Fallout from the bubble

Amhran Nua

A few stories in the media today, no doubt just the beginning of the social problems caused by the property bubble, first about the numbers seeking help with their mortgages.

1,000 a month seek help to pay mortgage
MORE than 1,000 people a month are turning to the Government for help to pay their mortgages.

But as many as half of them are being turned down some months.

The dramatic rise in the numbers who cannot afford to meet their monthly mortgage repayments has underlined the scale of the crisis affecting a growing number of desperate homeowners.

The mortgage interest relief supplement is designed to cover the interest portion of the home loan. Those seeking aid have to show they negotiated to reschedule the mortgage payments with their lender. They also have to be means tested. And both husband and wife must be out of work.

The increase in applications comes at a time when mortgage interest rates are at record lows. Expected rises in the next year are likely to push substantially more people to the financial brink.

Figures obtained by the Irish Independent reveal that the Government expects to have to spend €60m this year helping homeowners to pay their mortgages. This is double the amount spent on the mortgage interest supplement scheme last year.

About 400 households a month are now getting an average of €367.40 every four weeks from the State to help them cover part of their repayments, the Department of Social and Family Affairs admitted yesterday. A total of 14,136 people are now receiving the mortgage assistance. This is expected to increase to 15,500 by the end of the year.

New figures show an average of 1,000 people a month are applying for the mortgage supplement, with up to 2,000 applying some months. However, large numbers of families are being refused the payment because of strict rules on who can qualify.

A report obtained by the Irish Independent reveals 2,116 people had claims for the mortgage interest supplement registered in May this year, but just 1,644 of these were granted assistance. This means close to 500 were turned down for State help that month.

The largest number of applicants was in the eastern part of the country, with the south-east also heavily represented in the figures.

Another about a local authority abdicating their responsibilities.

Snag list turns into living nightmare for homeowners
SCHOOL principal Kenneth McCarthy and his wife Christine bought a house in Abbey Heights in Skibbereen, Co Cork, five years ago.

A small estate with just eight homes, other buyers included elderly people who had "put in their life savings" to live in an attractive estate.

The developer handed over the running of the estate to residents after Cork County Council released the bond.

But it did not inspect the property to ensure it was properly finished.

Residents wrote to the council, asking if it would take over the maintenance of the roads, lights, open space and sewerage treatment plant, but the council refused unless a snag list of problems was fixed.

The residents believe that jobs on the snag list were items that the council should have ensured the developer corrected before releasing him of the bond.

Mr McCarthy says the residents were the losers leaving them to "foot a gigantic bill in order to correct the snag list".

But the estate has yet to be taken in charge by the local authority.

Kenneth McCarthy says residents feel let down in relation to their properties.

"It looks like we have been stung once again by the council.

And the tactics being taken by the banks in pursuit of mortgages.

'Bank is hounding us about mortgage'
A MOTHER broke down in tears as she told of how a bank is "hounding" her and her husband to repay their mortgage.

Karen and Jason Moody, who have three young children, are in negative equity and are being forced to consider selling their house in Cavan.

"They've threatened us now," she said yesterday.

"They've sent us a letter saying that if we don't pay the arrears in full, they will send a repossession order. They ring my phone at least 15 times a week looking for more money, which we just can't give them.

"I can't even answer them anymore because I get so upset. They are hounding and hounding us all the time. I haven't got a clue what we're going to do. We just have to wait until it goes to court and hope it goes in our favour."

...

The couple's bank have sent a "financial counsellor" to their home, in order to "get the money", Karen says.

"He told us that we should at least be able to meet the bank's interest rate, which amounts to €1,300 a month, but we only get €390 a week in social welfare.

"He told us that we shouldn't worry about our other bills, such as ESB and heating and water. He was only interested in getting money for the bank. We've tried a few things with them, but they won't budge.

Theboinkmaster

Amhran Nua wrote: »

A few stories in the media today, no doubt just the beginning of the social problems caused by the property bubble, first about the numbers seeking help with their mortgages.


Another about a local authority abdicating their responsibilities.


And the tactics being taken by the banks in pursuit of mortgages.

