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THE MASTER OF the High Court has written to Fianna Fáil leader Micheál Martin, urging him to support legislation aimed at keeping people in their homes.
Edmund Honohan wrote the Affordable Housing and Fair Mortgage Bill, which was introduced in the Dáil last year by Fianna Fáil TD John McGuinness. Although McGuinness introduced the bill, it is not clear whether his party colleagues will support it.
In a letter sent to Martin at the end of December, the High Court Master said neither he nor the Taoiseach had come up with “any plan of action” to tackle the housing crisis at its root.
The long drawn out saga of [Kevin] Boxer Moran’s bill and Michael McGrath’s increased regulation provisions suggest to the observer that the government is only toying with these ideas (and watering them down in transit) hoping the overarching objective of bank insolvency is reached before legislation is passed.
Honohan was referencing a private members’ bill that had been introduced by the party’s finance spokesperson Michael McGrath. The bill was signed into law on Christmas Eve.
Under the new legislation, vulture funds can now be investigated by the Central Bank and the regulator can take enforcement action against them.
In speaking about banks and vulture funds, Honohan tells Martin “it is your job to call them out”.
“It appears that the government has now caved to the vultures and quietly abandoned its earlier Mortgage to Rent model. Remember when Leo, in opposition, said he’d not pay another red cent to the junior bondholders?
Allowing the VFs [vulture funds] to make tax-free windfalls creates years of unnecessary extra capital outflow when the country has Credit Union and not-for-profit resources it could easily tap instead. Another bondholder-type surrender!
“It’s past time that you re-engage with the Fair Mortgage Bill. Do not make the mistake of dissing it just because Deputy McGuinness is promoting it. Please look beyond that.”
The Affordable Housing and Fair Mortgage Bill brings together a number of pieces of Irish and European law to reinforce them. It also proposes the establishment of a ‘national affordable cooperative housing exchange’, which would allow not-for-profit housing providers to buy distressed loans and lease the properties to the borrower.
The bill also covers the provision of housing by not-for-profit, non-state entities with ethical funding. And it provides for a reconfiguration of the government’s Abhaile scheme – which currently provides vouchers for legal or financial advice – to broaden its services.
Honohan in his letter suggests Martin is “perhaps worried that mortgagors in arrears who are turned into tenants under the Mortgage to Rent proposal are, in some way, freeloaders and not ‘respectable’”.
Are all now tarred with the strategic defaulter tag merited by a small minority? Are they all “deplorables” in a bourgeois consumer society and to be left to the thin options in the insolvency system?
“The immediate question for policy makers is: given the current shortage of housing, are there families in mortgage arrears (or tenants of landlords in arrears) who should NOT be evicted? Which families?” he asks.
Last month Fianna Fáil did criticise the Taoiseach after he commented that vulture funds often offer better write-downs on loans than banks. Leo Varadkar also said at the time that he is reluctant to use the term “vulture fund” because he believes it is a “political term”.
At the time Michael McGrath said the comments were “really quite bizarre and underline how out of touch he is with the reality facing thousands of families across the country”.
“Many of the deals referred to by the Taoiseach entered into by these vulture funds involve the loss of the home, the farm or the business.”
Fianna Fáil declined to comment on the content of the High Court Master’s recent correspondence.
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Obviously when FG gave the banks a 20 year tax free loophole and its supported by FF, it gave them a balance of power to do what they want.
They see themselves as ” Untouchable”.
No doubt the politicians recieved a nice little windfall for their cooperation.
@Trevor Hayden: Would you want a situation where the banks can’t offset previous losses against tax on future profits? The banks would have to make that back up by increasing costs, interest rates and maybe even more loan book sales? It would also reduce the value of the stakes the state has in the bailed out banks, and limit investment in them. You probably didn’t consider any of that though, the comment section is for blind outrage, not logic.
@Padraig Bateman: Far from blind outrage, the properties could be a gold mine if possession was taken and rented to the current homeowner, therefore guaranteeing a steady income, if the current homeowner then refuses the rental agreement should repossession occur.
