I have compiled a collection of statements, quotes and articles from the Banking sectors heady days of the Celtic Tiger era which reinforce the level of greed, avarice and sheer disregard for the ordinary homeowner without whom the gorging and mismanagement could not have occurred.
It is very important to remember, without your signature on a loan agreement the Banks could not engage in Securitisation but, you the absolute required component to the securitisation did not receive one single benefit from the same process, in fact, some of the securitisation prospectii specifically instructed and stated that the borrower / mortgagor was not to be told of the securitisation process.
I would like to introduce those people who may not have heard of a SPV (special purpose vehicle) or sometimes known as a FVC (financial vehicle corporation) to the explanation of these terms as they are quite central to the whole Securitisation Industry.
Defininition:
“A special purpose entity (SPE; or, in Europe and India, special purpose vehicle/SPV, or, in some cases in each EU jurisdiction – FVC financial vehicle corporation) is a legal entity (usually a limited company of some type or, sometimes, a limited partnership) created to fulfill narrow, specific or temporary objectives. SPEs are typically used by companies to isolate the firm from financial risk. They are also commonly used to hide debt (inflating profits), hide ownership, and obscure relationships between different entities which are in fact related to each other (see Enron). Normally a company will transfer assets to the SPE for management or use the SPE to finance a large project thereby achieving a narrow set of goals without putting the entire firm at risk. SPEs are also commonly used in complex financings to separate different layers of equity infusion. Commonly created and registered in tax havens, SPE’s allow tax avoidance strategies unavailable in the home district.”
As of April 2011, according to the ECB there were 4,491 Financial Vehicle Corporations registered in Ireland and in the main in Dublin, so make no mistake it is business as usual.
Back to those statements, quotes and articles I mentioned earlier:
2006
Nevertheless, the business sector and, indirectly, Irish mortgage borrowers have had access to global finance. There has been a rapid recent growth in foreign borrowing by banks to finance their mortgage lending. In the past few years, banks borrowing from abroad to lend to Irish residents has soared from 10 per cent to 41 per cent of gross domestic product (GDP), according to Dr Honohan’s paper.
In the past, financial markets served a watchdog role and penalised over-borrowing with high interest rates. But now that the Republic is in the euro zone, Dr Honohan notes that the watchdog is muzzled and even high rates of borrowing can proceed without any warning from the markets.
http://www.ireland.com/newspaper/finance/2006/1221/1166138276952.html
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2006
I do not blame the Government for the boom in the property market but, to some extent, those who are lending money recklessly to people who, one day, will be unable to afford to repay that money. All sorts of bogus stress tests are conducted on people. We know these are bogus becausethe amounts that the banks are prepared to lend to people to get into the property market are now from six to nine times their income. In more prudent days, the amounts were two or three times their income.
http://www.shane-ross.ie/house_prices.htm
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2007
If anyone believes that the banks are staying within the Central Bank’s multiple of income guidelines when it comes to lending, they need to have their heads examined. So the “Dundrum” equity withdrawal is a credit derivative that is driving up property prices in Budapest.
http://www.davidmcwilliams.ie/2007/01/09/the-dundrum-paradox%e2%80%93dont-be-paddy-last
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2007
In fact, the Asset Covered Securities (Amendment) Bill 2007, recently debated in the Dáil, shows the Government is more interested in protecting big business. The amended Bill proposes increased protection for investors and ensures the competitiveness of Irish-based banks. There was no mention of protection for borrowers.
Ireland’s covered bond/ACS market is a jewel in the financial services crown. It is the sixth-largest in Europe and, in 2007, it has an estimated worth of €10 billion. That adds up to many jobs and votes.
http://www.ireland.com/newspaper/finance/2007/0413/1176157065360.html
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2007
According to latest figures released by the Central Bank, as of December 2001, 11.3 per cent of all outstanding Irish residential mortgages were securitised.
http://www.finance-magazine.com/display_article.php?article_id=2869&node=70
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2006
Mr Hurley said private sector debt now stood at €300 billion, equivalent to approximately 205 per cent of GNP and was rising quickly. This was “inextricably linked” to developments in the property market, the report notes.
