Are there any posters from Galway here? Arguments for and against the Homechoice Loan Scheme

There is a plan formulating on the pin with regards to the builder bailout. Is there anyone from Galway here who would be free on Monday evening?

See here for details of what you missed

floatingingalway wrote:

See here for details of what you missed

Irish people get an interesting reaction when you tell them they have a chance of getting a roof over their heads. Did you think you convinced any of the sheeple there who were all up for pouring down for the sheep dip ?

floatingingalway wrote:

See here for details of what you missed

Thanks floatingingalway - you earned that drink. Frank Fahey has quite a portfolio. Next time you'll all know what to expect and you'll be ready for them.

The people who went wanted to hear that they could get a house. People have been holding off for at least a year now. It will build up a lot more. What do you think people should do ? Rent, save if they can and wait ?

Auditor #9 wrote:

floatingingalway wrote:

See here for details of what you missed

Irish people get an interesting reaction when you tell them they have a chance of getting a roof over their heads. Did you think you convinced any of the sheeple there who were all up for pouring down for the sheep dip ?

It's quite hard to guage how many actual sheeple were there. There were certainly plenty of estate agents, pinsters and Fahy rentacrowd members. I think if we managed to raise a doubt in even one of the potential FTBs, then we did a good job.

floatingingalway wrote:

Auditor #9 wrote:

floatingingalway wrote:

See here for details of what you missed

Irish people get an interesting reaction when you tell them they have a chance of getting a roof over their heads. Did you think you convinced any of the sheeple there who were all up for pouring down for the sheep dip ?

It's quite hard to guage how many actual sheeple were there. There were certainly plenty of estate agents, pinsters and Fahy rentacrowd members. I think if we managed to raise a doubt in even one of the potential FTBs, then we did a good job.

Full marks for condescension and three cheers from the pinsters.

Tonys, if we were on any forum but this I'd tell you to get over yourself but its nice around here so I'll just ignore you instead.

There are questions over why it can't apply to renovations, second-hand purchases, building a new house on your own land, re-building an old house ... if it's a line of credit for certain people who won't get it from banks then it's sub-prime.

It's also tampering in the market.

floatingingalway wrote:

Tonys, if we were on any forum but this I'd tell you to get over yourself but its nice around here so I'll just ignore you instead.

Yep, beats having to justify your sheeple remark and attitude any day.

That's nice floatingingalway. But just remember that today's sheep is tomorrow's wolf.

O.k. biology not my strong subject, but you know what I mean.

cactus flower wrote:

That's nice floatingingalway. But just remember that today's sheep is tomorrow's wolf.

O.k. biology not my strong subject, but you know what I mean.

Not sure if that applies to your average wooly FF supporter. Its an IQ thing.

Auditor #9 wrote:

There are questions over why it can't apply to renovations, second-hand purchases, building a new house on your own land, re-building an old house ... if it's a line of credit for certain people who won't get it from banks then it's sub-prime.

It's also tampering in the market.

Bang on. It is a seriously anti-competitive sub-prime line of credit. I think there may be plans afoot to challenge it. Watch this space.

Auditor #9 wrote:

There are questions over why it can't apply to renovations, second-hand purchases, building a new house on your own land, re-building an old house ... if it's a line of credit for certain people who won't get it from banks then it's sub-prime.

It's also tampering in the market.

It’s a line of credit for people who would have got the loan from a bank a year ago and would still get it today if the banks had the cash. It’s not by any means sub-prime and shouldn’t be described as such.

floatingingalway wrote:

cactus flower wrote:

That's nice floatingingalway. But just remember that today's sheep is tomorrow's wolf.

O.k. biology not my strong subject, but you know what I mean.

Not sure if that applies to your average wooly FF supporter. Its an IQ thing.

Pity your IQ doesn’t stretch to being able to count, still I expect you know all about finances.

Now Now.....

The reason Irish banks can't lend has nothing to do with the availablity of funds. There are many factors inhibiting mortgage loan creation and the biggest, imo, is their inability to repackage loans as securities and sell them off to investors. This means that the banks have to keep the loans on their books. Guess what? They don't want to keep 100% mortgages on their books or intrest only loans, etc. They have had to return to traditional risk evaluation. This limitis the potential number of borrowers when 20% cash deposits are required, when income verification is stringent, and when past credit history must be more than adequate.

Meanwhile, back on the farm, one of the biggest and most powerful lobby groups in the country, the developers, have unsold stock which they can't sell. The govt would also dearly like property asset prices to be maintained at the highest level possible. It's good for future tax revenue among many other things.

