.

Separate from the house, the application included plans for a large two-car garage with an upstairs, providing generous additional space.
 

Bronte

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gnf has pointed out in another thread how big the house is which I had missed completely.

The couple applied for planning permission in May 2005 to extend their already substantial three-bedroom family home into a six-bedroom residence.

The floor space at Park House, in Growtown, just outside Dunshaughlin, Co Meath, was to increase by two-thirds, from 435 square metres to 715 square metres, and there would also be a new entrance hall, drawing room and sun room.

Separate from the house, the application included plans for a large two-car garage with an upstairs, providing generous additional space.
BB they didn’t extend the house was my reading of it.

I fully expect them to default again. They will have massive legal bills and have a rather cavalier attitude to paying their mortgage up to now. Like underpaying one month recently by 100 Euro.
 

NoRegretsCoyote

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It's clear that they didn't. But the house was already 5000 sq ft. They were refused permission to increase it to 8,000 sq ft.

Brendan
Why isn't there an ISI standard on what an acceptably-sized house is?

Two people don't need 5000 sq ft when I'm paying a 3% mortgage for my 1100 sq ft.
 

Delboy

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How can a 5,000sq ft house only have 3 bedrooms???
The 550k valuation IMO is ridiculous, despite what has been said in previous posts. It's not much more than double the average house price in Meath and is quiet close to Dublin. It's got large gardens around it too.


Here's a good piece on said couple and some other well known Irish D list celebs who've gotten into financial troubles and yet, have been let keep their oversized, high valued homes rather than downsize
 
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