Key Post What can a PIA reasonably achieve for a mortgage holder?

[Raging Bull]

Well, now you have put your finger on it.

You will find the vast majority of PIAs, particularly with lowered interest rates (for the purposes of ensuring repayments are affordable for the debtor) are often "negotiated" down on the basis that they are proposing a variable rate to be applied in the debtors arrangement. In particular, with funds rather than banks. It is funds who primarily bought non-performing loans, and we need not explain the reasons why or how a large proportion of these loans stopped performing in the first place (read: thread title)...



Any information regarding the process leading up to and including this should be made available for the knowledge and benefit of those facing into arrangements that will allow the lender/vulture to "impose" excessively high interests rates on the debtor for the duration of the term of the mortgage on their own home. While they may now become solvent, they also may now be facing the same problems as before - presumably their RLE's have not changed, but their interest over the term may well be higher now than what brought them to insolvency in the first place. In this circumstance or under certain types of arrangements (e.g. typical arrangements with vultures), the debtor has no recourse to seek a fixed rate or seek a better rate from another lender now, or in the future. In particular, if their secured debts (e.g. their own home which "they get to keep") is subject to any write down as part of the arrangement.

A PIP can do many things in a PIA. Write down to MV, extend term, capitalism arrears and fix a rate all in the one pia if they thought necessary to return Debtor to Insolvency and keep them in their PPR

 

[Raging Bull]

This type challenge fails because of a previous error in judgement. That is, the sustainability effects on those whose loans were transferred to funds/vultures who are not subject to same regulations or in competition with any markets (the market is captive) and is refusing to fix interest rates because of their predatory lending practices.

No the Judge looks at the Debtor specific circumstances. What you talk about above has little relevance.

A PIP has far more scope to do things against a Fund than original lender as the court views the fund as having an investment

 

[surfinky]

No the Judge looks at the Debtor specific circumstances. What you talk about above has little relevance.

I am suggesting that specific circumstances have been overlooked, in the case of arrangements involving funds/vultures. It is either overlooked by the Judge or the PIP, unless the debtor is advised that specifically, with regard to funds/vultures, any arrangement will result in the debtor (now solvent) being subject to and completely bound to excessive rates (which are not even close to in line with the market). One might be forgiven for assuming what a PIA can reasonably achieve for a mortgage holder is that they do not end up in the same damn situation again, or worse. That's fairly relevant.

 

[Raging Bull]

I am suggesting that specific circumstances have been overlooked, in the case of arrangements involving funds/vultures. It is either overlooked by the Judge or the PIP, unless the debtor is advised that specifically, with regard to funds/vultures, any arrangement will result in the debtor (now solvent) being subject to and completely bound to excessive rates (which are not even close to in line with the market). One might be forgiven for assuming what a PIA can reasonably achieve for a mortgage holder is that they do not end up in the same damn situation again, or worse. That's fairly relevant.

But everything is done on a reasonable basis, the PIP or Judge can't be blamed for price gouging caused by both Covid or Putin because the rate rises to date in variable rates don't have the justification in their entirety. What you will likely see is more fixed rates in PIAs to ensure greater certainty but by no means expect a Creditor to fall on their sword. The fairness of rate clauses or otherwise is best left to fspo. Personal Insolvency is not a route to litigation but a means of resollution

 

[surfinky]

But everything is done on a reasonable basis, the PIP or Judge can't be blamed for price gouging caused by both Covid or Putin because the rate rises to date in variable rates don't have the justification in their entirety. What you will likely see is more fixed rates in PIAs to ensure greater certainty but by no means expect a Creditor to fall on their sword. The fairness of rate clauses or otherwise is best left to fspo. Personal Insolvency is not a route to litigation but a means of resollution

I take your point.

 

[Raging Bull]

The best way around a clawback is to remortgage elsewhere when you credit rating improves.

With respect to your point; I suggest those impacted form a Consumer Association to tackle the issue directly and pool resources.

It's the Central Bank, the Oireachtas and the CCPC here that allow this to happen

 

[surfinky]

The best way around a clawback is to remortgage elsewhere when you credit rating improves.

You cannot remortgage elsewhere if there exists a (standard) claw back provision in the arrangement (which is most PIAs). At least for the duration...

As per ISI:

[...claw-back provisions may apply for up to 20 years on any secured debt written down as part of your PIA. If you subsequently sell a secured property retained by you in accordance with the terms of your PIA, any uplift in price achieved will be payable to the secured lender subject to certain conditions...]

These conditions would also apply to a remortgage situation. The PIA is drawn up and agreed on basis you have outlined, but I don't see any consideration of this.

It all goes back to the title of this thread.. "what can a PIA reasonably achieve for a mortgage holder". If, as you say, the purpose is to arrive at a solution, rather than litigation, can we say that a PIA should reasonably ensure that the debtor, now solvent is not subject to predatory lending (interest rates) and can remortgage with better rates, as per your example?

I definitely agree with your suggestion that those impacted should gather and take action.

 

[Raging Bull]

Clawback is relation to sale but not remortgage

For the rate gouging a PIP can fix till the end of mortgage term for however long is needed up to life expectancy but no further unless there's consent

 

[surfinky]

Clawback is relation to sale but not remortgage

This appears to be misleading. How is a remortgage possible with a clawback (for 20 years as standard) on the security?

For the rate gouging a PIP can fix till the end of mortgage term for however long is needed up to life expectancy but no further unless there's consent

Should one reasonably expect that a PIA will propose and/or require the inclusion of a fixed interest rate or the option to fix for the average (standard) PIA case? Particularly in consideration of the "type" of creditor or debt involved?