“This is very high both absolutely and in comparative terms and will be higher by the end of the year. Historical experience from a number of countries suggests that high indebtedness may increase the vulnerability of the economy to shocks,” Mr Hurley said.
http://www.ireland.com/newspaper/breaking/2006/1108/breaking37.htm
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2003
New product – Irish Covered Bond
A new Irish product introduced in 2003, was the first issuance of a Pfandbrief-style bond under Irish law. Pfandbrief are low risk bonds collateralised by public sector or mortgage loans, Ireland is the latest country to develop an asset-backed bond market along the lines of the German Pfandbrief, now the eurozone’s biggest fixed-income market, estimated to be worth some €1,200bn.
Irish covered bonds were established under the Asset Covered Securities Act, 2001. This Act established a regime for the issuance of securities by designated credit institutions, which securities are secured on pools of public credit or mortgage assets, which are ring-fenced from the designated credit institution’s other creditors.
Two major financial institutions, Depfa Bank and West LB, have established subsidiary credit institutions, which have received appropriate designation from theCentral Bank of Ireland to issue Irish covered bonds. Depfa launched its first Irish covered bond issue in February 2003 with a 5 year €5bn issue, and followed up in May 2003 with a further €3.5bn 10 year issue. West LB launched its first issue in October 2003 with a €2bn 5 year issue.
http://www.idaireland.com/home/index.aspx?id=134
PICTURE THE CHICKENS GUARD OF HONOUR TO WELCOME THE FOX INTO THE HENHOUSE! Awaken
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Speech at the Launch of the Irish Securitisation Forum at the Irish Stock Exchange
I am delighted to be here today to officially launch the Irish Securitisation Forum. I would like to congratulate Financial Services Ireland and the Irish Bankers Federation for their initiative in establishing this Forum. Its purpose is to provide a coherent and comprehensive voice for the rapidly expanding Irish securitisation sector. Equally, I want to take the opportunity to congratulate Deirdre Somers on her appointment as Chairperson. I am sure that her knowledge of and enthusiasm for this initiative will ensure the Forum’s future success.
http://www.taoiseach.gov.ie/index.asp?locID=462&docID=2290
NOW WE HAVE THE FARMER JOINING IN TO CONGRATULATE THE FOX ON HIS ARRIVAL IN THE HENHOUSE awaken
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2006
Start Mortgages announces €525 million mortgage backed securitization
Deidre Barry, Head of Treasury at Start said, “We are extremely pleased with the pricing and subscription levels which, despite busy market conditions, exceeded our expectations. Our business partners in this program, Barclays Capital, did an excellent job in attracting both traditional investors and new investors. We look forward to continuing to build the program in the future”
Start Mortgages, a subsidiary of Kensington Mortgages Plc, is the leading provider of Specialist mortgage solutions in Ireland. It has provided mortgages to over 5,000 customers and has completed in excess of €1 billion in mortgage business since inception in November 2004.
http://www.finfacts.com/irelandbusinessnews/publish/article_10008389.shtml
Ahh… ONE OF THE MOST PROLIFIC SUB PRIME LENDERS IN THE IRISH MARKET awaken
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Acted on the establishment of Bank of Ireland Mortgage Bank and on its inaugural €2bn issue of Mortgage Covered Bonds in September 2004 and on theestablishment of its €10bn Mortgage Covered Bond Programme in June 2005
AIB Bank. We also advised AIB on the establishment of AIB Mortgage Bank’s €15 billion mortgage covered securities programme and on its debut issues totaling €3.5 billion.
http://www.mccannfitzgerald.ie/dealsheets_4.asp?sID=186
THIS PAGE HAS BEEN CONVENIENTLY REMOVED FROM MCCANN FITZGERALD WEBSITE awaken
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FirstActivep.l.c. – CelticRMBSSeries
Hugh has advised First Active p.l.c. (the Irish bank subsidiary of The Royal Bank of Scotland PLC) as originator on the Celtic Irish residential mortgage securitisation series since its inception in 1998, including the recent €1.75 billion Celtic 9 transaction in November 2005 and the €1.8 billion Celtic 10 transaction in August 2006. The first Celtic deal was Ireland’s first domestic asset securitisation;
http://www.mccannfitzgerald.ie/our_people_4.asp?sID=331
MCCANN FITZGERALD IN THE THICK OF IT AGAIN! Awaken
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08/11/2006 11:01
Vulnerabilities arising from strong credit growth and rising indebtedness levels are now combined with developments arising from higher repayment burdens and continuing uncertainty with respect to the outlook for house prices, the report states.
