Mortgage arrears on the increase and simple solution being ignored

All of the comment yesterday and this morning on the current mortgage arrears situation miss one very important point and that is the significant number of people who are not yet in arrears but who will be in the coming months. The number of people who come to see me who are not yet in arrears is still rising and is of great concern since they are not in any of the arrears figures published yesterday.

Despite what the banks and government want us to believe this problem is getting bigger and nobody is taking it seriously enough to stem the tide. In the Irish times today David Hall of Irish mortgage holds association makes this same point better then I could and has been for some time.

In my recent interview on RTE I spoke of the current environment being different and nothing like what we have seen before. Well it seems to be getting worse through lack of action not because of lack of solutions. In fact since that interview solutions have dried up, banks have been given instructions by the central bank and government NOT to do any deals for debt forgiveness with borrowers. This is the continuation of the government policy of looking after the fat cats and make the people in trouble or most vulnerable pay more.

The upcoming Personal Insolvency Legalisation has been tainted by the fat cat banks and been allowed by the government. So if the banks do not play ball then the legalisation will be another failure for a government which has turned its back on the ordinary people.

It is obvious to everyone that there is a massive household debt problem here which is holding back the people economically and emotionally. This needs to be addressed and quickly. Our leaders should hop on the government jet and head not to Brussels for fancy meetings and dinners but head west to Iceland where they have solved the household debt problem simply and quickly. The Icelandic government nationalised their banks (as we effectively have done) then instructed them to write down all home mortgages to 110% of the property value. This had the effect of releasing the ordinary people from the excesses of massive household debt and in turn helped their economy to become the fastest growing economy in the western world.

Not only that but after having had to let their banks go bust and default on major loans they have successfully returned to the bond markets. The bond traders know how to get their money back when a default happens and that is to lend again! This is something which seems to have passed our government and their advisors by.

The mortgage arrears problems are not going to go away with tinkering around the edges. If the tinkering continues the economic disaster we are experiencing will only get worse! And it looks like that is what is in store for us for a long while!


Paul C Carroll

AIB finally waking up to Debt Forgiveness


I read in the IrishTimes today that the head of AIB arrears support unit Garry
Stran has finally admitted that there is going to have to be some sort of household debt forgiveness. This is what some of us have been saying is so necessary to get this county off its face and back on its knees for a long time. AIB seems to be the first to come out of denial!

If the article is to be taken at face value and I have no doubt to believe otherwise and PAMELA NEWENHAM is a very creditable journalist, this will have the single biggest impact in kick starting our broken economy. This will mean much more then not paying the €3.1b Anglo bond, increasing taxes and introducing massive cuts.

If the banks finally realise that they have to free people of the massive household debt burden, which THE BANKS ARE RESPONSIBLE FOR GIVING THEM IN THE FIRST PLACE, it will have a massive effect on the confidence of people and give people a little hope for the future.

The hope effect for people will be so important to everyone because it will give people the confidence they need to get back into the market buying again. This will directly effect those who do not receive debt forgiveness as much as those receiving it.

For these who do not need debt forgiveness YET stopping the rot and economic disaster we a currently experiencing is even more important for them as they probably have assets to protect. If this current situation continues they too will be left with nothing.

I am however amazed that this story has not been headline news in the media today. Hopefully this will change as we get through the day but the importance of this cannot be understated.

Mr. Stran outlines the banks plan in relation to engaging with people who have been cooperating and trying to sort out their problems. “If they cannot pay they will not be forced too”! How refreshing is this? Someone talking since at long last, willing to look at the problems and provide a solution. This will be a solution for both customer and bank because both are being crushed by the problem. For both to survive the issues has to be addressed and the quicker the better.

I understand AIB have trained up over 300 new staff to deal with the issue and hopefully we will start to see the benefits of the new policy in the new year. Lets also hope the other banks get some sense and start dealing with their problems in a similar way.

Paul C Carroll
NEO Financial Solutions


If the announcement today from AIB is taken at face value it is a very positive step for SMEs all over the country. The shift of a lending decision back from the so called business centres to branches is a good move. After all it is the branches who see the owners of the SMEs on a daily basis, deal with their issues and know the business in as much as possible from a banking perspective.

Getting back to the core idea of banking in knowing your customer, assessing their needs and ability to repay on a face to face basis rather then some junk pumped out of a spreadsheet by a faceless person is surely a back to basics idea which is very welcome.

I have a few concerns though and the first being that this is a simple PR exercise and will simple produce faster NO answers! There needs to be a commitment of funds and confidence in the branch level personal to ensure they can lend when they want too.

