The Keane Report

The Keane Report

Keane ReportThe Keane Report is due for publication shortly; recently leaked documents suggest that the following ideas will form a central theme to the suggested policies:

  1. Homeowners who can no longer pay the mortgage could negotiate with their lenders to hand back the property but remain on as tenants.
  2. Banks who repossess homes will then lease them to local authorities to deal with housing shortages.
  3. The timeframe to get discharged from bankruptcy to be cut from up to 20 years to just three years.
  4. People facing bankruptcy will be offered a “non-judicial” route — meaning they won’t have to go through the courts in all cases.
  5. The Money Advice and Budgeting Service will be beefed up with hundreds of “front-line” financial advisers who will deal exclusively with distressed mortgage holders.

The IMF pushed for this bill – which must be put before the Dàil by the end of March 2012, it is unfortunate that we nationally lacked the foresight to have this legislation in place already.

What works in other countries – and has been proven to work as opposed to being a ‘proposition’, is that Debt Mediation is a regulated activity, no further Governmental organizations required (such as a ‘beefed up MABS’).

What also works is a non-judicial option, but this must amount to personal examiner-ship and have enforcement backing or it will be disregarded by banks and creditors generally.

There are almost 100,000 people on the housing list, any evictees potentially end up on that list so the idea of renting back properties or giving them to local authorities does hold merit, but we are not settling arrears issues in this manner generally, instead opting for an endless “delay & pray”.

This coming Monday there will be the follow up documentary to Further Shock called ‘Property Crash, Where to Now?’ it will make for some very compelling viewing. For now we will need to see what the Keane Report suggests in full and also the appetite the Department of Justice has for enacting it or going beyond the recommendations.

Of course, we love to hear what you think the solution would be. So today we ask that you give two or three ideas that you think might help make the situation with arrears/debt/property any better in the future?

There are 34 comments for this article
  1. john at 11:51 am

    I think that there is a lot more than Banks .There is the TAX MAN / WOMAN If they were not closing down the business all over the Country .We might be able to get work and pay our Bills I know quite a lot of Business that have went bust over the cost of rates and tax. People should be looking at the reasons why there is nothing here. All the Government want is for MORE OF US TO MOVE OUT OF OUR COUNTRY .Less payments for them and they will look good.For God sake wake up THEY DONT KNOW SWEET F ALL ABOUT RUNNING A COUNTRY. I TAKE MY HAT OFF TO THE PEOPLE OF NEW BEGINNINGS. BUT DONT FORGET THE SMALL BUSINESS PEOPLE .With us there is NOTHING THATS WHY YOU CANT PAY YOUR BLOODY BILLS

  2. Andre Dasouza at 12:49 am

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  3. Lynda at 7:43 pm

    Shoot, who would have thought that it was that easy?

  4. Eamonn Kelly at 1:13 pm

    Why can the mortgages not be renegotiated to cover a longer period of time? e.g. from 20 years to 40 years, in some European countries houses are only owned by fourth or fifth generations down the line after the initial purchase..

  5. trevor at 8:42 pm

    Increase Tax Credits, Homeowners & Banks 50/50 agreement. For example, homeowner bought property for €400,000 and is now worth €200,000. The bank recognise this and enter an agreement with homeowner for say 10 years. Agreement along the lines that the homeowner services their 50% repayments (reduced payments), keeps possession of the property and looks after the upkeep. The bank retain the other 50% until the 10 yrs are up. In the meantime the government introduce tax credits for those homeowners effected. This way the homeowners will have more disposable income and start spending more. This extra spend will in turn inspire confidence and encourage growth. After the 10 yr agreement is up the property has returned to its purchased price and everybody has been serviced. 1. Homeowner keeps possession of property and its value is restored 2. Banks receive regular payments to service mortgages 3. Government led initiative to recovery.

  6. Kosogun at 11:21 pm

    I think I have said it some where before. The solution is too late. Individuals should have been rescued instead of the banks and the builders. The money paid to individuals should be recovered as part of special tax levied on the receipient which can be adjusted as part of fiscal measures to suit the economy. Indivual would have been made to pay the money received to banks to cover their losses. They will then be making a lower mortgage payment to banks. That way transaction in the property market would have continue and this substantial negative equity problem wouldn’t have happened.
    and the economy wouldhave been ticking over.
    Even those who came up with the mortgage arreas solution are still shieding away from reality, instaed of advising the government to bite the bullet.

