Our thoughts on Debt Forgiveness have been a source of debate and while we accept that there are cons to the idea there are also sound reasons.
The Independent looked at this topic today and mentioned Karl Deeter in the piece
Mortgages with a total value of €1.3bn were now in arrears of three months or more. This represents 16pc of its €7.8bn buy-to-let mortgage book — up from 10pc in December. Low rents and difficulties finding tenants mean many buy-to-let investors lost money on their properties, director of Irish Mortgage Brokers Karl Deeter said.
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Tagged bank owned property, bank repo, distressed seller, forced sale, liquidation sales, repossession, vendors in liquidation
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We were mentioned in the Irish Independent (via our sister company): THE fact that private investors are prepared to put money into Bank of Ireland does not mean the bank will suddenly start lending to house buyers and small businesses, experts said yesterday. Although the investment move was welcomed, fears were expressed that personal and business customers would be hit with higher charges. This was because the bank was still short of funds, director of Irish Mortgage Brokers Karl Deeter warned. And there are fears that variable rate customers will now be hit with hefty rises in rates. Mr Deeter said there would be no immediate flow of credit for house buyers and small firms.
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Tagged accountancy, banks, dublin financial advice, financial advisors, financial planning, mortgage credit, sme accountants, sme credit
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In answer, let me quote Irish economist Karl Deeter, who recently said: “I think debt forgiveness is generally a terrible idea, and have only become an advocate as I watched a system evolve whereby investors have been insulated from taking loss at the expense of largely innocent bystanders [taxpayers]. In chasing the crisis down this rabbit hole we have perhaps avoided creating zombie banks, but we are creating zombie households in their wake.”
He continued: “The idea that this is a ‘punishment to the prudent’ [debt forgiveness] is a mistake. If so, then where is the ‘prudent rage’ against people receiving taxpayer-funded Mortgage Interest Supplement, which is paid to more than 18,000 households, while on the same street another person slaves to make their payments?
“Or the ‘prudent backlash’ by people who stayed out of the market entirely, against taxpayer money spent on rent supplement, which allows a person around the corner to enjoy a similar property for free?”
Also filed in Accountancy, Advisors.ie In the Press, Debt, Economics, Financial Advice, Mortgages
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Tagged advice, banking guarantee, carol hunt, debt forgiveness, financial news, karl deeter, sunday independent
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The problems in Greece are weighing heavy on Europe; the worry is that Greece will be Dracula and suck the lifeblood out of the Euro, or they will go Drachma – returning to their own money. For now, they remain the focal point of almost every financial worry at present worldwide. At Advisors.ie we are getting calls from clients on a daily basis who are worried about their savings, wondering if their money is safe, and they ask us what they should do in order to protect themselves.
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Tagged deposit guarantee scheme, deposit guaratnees, elg, eligible liability scheme, fdic, greek crisis, irish bank deposit protection
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BENEFITS to first-time buyers from drastic falls in property prices are wiped out by sharp increases in mortgage costs, new research shows. House prices have dived by 40pc since 2007, which means potential buyers would need a much smaller mortgage. But a series of mortgage-rate hikes by all lenders mean that the cost of servicing even a small mortgage has shot up. Mortgage expert Karl Deeter accused banks of capturing most of the gains for potential buyers of lower prices by pushing up mortgage costs.
When a bank holds a loan worth €200,000 it is an asset valued at that figure. Even if the security for the loan is a property that has fallen in value to €100,000.
So it is no surprise that banks will do whatever it takes in order to avoid turning their asset into a 50 per cent loss. In fact, even if the loan getting into trouble it doesn’t get written down to €100,000 -that only happens after the asset value has been realised. This is in part why we have three repossessions per 100,000 mortgages, while Britain has 65 times more, at about 200 per 100,000. At the same time, there has been huge political pressure via politicians and the Central Bank (formerly the Financial Regulator), via the thrice reworked Code of Conduct on Mortgage Arrears to ensure that we don’t allow people to get their homes repossessed as long as they engage’ with the lender.
Also filed in Accountancy, Accountant, Advisors.ie In the Press, Debt, Economics, Financial Advice, Mortgages
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Tagged debt forgiveness, distressed debt, distressed mortgage, distressed seller, imb, mortgages, problem loans, provision for bad debt, writedowns
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Wednesday’s Today with Pat Kenny (RTÉ Radio 1, weekdays) provided a more less heartening illustration of contemporary mores. The economist Jim Power and the mortgage broker Karl Deeter were in the studio to discuss AIB’s tentative debt-forgiveness proposals for distressed mortgage holders.
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Tagged acca, accountants, debt forgiveness, dublin accountancy, financial, irish mortgages, jim power, karl deeter, pat kenny, pat kenny show, provision for bad debt
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Karl Deeter of Advisors.ie was mentioned in two papers, his commentary was via his role as Operations Manager with Irish Mortgage Brokers
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Tagged accountancy dublin 2, accountants dublin city centre, advisors.ie, dublin accountants, financial advisers, financial advisors, irish mortgage brokers, tax relief, trs
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Frank Daly, has said that the Agency is exploring ways by which it can provide finance for commercial and residential property deals as part of its efforts to restart the Irish property market. Mr. Daly was speaking at the launch of the Society of Chartered Surveyors Ireland – the result of the merger of the Society of Chartered Surveyors and the Irish Auctioneers and Valuers Institute. The new society represents 4,000 professionals working in the construction, land and property professions.
Also filed in Accountancy, Economics, Financial Advice, Mortgages
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Tagged cheap houses, cheap property, discount property, former revenue, frank daly, irish market, low price mortgage, nama, national asset management agency, prices for property, property sales
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