On that last story - I'm sorry but anyone who buys property in cavan which incurs €1,300 per month in interest alone obviously extended themselves and as such deserve what's happening.

Nobody forced them to borrow the money - they should have lived within their means and performed the correct research before committing to a lifetime of debt. Negative equity is their own fault IMO.

They're probably looking for a handout from the government but why should I support their bad financial decisions, through my taxes, when I made financially sound decisions.

There's going to be alot of stories like these coming out, and whilst I do feel sorry for them, it is their own fault.

Yes the government failed us.
Yes the banks failed us.

But we have to take responsibility for our own actions.

If it wasn't for all these muppets (about half a million of them in fairness) I'd be able to comfortably buy now, but instead ive to wait 5years for the market to bottom out (my guess anyway).

In negative euity? Your own fault - you took a gamble that didn't pay off. I do feel sorry for perhaps elderly people who may not have had the means to conduct the correct reseach online.

But everyone else could have easily gone online and researched the countless IMF, OECD reports etc warning us of the bubble. Everyone outside ireland saw it coming a mile off.

/end of rant

Amhran Nua

Theboinkmaster wrote: »

On that last story - I'm sorry but anyone who buys property in cavan which incurs €1,300 per month in interest alone obviously extended themselves and as such deserve what's happening.

Yes, that caught my eye too. The main thrust of it though was that the banks are advising them to ignore heating and electricity costs in order to repay their debts. That is in no way ethical, and is probably illegal as well.

Theboinkmaster wrote: »

But everyone else could have easily gone online and researched the countless IMF, OECD reports etc warning us of the bubble. Everyone outside ireland saw it coming a mile off.

Agreed, however there are those who have the education and background to research these things, and those who believed what their families, newspapers, televisions, radio stations, elected representatives, and banks were telling them.

And what in the hell was the bank doing handing out that sort of a loan to someone in a "security guard" job anyway? Looks like predatory lending to me, top to bottom.

Diarmuid

Amhran Nua wrote: »

Yes, that caught my eye too. The main thrust of it though was that the banks are advising them to ignore heating and electricity costs in order to repay their debts. That is in no way ethical, and is probably illegal as well.

1. You are only getting one side of the story.
2. I have a bridge to sell them, if they did believe that line.

bobbysands81

Theboinkmaster wrote: »

On that last story - I'm sorry but anyone who buys property in cavan which incurs €1,300 per month in interest alone obviously extended themselves and as such deserve what's happening.

Nobody forced them to borrow the money - they should have lived within their means and performed the correct research before committing to a lifetime of debt. Negative equity is their own fault IMO.

They're probably looking for a handout from the government but why should I support their bad financial decisions, through my taxes, when I made financially sound decisions.

There's going to be alot of stories like these coming out, and whilst I do feel sorry for them, it is their own fault.

Yes the government failed us.
Yes the banks failed us.

But we have to take responsibility for our own actions.

If it wasn't for all these muppets (about half a million of them in fairness) I'd be able to comfortably buy now, but instead ive to wait 5years for the market to bottom out (my guess anyway).

In negative euity? Your own fault - you took a gamble that didn't pay off. I do feel sorry for perhaps elderly people who may not have had the means to conduct the correct reseach online.

But everyone else could have easily gone online and researched the countless IMF, OECD reports etc warning us of the bubble. Everyone outside ireland saw it coming a mile off.

/end of rant

I've a few points to make on your post here...

Firstly I believe, as you do, in personal responsibility, we have to try and sort out messes ourselves.

However, there are circumstances which occur in people's lives where they may find themselves struggling to pay off mortgages through no fault of their own. You can't just put that down to being "their own fault".

What if one of these "muppets" with quite a large mortgage lost their job? What if someone has a joint mortgage with a partner and there's a split? What if somebody becomes ill and can't work? What if one of their relatives become sick and they need to cut down on hours/spend money on that relative? There are a whole host of unforseen things that can happen, you are being completely unfair on half a million "muppets".

Negative equity is no individuals' fault, there has to be some sort of collective responsibility for it. You're one of the lucky ones that saw this coming, many didn't, you could have equally been wrong as you were right. I believe the market wouldn't have died the death it did if Michael McDowell hadn't had intimated that an overall of Stamp Duty was going to take place thus killing the property market overnight, confidence drained from the market immediately afterwards.

