Get you debts written off!

thebman

Deleted User wrote: »

Theres a difference though.
You put your money into shares.
You are not borrowing it.
It's a big risk.

lol since when did people stop seeing borrowing as risk?

As long as you only borrow what you can afford, you can minimise the risk to a large extent.

The obvious problem in our case is people borrowed as much as the banks would let in order to get "on the property ladder" and ignored the implications of this. They accepted the risk.

So your post doesn't really make sense to me since the above is how I see borrowing and buying shares. They are both risky.

Tipp Man

thebman wrote: »

lol since when did people stop seeing borrowing as risk?

As long as you only borrow what you can afford, you can minimise the risk to a large extent.

The obvious problem in our case is people borrowed as much as the banks would let in order to get "on the property ladder" and ignored the implications of this. They accepted the risk.

So your post doesn't really make sense to me since the above is how I see borrowing and buying shares. They are both risky.

If anything borrowing is even more risky, at least with shares if you loose money its your own (ignoring idiots who borrowed to buy shares), but if you borrow and loose you've lost somebody elses money, way more serious in my opinion

Festus

Deleted User wrote: »

Theres a difference though.
You put your money into shares.
You are not borrowing it.
It's a big risk.
The scheme in question has been running in the UK for years.
It's not for big time borrowers.
I'd go along with you to a different extent.
Yes it's people who decide these things.
Greedy people who are 99.9% of the population.


We're all in the same boat internationally in terms of having to restructure banks liabilities.
Ironically this country was in a better starting position to pay for it now as we got our debt so low comparatively thanks in large part to the flood of taxes coming in during the boom.
It would have been lower if we hadn't been so slipshod in terms of being carefull with what we spent.
Keep demanding the oversights that are now being pushed lest when things improve economically we go back to our old ways.

What I was saying was...moaning and groaning about it is a waste.
Positivity not negativity.

I'm trying to find out if it was Argentina or Venezuela had a similar problem - banks collapsed and needed a Government bailout. They got bailed but the country also learned from the lesson and during the recent boom years the Government put huge amounts into savings as well as rigorously controlling the banks lest they repeat the collapse. Now in the recession the saved money is being spent on infrastructure to keep construction employment going as well as having money to protect their economy from the worst of the international fallout.

Unfortunately in Ireland we had greedy politicians as well as greedy banks and greedy businesses.
We sent idiots on junkets to see best practise in the rest of the world and they came back with plans for how to do things arseways. A simple example is the integrated ticketing for Luas, Bus, Dart. Not even thought about or planned for when the Luas was being implemented.
Annual tickets for Bus and Dart fail after a few trips through the ticket manglers. Why were hard plastic tickets for inductive readers not used? I'm sure there are excuses and explanations a plenty but I have seen grown engineers cry watching as the Dart disgorges and masses of commuters try to exit and enter via the same gate while the ticketmaster sits behind the glass refusing to open the gates to relieve the crush risk because it's more than his jobs' worth.
Pitiful.
The M50. Built originally with 2 lanes when three would be needed within a few years.
Overheating the property market with tax incentives to build in places no-one wants to live.

In all fairness it is easy to undersand the negativity and to cap it all because the crisis is a function of globalization the option to emigrate is not as attractive as it once was.

So moan and groan over.

But there is serious problem with NAMA. As a theory it might be viable but given our propensity, or at least our politicians and civil servants propensity for short sighted thinking is it any wonder we look at this with skeptically tinted negativity.

Here's a thing. If you go to a bookies or casino and try to guess what will happen next you might win. Not often and depending in the stake not a lot.

NAMA is based on guesswork as to what the values will be in the future and the inital stake is based on this guesswork.
It is a gamble and a gamble with taxpayers money.

If NAMA was designed to mop up at todays market values we might be less skeptical but taking a punt on what you expect the market values to be in a few years time is not clever.

Bail the banks if you must. Prop up your developer buddies if you think that is sensible but for the sake of the country do it honestly and with intelligence.

Festus

thebman wrote: »

lol since when did people stop seeing borrowing as risk?

As long as you only borrow what you can afford, you can minimise the risk to a large extent.

The obvious problem in our case is people borrowed as much as the banks would let in order to get "on the property ladder" and ignored the implications of this. They accepted the risk.

