Get you debts written off!

uberwolf · 17-10-2009 7:38pm

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.

As those incurring the debt were not aware of a potential let off at the time, I don't think moral hazard comes into it. But I accept the thrust of what you are saying.

This is economics though - do morals come into it?

starbelgrade · 18-10-2009 2:29am

uberwolf wrote: »

This is economics though - do morals come into it?

Excellent point.

18-10-2009 11:16am

http://www.independent.ie/opinion/analysis/a-generation-caught-in-a-trap-waiting-for-its-nama-1917112.html

Negative equity probably would have remained a hidden issue for another while yet were it not for Nama. Nama is going to change everything when it comes to negative equity. Nama is a necessary evil but it is going to be very difficult for people to stomach what they view as the bailing out of rich people's loans if the little guy is being put out of his house because he can't afford to pay a mortgage that is a pittance compared to the billions of our money we are pumping into Nama.

The Government needs to step up its thinking on this one. To have 350,000 families in the State who feel that their lives' work is for naught, that the economy has failed them, who feel at worst that they could lose their house and at best that they will never get out of their hole, would not be a pretty sight.

lmimmfn · 19-10-2009 1:04am

Deleted User wrote: »

http://www.independent.ie/opinion/analysis/a-generation-caught-in-a-trap-waiting-for-its-nama-1917112.html

thats all grand on paper apart from 3 things:
1. They bought their property knowing the potential outcomes
2. If anything is done on this it will keep property prices artificially high.
3. Who the hell will pay for this? the likes of me who has worked hard in the past 10 years,paid my taxes, didn't experience any boom, dont own any property and hav'nt had a loan in 8 years.

Bail out these guys and you're just pushing the pissed off state from those with homes to those without homes who are now bailing out banks and homeowners while with the increased taxes those of us without homes will have feck all chance of ever getting one.

Yep nice one and would be typical of this country to want that, get those with feck all to pay for everyone else( banks/homeowners and dole heads )

thebman · 19-10-2009 1:14am

hellboy99 wrote: »

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.

So its not that you want them to suffer, its that you want them financially crippled for life! :eek:

TBH you seem like someone that is jealous of people that had homes during boom time little realising the problems they'd face.

I don't think there is anything wrong with writing down these values to a payable level assuming their credit levels take the necessary hit.

Never being able to credit again will be a big enough crutch for these people. As I said, employers will start caring about credit ratings for people as it shows who was competent enough to avoid the housing boom and who walked into disaster with their eyes opened so it might effect future employment prospects for these people too.

Its not a bail out, its an acceptance that they will never be able to pay the money back so why bother trying to get it when you haven't a hope in hell? You'd rather they try to get blood from a turnip, not going to happen so why waste resources trying?

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.

I agree completely.

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 ?

You'd probably end up in jail after handing back the keys to your house.

hellboy99 · 19-10-2009 5:15am

thebman wrote: »

So its not that you want them to suffer, its that you want them financially crippled for life! :eek:

TBH you seem like someone that is jealous of people that had homes during boom time little realising the problems they'd face.

It's not nice to see anyone suffer, but like I've said before, many of these people surely knew what they were getting into and couldn't of been that naive to believe the boom would last forever.

I'm not jealous at all, I just don't agree with it. I'm sure there are many jealous with it, you can't blame them really and what do you think the people that have already lost there homes or have been made bankrupt prior to this feel.

Happy Monday · 19-10-2009 8:34am

Comments have been made here about how this scheme does not apply to mortgages.

But rest assured a scheme will be introduced over the next year or so to allow mortgage holders get a slice of their oversized debt written off.

Greens, FG, Labour will bring this in.

Amhran Nua · 19-10-2009 9:32am

Happy Monday wrote: »

But rest assured a scheme will be introduced over the next year or so to allow mortgage holders get a slice of their oversized debt written off.

Either the taxpayer will end up paying for other peoples' mortgages or the banks (who we are spending tens of billions to recapitalise) will lose money over it, in that event.

Festus · 19-10-2009 10:06am

Sarn wrote: »

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.