  7. Barry McEvoy at 2:42 pm

    Hi,
    I would like to make a comment regarding the property and debt situation.
    Having looked at the RTE programme on Monday night regarding the property crash and the Frontline programme that followed, it seems that the only realistic solution to the situation was put forward by Ross Maguire SC. This New Beginnings solution seems to represent a win win win situation for everyone involved and the banks should not be consulted but FORCED to cooperate and introduce this scheme for customers struggling with mortgage repayments. At least this would result in people being treated with some humanity and not being made slaves to the irresponsible fat cats in the banks.

  8. sue kelly at 1:35 pm

    so let me get this straight, it has been suggested that homeowners who can’t keep up repayments are going to be given the option of handing back THEIR keys and bank/building society can approach local authority to help with their housing shortages. What about the poor unfortunate who had to give up property in the first place, where are they to go????

  9. marian dooley at 8:28 pm

    I thought the idea suggested last night in the Frontline programme of a union or organisation of mortgage holders in negative equity to support and help each other in the negotiation process with the banks safety and support in numbers perhaps could be coordinated by yourselves

  10. Peter McMillan at 7:57 pm

    If the Banks have been recapitalised by twists and turns – by us the citizens of the Republic – The free state ? Why then can MABS not be allowed to overide the Banks and let MABS deal with the debt directly between those affected and using the proposed agenda. The Banks will not treat individuals fairly or even sensibly at that. Why not involve New Beginnings in the process also.At the end of the day we are talking about peoples lives – their families and their futures.
    Peter McMillan

  11. Sam Burke-Kennedy at 9:35 am

    Financial institutions that gave out 100% mortgages should have to share the loss accrued through negative equity, should the mortgage holder wish to sell

  12. c corr at 2:56 am

    Get back to real values and eradicate greed.
    A Simple Maths equation would have provided the answer: outgoings exceed income equals trouble.

  13. Down with this sort of thing at 2:03 am

    It looks like a helping hand for people struggling with their mortgage, its not, its just another redistribution of wealth from the poor to the rich, the property developers and the banks. I have a memory of a picture that was in my history book, a cartoon from the 17th century showing the poor under-nourished peasant farmer struggling to carry the fat landlord and the fat clergy man on his back. How little things have changed.

    “Homeowners who can no longer pay the mortgage could negotiate with their lenders to hand back the property but remain on as tenants.”

    Oh what a brilliant idea, we taxpayers have handed over 120 billion (80 to the banks, 40 to NAMA)to the banks and developers to bail them out and now they want our homes as well, what genius thought that one up, the banksters did, soon their plan to have everyone in the country either up to their necks in debt to the banks or taxed out of existence to pay for the banksters gambling on the stock markets. Why have an asset that only generates revenue for the banks for twenty or thirty years when this way they can have revenue from the asset for much longer.

    “Banks who repossess homes will then lease them to local authorities to deal with housing shortages”.

    What housing shortage? Academics from Maynooth University say there are 300,000 empty houses in Ireland, there are about 12,000 unused hotel rooms in the country built for the ridiculous tax breaks that fianna fáilure gave to their builder friends. Why can’t that be used for social housing? after all the tax payer has paid for these houses and will be paying for them for the next 20 years.

    “The timeframe to get discharged from bankruptcy to be cut from up to 20 years to just three years.”

    Well of course the time to get discharged from bankruptcy has to reduced, how are all the developers going to buy back the property that the taxpayers have compensated them for the loss in value. Another idiotic idea to help the banksters and developers.

    “People facing bankruptcy will be offered a “non-judicial” route — meaning they won’t have to go through the courts in all cases”.

    Well DAH! Much better to hold the banksters and developers cases in camera, wouldn’t do for the great unwashed horde to know about the sweetheart deals between NAMA and the developers like David Daly where NAMA was prepared to allow his wife Mary to keep €7 million of the €17 million in cash (plus another €80 million in assets) transferred to her by him in 2009 for “tax reasons”.

    “The Money Advice and Budgeting Service will be beefed up with hundreds of “front-line” financial advisers who will deal exclusively with distressed mortgage holders”.