My second concern is do the branch staff actually know how to do real banking any more?Before the crises they were involved in simply selling and with no regard for assessing a customers ability to pay. Now things have come full circle and we need the skills of the old style bankers who know their customs and could make good sound lending decisions. Are these people still in the banks and if so will they really be given the money to lend. Time will tell and very quickly if what the AIB statement says is true.

I will be taking myself down to my local AIB with my excellent business plan looking for €25k and the answer the day after! I cannot wait and of course I will keep you posted!

Paul C Carroll FCCA

NEO Financial Solutions


Ireland Financially and Morally Bankrupt

So at long last the EU Commission and government is about to admit (again) that things are not getting better in Ireland (unless you are part of the political and professional elite who continue to rip our broken economy off). They are now admitting what we all have been experiencing for the past 5 years and will continue to experience while these fools are still in control of your country. And worse still is that they have revised their figures on growth 3 times in the past 6 months ….. all downwards! It seems that these people are clowns and just cannot do their job!

We still have falling property prices, falling income, no sign of urgent action on the household debt problems, refusal to address excessive pensions and salaries, increasing prices of utilities and anything else the government has its hands on!

Being the “good boy” in the Euro class has cost us dearly. It has robbed us of 4 years in the fight to overcome this Great Recession, cost us €64b in bank debt, given us unemployment approaching 20% and massive increase in immigration again!

We now need some simple but radical things to be done which include the immediate cutting of excess salaries and expenses of public servants to ensure nobody is paid in excess of €100,000, pass a law to have excessive pensions cut, a financial transaction tax should be introduced immediately, the utilities under control of government should be made reduce prices and immediate introduction of a debt forgiveness programme for anyone in negative equity! There a many more things to be done but these are starting points and targeted at the people at the top, those who are responsible for the mess and assistance for those who are suffering the most.

But I have no confidence in anything being done that will make things better and more fair! The main reason for this is that as long as the people in control and advising are the people who gain most from continuing to encourage the financial bankruptcy of the country we will be doomed to fail!

The people whom we have been brought up to trust and rely upon from priests to politicians to professionals have all slowly reduced this country to bankruptcy both morally and financially and it seems the majority of people seem to be happy to do nothing about it! I just wonder how long this will stay and when will people finally realise something needs to be done apart from talking about it?

Paul C Carroll FCCA
NEO Financial Solutions

Bully Boy Banks I have been a victim too!!

Bully Boy Banks I have been a victim too!!


Are you being bullied by your bank? Well it would seem you are not alone. According to an article in The Independent today by Charlie Weston banks are trying to set spending levels for their customers who happen to be in trouble with their mortgages.

Like every bully when allowed to carry on their oppressive and aggressive tactics they will thrive. They pray on the weak and vulnerable who feel they have not got the position of strength to stand up to the bully. The bully will pray on this perceived position of weakness and will push to endless limits with sometimes fatal consequences.

I am afraid to say I have myself been the subject of such bullying from the very same banks who I challenge on behalf of our clients every day. I say “I am afraid to say” because I know now the only day to deal with them is to stand up to them, bully them back, tell them to get lost and take control back by telling them what you are prepared to do rather then what they want.

My personal experience has thought me a great lesson in dealing with the bully and how to overcome their oppression. They hate anyone who will stand up to them. When your weakness becomes your strength they run, they become passive and simply skulk off looking for another victim.

Banks are no different, stand up to them, push back and they will back down. So do not let them tell you what you can spend, who you can pay, where you can live. These are your choices and for you to decide. The bank only have their interests at heart, you however, have to consider your family, your future, your health and your future financial security. The path you take should be with these in mind and not what he Bank considers you should do.

So do not let the bully have its way. Stand strong because it is your life and your family.

They are being taken on and people are winning so become a winner today!

Paul C Carroll FCCA

AIB Interest rate Increase part of the Enda Kenny “Celtic Comeback”??

The increase by AIB in their mortgage interest rates last week is another element of the scam that is continuing in this country by the elite professional and political classes. These classes are described so well in the recently published book by Shane Ross and Nick Webb The Untouchables.

Another element of the scam is that we must continue to pretend that things are getting better in Ireland. The economy is recovering, people are slowly recovering, property prices are stabilising, unemployment is stabilising, etc..  This is being peddled because it is important for “the Untouchables” to create this illusion about Ireland being the Good Boy in the class of austerity so their position of overpaid offices and professional fees continues.