Fair point but when it comes to large amounts of money the banks are expected to know better - hence the analogy

thebman · 19-10-2009 11:49am

hellboy99 wrote: »

It's not nice to see anyone suffer, but like I've said before, many of these people surely knew what they were getting into and couldn't of been that naive to believe the boom would last forever.

I'm not jealous at all, I just don't agree with it. I'm sure there are many jealous with it, you can't blame them really and what do you think the people that have already lost there homes or have been made bankrupt prior to this feel.

I know they'll feel hard done by but the problem is the number of people involved. It it a ticking time bomb and these people can't contribute anything to the real economy as everything is going on servicing debts they can't even afford.

Festus · 19-10-2009 12:12pm

thebman wrote: »

I know they'll feel hard done by but the problem is the number of people involved. It it a ticking time bomb and these people can't contribute anything to the real economy as everything is going on servicing debts they can't even afford.

Interesting thought there - have the dept of finance through this through?

NAMA takes on the high value property loans from the banks - ostentsibly to free up loans to the housing market and SME operations

Government needs money so raises taxes, levies, introduces new taxes.

Increased taxes and levies reduce income

Reduced income reduces ability to pay mortgages

Mortgages begin to default in larger numbers

Banks left with bad mortgage debts

NAMA-2 instigated to take care of defaulting mortgages

Governement needs more money so raises taxes, levies, introduces new taxes.

thebman · 19-10-2009 12:16pm

Festus wrote: »

Interesting thought there - have the dept of finance through this through?

NAMA takes on the high value property loans from the banks - ostentsibly to free up loans to the housing market and SME operations

Government needs money so raises taxes, levies, introduces new taxes.

Increased taxes and levies reduce income

Reduced income reduces ability to pay mortgages

Mortgages begin to default in larger numbers

Banks left with bad mortgage debts

NAMA-2 instigated to take care of defaulting mortgages

Governement needs more money so raises taxes, levies, introduces new taxes.

Yeah that is pretty much why we are so fooked. Doesn't matter what we do really, country is bankrupt and taxes need to go through the roof but you'll just finish off the economy if you do that.

People are bankrupt too so need to default or right off part of their debt. Writing off part of the debt still ensures the bank get something out of it.

Festus · 19-10-2009 12:38pm

thebman wrote: »

Yeah that is pretty much why we are so fooked. Doesn't matter what we do really, country is bankrupt and taxes need to go through the roof but you'll just finish off the economy if you do that.

People are bankrupt too so need to default or right off part of their debt. Writing off part of the debt still ensures the bank get something out of it.

Taxes don't need to go through the roof - we could try bucking the Laffer curve just to see what happens.

The things we do need to do won't get done.

Too many over paid TDs - that's not going to change

Too many over paid ministers - that's not going to change

Too many over paid civil servants - that's not going to change much

Too many tax breaks for the rich - that's not going to change enough

Too much governement incompetence - that's just the way it works here

Total lack of public service and government oversight - sure if we had oversight they (gove, PS, quangos) couldn't get away with it.

Forgive the negativity but in a couple of decades of having the right to vote I have yet to see a competent governement ever. The boom happened inspite of government action, not because of it, and was then systematically mismanaged.

To my memory we have only ever had one decent honest politican who did not have a self serving bone in his body. There may be others but they will never get the chance to shine while the gougers run the parties and the PS run the country.

helmut147 · 22-10-2009 5:17pm

going by the logic of some of the more self righteous poster, if people who bought houses in the last few years are stupid and don't deserve to be helped,... should i stop paying taxes to the unemployed, or the disabled, or elderly or to people with an iq under 100 ? why should i pay money to them.
stop whining about people getting "off" with their debt. negativity equity ruins lives. it has to be addressed. just like looking after any disadvantaged section of society. it is indeed a time bomb as suggested previously. there is no turnaround coming for ireland soon, absolutely none. this will take years to work out and the sooner it is addressed the better.
we all suffer when negativity equity abounds. i have heard 300,000 homes will be in negative eq by the end of this year.
the money that was p*ssed away keeping bondholders in banks happy(not talking about nama), should have been spent on a fund for the negative equity generation.,
actually there's a title for david mcwilliams next book ! The Negative Equity Generation.