So your post doesn't really make sense to me since the above is how I see borrowing and buying shares. They are both risky.

Since the Irish property values began to rise. There was a thinking that Irish property prices were undervalued because ordinary people could afford properties. This had to be fixed.
It was fixed.

Then there was the thinking that Irish people know better than everyone else and that Ireland is the only place in the world where things like this don't happen. Sure we had the Tiger Economy. There was no 'risk'. The governement were thinking of ways to organise a 'soft landing'.

It wasn't the case that people borrowed as much as they could - the case was the banks gave as much as they were prepared to risk. After all if you defaulted the bank could take your property and in a rising market take a profit.

If the banks cannot learn from history, if the banks ignore the fact that what goes up must come down it is a little harsh to blame everything on the mortgage holders who 'took a risk'.

In a normal economy we give the banks our spare change to look after it and invest it wisely.

The banks did not do this. They gambled with our deposits and then took risks with money they borrowed using our property values as leverage.

What would have happened if the banks capped mortages at 3 times salary and did not submit falsified stress tests for the applicants? The property market would have cooled years ago as the first time buyers fell off.

thebman

Festus wrote: »

Since the Irish property values began to rise. There was a thinking that Irish property prices were undervalued because ordinary people could afford properties. This had to be fixed.
It was fixed.

Then there was the thinking that Irish people know better than everyone else and that Ireland is the only place in the world where things like this don't happen. Sure we had the Tiger Economy. There was no 'risk'. The governement were thinking of ways to organise a 'soft landing'.

It wasn't the case that people borrowed as much as they could - the case was the banks gave as much as they were prepared to risk. After all if you defaulted the bank could take your property and in a rising market take a profit.

If the banks cannot learn from history, if the banks ignore the fact that what goes up must come down it is a little harsh to blame everything on the mortgage holders who 'took a risk'.

In a normal economy we give the banks our spare change to look after it and invest it wisely.

The banks did not do this. They gambled with our deposits and then took risks with money they borrowed using our property values as leverage.

What would have happened if the banks capped mortages at 3 times salary and did not submit falsified stress tests for the applicants? The property market would have cooled years ago as the first time buyers fell off.

None of that means borrowing isn't a risk. And anyone that borrowed as much as they could instead of what they could afford was and is a fool for doing so.

Why did people accept mortgages more than 3 times what they earn? If everyone had only taken 3 times what they earn, house prices could not have gone higher than 3 times what people earn as that is all people would pay for them.

Don't give me that banks threw money at people line anyway as you know people were including commission in basic pay to bump up the amounts they could borrow rather than just giving the bank basic pay. Now the commission and bonuses are gone, these people are screwed.

The banks assumed the information given to them by borrowers was accurate since who would want to fook themselves over? Most people it seems.

Festus

thebman wrote: »

None of that means borrowing isn't a risk. And anyone that borrowed as much as they could instead of what they could afford was and is a fool for doing so.

Why did people accept mortgages more than 3 times what they earn? If everyone had only taken 3 times what they earn, house prices could not have gone higher than 3 times what people earn as that is all people would pay for them.

Don't give me that banks threw money at people line anyway as you know people were including commission in basic pay to bump up the amounts they could borrow rather than just giving the bank basic pay. Now the commission and bonuses are gone, these people are screwed.

The banks assumed the information given to them by borrowers was accurate since who would want to fook themselves over? Most people it seems.

Why are you so intent on not blaming the banks? They did throw the money at borrowers and many cases called up existing borrowers asking them if they wanted to borrow more?

I agree then anyone who borrowed to the hilt to by a property in a rising market needed their heads examined but in many cases if the banks were willing to provide the money the borrower was willing to invest it in a house.

Don't forget that bank staff were earning commisions on their books whether it was new accounts in or new loans set up because these loans were being packaged into valuable derivates.

Do you think that what Northern Rock did was not happening here?

I suggested that the banks falsified the stress test in applications and you did not counter. Are you accepting that the banks had a major hand in this debacle or are they blameless ?

thebman

Festus wrote: »

Why are you so intent on not blaming the banks? They did throw the money at borrowers and many cases called up existing borrowers asking them if they wanted to borrow more?