Hindsight is 20/20, it's easy to say "I told you so" now like you're doing but over the last ten years all sectors of society bar one or two economists have been telling everyone to buy, as all sectors of society were stakeholders in this fraud against the Irish people. Morgan Kelly was derided as a fool a few years ago when he said that property prices could fall 60%, now it looks like he was right!

As I said everyone in society gained... except those "half a million muppets" in negative equity.

The Govt were delighted that they were making huge money off Stamp Duty, mega Income Tax receipts, massively increased employment, increased taxes all round whilst taking many many people off the Dole. We had full employment all fuelled by the building bubble, of course nobody was going to cry STOP!

Developers were delighted as they had extortionate prices on shoebox properties, they rode the Irish people disgracefully racking up record profits. (Will we even see one developer in social housing now that the market has gone the other way?)

Journalists were not allowed to cry halt as newspapers were up to their necks in this fraud. Papers were teeming with Property Supplements which carried huge full page full colour ads. As such newspapers and their editors danced to the tune that the piper was playing and were afraid to speak about this fraud. As such constant stories, even at the height of the bubble, appeared in papers exclaiming that everyone should buy now!

Estate Agents needed no skills to sell a house, they sold themselves as everyone was preying on the old Irish necessity that we NEED to own our land.

Solicitors wanted in too and they were getting their cut from the sale of properties.

Employment of ordinary workers, and their wages, went through the roof! Although these people didn't cause the problem, they benefitted from it.

Meanwhile hardly anyone cried halt and those that did were derided as fools. Is it any wonder what happened actually happened?

You're lucky that your only problem is that you have had to wait 5 years to purchase a property - this bubble bursting will bankrupt many, rip apart many families and cost others their lives.

Show a bit of decency and humility.

Fr0g

Amhran Nua wrote: »

Yes, that caught my eye too. The main thrust of it though was that the banks are advising them to ignore heating and electricity costs in order to repay their debts. That is in no way ethical, and is probably illegal as well.


Agreed, however there are those who have the education and background to research these things, and those who believed what their families, newspapers, televisions, radio stations, elected representatives, and banks were telling them.

And what in the hell was the bank doing handing out that sort of a loan to someone in a "security guard" job anyway? Looks like predatory lending to me, top to bottom.

Broadly in agreement with this. I would go as far as saying that people in this country were lied to by politicians, media, banks, and of course estate agents.

The lesson to be learned here is believe nothing of what a politician tells you, belief only half of what you read in newspapers and see on TV and keep banks at arms length. Paying 300k for a house (approx. avg. price at peak) is something that you should put a lot of thought into and not just do it because everyone else is.

Here is a good list of who is to blame for this mess

http://www.thepropertypin.com/viewtopic.php?p=192970#p192970

robd

There is a huge case here for non recourse mortgages being the only mortgages. Non recourse means that the banks could only recover the property that the mortgage is secured on if loan fails, rather than trying to recover the difference from the customer for years into the future. This would require a legislative change.

This would make the banks would be more prudent in the percentages of house value that they would lend.

This would mean customers can walk away if they end up in dire situation such as illness or job loss and they can no longer pay.

I believe this would be a win for both sides and lead to a fairer and more balanced market with a long rather than short term outlook.

D3PO

Theboinkmaster wrote: »

If it wasn't for all these muppets (about half a million of them in fairness) I'd be able to comfortably buy now, but instead ive to wait 5years for the market to bottom out (my guess anyway).

explain to me why theres half a million muppets ? Theres not half a million people overstretched causing the economy to stagnate. Being in negative equity and being a muppet are 2 different things :rolleyes:

overstretching yourself and defaulting = muppet being in negitive equity is not

D3PO

robd wrote: »

There is a huge case here for non recourse mortgages being the only mortgages. Non recourse means that the banks could only recover the property that the mortgage is secured on if loan fails, rather than trying to recover the difference from the customer for years into the future. This would require a legislative change.

This would make the banks would be more prudent in the percentages of house value that they would lend.

This would mean customers can walk away if they end up in dire situation such as illness or job loss and they can no longer pay.