AARRRGH · 22-10-2009 5:59pm

helmut147 wrote: »

going by the logic of some of the more self righteous poster, if people who bought houses in the last few years are stupid and don't deserve to be helped,... should i stop paying taxes to the unemployed, or the disabled, or elderly or to people with an iq under 100 ? why should i pay money to them.

There is a huge difference between making a bad investment and being disabled/sick/elderly/unemployed.

helmut147 wrote: »

negativity equity ruins lives. it has to be addressed. just like looking after any disadvantaged section of society.

I'm quite amazed by the above quote.

If you bought a house as an investment (which you obviously did if you are concerned by negative equity), you have to accept the good times with the bad. That means the price of your house could go up or down.

If you aren't willing to accept this (or are unable to understand it) you should not have bought a house in the first place.

helmut147 wrote: »

we all suffer when negativity equity abounds.

No we don't.

I was someone who could see the imminent crash as clear as day, so I didn't buy a house. As a result I have plenty of savings and can simply wait for prices to reach a level I am happy with. Negative equity and falling prices is good for me.

That's not to say I don't have some sympathy for people in negative equity (I do), but as a believer in personal responsibility I have no interest in any sort of bail out for people who made a bad decision.

MysticalRain · 22-10-2009 6:41pm

AARRRGH wrote: »

I have no interest in any sort of bail out for people who made a bad decision.

Especially when the actions of those people have negatively effected others who did behave sensibly and lived within their means. I avoided the property bubble, but I'm still suffering the consequences regardless.

RCIRL · 22-10-2009 8:12pm

Your debts are not written off, gone into the wind, away with the fairy's! You folks are living in la la land if you think its like that.

I am not sure of all the details but something like this is proven to be very successful in the UK and as I believe is funded by the banks themselves. Without a system like this in place the banks have even less of a chance of receiving money from bad debts.

Houses: People have to buy houses end of argument.

Loans: People over borrowed which is there own fault, the banks also took the risk in giving out the money so they should be also responsible for any over borrowing that took place.

The truth is, Ireland is in a terrible situation right now and without a system like this people will carry the burden for the rest of there lives, court judgments, prison sentences, black marks etc all this hampers with peoples chances of returning back to work. If there was jobs available it would be a different, their is no jobs available so Ireland needs something like this.

Voting for FF is the biggest mistake anyone made.

SLUSK · 22-10-2009 8:14pm

RCIRL wrote: »

Your debts are not written off, gone into the wind, away with the fairy's! You folks are living in la la land if you think its like that.

I am not sure of all the details but something like this is proven to be very successful in the UK and as I believe is funded by the banks themselves. Without a system like this in place the banks have even less of a chance of receiving money from bad debts.

Houses: People have to buy houses end of argument.

Loans: People over borrowed which is there own fault, the banks also took the risk in giving out the money so they should be also responsible for any over borrowing that took place.

The truth is, Ireland is in a terrible situation right now and without a system like this people will carry the burden for the rest of there lives, court judgments, prison sentences, black marks etc all this hampers with peoples chances of returning back to work. If there was jobs available it would be a different, their is no jobs available so Ireland needs something like this.

Voting for FF is the biggest mistake anyone made.

You do not have to buy and own a house. You can rent the house or apartment you live in. This is normal in many countries. Wake up from lala-land.

lmimmfn · 22-10-2009 8:50pm

SLUSK wrote: »

You do not have to buy and own a house. You can rent the house or apartment you live in. This is normal in many countries. Wake up from lala-land.

Agree

RCIRL · 23-10-2009 3:02am

SLUSK wrote: »

You do not have to buy and own a house. You can rent the house or apartment you live in. This is normal in many countries. Wake up from lala-land.

I am in the middle of la la land with the way things are going on here.

I have mentioned this in another post, the rental market would not have been able to cope with the demand during the time of the "boom" that is why it was called a "boom". If houses were not built during this time, where do you expect people to stay? With the rental market not being able to cope with the way your thinking people would have to stay at home with mammy or live on the street.

A generation of people grew up and houses were required and reasons for requiring a house are justified. Its not right to pick on people and make it out to be a mistake to buy a house?

Ireland is turning into a real bad place with this type of mentality going around.