I agree then anyone who borrowed to the hilt to by a property in a rising market needed their heads examined but in many cases if the banks were willing to provide the money the borrower was willing to invest it in a house.

Don't forget that bank staff were earning commisions on their books whether it was new accounts in or new loans set up because these loans were being packaged into valuable derivates.

Do you think that what Northern Rock did was not happening here?

I suggested that the banks falsified the stress test in applications and you did not counter. Are you accepting that the banks had a major hand in this debacle or are they blameless ?

I'm not refusing to blame the banks

I'm just saying it is equally the borrowers fault. It is a loan they both agree to and there is risk for both parties. You can't say its all the banks fault however because it clearly isn't and the borrower should ensure they only borrow what they know or feel they will be able to pay back and this includes trying to forecast that things won't always be so rosy.

shoegirl

Tipp Man wrote: »

I like you looked at house price these last 5-6 years and laughed at how stupid people were to buy these properties, now when the s''t hits the fan these guys are going to have their debts written off is ridiculous.

I can relate to the overwhleming anger at the notion that people are "getting off." However you do need to recall that many people, especially families, were left with no option aside from private rentals, which is very poorly regulated, almost entirely not policed and until 3 or 4 years ago, rents were often being hiked by as much as 25% per year. In fact I am only paying 5 euro a month more in rent than I was in 2002, for a very similar flat in a similar area. And at the time my rent represented 36% of my after tax wages.

I was also, paying back some arrears I'd got into during a 3 month spell out of work. By the end of the whole thing the banks had gouged an additional 400-600 euros out of me due to late payments, penalities and additional interest which in most cases was at a higher rate due to it being unauthorised borrowings. Now I was effectively living on about 95 euros a week of which about 20 went on medication through the DPS scheme (I'm extremely asthmatic and there is paltry relief for sufferers on low incomes, which I was at that time).

While this effectively ended any real hope of home ownership for me due to having poor credit, what it did make me realise is that for anybody who at the time would have been faced with paying anything from 700-1800 per month for a very ordinary 3 bedroomed semi in rent, purchasing, even at the obscene prices seen at the peak of the boom, must have looked really attractive.

And I'll tell you why. In 1999 I had friends paying 65 pounds in rent a week for a nice studio in Dublin 6. By about 2002, the rent on similar properties had risen to about 700-800 per month. Thats an increase from 82 euro a week to 184 euros or more than double the rent in less than 3 years. A lot of people bought because they were already conditioned to very high monthly rents, not to mention also rapidly escalating rents.

A lot of people were genuinely scared too, I think, that they would be unable to pay those kinds of rents in a few years if they didn't buy ASAP. Hence the panic. While we can be very judgemental now of the high pay demands of those years, we forget how much of it was swallowed complete, and often more, by huge rent hikes that drained incomes dry.

So I don't think these people were "stupid", they were faced with an option of paying overpriced rents that were still escalating, or a large mortage, which would at least be paid in 25-35 years. They were faced with a lose-lose situation - there are few other real options for anybody who needs a place to live (which is everybody) who is in paid employment.

I'm still living in fear at how I am going to put a roof over my head when I hit retirement age, as if I am still renting then, my pension will be quite modest and god knows what rents will look like then.

shoegirl

thebman wrote: »

Why did people accept mortgages more than 3 times what they earn? If everyone had only taken 3 times what they earn, house prices could not have gone higher than 3 times what people earn as that is all people would pay for them.

I live on a street in Cork city were most of the houses are subdivided into flats and then rented out. 4 bedroomed houses have become 12 1 bedroomed apartment, many of them effectively dark tunnels and caves with almost no natural lighting. In fact none of the 8-12 rented houses on the street are divided into less than 6 apartments. Its like a 1950s tenement, only nobody calls it that. The landlords who rent out the slums which is what most of what these places are call them "apartments."

If you could see the squalid, shanty town like living standards of some of these places, most of whom are priced in the 110-165 per week rent brackets, I think you'd understand why people were prepared to borrow 6/7 times their income for a nice, newly built, properly maintained and not overcrowded semi, especially since it was in many cases only another 200-400 per month. As I said above, people had no real choice.

thebman

thebman wrote: »

lol since when did people stop seeing borrowing as risk?

As long as you only borrow what you can afford, you can minimise the risk to a large extent.