I believe this would be a win for both sides and lead to a fairer and more balanced market with a long rather than short term outlook.

how is that win win. who in negative equity wouldnt walk away right now ? Leaving the banks up the creek to the point they all fail.

Seriously how in the world do you think this is win win !!!

RedPlanet

bobbysands81 wrote: »

However, there are circumstances which occur in people's lives where they may find themselves struggling to pay off mortgages through no fault of their own. You can't just put that down to being "their own fault".

It's their own fault for making leap of faith in the economy and their own job security.

bobbysands81 wrote: »

What if one of these "muppets" with quite a large mortgage lost their job? What if someone has a joint mortgage with a partner and there's a split? What if somebody becomes ill and can't work? What if one of their relatives become sick and they need to cut down on hours/spend money on that relative?

Those are all things they should have considered before taking loan from the bank. Why should i bail them out so they get to keep the house they can't afford? I expect the bank to re-possess and put that property on the market where it belongs.

bobbysands81 wrote: »

Negative equity is no individuals' fault, there has to be some sort of collective responsibility for it. You're one of the lucky ones that saw this coming, many didn't.

Rubbish it was common currency that the housing bubble wouldn't last, they used to talk about "soft landings" if you remember

Amhran Nua

RedPlanet wrote: »

Those are all things they should have considered before taking loan from the bank.

The bank that gave a massive loan to buy a house in Cavan to a security guard? I don't think all the responsibility lies with the householder. I also don't think the taxpayer should be bailing them out, but to be honest the banks have the country held to ransom because they have everyone's deposits. If the banks go down, so does your money. This is the quandry we face. There are solutions, but you can bet "criminal" NAMA isn't one of them.

iguana

The Moodys in Cavan currently have a monthly income of €2916. They can easily afford to pay €1300pm.

As they stated on TVAM they have €390pw dole, €150pw mortgage interest supplement, €535pm in Children's Benefit and €41.50 Early Childcare Supplement totally at an annual tax free income of €34,998. But neither they nor the TVAM presenters or researchers bothered to add up exactly how much they currently have.

They should be living as frugally as possible right now and paying back as much of their debts as they can. They will not continue to receive so much from the state for very long, so they really should be getting their debts down as low as they can while they can. They should also look at selling the house and downsizing or renting. Sure everyone wants a 5 bed detached, but if you can't afford it you live in a 3 bed semi like everyone else.

RedPlanet

Amhran Nua wrote: »

The bank that gave a massive loan to buy a house in Cavan to a security guard? I don't think all the responsibility lies with the householder.

Not all no, of course. It's a regulatory issue that financial institutions could invent schemes like CDO's and Securitisation to spin money from borrowed sums.
Nonetheless i don't think anybody can use the phrase "predatory lending" as having occured here.
http://www.investorwords.com/5728/predatory_lending.html

Any of a number of fraudulent, deceptive, discriminatory, or unfavorable lending practices. Many of these practices are illegal, while others are legal but not in the best interest of the borrowers.

Also check this one out:
http://www.mortgagenewsdaily.com/Mortgage_Fraud/Predatory_Lending.asp

Predatory Lending involves targeting people, intimidating them, coercing, charging excessive fees, frauding them etc.
That is not what occured here.
People here behaved like greedy sheep, they bought into a marketing concept that they must own a home, that they should get onto the "property ladder" etc.
Not the same thing as predatory lending i'm afraid.
Those homeowners should man-up and not ask we taxpayers to help them own property they can't afford.

the_syco

robd wrote: »

There is a huge case here for non recourse mortgages being the only mortgages. Non recourse means that the banks could only recover the property that the mortgage is secured on if loan fails, rather than trying to recover the difference from the customer for years into the future.

Where would the rest of the money come from?

robd wrote: »

This would make the banks would be more prudent in the percentages of house value that they would lend.

Reread that a few times, will you?

robd wrote: »

This would mean customers can walk away if they end up in dire situation such as illness or job loss and they can no longer pay.