@Padraig Bateman: they were bailed out so what loss are you describing?
@Trevor Hayden: There’s already a method of doing that. It’s called Mortgage-to-rent, people in difficulty can surrender the property to the bank and rent it back off them, allowing them to pay what they can and keep their family home. Until repossession process in this country is changed, selling loan books to BFs is the quickest way to get rid of bad debt. Regardless of how the eviction was carried out in Roscommon, that family were in the house 10 years without a payment – would a bank prefer to go through that long process or just get rid of it in an instance by a loan book sale?
@Is Mise jay: They were still making loss. ‘Bailed Out’ was the state buying a stake in the banks, they didn’t just write them a cheque as a gift? You can buy a stake in a company that’s making a profit or one that’s making a loss.
@Padraig Bateman: Beside the Roscommon case, how many homeowners have just received a letter telling them of a vulture fund taking over their debt without having the mortgage to rent proposed to them?
This is what the outrage is over.
FF and FG are supposedly there to represent the people of Ireland, not turn a blind eye to the underhanded dealings of bailed out banks.
@Padraig Bateman: sadly mortgage to rent has been stalled by none agreement by banks. Favouring their way or the highway. Collectively they’ve let the status quo ride knowing full well the house remains ‘warm’ whilst the prices inflate again ( with the governments help). What we forget in all this is that bad loan book was already coveted by Bailout. So these adjustments could have been made from day one. But no. Banks don’t get the second bite at the cherry by doing consumer deals, only by declaring loss, gaining bad debt relief and selling on do they get to keep ALL the money the taxpayer gave them.
@Martin Critten: covered.
@Martin Critten: They don’t keep all the money the taxpayer gave them though. The state retain a stake in the banks, these banks are making a profit so in reality, the state will get more back than they put in (but have to take into account the cost of borrowing the money in the first place etc). Mortgage-to-Rent works if both parties agree but one rule is that the home is suitable, to stop a family of 3 living in a five bed house. These people with spare bedrooms want to keep the house but aren’t willing to rent out the spare bedrooms to pay the mortgage. People can have their opinion of the banks, but the priority is keeping cooperative people in their PDH, if they don’t cooperate, like with all aspects of life, you can’t help people who don’t want to help themselves.
@Trevor Hayden: I don’t know. If it was suitable it would’ve been considered as an option when they first engaged with the bank after initially going into arrears. The problem with loan book sales is that they include accounts that were previously in arrears, and have since been resolved. In my view they shouldn’t be in them. Also need to treat VFs the same as any other financial institution and regulate them.
@Padraig Bateman: and the €8/billion euro the banks were gifted to cover distressed mortgages…which was never heard of again? Any comments on that ?
@Ibhar Mac Suibhne: When did this happen? Gifted by who? Send me the documents and il give my comment then.
@Padraig Bateman: If the banks were not ran as out of control casinos you might have a point. We pay the managers of these rogue institutions huge sums to do an appallingly bad job. They get paid such sums because we need to ‘attract the best’, the monkeys and nuts argument. Seems to me that bigger nuts just got us the biggest monkeys of all.
Is Michael Martin still a td ? Haven’t heard from him in a while
@Jimmy jones: yep and he is nearing his end the only f fail leader never to be taoiseach will be his glorious legacy
@richard fennessy: Agree.. Since he became the deputy leader of the blueshirts Michael Martin knows that’s as close he will ever come to being Taoiseacht.
@Jimmy jones: still on his Christmas holidays?
All fake to make out they are doing something for the people of Ireland. FF and FG do not give a two penny feck about the people. That is as clear as day.
@David Corrigan: i would not agree with you on that. I think they do care (sure if they sorted it out they would be sure of reelection), I think the problem is that they are just not capable of solving these problems.
@john doe: Who created the problems?
Don’t forget it was FF who signed away the right to a home in the 2000’s.
Wait, our FFG government aren’t supporting an affordable housing and fair mortgage bill? How very unlike them!