    This will go the same way as the announcement by Michael Woods of the setting up of the The National Educational Psychological Service (NEPS) in 2000 (not sure of exact date) and that NEPS was to have 220 psychologists working for it. By 2007 that has 120 and in 2010 its budget was cut. I’ll bet that there will be no legislation introduced to increase the number of advisers in MABS, instead when some politician is quizzed about it the taxpayer get the stock answer “No, the government is fully committed blah.. blah.. blah..”

    The fact of the matter is that the banksters have already written down these “bad” mortgages on their books, they have to, accounting practice as covered by SAPPs (17?) and IAS/FRSs. Bad or doubtful debts cannot be considered possible future income (or words to that effect). The banks have written down these assets and have already been bailed out by the taxpayer for doing so. So why do that the the asset (house) as well????

    The common phrase used is debt forgiveness, people who can’t pay their mortgages need to have the loans restructured so that they can pay their mortgages, will it be worrying me that in 25 years time my 4 bedroom house will be too big for me when the children grow up and move or that I still owe X tens of thousands on it, No, I’ll be selling it and moving to a smaller house anyway.

    That’s what we need to do, not hand over the family silver to the banksters.

  14. MARIE NOLAN at 11:09 pm

    I was in a council apt 50/50 told by the council they need a date when i will b out. They said they were not a charity.I was not told i had any option give it back or ill b on the streets my partner just had a kidney out ( cancer ) no i was told need a date. sold everthing for deposit then they ring me you can hold on 2 it ? 7 months later ?

  15. Mar Ryan at 7:00 pm

    The banks cannot continue to turf people out of their homes, some houses have been re possessed locally and they have quickly become derelict, windows broken and grass growing out over wall. This is not the way forward. Handing them back to the banks and renting is definitely a good option. Where are the friendly bank managers now? We thought their friendship was genuine…. but it was a passing friendship until they got us to sign up for the loans and they got their fat commissions…. what happened with those fellas reminds me of what other institutions did to single women who fell pregnant and went to the Catholic church for help.

  16. turlough o brien at 6:24 pm

    One thing I would like to see is that individuals with pension funds could get access to the fund before 65. Even if some tax is paid on it. I would rather have €150k now than when I get to 65. This would be on the basis that they would go off mortgage payments…..What peace of mind is a lump sum at 65 if you are out of the house that you love.

  17. LM at 5:41 pm

    Can I just ask this? With regard to point 1. “Homeowners who can no longer pay the mortgage could negotiate with their lenders to hand back the property but remain on as tenants.” If the Homeowners cannot afford to pay the mortgage, how are they going to remain on as tenants to pay rent? Are they going to apply for rent supplements through welfare? Why don’t the Govt make the Mortgage Interest Supplement more open to people so they can get help in paying the interest part of their mortgage instead of them renting and looking for much (much) higher rent supplement payments?

  18. Eileen Doyle at 3:56 pm

    If a house bought for 350000 Euro is now worth 175000 Euro DOWNGRADE the repayments as this house will never again be worth 350000 Euro why should the people take all the load.

  19. Ann Marie Diggins at 3:23 pm

    I don’t think that bank’s should hand houses over to help with the housing waiting list unless there is some agreement about what will happen if their are troublesome families or persons placed in these houses. We must try to protect the value of the homes that working people are still paying full repayments for!!!!

  20. mike at 3:04 pm

    Extent the mortgage term. by 5 to 20 years

    Have an interest only term of 5 years for both Buy to Let and Residential properties

    Same rules should apply to all banks particular banks, which are leaving Ireland as they currently bulling owners.
    When a bank take ownership of a property via the courts the debts should be considered cleared as people are leaving Ireland to get away from the banks.

    Put a system like in Canada (insurance etc) in place so that this problem can never happen again

  21. Tax slave in private sector at 2:38 pm

    Dramatically reduce the mortgage interest rate on standard variable for those mortgage holders whom have managed to keep out of arrears so they can clear their mortgage sooner. To keep penalising people trying to pay off a mortgage by increasing the monthly payment is a disincentive to keep a mortgage up to date especially if the property is not worth what you owe on it.

  22. T Thompson at 2:38 pm

    I think allowing people who default on their mortgages and end up in the nightmare of repossession should always be given the option to stay in their homes and pay rent to the bank as an alternative solution.