How many people do you know who grew up in rented accommodation, I cant think of many, I cant even think of one.

lmimmfn · 23-10-2009 3:28am

RCIRL wrote: »

I am in the middle of la la land with the way things are going on here.

I have mentioned this in another post, the rental market would not have been able to cope with the demand during the time of the "boom" that is why it was called a "boom". If houses were not built during this time, where do you expect people to stay? With the rental market not being able to cope with the way your thinking people would have to stay at home with mammy or live on the street.

completely untrue, that was the perceived perception in Dublin during the good times, there were plenty of properties for rent in Rathfarnham and the likes only nobody wanted to take them cos it wasnt convienent for shopping and crap.

I lived in Dublin for most of the boom, had 0 problem finding a place to rent( and all great houses ), only thing is they werent in 'cool' places or we're slightly inconvenient.

There was never ever a shortage of rental especially not in Dublin unless you wanted to live on Grafton street.

RCIRL wrote: »

Ireland is turning into a real bad place with this type of mentality going around.

Irelands been a ****hole during the 'good' times, at least people might cop on now on the value of money

RCIRL wrote: »

How many people do you know who grew up in rented accommodation, I cant think of many, I cant even think of one.

Well ill tell you one, me, and there was fcuk all wrong with it.

oopsbritney · 23-10-2009 3:51am

lmimmfn wrote: »

completely untrue, that was the perceived perception in Dublin during the good times, there were plenty of properties for rent in Rathfarnham and the likes only nobody wanted to take them cos it wasnt convienent for shopping and crap.

I lived in Dublin for most of the boom, had 0 problem finding a place to rent( and all great houses ), only thing is they werent in 'cool' places or we're slightly inconvenient.

There was never ever a shortage of rental especially not in Dublin unless you wanted to live on Grafton street.

Irelands been a ****hole during the 'good' times, at least people might cop on now on the value of money

Well ill tell you one, me, and there was fcuk all wrong with it.

Well said

youareyou · 23-10-2009 3:55am

What is the best thing to do in the future? Im lost now reading all this. Im 0 debt and renting, lived within my means.

I lived through the 80s here and would find it difficult to face all that depression everywhere again.

Financially ........ whats the best thing to do I wonder?

Stay and weather the storm?
Will I ever be able to afford a home here?
Will there be thieving zombies roaming the streets here in the next few years?

Oh lordy have mercy on us.

oopsbritney · 23-10-2009 4:00am

youareyou wrote: »

What is the best thing to do in the future? Im lost now reading all this. Im 0 debt and renting, lived within my means.

I lived through the 80s here and would find it difficult to face all that depression everywhere again.

Financially ........ whats the best thing to do I wonder?

Stay and weather the storm?
Will I ever be able to afford a home here?
Will there be thieving zombies roaming the streets here in the next few years?

Oh lordy have mercy on us.

Don't be silly zombies can't steal. On a serious note, I think the next two years will be very telling, if you have zero debt, able to save and a secure job obviously you're in a good situation. If after two years things look just as bad then break out the Home and Away back catalogue and catch up for your new overlords.

Scofflaw · 23-10-2009 4:22am

Could people tone down the language, please. This isn't AH.

moderately,
Scofflaw

RCIRL · 23-10-2009 5:25am

youareyou wrote: »

What is the best thing to do in the future? Im lost now reading all this. Im 0 debt and renting, lived within my means.

I lived through the 80s here and would find it difficult to face all that depression everywhere again.

Financially ........ whats the best thing to do I wonder?

Stay and weather the storm?
Will I ever be able to afford a home here?
Will there be thieving zombies roaming the streets here in the next few years?

Oh lordy have mercy on us.

The storm is going to last a long time by the looks of things, its been over two years now and we have seen no improvement, you can safely say its actually worse now than it was two years ago and the people in charge have another two years to continue making a mess. Over these 4 years dealing with the crisis they Government will embed policy's that will last for a very long time. Our Governments past policy's are now proven not to be good policy's so these recent one's including NAMA spell disaster for Ireland.

