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A CABINET MINISTER has said there is no “global strategy” that will be used by banks when seeking to make deals with customers in restructuring their mortgages – but acknowledged that households struggling to make repayments will have to make some sacrifices to reach a deal.
Jobs minister Richard Bruton said reports that homes would be asked to give up private health insurance, or lose a Sky TV subscription, would not be true in all cases – but that each household hoping to make deals with banks would need to make changes to cut spending.
“The truth is, there are many people who are meeting their obligations,” Bruton told RTÉ Radio 1′s This Week programme.
“It is those who simply cannot do that, who are unable to meet them, and there’s no way that they can meet them… those are the category you have to deal with,” he said, adding:
Obviously, that’s going to require a sacrifice – both from the banks, in dealing with the overhang, but also with the individuals and families concerned.
While the provisions of the Personal Insolvency Act would apply as a final option to people in severe mortgage distress, Bruton said banks and individuals would have to negotiate on individual arrangements outside of that structure.
“These are not easy situations,” Bruton said, suggesting a desire that banks would neither micromanage an individual’s finances, nor pursue across-the-board tactics ”Government cannot announce a global strategy for every house.
“This is a negotiation where the people have to come to the banks and work out a resolution so they can continue to stay in their hous, [and] meet their obligations.
The bank gives something, the people give something, and you work out a sustainable solution.
Earlier, Bruton’s junior minister Seán Sherlock had told The Week in Politics that he did not anticipate that families with two working parents might be told to give up one of their salaries and stay at home.
Sherlock was responding to reports in the Sunday Business Post that the deal could force mothers to stay at home if their earnings are less than the amount the family otherwise spends on childcare.
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Abolish health insurance, abolish Sky Premium, abolish second car ownership, abolish all luxuries but only after the Ministers individually do so first. Let the Minister take their own medicine first.
The first step in the austerity is that we need on an emergency basis to cancel all publicly funded pensions of more than 30,000. Sorry we can’t afford to pay these. Second, we cancel all publicly funded pensions until the recipient is 65. Tough times call for tough measures.
As for the Senior Bankers, let Mr. Boucher and his colleagues take their own cuts. If they want to mount legal challenges the the cuts, that’s okay. The Government can plead inability to pay as they have in so many other instances.
Loss making banks can’t afford big salaries and pensions.
Well said.
Well Said!!!
Yeah its easy for Bruton to say that people will just have to suffer he’ll never have to go through that and he knows it!
Let them eat cake
Well said Peter. Literally the elephant in the room.
The banks have been given far too much say in the day to day living of people, all thanks to Fine Gael and Labour
How can anyone make a deal with an organisation that has a veto, Burton is bereft of ideas and answers.Bet he has Sky
The truth is he and his cabinet colleagues have their heads in the SKY – arrogance of historic proportion
Clueless
He more than likely does have sky, but he can bloody well afford it, there is people out there who are not paying there mortgages on homes or investment properties and still can afford holidays, sky sport, pub.
I know some of them myself.
Now there is also a flip side, thousands of people who cant afford there mortgages and never ever will and its these people that need help and support.
Unfortunitly There is always going to be people who take advantage, we are Irish after all.
@ Philip eeno
Its people like you that have us where we are today, This “I know a someone who Story” is old, the banks must be made help the majority forget about the one that got away, Move on.
New government please!!
@ Genius, that is the pragmatic and productive problem solving approach. There may be a few outliers , a few people seeking to exploit the system, but an analysis of income and expenditure will sort that out.
I am three years from the end of my mortgage and then I am free. But this does not blind me to the fact that there are vast numbers of younger borrowers and families out there who are crippled by immense mortgages who have already been put through humiliating rituals with the banks to see what discretionary spending cuts that they can make.
It was the banks who scammed the borrowers by not sensibly controlling credit, in turn causing residential property price inflation, an asset bubble, which further increasing borrowing to unsustainable levels.
We need to focus on the typical, average and mainstream cases of mortgage default. I don’t want my neighbours or strangers rendered homeless or reduced to loan serfs.
Are we expected to pour the entirety of the personal incomes of people into supporting impossible loan repayments as in Japan. If we do this, we will get the same result as Japan. Austerity and elimination of personal consuming will not aid recovery. It will make the recession more entrenched.
If private medical insurance is surrendered and Sky and UPC packages are all cancelled, what will happen to the employment.
Are we in for the Scrooge approach?
Concerning ourselves with the possible exploitation and abuse by a small minority will stop a solution and make it impossible for deserving victims to be assisted.
We need more solidarity and altruism.
Let it Go. But Not Sky Go.
@ Philip enno, chucking, I thought so!
@peter
Yeah Peter chucking,
Thats it thats the answer to everything, Our brilliant Government were just like you before they got into power, they had the answer to everything and they made the people believe them.
When it actually came down to it they couldn’t even answer a yes or no question.
Its funny that we both want the same thing but your answer to it is to put every suggestion down.
This site can be just depressing sometimes.
@ Philip, we have to focus on the real victims not invent paper tigers of those exploiting mortgage write downs when such write downs have not even started.
There has to be a recognition of reality. It is easy to establish genuine repayment capacity. Most distressed borrowers want to repay but they are unable to repay. Reduce their mortgages to a level that they can afford to repay and still have some of life’s modest pleasures. Our economy is based on consumerism. We cannot afford to divert most of income to the banks.
It will be easy to screen out the opportunists, if there are any, but basing a mortgage arrears policy on the apprehension of such opportunists will ensure disaster. The mortgage arrears crisis is now so serious that a stupid move will provoke a massive solvency crisis.
This is a time for solidarity and humanity.