    Too often these people and especially families are pushed to the brink of depression often feeling shame and loss of dignity? who wants to tell their children they have failed to keep a roof over their heads? As parents we are all aware of how a sense of security is profound to any child at any age, so yet again this country is failing our children

    The above solution means the whole ordeal can be keep to a more dignified less stressful procedure your children wont need to know until they are older, neighbours and friends wont be aware of your loss of home and people can choose to have a dignfied silence if this is their wish.
    It would certainly reduce suicide numbers, breakdown of marriages, and allow people and families some small control and return of dignity and respect.

  23. John Sherwin at 2:32 pm

    We need to treat individuals in the same way banks have been treated. That is their negative equity, in the case of mortgage holders through Government and Banking profligacy, be re capitalised by a national effort with no fault attaching. This is the only fair way

  24. Sean McCabe at 2:15 pm

    All great ideas in this report Karl but I would put my house on it that none of them will be implemented. The delay and pray brigade include our government (whichever party that might be) as well as the banks. Nothing will happen because nobody wants to pay for it!

    Sean

    Raheny

  25. Seamus Carrick at 2:03 pm

    Well Said Mr Deeter, we need some pro-activity in this economy, not in-activity which is what is happening at the moment. Bankruptcy should be cut down to three years and it would go a long way to soliving a lot of the country’s problems.

  26. Brendan Murray at 1:38 pm

    Why not extend mortagages to reduce the payments to a realistic level and if necessary the mortage can be taken on by the next generation ,
    This allows everybody to take responsibility for their own actions

    Regards
    Brendan

  27. Purple at 1:37 pm

    government definetly needs to get going on implementing some of these recommendations fast -once this is published!

  28. Mark at 1:19 pm

    Let the market take a natural course of supply and demand.
    The rent assistance from the HSE tends to push renting cost up because it has a fixed cap. This can cause house prices to rise artificially as it becomes more attractive to buy to rent houses.
    I suggest that the cap in rent assistance could be made into a range instead of blanket cap. The tenant can choose to keep a proportion of the payment (if they negotiate a good price) or pay a small amount (say 50 euro a month max) extra as they wish. The cap could be adjusted yearly in the budget depending on the new average rent price.

  29. Rory Conlon at 1:18 pm

    Why cant we simply give people who cant aford to pay the Mortgage some extra time, ie a 50,75,100 year Mortguage, what ever length that allows them to have a monthly payment they can afford, Yes this means there kids may have to continue paying but by that time two things may happen, 1 The ability to pay it back sooner might be available ie the person can afford to pay or 2 the Mortgage will be tiny by that time and easily paid off or with sale of house. This way no one defaults, banks get there money eventually, no one looses there family home. We forget there will be a time when a recession turns. Lets get back to basics and some family values and good honest hard work.

  30. Pearl at 1:11 pm

    If the local authority takes a repossessed home to rent out will the original owners be given the option to buy it back after a few years.

  31. Stella O’Shea at 1:00 pm

    Devalue all mortgages by a third and that way it would give some hope to those suffering.

    Freeze interest on mortgages for a year or two to enable those struggling to see some way forward.

  32. Gary McAuslan at 12:55 pm

    In my opinion, the solution is straight forward, having lived in the UK during the Thatcher era, when house prices collapsed and repossessions pulled down the housing maket as the economy fell off.

    In order to mitigate further banking risk in €urope, and avoid the inevitable (more capital injections from European government purses), the approach should be to divert IMF funding away from bailing out the banks, to the end user and ‘level’ or correct mortgages, personal and car loans, back in line, mortgages specifically back to 3 times basic salary (where they should be), significantly reducing the potential for further repossessions, mitigating the risk as far as is reasonably practicable.

    Yours sincerely

    Gary McAuslan

  33. Thomas Burke at 12:41 pm

    What is the situation as regards people who are in trouble with investment properties.What can they do when interest only or restructuring is not enough for them to avoid arrears
    Thomas Burke

  34. Joe Bloggs at 12:28 pm

    I own a house under a shared ownership scheme. It is no longer suitable for my family size (really, it’s not) and while I can for now keep up payments, I cannot indefinitely as I have moved out and am renting elsewhere. The council have been shocking in their ‘not our problem’ attitude and it took 5 months to get a meeting after which they ignored me again. Am I the only person who wants to offload his home, pay his debt and is just looking for some assistance from the council, ie the state? It’s bizarre. I am claiming nothing, fiddling nothing and just want something worked out. The banks are better to deal with then the councils it seems….