In a statement the Central Bank governor John Hurley said the ”overall conclusion is that the Irish financial system continues to be in a good state of health to cope with such emerging issues.”
However, Mr Hurley said that since the publication of last year’s report there has been an unwelcome reemergence of annual house price growth in Ireland.
He said it was not obvious that this was driven by fundamental factors. “House prices would have enjoyed some support from continuing strong demographics and higher income growth, but increasing interest rates and continuing high levels of housing supply were acting to counteract this.
He added that research suggested that an overvaluation in house prices started to emerge towards the end of the period 1980 to 2005.
Mr Hurley said private sector debt now stood at €300 billion, equivalent to approximately 205 per cent of GNP and was rising quickly. This was “inextricably linked” to developments in the property market, the report notes.
“This is very high both absolutely and in comparative terms and will be higher by the end of the year. Historical experience from a number of countries suggests that high indebtedness may increase the vulnerability of the economy to shocks,” Mr Hurley said.
The report also notes that this level of debt is unevenly distributed. “While the average household may not be highly indebted, it is likely that there is a minority of households with significant levels of borrowing.
http://www.ireland.com/newspaper/breaking/2006/1108/breaking37.htm
OH MY GOD! Awaken
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2006
Ireland in 2001 to 2005 had the highest house price inflation in the EU and the higest increase in mortgages?
http://www.securitization.net/pdf/sp/EurEconFore_30Nov06.pdf
HOW MANY ALARM BELLS DOES IT TAKE TO TRIGGER A RESPONSE! Awaken
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2007
Niall O’Grady, head of marketing with Permanent TSB Bank, said 2006 had been a very successful year for the bank, which saw it increase its share ofthe mortgage market by 3.9 per cent to 22.3 per cent. This year the bank also plans to move into the sub-prime mortgage lending market through a venture with Merrill Lynch and is aiming to take about a third of that market, which is estimated to be currently worth about €1 billion.
http://www.ireland.com/newspaper/finance/2007/0104/1167776630274.html
ANOTHER SNOUT JUST ABOUT TO LAUNCH ITSELF FIRMLY INTO THE TROUGH! Awaken
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10/10/2005
BANK OF IRELAND MORTGAGE BANK – €10,000,000,000 Mortgage Covered Securities Programme
06/11/2006
BANK OF IRELAND MORTGAGE BANK – €10,000,000,000 Mortgage Covered Securities Programme
http://www.ifsra.ie/industry/in_mark_print.asp
MONEY MONEY MONEY MONEY………..awaken
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2007
Bank’s €2.95bn mortgage move
Bank of Ireland’s first mortgage securitisation in over five years, the sale of €2.95 billion worth of mortgage lending from its ICS Building Society subsidiary, was significantly over-subscribed, the bank said yesterday.
The fundraising, which covered more than 50 per cent of ICS’s mortgage book, will be used to fund the bank’s general operations. The securitisation was sold in to the US market through a specialist purpose vehicle, Kildare Securities.
http://www.ireland.com/newspaper/finance/2007/0215/1170364519225.html
NOTE THE TERM SPV! Awaken
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2006
ULSTER Bank has completed one of the largest fund raisings by an Irish institution, raising €3.9bn through a mortgage-backed securitisation.
http://www.unison.ie/irish_independent/index.php3?ca=35&issue_id=14998
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2000
ANGLO IRISH BANK plans to raise a further £1 billion through securitisations over the next 18 months to fund further expansion and possible takeovers.
This was confirmed yesterday by Tiernan O’Mahoney, director,
http://archives.tcm.ie/irishexaminer/2000/09/30/current/b_text.htm
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Irish Life and Permanent, the country’s largest mortgage lender, has concluded a €1.25bn securitisation programme intended to fund future mortgage business.
http://www.emigrant.ie/article.asp?iCategoryID=556&iArticleID=61314
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Further, as the establishment of securitisation programmes in Ireland is encouraged by the Department of Finance and the Revenue Commissioners, continued amendment of the legislation to facilitate a broader range of securitisations and structured finance transactions is anticipated
http://www.sfmlimited.com/SPVs/spvs_ireland.htm
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I am suitably sickened to my stomach so I will stop here, there are many many many more statements and quotes which highlight how greed took over the Banking sector in Ireland and how the FF government was complicit and encouraging while their appointed regulators looked on without as much as a passing thought for the citizens of Ireland or the welfare of the state.