I think that we are being quite unfair to vultures by associating them with these companies as vultures wait until their prey is dead before preying on its victims.
How long more should we suffer FFG .. No democracy in holding the people from election. Time will come though when mehole will have to play tough to deceive the nation again .. FFG need putting out .
Once you cut through all the point scoring and politics, this boils down to whether a mortgage is a legally enforceable contract describing a schedule of payments ultimately securing ownership of a property, or something else.
I just don’t know what that something else is, and I struggle with the idea that Ireland needs a completely exceptional solution that doesn’t exist anywhere else in the world.
It feels like “This one amazing trick that will solve the arrears crisis”, the sort of clickbait that should appear below journal.ie stories, not in them.
@Hundredth Idiot: one exception should be non recourse mortgages. That would help stop banks inflating market.
@Hundredth Idiot: anywhere else in the world was the US in 1930, who did exactly as Ed’s bill is suggesting (thoigh this should have been done 10 years ago) Where extreme market collapses led to a re-callabrating of contractual law which offered all of society protections. Lets not forget Banks got every assistance known to man for their preditory recklessness which brought about the collapse. Even referrence to the flow of credit is in our Constitution but the gombeens we have are more interested in golf days with their banker friends than being equitable.
@Martin Critten: ‘us in the 1930’s’ is that the only reference you ever have?……it’s like comparing apples and oranges.if the government had of stepped in like they did back then every body would have cried help and the government would of had to step into every mortgage.we already had a huge amount of won’t pay instead of can’t pay.
@John: I think he meant the US i.e. the United States.
@David Corrigan: yes, I know that.he has brought it up many many times now.spell check kicked in and it’s 7.45 am.
@John: whether its the only reference is neither here nor there, its an established president. Your comment is highly disingenuous. Its also a precident that’s been continually ignored in full view of favouritism to one section of society.
Cried for help.. Man what kind of judgemental robot are u ? Indeed look at the mess we are now in and continue to face simply because of entrenched views by those. What kind of cry for help did Lenihan have to listen too. Until both sides of this mess are dealt with equitably then as a society we have truely lost our soul.
@John: apples and oranges – really ?
@Martin Critten: yes we are still deep in it, one of the reasons is that we did not do what every other country did and follow ‘best’ practice.we thought we had better ideas and that it would go away.we buried our head in the sand and did nothing which let to contagion within the mortgage sector.no question there were people who fell on hard times through no fault of their own and nobody would deny them help. But there was a huge amount of won’t pay people out there………. take for example that case in strokestown.
@John: one case John, and even if 5% were chancers (every century has them) then there are still 26,000 distressed homes out there still. But that’s where this country shoots itself squarely in the foot every time with of course the media in full emotional flow. Focusing on hair splitting rather than pursuit of the common good. Which as Ed’s bill shows ‘common good’ is enshrined in much of our contractual law and constitution but very rarely used – and I wonder why….
@Martin Critten: Precedent. Michael Higgins is an established president.
@Martin Critten: 5%…..go away out of that.i’d day it’s more like 25%,and it would be even higher if the government stepped in with some package.
@Chemical Brothers: non recourse mortgage just means that the bank can’t go after your other assets. You still lose the house..
Isn’t anyone who buys these properties,which banks have seized,to profit on others misery and misfortune, equally as treacherous , it happening everywhere, even public representatives at it …..Time for people that wake up.
@Gerry Campbell: I’ll buy whatever house I want. A family home doesn’t get repossessed unless the family refuse to pay – which would imply they didn’t want the house.
@Padraig Bateman: Were it only that black and white Pat.
@Dave Doyle: Sorry Dave, I’ll see it from your point of view. The banks only go after family’s where someone is sick and can’t work to pay their mortgage, they always have lots of kids too. The person will contact the bank and promise to pay what they can but the banks won’t reply to their letters or answer the phone. Then the big bold banks hire the UDF to go and beat the elderly people aged 30 and 35 up and throw them out of the house. The banks, which operate in the most regulated industry in the country, always break the rules but the person who has broke the contract shouldn’t be held liable at all because the big bad banks caused the recession.