The obvious problem in our case is people borrowed as much as the banks would let in order to get "on the property ladder" and ignored the implications of this. They accepted the risk.

So your post doesn't really make sense to me since the above is how I see borrowing and buying shares. They are both risky.

Perhaps I'll clarify.
I meant he put his money into shares.
He could have put it in the post office with no downside relatively.

Ok you put your own money into your mortgage but if you don't you don't have a house or appartment at the end of it.

On the subject of mortgages,the big upset in this recession on that type of debt is the person losing their job and being unable to pay it.
If you are still working,your wages still covering your mortgage,then having gone into that deal eyes wide open and happy to pay the house price you did for having the house at that particular time,then that decision maker can have no complaints.
They might moan that they paid so high at the time but with no justification in my humble opinion.
Thats the market for you.
It's driven by greed and greed is universal even in the poor person.

AARRRGH

shoegirl wrote: »

rents were often being hiked by as much as 25% per year

I'm sorry, but that's rubbish. :pac:

In exceptional cases some rents may have been increased by that much, but it definitely wasn't often.

The excuse people use that they were somehow forced to buy during the bubble just doesn't sit with me. I have rented for 12 years, and refused to buy as I knew it would be a waste of money.

People can say whatever they want, but the fact remains that buying during a bubble (particularly near the middle to end of the bubble) is a really bad decision.

shoegirl wrote: »

So I don't think these people were "stupid", they were faced with an option of paying overpriced rents that were still escalating, or a large mortage, which would at least be paid in 25-35 years. They were faced with a lose-lose situation - there are few other real options for anybody who needs a place to live (which is everybody) who is in paid employment.

I agree stupid isn't the right word, but they are definitely bad with money, uneducated and irresponsible.

I saw we were in a bubble so I resisted buying. Same with my brother. If we could do it, anyone could...

Festus

thebman wrote: »

I'm not refusing to blame the banks

I'm just saying it is equally the borrowers fault. It is a loan they both agree to and there is risk for both parties. You can't say its all the banks fault however because it clearly isn't and the borrower should ensure they only borrow what they know or feel they will be able to pay back and this includes trying to forecast that things won't always be so rosy.

Apologies for the confusion - think I must have missed something.

However I cannot agree that it was equal fault. We used to ( not the case now though) put a certain amount of trust into the banks that they knew what they were doing.

To use an analogy. A kid sees a sweet shop advertising all you can eat for a tenner. Kid goes to mammy to beg a tenner.
Does mammy provide the tenner?
If mammy provides the tenner and the kid gets sick or bad teeth do you blame the kid, the mammy or the sweet shop owner?

The cheap credit had a lot of people behaving like kids in sweet shops.

Time was banks would do your credit thinking for you and only give you what it thought was reasonable. bear in mind that when you borrow it is not your money it is the banks. if you lose it by betting on shares or buying an overpriced house you are still required to pay it all back. When it comes to houses the bank takes this as security because it can and expects to get it's money back one way or another with profit.
If the banks were lending money into an over inflated bubble market they still expect to get it all back by pursuing defaulters until they are declared bankrupt. The banks need to realise that they contributed to the bubble by providing the loans. You cannot blame those who took large loans with equal proportion to those who offered the loans.

gdael

AARRRGH wrote: »

I have rented for 12 years, and refused to buy as I knew it would be a waste of money.

Imagine if you had bought a house 12 years ago in 1997 for about the average price then of €100k with a 20 year mortgage.
You'd only owe less than €50k probably and be paying less than €600 a month today for the house for another 8 years until you never had to pay anymore rent ever again.

I wish had done that.
I wouldnt say that was a waste of money at all.

Sarn

Festus wrote: »

To use an analogy. A kid sees a sweet shop advertising all you can eat for a tenner. Kid goes to mammy to beg a tenner.
Does mammy provide the tenner?
If mammy provides the tenner and the kid gets sick or bad teeth do you blame the kid, the mammy or the sweet shop owner?

I would blame the mother. The problem with your analogy is that it involves a kid. Adults are expected to know better. You can only take out a mortgage as an adult and thus should be aware of the consequences.