The current government is quite possibly worse and certainly no better than the last, as I write I am listening to media reports that we will get no deal on debt until at least 2014 after EU Banking rules have been changed, WE WILL NOT GET ANY DEAL UNTIL WE HAVE GIVEN UP ALL AND ANY SEMBLENCE OF SOVEREIGNTY, THIS GOVERNMENT NO DIFFERENT FROM THE LAST WITH REGARD TO THE BLANKET BANK GUARANTEE, HAVE NO AUTHORITY TO DO ANY DEAL WHICH ERODES IRELAND’S SOVEREIGNTY WITHOUT CONSULTING THE IRISH PEOPLE BY REFERENDUM – THIS IS ENSHRINED IN THE CONSTITUTION!
[...] Mortgage Securitisation, among other things…… [...]
Unimpressed wrote:
“The financial crisis happened, in part, because banks became too aggressive in who they would give loans to, giving those loans exclusively so that they could be securitised. That is all. Securitisation is not evil any more than banking is evil or money is evil. Securitisation is a tool which was misused.”
First of all, the financial crisis didn’t just happen – it was planned, designed, and executed by an elite Money Power whose endgame is the centralisation & globalisation of international banking. This will give them complete control of the world’s finances and, by implication, control of the world’s governments. You will find ample verification of this all over the internet.
Secondly, when you say that banks give “loans” you are implying that banks actually hand over pre-existing money that either came from depositors or from the banks’ shareholders. Neither is the case. The fact is that money is ‘loaned’ into existence merely by creating ledger entries on the banks’ computers and is not backed by anything of substance by the banks, i.e., they create money out of nothing.
I hesitate to describe anyone or anything as being “evil” but a system that creates money out of nothing, loans it out with interest, and seizes property & tangible goods for default of payment could hardly be described as anything but evil.
But don’t take my word for it. Here is a comment from a director of the Bank of England who was regarded as the second richest man in Britain in the 1920s & 30s:
“The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was ever invented. Banking was conceived in iniquity and born in sin…But if you want to continue the slaves of bankers and pay the cost of your own slavery, let them continue to create money and to control credit.” Sir Josiah Stamp.
http://foolscrow.wordpress.com
I couldn’t have said it better myself, succinct and to the point.
Planned, designed and executed by an elite money power, you say?
Geesh. I’ve got the Illuminati on one side of me, the Elite Money Power on the other, I’ve got God above me, the Devil below, and here I am, poor little old me, being offered loans I can’t afford and somehow managing to say no. Maybe the subliminal advertising which goes out with every TV broadcast just isn’t strong enough?
If it’s not a Mayan apocalypse it’s a shady cabal rigging the world’s economies instead of just bribing a few politicians and cutting out the wasted effort. Well, if we’re all doomed I suppose there’s nothing for it but to burn our money and live in caves where “The Man” cannot reach us.
OR, if there is no Elite Money Power/League of Shadows/SPECTRE, then of course there is the more prosaic possibility that the global financial crisis was brought about by people over-extending themselves through no driver but greed (and perhaps ignorance) and failing to make repayments they had committed to. Ask the voices in your head and let them have a vote on which seems more likely.
[...] Mortgage Securitisation, among other things…… [...]
This is rank idiocy. “It is very important to remember, without your signature on a loan agreement the Banks could not engage in Securitisation but, you the absolute required component to the securitisation did not receive one single benefit from the same process”
Not a single benefit apart from a loan? You know, that money you desperately needed.
Some securitsation can be done with existing loans, but the reason the financial crash happened is because banks moved into giving mortgages (you know, loans) to people who were not good candidates for mortgages, purely so those banks could securitise them. So we’re all idiots for taking on mortgages we couldn’t afford and the banks are idiots for giving them out, but you’re not doing much better if four years after the risis started you still misunderstand such basic concepts of securitisation.