@Padraig Bateman: well exactly ,and away with you, my point is people need to wake up to the likes of you , and shun you out of the community, great old Irish tactic to express disgust …buy away now.
@Gerry Campbell: Imagine if all of Ireland did that. Shun away the people who want to pay their way, and support the people that won’t pay their way. Will you pay for my mortgage please?
@Padraig Bateman: exactly ,now you are getting the message even if you don’t realize it, all of Ireland needs to do this,it’s a bit like the story with crime,if no one bought stolen goods ,no one would steal, no point , so there you go , if no one buys these houses ,what’s the point in your friends the banks ,taking them….shun the vultures PS….vultures are actually a very important bird,maybe we could get a more suitable term for these funds,and like minded people, Vultures have value .
@Gerry Campbell: do you think people should honour their debt?
Mickey Martin varuka varadkar and there respective gangs all work in the best interest of vulture funds failed criminal banks and corporations while working against the people of this kip state. These are the facts I’m afraid
Do the banks ever go after the developers that owe billions and are still living the life of luxury
@Kevin Moylan: Yes.
@Padraig Bateman: You can post a link to Pat?
@Dave Doyle: There’s the link to the appeal case from 6 months ago.
@Padraig Bateman: The banks in this case didn’t get their way. I don’t think that link is very relevant re the question posed by Kevin Moylan above.
@Dave Doyle: The question asked was ‘Do the banks ever go after…?’. The banks did go after them, and were successful until the appeal. A quick Google search will give you a few more cases. Quick question for you, given that as you say the banks only care about profits and nothing else, why wouldn’t they go after developers who owe such large amounts of money?
@Padraig Bateman: you wanna hope ye don’t loose your cushy little job or become I’ll as happened to me, myself and my wife were fully compliant in our Morgage payments and have still been sold to a vulture fund…you’ll soon change your smug selfrighteous little attitude if your cosy little life takes a change you pratt.
He will call no one out to many back handers.
Honohan has no other goal in life but to make a name for himself, dont let his title fool you, he is not a judge in any sense of the word, he is a glorified civil servant and nothing more
@Ian McNally: Great bit of spoof work their.. lets not focus on the policy ffs.
@Martin Critten: *there.
@Martin Critten: Im simply pointing out his motivations for many who may not be aware of them, much like people who are constantly anti government cynically criticise anything and everything they do due to the perceived motivations behind each action
@Ian McNally: Edward Honohan as Master of the High Court has being warning the government for years about what the banks are doing re distressed mortgages. He has seen first hand what the banks are doing and the steps they take to gain repossession at all costs. He knows that the banks do not engage, despite what they say and the government spins us. He is decried as a joke by vested interest in the country. His warnings treated as no more than a rant. Yet he has to tackle the banks legal eagles on a daily basis to try and forestall their rush for eviction orders after the Circuit court has found fault with their case for eviction. They’re the few that makes it to the High Court. His motivations are based on what he sees, on how the banks conduct their business. Nothing else.
@Dave Doyle: Incorrect. As Master of the High Court he only knows the cases that land in courts. He has no idea about all other cases which end up before Bank decides to take up court proceedings. He’s seen only part of the picture and he thinks that’s everything. No bank would go to court without trying to resolve it directly with borrower. The reason being 1) cost 2) any judge would throw them out with a laugh telling them to engage with borrower first.
This is the reality I know first hand.
@astjan: The costs of all legal proceedings re eviction are borne by those being evicted. The eviction process starts in the Circuit Courts, presided over by the County Registrar in most cases, who has limited training. The banks are represented by solicitors and barristers. 99.9% of those before the court have no legal representation. In fact, most of those whose cases are brought before the eviction courts do not attend. They are already broken by the harassment of the banks and don’t have the strength to suffer more humiliation.
It’s a win win situation for the banks. That’s the reality.