How on this earth can it be justified that the bank owned by the state is allowed to put up interest rates on people who are already struggling except for the creation of an illusion that AIB will recover. We all know that the increase in the interest rates will make AIB worse and not better. It will simply cause more people to fall into arrears. It may also cause some people to reflect on why at all they should be paying anything on a loan which is possibly in excess of 50% greater then the value of the property it is on! Why Bother? Why Bother?

It seems the chief driver of the scam is none other than our leader and poster boy of “the Celtic Comeback” Enda Kenny. He is on the front of Time Magazine peddling the comeback scam and today insists that AIB are right in increasing rates to ensure its recovery! What about the recovery of the people? What about the Celtic Comeback of the people? Or do the people not matter as long as AIB and the other Untouchables are looked after? Is that what Mr. Kenny considers a comeback? AIB, BIO, Anglo, PTSB, EBS and Nationwide can all have debt forgiveness but the ordinary person cannot that is a comeback? I do not think so Mr. Kenny!

In the interview by Mick Wallace TD on the Marion Finucane Show on RTE radio 1 he said that one of the things that strikes him most about the Dail is how out of touch most people are there! Well it seems he is right on that one and the more Mr. Kenny goes on about the comeback the more Mick Wallace is right! Somehow we need to drag these guys back into the real world. Let them sample the “comeback” and see how it feels!

There can be no comeback unless excess household debt is addressed, the real level mortgage arrears are admitted to and the national current account deficit is addressed.

Paul Carroll FCCA

Mortgage Arrears 30% not 10% as reported by the Banks!

So the seismic shift that was brought home last June was a seismic figure of our leaders’ imagination. It is a shame that they do not use their significant powers of imagination to put a realistic plan together to get this country out of the depression we are in right now.

My biggest concern now is not how we are going to get back the money we paid into our Banks and then out the back door to private investor and banks in Germany, France, UK, US and further afield. The real worry now is where we are going to get the money to give the banks the second bailout or hopefully “bail in” this time. When I talk about a “bail in” I mean when funds are put into the banks they actually stay in the banks and are used to give people the debt forgiveness they need.

I have taken a short unscientific look at our ever growing client list and a sticking thing to come from the review is that over 65% of them have come to us BRFORE they have gone into arrears. They know they are heading into trouble because of falling salaries, falling rental income and falling savings. Another big reason for people coming looking for help is the ending of interest only periods and usually that means that repayments are going up by as much as 3 times when income is falling.

So from a banking perspective the numbers they give us about accounts being in difficultyare considerably more then they admit. It is our view that there are two reasons for this, firstly as described above they do not know of the pending trouble of people and the second they massage the published figures anyway!

So it seems the figures given by the central bank recently about 10% of mortgages being in difficulty are grossly underestimated (Central Bank report March 2012)  and/or reported. So whatever about recovering the €64b paid into the banks to date to “save” them I believe the next €20b or so for the impending “bail in” is the real problem.

The first €1b of that €20b could be gathered on Monday 1st October by refusing to pay the AIB bond which is up for payment. That would be a good start!

Paul C Carroll FCCA

Political Appointments, Judges, Top Public and ESB/ Bord Gais for sale! The SCAM continues

Justice Peter Kelly had the guts to say what we all have known since this government has taken power “the more things change the more things stay the same”. The extent of broken promises by Enda and his band of merry men on their election campaign has not only been limited to not standing up to the Trika on bond holders. Now it seems that it has continued the cronyism they so criticised the last government for. Not only do over 30% of the judicial appointments have direct political connections to government parties but the political connections are more important than the ability of the appointee!

Added to this insult to the people who elected the government on a false mandate we now see that Judges are paid in excess of €150,000 pa. They are joined by ALL politicians who get in excess of €150,000pa and over 3,000 top public servants who earn in excess of €150,000pa. Who says that you have to pay peanuts to get monkeys? These people are grossly overpaid for the job they have been doing. These are the people we are relying on to give us proper justice, implement fair plans and legislation to ensure that the people of this country will be able to get back to having a decent living. Yet if they do the things that need to be done they will be the first to be found out. Is there any wonder 5 years on we in Ireland Inc. are going further into depression. And today the Central Bank says it may continue until 2010!

These same people have stood over the grossly unfair rises on utility bills just so that another band of overpaid people can continue with their lavish lives at a direct cost to the Irish people. We are told that this is part of the process of getting the utility companies of ESB and Bord Gais ready for privatisation.

This is another scam! So we are going to take more out of the Irish people’s pockets by way of increased utility bills. Then we are going to sell the utility companies in a depressed market getting poor prices for them. But here is the real kicker …… who is going to buy the ESB and Bord Gais at knock down prices …….. the very same BOND HOLDERS we bailed out at TOP prices! How come? Because they have the money (the money we gave them)! And believe me they think Ireland is a great place to do business. And why not since they made a really bad investment in the Irish banks…. all now bust … but they managed to get 100% of their money back PLUS interest.