Unimpressed: You are as always entitled to your opinion, and I will post all comments posted good,bad or indifferent, I would point out that I have never indicated, directly or indirectly that a borrower was not responsible for his/her signature, I will nonetheless continue to trumpet the inequality that existed and still exists regarding the treatment of distressed Mortgagor’s and the treatment of the Bank’s.
It is also crucial to remember that the Bank’s, our government and all mainstream media bombarded the Irish public on a daily basis with warnings that if one did not get on the property ladder one would be left behind, this scared the bejasus out of a significant segment of the population who now have to live with the consequences,
Securitisation is the root of all evil and the basis of all the Banks problems and the Banks problems have destroyed the Irish economy and in turn the personal finances of the Irish people so, you will forgive me if I don’t agree with your comment that the signatory is ultimately responsible, in this case they are not and only a vested interest would attempt to drive this opinion. You will meet massive opposition with this view but as I said earlier it is your view and you are entitled to it! While I am attempting to respond to your comment in a respectful, intelligent manner I might ask that you afford the same courtesy in future comments and refrain from insulting phrases, and explanation of terms which require no explanation in an attempt to either portray yourself as more intelligent or the author as less intelligent, this type of approach very seldom succeeds and more often than not backfires!
Kind Regards
Thank you for giving such a long reply and failing to answer the one charge I levelled – you said there was no benefit to the individual from securitisation and I was attempting to show that that is untrue (the benefit is the loan received in the first place).
I am not interested in how people were “bombarded” about the importance of owning property and I am not a vested interest, I am just very bored of people getting angry about securitisation and then displaying a complete ignorance about how it works. You are certainly not alone in this and nor are you the worst offender, but you are incorrect in your assertions and you received nothing but praise from a readership who I sincerely hope are not reliant upon you for their full education on this matter.
Securitisation is not the root of all evil (that’s pure hyperbole) and nor is it, necessarily, a bad thing (it took place for decades without the economy blowing up). The financial crisis happened, in part, because banks became too aggressive in who they would give loans to, giving those loans exclusively so that they could be securitised. That is all. Securitisation is not evil any more than banking is evil or money is evil. Securitisation is a tool which was misused.
And finally, it was only able to be misused because people took on loans that they could not afford. Sure there was peer pressure and sure the government told us it would all be fine, but the fact that we were stupid enough to take on debt we could not repay is not the government’s fault, or even the banks’ fault, it is our fault. This righteous anger blame culture is not the answer.
I will continue to disagree with you on this matter, i am sure that you will agree with me that it is generally accepted that the majority of people do not understand Banking, when we are informed that 92% of a mortgage pool of securitisation tranche is in serious negative equity and 30% of the mortgages in that pool are distressed or have been the subject of some form of forebearance, this can only be explained by by understanding that the banks engaged in reckless lending. Changing the lending ratio from 2.5 times the main salary and 1.5 times the lesser salary to up to 6/8 times the total salaries is reckless lending, engaging in total securitisation of loan books again and again is reckless lending, total condolence and encouragment by public trustee’s and mainstream media hype all add up to a fraud perpetrated om the common man who, remember, in general does not understand banking and is not an economist, so to say that getting the loan is a benefit is wrong when the purpose of granting the loan in the first place was based on a fraud, fraud by the banks, greed by the public trustee’s and greed by mainstream media who made millions in advertising on the way up and in subject reporting on the way down.
This is even more disgusting when the indentured homeowner is the only damaged party in the whole contract, the bank isn’t damaged it is insured, it has all the interim payments and ultimately the property when the homeowner is dragged thru tthe courts and evicted, and we haven’t even touched on the human and societal impacts. ( Anglo irish Bank- the only fully funded pension in the industry in Ireland, Micheal Fingleton – 28 Million Pension, Riche Boucher 800k per year, etc. etc.)
The only common man who benefits from a loan is the one who thru luck and the grace of god manages to get to the end of a mortgage term, these are becoming fewer and futher between as every day passes, the residential mortgage debt tsunami has yet to come and the damage will resonate for generations.
I understand your point, but I do not agree, my friend.
[...] Mortgage Securitisation, among other things…… (awakenlongford.wordpress.com) [...]
Reblogged this on Machholz's Blog and commented:
Excellent work!