@Dave Doyle: Not only incorrect but also ridiculous. First of all I actually wasn’t taking about cost of eviction but cost of the proceedings. Which is irrelevant because both are covered by bank/receiver. Eviction is absolute last step in this process after years of court proceedings. And I dare to say it only takes place in very few cases as in most cases borrowers free up the house upon a court order and no eviction is necessary.
In fairness you might be right with no representation on the borrower side (no barristers or solicitors). This is definitely something that should be looked at.
And it’s never win win for the banks. Win win would be when the loan was repaid as it should and the bank wouldn’t spend money on managing non-performing loan and legal costs. That’s the reality.
@Dave Doyle: You are aware that banks can only apply for repossession if all other options are exhausted or the borrower hadn’t engaged from the start. In Q3 2018 there were 65,510 PDH accounts in arrears. That’s 65,510 seperate borrowers that have broken their contractual obligation. 4600 new restructures agreed for PDHs. Just 68 family homes were repossessed on foot of a court order. If those numbers were equal for each quarter, in a year, the banks repossess just 0.4% of PDH property’s. Would it be fair to say 0.4% of people in arrears are deliberately non-engaging? Put back on your blinkers Dave, you won’t like the real story the numbers tell.
@astjan: You don’t have a clue what’s going on in these courts.
It is widely accepted these days that we have a #housingcrisis which is spiralling out of control as can be evidenced with #homelessness and now being compounded by the #VultureFund scandal for which FG’s Michael Noonan & Co can, and will, ultimately be held responsible for. What’s unforgiveable today is the stance being adopted by @MicheálMartin who continues to (mis)lead Fianna Fáil by gifting the Opposition’s support to Fine Gael and now the Vulture Funds as well. Ed Honohan is quite right to call MM out on that and hopefully good sense will prevail and John McGuinness will eventually succeed in getting the ‘Affordable Housing and Fair Mortgage Bill 2018’ passed into Law before very much longer. Well done to the Journal.ie for highlighting this important development. Brian (Right2Homes)
@Right2Homes: Ed Honohan is right to try to enlighten the population re this abuse.
An amendment to the Constitution (like Germany) is required to put a stop to this obscenity.
LPT (Local Property Tax on Family Homes) is a 2-Tier Tax.
Only families who own their homes have to pay the LPT.
Families in social homes do not pay anything.
This is a grossly unfair tax.
Family homes which are basic to human needs (shelter) like food, water, clothing, air ..should not be taxed in a decent society. LPT is an obscene tax on families.
https://www.change.org/p/housing-crisis-referendum-on-family-homes
John Mc Guinness FF ,last summer,asked for the Dail to be recalled to debate this but Government not interested.Ive great respect for John Mc Guinness even though he is FF&Mr Holihan.
See will mehole have the balls to do it
Poor Ed is feeling insecure again and needing a media fix.
Martin is only interested in his pension FF are only there to feather their nests ankers
Irish Family Homes should have the same special status afforded to them as in the German Constitution. That would put a stop to the obscene abusive treatment of the Irish in trying to get a roof over their heads .. a basic need – shelter.
https://www.change.org/p/housing-crisis-referendum-on-family-homes
The Irish Constitution is defective in failing to underpin Family homes as a basic need in the hierarchy of needs like food, water, clothes …
Family homes are not assets – cant liquidate them ..no where to live
Family Homes are not wealth – cant generate a revenue stream from them .. nowhere to live.
Family Homes are not property like pubs, shops, offices .. they are shelter for families …essential to life. They should not be taxed. They should have special status like defined in the German constitution.
Until the Irish bring their brains to the Polling Booths or their yellow vests onto the streets they will continue to be abused by the political class and their kids will be next.
LPT (Local Property Tax on Family Homes) is a 2-Tier Tax.
Only families who own their homes have to pay the LPT.
Families in social homes do not pay anything.
This is a grossly unfair tax.
Family homes which are basic to human needs (shelter) like food, water, clothing, air ..should not be taxed in a decent society. LPT is an obscene tax on families.
https://www.change.org/p/housing-crisis-referendum-on-family-homes
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