So, they come up with the equivalent of Fannie Mae. Here's an audio link to a discussion on the insolvency of FF and Fm: www.econtalk.org/. They discuss why FF and FM went bankrupt. Apparently the main reason was that the govt under both Democrats and Republicans encourages FF and FM to lend to sub-prime borrowers - those who didn't have 20% downpayments, regular income profile and more than adequate credit histories.*

*These people have a free-market bias a lá the Cato Institute but the presenter is fair and relatively unbaised politically. There are two audio lasting about 2 and a half hours. Can be quite boring.

I can just hear the scratching of pens as local councillors write letters begging asking for Mr and Mrs A to be given their mortgage...

cactus flower wrote:

I can just hear the scratching of pens as local councillors write letters begging asking for Mr and Mrs A to be given their mortgage...

I haven't looked at the detail yet, but haven't they abandoned the grant element of affordable housing in favour of taking a share in the ownership of the property? Sounds a bit like Islamic banking to me.

cactus flower wrote:

I can just hear the scratching of pens as local councillors write letters begging asking for Mr and Mrs A to be given their mortgage...

My skin is crawling at the thoughts of it!

cactus flower wrote:

cactus flower wrote:

I can just hear the scratching of pens as local councillors write letters begging asking for Mr and Mrs A to be given their mortgage...

I haven't looked at the detail yet, but haven't they abandoned the grant element of affordable housing in favour of taking a share in the ownership of the property? Sounds a bit like Islamic banking to me.

Yep. 20% stake from what I can gather.

cactus flower wrote:

I can just hear the scratching of pens as local councillors write letters begging asking for Mr and Mrs A to be given their mortgage...

Whatever one's political proclivities, at least FF and FM were adminstered on a national basis with over-sight on the Federal level. Leaving aside the Fed governmental over-sight debacle, it seem the Irish scheme will be implemented on a local goverment level. Is this being done intentionally before the local elections? Will councillors begin to get mortgages for traditionally unqualified borrowers and make the borrowers feel like the govt is doing them a favour, and at the same time bail out the developers?

cactus flower wrote:

I can just hear the scratching of pens as local councillors write letters begging asking for Mr and Mrs A to be given their mortgage...

Indeed.
So along with people saying that Councillor X *got* them the medical card, *got* them the planning permission, they can *get* them the mortgage.

rockyracoon wrote:

The reason Irish banks can't lend has nothing to do with the availablity of funds. There are many factors inhibiting mortgage loan creation and the biggest, imo, is their inability to repackage loans as securities and sell them off to investors. This means that the banks have to keep the loans on their books. Guess what? They don't want to keep 100% mortgages on their books or intrest only loans, etc. They have had to return to traditional risk evaluation. This limitis the potential number of borrowers when 20% cash deposits are required, when income verification is stringent, and when past credit history must be more than adequate.

These are not 100% mortgages, the upper limit is 92%. Why 92% and not 90% I have no idea, but they are not 100% and there’s no point I can see in trying to present them as if they were.

The alternative to this sort of activity, in a situation were in the short term very few people have the 60,000 plus in savings for an 80% mortgage is that existing stock ends up in a fire sale, builders go bust, can’t pay the banks and we end up picking up the tab for these losses.

BTW, in a fire sale where property is being sold at well below cost, who do you think will have the cash to take advantage of this situation, FTB’ers or seasoned property investors?

Tony, the point is that people most don't have €60k laying about becuase our economy doesn't make this type of earnings/savings capability possible for the vast majority of people. Home prices, in the absence of securitisation and many other factors, would be much lower in Ireland and in line with people's incomes.

I have no sympathy with developers who have landed themselves in this mess along with a whole host of other property players who ramped Irish property prices way beyond what the economy can support. Let them hang on their avarice.

In addition, if the "seasoned property developers", as you call them, can buy the excess stock that is their choice. They are able to do this because the entire property market in Ireland was seen as a gravy train for so many vested interests and intentionally allowed to become a bubble.

The current govt scheme whereby €1.65 can be borrowed in this current economic climate is nothing more than a political and developer gravy train.

rockyracoon wrote:

Tony, the point is that people most don't have €60k laying about becuase our economy doesn't make this type of earnings/savings capability possible for the vast majority of people. Home prices, in the absence of securitisation and many other factors, would be much lower in Ireland and in line with people's incomes.

I have no sympathy with developers who have landed themselves in this mess along with a whole host of other property players who ramped Irish property prices way beyond what the economy can support. Let them hang on their avarice.

In addition, if the "seasoned property developers", as you call them, can buy the excess stock that is their choice. They are able to do this because the entire property market in Ireland was seen as a gravy train for so many vested interests and intentionally allowed to become a bubble.

The current govt scheme whereby €1.65 can be borrowed in this current economic climate is nothing more than a political and developer gravy train.

1. It’s 500 million, not 1.65 billion
2. Sympathy doesn’t come into it, the preservation of the national finances, such as they are, should.