Small Rant about Banks, Mortgages and The Code

Did you see this today?   Article from the Irish Independent about how the banks are making a proposal to the Financial Regulator about the existing Mortgage Code.  The code is there to protect mortgage owners, and in the bank's opinion, it protects them too much!!  I'm so mad right now. 

Basically, the banks want to propose a new code, which wouldn't allow mortgage holders to play the system as much as they might at the moment.  They suspect that people who can afford to make their repayments are defaulting in order to (a) hold onto their tracker mortgage, and/or (b) not get their house repossessed.  Does that make sense to you?  Surely if you are worried about getting your house repossessed you cannot afford to make your repayments?  I'm confused, lads. 

If you sign up for a mortgage, you are taking a gamble. Should you fix? What if the rate goes down and you miss the opportunity to pay less?  If it goes up you're singing.  I call that a gamble.  You're second guessing what could happen in the future.   If you go for a variable, you take a gamble that it might go down an interest rates along with corresponding repayment amount fluctuations will go in your favour.  But like any gamble, it might not - it might go up, you might be screwed. 

A tracker is no different.  You pay over the odds, agree a rate to pay your bank over and above the standard ECB rate, and you track the ECB rate for the duration of your mortgage: happy out.  If the ECB goes up, you're in a spot of bother, if it goes down, you're OK.  If it stays the same - as it is rumoured to do, until at least the end of 2011 - you're OK.  If you can make the repayments and haven't lost your job/received a massive pay cut, that is. 

What the banks are proposing, is that the protection that the Mortgage Code affords mortgage holders, be diluted.  Right now, if you are in arrears and make a deal with a bank to give a different repayment scheme a go, you are protected (for a year) from the bank approaching you for repossession.  The banks are concerned that people are going to take advantage of this rule and continue breaking each new agreement after 51 weeks or so, and continue to protect themselves for a further year.

What the frick is wrong with that???  I ask you!!  The banks have taken advantage of every rule they possibly can in order to stay afloat, over the last 2 years especially. They have been doing it in fact for years.  Big companies play the system & get away with it, and when a small company tries to do it they get screwed.  We own the banks now for fcuk sake, they cannot possibly get away with trying to screw us some more.  We are their saviours for Christ's sake!

In my humble opinion, just because the tracker rates are not in their favour right now does not mean they can go and reverse the binding agreement they have with us.  Tough shit lads, you're long overdue a right rollicking.  If the tables were reversed you can bet your butt they wouldn't be off chasing us going "Oh I'm terribly sorry, we seem to be making an unfairly large amount of money off you at the moment, please have some back with our compliments." You bet your sweet ass they wouldn't.  Tough shit lads, stop trying to screw the people who are already fcuking bailing you out, from every conceivable angle.  Fcuk the lot of you.  BANKERS. 

Show me the Money - Credit Review

There has been talk on the ground for some time about how the banks HAVE TO lend to the SME sector to try and survive the recession and all the gloom it brings.

Banks involved in NAMA are going to have to play ball with SME's, and Enterprise Ireland have set up a website full of information about making the system work for you.

The "Credit Review Office" as it is called was launched this month, without too much fanfare I'm sorry to say.

Essentially it's there as a support service for those who have been refused credit by banks involved in NAMA.

Some text from their site:
"The Credit Review Office has been established to conduct this review process and will accept applications from SMEs, sole traders and small and medium-sized farm enterprises that have had their application for credit refused or reduced or have had credit facilities withdrawn, and feel that the bank’s decision is unjustified. The Credit Review Office will, on application from the borrower, carry out an independent and impartial review of the bank’s decision."

Best of luck to anyone who needs this service and anyone who gives it a go. Let us know how it works out.

David McWilliams

He's telling it like it really is, over here on his blog. I haven't always agreed with David and the way he explains things - being a jaron-creator, for example - but his words today are clear and well thought out. I think more people need to read it. Go!