The housing market will calm down eventually but it will be some time before prices settle and we see some stability. God forbid you do purchase one of life's most important necessity and another crisis happens you will find yourself feeling guilty for making such a purchase as the banks even though they found you suitable for a mortgage will no longer find you suitable due to circumstances outside of your control, also you will face ridicule from others for simply "buying a house".

There is a lot of unease at the moment, people may calm down or people may start to rebel its 50/50 at the moment.

Their is far to many uncertainties in Ireland at present so the safest bet is to leave Ireland until a time stability resumes.

thebman · 23-10-2009 9:02am

RCIRL wrote: »

Their is far to many uncertainties in Ireland at present so the safest bet is to leave Ireland until a time stability resumes.

Not really as an Irish citizen you have entitlements here you don't elsewhere.

Most other place aren't in great shape anyway even the supposed safe havens have their own concerns but if things don't go to plan when your in a country that owes you nothing, what is plan B?

Long Onion · 23-10-2009 9:29am

I notice that people are still hung up on the mortgage/negative equity argument - just to state again that the IVA type agreements which are being mooted will not cover secured debts, so for the purposes of this thread, these arguments are really null and void.

As an aside though, it is certainly traditionally the case that negative equity only effects property investors (this could be landlords or people who purchase a home they don't intend to live in long term as a private residence with the hope that they will sell it on and move up the ladder at a later date) however a new phenomenon is now emerging as the banks begin to ratchet up the variable mortgage rates. Those in negative equity can no longer move to another bank and are at the mercy of the rates.

If we do believe that the banks were at fault to some degree here for lending too much, why not push for legislation which would bar them from raising rates where the homeowner has gone into negative equity? Would this be worth considering?

Finally, it has come to my attention that bankruptcy in the UK effects you for 12 months as opposed to twelve years here, anecdotally there are directors moving to the UK and declaring bankruptcy there, they will be free to come home in 12 months. Insolvency advisers state that this is particularly useful if you may be due a large inheritance in the next few years. This seems a large loophole, but then again, with Aviva moving to Ireland, can we complain? - I think not - welcome to the global economy.

Festus · 23-10-2009 12:16pm

helmut147 wrote: »

going by the logic of some of the more self righteous poster, if people who bought houses in the last few years are stupid and don't deserve to be helped,... should i stop paying taxes to the unemployed, or the disabled, or elderly or to people with an iq under 100 ? why should i pay money to them.
stop whining about people getting "off" with their debt. negativity equity ruins lives. it has to be addressed. just like looking after any disadvantaged section of society. it is indeed a time bomb as suggested previously. there is no turnaround coming for ireland soon, absolutely none. this will take years to work out and the sooner it is addressed the better.
we all suffer when negativity equity abounds. i have heard 300,000 homes will be in negative eq by the end of this year.
the money that was p*ssed away keeping bondholders in banks happy(not talking about nama), should have been spent on a fund for the negative equity generation.,
actually there's a title for david mcwilliams next book ! The Negative Equity Generation.

Unfortunately negative equity is a market force driven largely by people buying into an inflated market. While it is unfortunate there is also an argument that both the buyers of houses and the suppliers of mortgages should have seen it coming.
Mechanisms should have been put in place years ago to cool the market didn't happen and the bubble was encouraged by vested interests in the banks, developers and governement.

If you can't see the sucker at the poker table your the sucker according to Doyle Brunsen and in the property market we saw here the same rule can be applied.

The only way to address negative equity is to assess the profit potential for the banks and minimise it while arranging suitable repayment methods for the mortgagees so they can keep their homes - in the meantime the storm has to be ridden out.

Festus · 23-10-2009 1:56pm

Long Onion wrote: »

Finally, it has come to my attention that bankruptcy in the UK effects you for 12 months as opposed to twelve years here, anecdotally there are directors moving to the UK and declaring bankruptcy there, they will be free to come home in 12 months. Insolvency advisers state that this is particularly useful if you may be due a large inheritance in the next few years. This seems a large loophole, but then again, with Aviva moving to Ireland, can we complain? - I think not - welcome to the global economy.

That only applies to the banckrupty or IVA declaration itself.

Your credit record will not clear for at least 5 or 6 years after so getting any kind of loan or credit or charge card or any other financial operation that depends on a clean credit record will remain next to impossible for some time.