Epic fail. Here's an anology: I buy a car for €20,000 and 2 years later, having only paid off €5,000 I loose my job. By your logic, the bank would then get the car back. At two years old, the car may only be worth €10,000 and thus the bank looses €5,000

Only €5,000 you say? Sure the bank can cover that you say? Now, lets say, instead of a car for €20,000, it's a house for €200,000. At the rate the market is falling, in two years, the house may only be worth €100,000, and thus the bank is really f**ked.

Amhran Nua wrote: »

If the banks go down, so does your money.

If a shop does no business in an area, and closes up with heavy losses, does another shop punce in for a killing? No. And neither will any banks. If the banks go down the drain, we'll have an extremely long road ahead of us.

=-=

Finally, some people couldn't get a loan in a "normal" bank, and thus went to a bank that had a higher rate of interest to get a loan for a house. They would pay through their noses, and most of the time barely have enough for the rent. Now, out of a job, they're f**ked.

Money Shot

I can't get my head around the idea the the government should help people with their personal debt, or even suggesting that the banks just simply write off debts when people get into temporary trouble. It just doesn;t make sense, especially when we are in such a fiscal black hole. Abuse would be rife for starters - there would be a queue of peopel doing what the Mcdonalds done down the road - I would probably be with them if I thought I could get a windfall. There is no devine right for people to own their own house when they can't afford to do so. We have a right to provide them with accomodation in the form of rental or public housing - that's the governments job, not to help people purchase an asset. What next - I need a dig out as I can't keep up payments on my 2008 jeep that I overstretched for, but I really need a jeep and a punto just won't do for me.

People need to approach their lending institutions and change the terms to reduce their payments. If they still can't afford it, I can't see any reason why the tax payer should step in and help them out.

Amhran Nua

RedPlanet wrote: »

Predatory Lending involves targeting people, intimidating them, coercing, charging excessive fees, frauding them etc.
That is not what occured here.

From the descriptions you linked to, its very much whats going on here.

the_syco wrote: »

If a shop does no business in an area, and closes up with heavy losses, does another shop punce in for a killing? No.

If the shop that closed was engaged in crazy business practices, overextending itself and giving lines of credit to anyone that wandered in, another more prudent shop will almost certainly move in and take over that area of the market, but will operate in a sane and sustainable manner, the lesson having been learned.

RedPlanet

Amhran Nua wrote: »

From the descriptions you linked to, its very much whats going on here.

Not even in the most liberal interpretation of the phrase.

Amhran Nua

RedPlanet wrote: »

Not even in the most liberal interpretation of the phrase.

Any of a number of fraudulent, deceptive, discriminatory, or unfavorable lending practices. Many of these practices are illegal, while others are legal but not in the best interest of the borrowers.

In no way was giving a loan like that to a security guard in the best interest of the borrower. The heavy handed tactics to secure the payments put the ribbon on it, as far as I can see.

robd

the_syco wrote: »

Only €5,000 you say? Sure the bank can cover that you say? Now, lets say, instead of a car for €20,000, it's a house for €200,000. At the rate the market is falling, in two years, the house may only be worth €100,000, and thus the bank is really f**ked.

You can't compare a luxury item like a car to a house. I said mortgages nothing else. There is nothing different in concept with a non recourse mortgage and a business loan. A business loan is generally non recourse because the company can declare bankruptcy. An individual cannot in Ireland.

Banks are commercial entities with trained staff and risk assessors. Yes they've been crap in recent years. If the loans were non recourse, then they'd get their act together and the leverage that they allow you on a property would be prudent. The valuations would be conservative and prudent also. It should be up to the banks to take the risk and charge an appropriate rate, not the vulnerably individual. If they consider the person unworthy of credit then they shouldn't give them the loan. In recent years anyone was given a 100% mortgage despite them not being able to afford it. The bank figured houses would continue to rise so they'd be covered. That's predatory lending and should not be allowed.

This would put in place a sustainable housing market based on real salaries and affordability as apposed to being based on outrageous multiples of hypothetical bonuses, self signed income declarations and renting out box rooms.

OMD

robd wrote: »

This would put in place a sustainable housing market based on real salaries and affordability as apposed to being based on outrageous multiples of hypothetical bonuses, self signed income declarations and renting out box rooms.