And who is overseeing this SCAM? The same band of €150,000+ public servant earners. No Wonder capital markets are back open to the Irish if in return the bond holders can partake in such a lucrative scam!

Paul C Carroll FCCA


There are times when I feel that I am just banging on about the same old stuff that is affecting so many people I meet every day .. Household Debt… Am I really right? Is there anyone really taking heed of what is going on in the country? How this household debt issue is really stripping people of their dignity and fight for life?

The household debt issue is holding back Ireland Inc. It is destroying the ability of our country to get back on its feet. It is stopping people who have the ability to spend spending. And above all it is holding back our banks from becoming banks again and not just being debt collection agencies.

This morning maybe there is some light at the end of the tunnel after all! Reading the article on the Moody’s report on Irish mortgages in the Irish Independent today where they discuss the massive household debt and declare “that Debt forgiveness provides an efficient mechanism to deal with the current mortgage arrears and negative equity issue” HALALUIA! There is someone out there dealing in reality! Yes we know the banks are going to have to recognize more massive losses, yes minister Noonan is not going to have to spend his time looking to extend the Anglo bond to 40 years but he is going to have to figure a way of getting the ANGLO bond funds BACK into the country to fund the next bank bail out ….. or rather the first BANK BAIL IN.

In my Open letter to the CEO of the Permanent TSB last week I said debt forgiveness is on its way wether the bankers like it or not and they best figure a way to deal with it…. well here it comes and at long last!

Finally let me deal with the issue of “moral hazard”. The two greatest acts of moral hazard in this country are firstly the banks in the way they lent money and spent money on their customers (I missed that gravy train sadly) and staff knowing that when and if it came tumbling down the Government/ECB would bail them out. Secondly, the government in the massive waste and overpayment of its officials it too knowing that if it all went wrong the ECB/EU/IMF would have no choice but to bail them out in order to save the EURO.

So the possibility of there being some risk of moral hazard due to household debt forgiveness is a direct fallout from the actions of our Bankers and Governments. It is too late to worry about it now …. Just get on with the Debt Forgiveness.

Paul C Carroll FCCA

An Open Letter to Jeremy Masding CEO Permanent TSB ……DEBT FORGIVENESS IS COMING

Simon Carswell of the Irish Times has reported on your letter to the Oireachtas finance committee in his article today on your warning over debt forgiveness. You suggested it would be “grossly unfair” to adapt a more lax attitude to debt forgiveness. I would suggest that it is grossly unfair to EVERYONE not to have a more lax attitude to debt forgiveness as this would fix a problem that the banks; yours included, are grossly understating and are losing control over.

The current attitude of the banks is mainly to either ignore the problem or in some cases attempt a restructure which, as has been seen in the US, 90% of which fail. This is because your attempt at restructure does not address the real problem which is too much debt!

You say it would be unfair to all the people who have worked hard in keeping their loans up to date if there was debt forgiveness. Are you suggesting that the people who have fallen into arrears have not been working hard? Are you suggesting they are in arrears out of choice or laziness? I can assure you nothing can be further from the truth. People in arrears have struggled with large repayments on homes which are worth in some cases 20% of the loan for which your bank and others like yours gave them to buy.  They are struggling with the stress of falling income, knowing they are in arrears, what is going to happen to their home and family and wondering if there is any light at the end of the tunnel.

And now because of the property boom which your bank and others supported EVERYBODY is suffering even those “hard working” people who have not been unlucky enough to fall into arrears. They too are suffering as they see their most valuable investment, their home, sink in value even further. They see an economy fall deeper into depression mainly due to excesses of household debts which you promoted.

The “cheapest bank bailout in history” was effected to ensure that the banking system was kept working and €63b later you say you cannot do what was intended. This is a joke and totally unacceptable! It would seem that you too are in arrears … arrears of thinking and providing a solution. What you should be saying to the Oireachtas committee is that to fix the country we need debt forgiveness; here is what it is going to cost and let’s figure a way to do it.

Debt forgiveness is coming Mr. Masding whether you like it or not because it is the only way we can fix our country’s economy and get it going again. I just hope it will not take people on the streets and social unrest to get it. You and people in positions of power like you are going to have to come down from your ivory tower and get working on real solutions for all hard working people not just those who are lucky enough to not have fallen into arrears.

Paul C Carroll FCCA

NEO Financial Solutions