Happy Monday

Anyone aware of how much of someone's mortgage the government will be writing off - 25%, 35%, 50%?

thebman

gdael wrote: »

Imagine if you had bought a house 12 years ago in 1997 for about the average price then of €100k with a 20 year mortgage.
You'd only owe less than €50k probably and be paying less than €600 a month today for the house for another 8 years until you never had to pay anymore rent ever again.

I wish had done that.
I wouldnt say that was a waste of money at all.

I was in secondary school in 97, I think even an unregulated bank would have told me where to go :P

shoegirl wrote: »

I live on a street in Cork city were most of the houses are subdivided into flats and then rented out. 4 bedroomed houses have become 12 1 bedroomed apartment, many of them effectively dark tunnels and caves with almost no natural lighting. In fact none of the 8-12 rented houses on the street are divided into less than 6 apartments. Its like a 1950s tenement, only nobody calls it that. The landlords who rent out the slums which is what most of what these places are call them "apartments."

If you could see the squalid, shanty town like living standards of some of these places, most of whom are priced in the 110-165 per week rent brackets, I think you'd understand why people were prepared to borrow 6/7 times their income for a nice, newly built, properly maintained and not overcrowded semi, especially since it was in many cases only another 200-400 per month. As I said above, people had no real choice.

Well have rented for over 5 years now and I can say that rents didn't go up that much in that time. Maybe they did on the place you were staying but then you move if you don't like it. I regularly moved to cheaper accommodation to what I was willing to pay.

The rent for the entire house I'm in has been reduced to 800 a month just this month and I didn't even negotiate with the landlord on it. He offered to do it to keep us here because we are good tenants and he is a sound landlord.

I was paying 450 before for a room and decided it was too much when it got to that level. Before that I was paying 300 a month to house share.

The house I'm in at the moment has 3 people in it so divide 800 by 3 and I have a double room for that because I was willing to shop around all the time and found a really sound landlord who is registered and everything so he accepts rent allowance and everything if I have to sign on.

Sir Oxman

It's not for mortgages but personal debt (CC's, personal loans etc)

In the same article, there is a footnote about the govt looking at helping people with mortgage arrears

"The programme also commits to examining ways of giving those in arrears on their mortgage repayments more flexibility in dealing with the banks. Interest roll-ups, extended credit terms or reduced interest rates will all be looked at for those struggling to keep their homes. "

peasant

thebman wrote: »

I was paying 450 before for a room and decided it was too much when it got to that level. Before that I was paying 300 a month to house share.

The house I'm in at the moment has 3 people in it so divide 800 by 3 and I have a double room for that because I was willing to shop around all the time and found a really sound landlord who is registered and everything so he accepts rent allowance and everything if I have to sign on.

You will admit though, that house sharing isn't exactly ideal when trying to raise a family ...or even for a couple for that matter.

thebman

peasant wrote: »

You will admit though, that house sharing isn't exactly ideal when trying to raise a family ...or even for a couple for that matter.

True not ideal but no point risking spending more than you can afford either.

MysticalRain

shoegirl wrote: »

I live on a street in Cork city were most of the houses are subdivided into flats and then rented out. 4 bedroomed houses have become 12 1 bedroomed apartment, many of them effectively dark tunnels and caves with almost no natural lighting. In fact none of the 8-12 rented houses on the street are divided into less than 6 apartments. Its like a 1950s tenement, only nobody calls it that. The landlords who rent out the slums which is what most of what these places are call them "apartments."

If you could see the squalid, shanty town like living standards of some of these places, most of whom are priced in the 110-165 per week rent brackets, I think you'd understand why people were prepared to borrow 6/7 times their income for a nice, newly built, properly maintained and not overcrowded semi, especially since it was in many cases only another 200-400 per month.

You're talking about city-centre bedsits here, so what do you expect? Not all rental properties fell into that category. I was renting in some pretty nice newly built 2 bed apartments for 350/month in Dublin during the boom times. If people didn't want to get fcuked by landlords, they should have shopped around.

As I said above, people had no real choice.

Or they could have waited a few years until the bubble burst and picked up the same kind of property for 30-50% less.

starbelgrade

Again - IVA's have nothing to do with mortgages or debate on whether it's better to rent or buy. This discussion is getting completely off topic.