Well it wouldn't really. You are saying banks can only recover the actual value of the house not the purchase mortgage. Therefore if we assume the market reaches the bottom then banks will only give about 70% mortgages. Afterall they cannot be sure it is the actual bottom.

RedPlanet

Amhran Nua wrote: »

In no way was giving a loan like that to a security guard in the best interest of the borrower. The heavy handed tactics to secure the payments put the ribbon on it, as far as I can see.

For predatory lending, the "heavy handed tactics" should really occur before the contract is signed.
Not a year later when the guys personal finances goes tits up and he can't pay his mortage. What do you really expect the lender to do if someone doesn't pay?
It really doesn't do the lender a whole heap of good if they have to re-possess. They then have to deal with this depreciated asset, sell it at a loss and maybe chase the guy for the difference. They'd have to invest their own time in man-hours for all that. Surely it's better for the lender if they get the guy to pay his mortage just like he agreed to.


What would you do if you were a landlord and your tenent decided his personal finances were such that he wasn't going to pay the rent?

Amhran Nua

OMD wrote: »

Therefore if we assume the market reaches the bottom then banks will only give about 70% mortgages.

Would that be such a bad thing? It would certainly make houses affordable, and ensure that anyone buying has plenty of practice at saving. There are a lot of good reasons to move the bulk of the risk onto the lender rather than the borrower, our current economic situation being the main argument in favour of that point of view.

RedPlanet wrote: »

For predatory lending, the "heavy handed tactics" should really occur before the contract is signed.

Heavy handed tactics occur afterwards, otherwise nobody will come to you for loans. And if we wanted to look at the tactics used prior, what was the marketing budget for any of the big three in say 2006?

RedPlanet wrote: »

It really doesn't do the lender a whole heap of good if they have to re-possess.

So you're saying that it was a prudent and financially savvy move to hand over that much money to a security guard with a large family, to purchase a house in Cavan.

RedPlanet

Amhran Nua wrote: »

So you're saying that it was a prudent and financially savvy move to hand over that much money to a security guard with a large family, to purchase a house in Cavan.

I am suggesting no such thing. But do you think that this security guard was targeted, coerced, and intimated into buying his house?
Or, like me, do you think he went to them looking to secure a mortage.

OMD

Amhran Nua wrote: »

Would that be such a bad thing? It would certainly make houses affordable, and ensure that anyone buying has plenty of practice at saving. There are a lot of good reasons to move the bulk of the risk onto the lender rather than the borrower, our current economic situation being the main argument in favour of that point of view.
.

Well it wouldn't really make houses more affordable.Wealthy people could afford houses. Other people would have to save for a lot longer. In the mean time cash rich landlords would be in control charging much higher rents, making saving more difficult.

jmayo

It is becoming very noticable how many of these hard luck stories are now appearing in print, on radio and TV of late.

And how many of them are real hard luck and how many are just the fallout from the "keep up with jones" lifestyle based on borrowed money that some people, who had a complete lack of fiscal management and cop on, carred on for the last 8/10 years ?

Another worry I have is that some publicity seeking genius is going to try and implement a personal bailout for these people, thus leaving the ones of us that did live within our means carrying yet another crock of sh**e. :mad:

On these threads one poster usually remarks that people should have been careful and that they should have weighed up how much they were spending, for what and where.

Then at least one gobdaw comes on and offers some waffle that how could people have been responsible with some real prize comments like:
- people didn't have the time to do a load of research about buying their home, they were just too busy
- not everyone is an economist so how could they be expected to work out how their finances or that of the country would go
- people didn't have the education or background to do some basic research into affordablity and they believed everyone and everything said by their families and all the vested interests.
Obviously they didn't believe the sceptics because it didn't suit them or they couldn't be bothered listening to the likes of George Lee or David McWilliams because the football was on Sky.
- it is the fault of the banks for offering them huge mortgage and the fault of the credit card companies for extending their credit.
They made them do it :rolleyes:

To me they are all BULLS**T excuses and a cop out for people making stupid decisions.