@Dave I’d gladly let them take 35% from me at source it would at least leave me with something, my problem with my mortgage is that I simply can’t afford it, massive drop in salary, done everything by the book, sent on bank statements, pay slips clearly showing an inability to pay only for the banks to say all we can offer you is interest only which came in at ,€900 for me earning €25k with two kids and spending €100 per week on petrol to get to work wasn’t feasible, so I’ve paid what I could every month while making sure I have some semblance of a life, haven’t had as much as a can of beer since April 2010, no sky sports, no second car, no public transport so I can get rid of our only car and save money that way, my point being that i’m racking up arrears on my mortgage every month and I haven’t heard a word from my bank in almost two years since I had one of their reps out to show them that I had no public transport and was living in the middle of nowhere in a half empty estate, its like the banks are burying their heads in the sand hoping the problem will go away, so I hope they get in contact with me offering me a deal cause i’m in at around €20k arrears now
@ Jason, your situation is more common than you think and you are being treated appallingly. Your case is a very good example of a case where a substantial write down is merited. You are being flogged by debt. I truly hope that you will get a good deal and a mortgage reduced to a level at which you and your family can live.
There are those who would have us believe that the only distressed borrowers have eur 3million houses, huge salaries, private helicopters and go on multiple foreign holidays every year. My impression based on analysis of the quarterly returns to the Central Bank of Ireland is that your case is quite typical but no less unfair for that.
My best hopes that you can get a life back.
SO now the benchmark of being well off is if you have Sky Sports or VHI. My God, they have well and truly lost the plot.
Looking at your situation I would say you are better of posting the keys to them stopping your mortgage payments and finding somewhere near to work to rent. Even if they reposes its not as if they will ever get there money back off you because with 25k coming in you will never afford it.
Words like strategy , global and Irish government don’t quite sit with me. Somehow they give the strong impression they make it up as they go along.
@ Richard Day, laughing, yes, indeed.
Irish man, scots man and English man walk into a bar, Scots man buys a drink with money from his pocket, the English man also buys a drink and puts it on his credit card, we will finish this joke when the Irish man gets back from asking the bank if he can buy a pint..
Ireland and Cyprus are totally different according to Minister Bruton. Our banks are generously capitalised. We have strong economic fundamentals. Our boom has restarted. Everything is fine and daisy.
How did I know that the politician was telling lies? I could see his lips move.
It was a tentative and hesitant performance. It suggests to me that the Government is starting to awake at last to the scale of the mortgage arrears crisis.
The scale of the problem is truly immense and will not be solved by cancellation of Sky Sports or getting rid of a second car. In many cases, mortgages taken out since 2001 or consolidated since that date are simply incapable of being repaid in full.
The other side is that if a realistic provision were to be made for the cumulative mortgage arrears problem for each of the banks and lending institutions, and a disregarding of the hope of a recovery in residential house prices, the Banks would be grossly insolvent. The additional capital is not enough to meet the black hole of mortgage impairments.
The whole shite about sky tv is just one of the many condescending pieces of crap thats spouted to us ‘minions’ by multimillionaire politicians.
Enslaved to 60,000,000,000+ euros of foreigners debt. The same foreigners who are now lending us money at interest to pay them, themselves back.
And we are encouraged to focus on whether we give up Sky TV, which we are more or less forced to subscribe to because apparently paid advertising and millions in TV licence fees arent enough to keep us entertained.
Ok, coherent ‘rant’ over with.
@ Jason, a wise and insightful ‘rant’ , I think.
the truth is they have no plan
the government have only woke up to the impending mortgage crisis
which will require another bail out and a depositers levy… wont happen immediately but irish banks and any savings ain’t good bedfellows
i fear what will happen myself gerbreen
Is Bruton putting the country up on eBay?
Well Ebay does have “Zero Insertion Fees this weekend plus how to make your listing picture perfect”, which does sound a little dirty to me. What would the buy it now price be?
@ Mark, yes, I am reading it at the moment. It says, only one careless and distressed owner.
That’s the €64bn question..
Ok we get the message.
Everyone, cancel your health insurance, let’s bring this turkey home!
I no longer trust politicians or banks. I don’t trust the regulators. I suggest that people should start taking precautions. Be careful. We can learn from Cyprus. The politicians are disconnected from the mood and welfare of the people.
Fine and feicing dandy to say this Tosh when you get paid what you get paid Dicky
Banana Republic
Septic ireland
@ Hilary MCDuffy, I want to disagree, I really do but I can’t honestly disagree.
We don’t need a global strategy …. we need a LOCAL strategy to sort out the problem ….. Set a figure of about 35% and take it at source .or by arrangement … anything left is able to be spent or saved .in the ecpnomy .. helping job creation etc … the banks get a defineable amount and people have money to live on … it is going to take ages to resolve the economy so at least this way everyone gets something ….this is simple economics but benefits everybody in the end ….
Would anybody trust this government to look after you if you became ill. I certainly won’t be giving up my health insurance
@ Barry, people have paid with their lives because of not having had private medical insurance and so you have justification for your view. If you can afford it, pay it.
So ‘households struggling to make repayments will have to make some sacrifices’ according to Richard. Is his head up his a***. Where does this stop? How many people cannot sleep due to hardship and he talks about SOME sacrifice. Bad for my BP.
@ Mary, it is reminiscent of Charlie Haughey telling us we will have to tighten our belts as he lived as a lord of the manor.
It is easy to prescribe hardship and sacrifice for others.
Are we seeing political leadership?
You’re dead right there Dickie ; it’s not “Global” ; it’s “International” as in – Monetary Fund !
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