SLUSK

Deleted User wrote: »

http://www.sbpost.ie/news/debt-writeoff-scheme-agreed-44966.html

This is so disgusting in makes me wanna throw up. People voluntarily took these loans and now they are gonna get large chunks written off!? Ireland is not only financially bankrupt it is morally bankrupt as well.

If you cannot afford to pay you debts you deserve to end up homeless on the street!

uberwolf

SLUSK wrote: »

If you cannot afford to pay you debts you deserve to end up homeless on the street!

and the burden on the private, employed, tax paying individual grows ever larger.

As a nation we need to find the route back to sustainable growth - it shouldn't the be the quickest route back, it shouldn't be the most pain free route, it shouldn't reward the feckless. But having huge swathes of the population saddled with debt they can no longer afford does nothing for anyone

SLUSK

uberwolf wrote: »

and the burden on the private, employed, tax paying individual grows ever larger.

As a nation we need to find the route back to sustainable growth - it shouldn't the be the quickest route back, it shouldn't be the most pain free route, it shouldn't reward the feckless. But having huge swathes of the population saddled with debt they can no longer afford does nothing for anyone

Have you ever heard of the concept "Moral Hazard"

If people take risks they should take the blows as well and not pass it on to the taxpayers. Homelessness is the only moral alternative for these people. It is immoral people who advocate a transfer of wealth to bail out these kind of people.

I guess I'm one of the few decent and moral people left on this planet.

_Kooli_

What about someone like myself who never borrowed in their lives.
I cant believe this. You piss your money up against a wall and get rewarded.

I would agree with a scheme where they can have a holiday from the payments for a couple of years and then it gets tagged on to the other end of the mortgage. But not that it gets written off.

I agree with the poster about sharing not being practical at different stages of your life too.
We are going to have to buy a house in the next year too. Its actually cheaper to buy one than rent our own house. I dont see our current housemates waning to share with us when there is a screaming baby in the house. I suppose one has to move on with their lives.

thebman

SLUSK wrote: »

Have you ever heard of the concept "Moral Hazard"

If people take risks they should take the blows as well and not pass it on to the taxpayers. Homelessness is the only moral alternative for these people. It is immoral people who advocate a transfer of wealth to bail out these kind of people.

I guess I'm one of the few decent and moral people left on this planet.

But they won't get off free. Their credit rating will take a hammering. As is starting to happen in the US, even employers are looking at this as a check for competence so it may give you a benefit when applying for a job.

The person will most likely never be given a loan again at least of any sizable amount such as a mortgage as they'll have a track record of taking on debts they can't afford.

Amhran Nua

uberwolf wrote: »

But having huge swathes of the population saddled with debt they can no longer afford does nothing for anyone

Agreed, but the best way to make certain their mortgages get paid is to ensure that we have lots of well paying jobs starting in the country.

hellboy99

thebman wrote: »

But they won't get off free. Their credit rating will take a hammering. As is starting to happen in the US, even employers are looking at this as a check for competence so it may give you a benefit when applying for a job.

The person will most likely never be given a loan again at least of any sizable amount such as a mortgage as they'll have a track record of taking on debts they can't afford.

Of course they're getting off free, you really think they give a toss about their credit rating when they are getting a big portion of their debt cleared off, if it were me I'd have a grin from ear to ear.

Most of them shouldn't of got loans in the first place. Some people will blame the banks for giving them such big loans in the first place and feel sorry for them, they had a choice, it wasn't as if the bank put a gun to them and said you have to take it.

To the people that are all for this and feeling sorry for these so called "victims" I ask you this, if this happened to yourself a few years back when there was no mention of such a scheme, you lost your job and were then in a financal mess due to big debts, what would you do ?

NewDubliner

Amhran Nua wrote: »

Agreed, but the best way to make certain their mortgages get paid is to ensure that we have lots of well paying jobs starting in the country.

That's why the banks encouraged pay rises during the boom. Now they want everyone to take a pay cut but to continue paying boom-time mortgages.

Amhran Nua

NewDubliner wrote: »

That's why the banks encouraged pay rises during the boom. Now they want everyone to take a pay cut but to continue paying boom-time mortgages.

Indeed, lunatic greed is the kindest sobriquet that could be applied, along with their dance partners in FF. We've some fairly direct plans for dealing with the banks if we ever get into power.