The real hard luck stories are the ones we won't hear paraded and pedalled on the media, they are the ones where people who didn't go nuts, but are yet in trouble because they lost their jobs.

bangersandmash

jmayo wrote: »

- people didn't have the time to do a load of research about buying their home, they were just too busy

This is the part I find incomprehensible. People will devote a huge amount of time organising weddings and parties, planning holidays, choosing a car, and so on. Yet there isn't enough time for the far more important decision of buying a home that will have implications for the rest of their lives.

I've been trying to fathom this aversion to researching a property purchase, and then I read today's paper of record...

http://www.irishtimes.com/newspaper/property/2009/1112/1224258649725.html

The resident property pundit ridicules the idea of researching a major financial decision by using some half-baked caricature of greedy buyers. They should really just get off the fence and leap in.

And then further down the page we see an article about excessive mortgages and debt-forgiveness

Amhran Nua

RedPlanet wrote: »

I am suggesting no such thing. But do you think that this security guard was targeted, coerced, and intimated into buying his house?
Or, like me, do you think he went to them looking to secure a mortage.

Targeted and coerced, yes. Anyway predatory lending doesn't imply intimidation beforehand, only afterwards. Which is what we are seeing here.

jmayo wrote: »

- it is the fault of the banks for offering them huge mortgage and the fault of the credit card companies for extending their credit.

So you're saying the banks loaned money prudently only to good risks throughout the boom? Or maybe the lending regulations were loosened to the point where they were lending money to anyone that wanted it, and they went ahead and did so? Its depressing that some people want to let the banks off the hook entirely, despite that we'll be paying for their profits for decades to come, after their irresponsiblity. And the people in question are already having their mortgage paid for by the state.

bangersandmash

Amhran Nua wrote: »

Its depressing that some people want to let the banks off the hook entirely, despite that we'll be paying for their profits for decades to come, after their irresponsiblity.

A nice sound-byte. But I'm pretty sure you have misrepresented Jmayo's comment. I didn't see anything about letting the banks off the hook. Rather he seemed to be referring to comments by those calling for debtors to be let off the hook entirely. There's a substantial middle-ground which allows for both parties to be responsible, to different degrees in different cases.

Amhran Nua

bangersandmash wrote: »

A nice sound-byte. But I'm pretty sure you have misrepresented Jmayo's comment. I didn't see anything about letting the banks off the hook. Rather he seemed to be referring to comments by those calling for debtors to be let off the hook entirely. There's a substantial middle-ground which allows for both parties to be responsible, to different degrees in different cases.

Theres a bit too much of the "blame the borrower to the exclusion of everyone else", to be honest. Yes, they cannot be excluded from blame and must be made to take responsiblity for their own actions (which right now they aren't), but that doesn't absolve the banks either. Far from it.

kippy

RedPlanet wrote: »

It's their own fault for making leap of faith in the economy and their own job security.
Those are all things they should have considered before taking loan from the bank. Why should i bail them out so they get to keep the house they can't afford? I expect the bank to re-possess and put that property on the market where it belongs.
Rubbish it was common currency that the housing bubble wouldn't last, they used to talk about "soft landings" if you remember

No one would ever be in a position to take out a loan or mortage if they were to take into account ALL those possible considerations.

I do believe there is some level of personal responsibility but for the vast majority of people, the advice from the Government, the banks, sections of the media, certain economists was that it was a great time to buy.
Some people over extended, but they were let do that, the bank themselves were let overlend. The government and legislators ultimately let us all down, and while ALL of us benefited in some way in the short term from the bubble, most of us were blind to the longer term issues. Myself included. Ultimately the majority in this country voted for successive governments and their policies.

whizzbang

bangersandmash wrote: »

This is the part I find incomprehensible. People will devote a huge amount of time organising weddings and parties, planning holidays, choosing a car, and so on. Yet there isn't enough time for the far more important decision of buying a home that will have implications for the rest of their lives.

I've been trying to fathom this aversion to researching a property purchase, and then I read today's paper of record...

http://www.irishtimes.com/newspaper/property/2009/1112/1224258649725.html

The resident property pundit ridicules the idea of researching a major financial decision by using some half-baked caricature of greedy buyers. They should really just get off the fence and leap in.

And then further down the page we see an article about excessive mortgages and debt-forgiveness

Fair play to those people! Sounds like they are taking it very seriously!