Idea for the People?

readyletsgo

Now before I start I dont really know much about the economy etc except from what I hear and see eg: my brother has to sell his house as he lost his job over two years ago and cant pay mortgage, he has since left the country. I know he is over 18 and he signed the contract with the bank.
If any mods think this is posted in the wrong place or this is talked about too much please move or close. I wont take it to heart :-)

I was thinking of the way the banks are being saved with nama by the gov. with there billions and I heard a woman on the radio this morning saying that she can pay her mortgage of €1800 a month but has nothing left over to spend on herself except for bills and food.

So i thought to myself (and i am so sure someone/many have come up with this idea so many times before already but just need to get this out)
why dont the gov. use these billions to clear everyones mortgages through the banks and set up 'New Mortgages' for say around €500pm for the rest of there lives so that people have money to put back into the economy here in Ireland.

My thoughts would be that this 'New Mortgage' would go on until your death where upon it would be taken over by your children but if you didnt have kids you would have to nom someone (ie a sis bro friend etc) who is willing to take over the 'New Mortgage'. If you didnt have someone to take it over then the bank could in there right take the house and sell it on for a profit or loss but either way, even if you are on the dole people can still meet there monthly payments.

Now we all know there will be people who will take the piss and not meet payments of say €500 so in this case i think if you miss 3 payments then the house is taken back from you, tough **** etc, you where given a chance an all.

It would also set up loads of new jobs in the banks to set up these 'New Mortgages'

What you think?

Open to flaming but be nice lol

UrbanSea

Aw I have always wanted to be the first person to respond in After Hours and put in a typically not funny remark.

Dravokivich

readyletsgo wrote: »

I was thinking of the way the banks are being saved with nama by the gov. with there billions and I heard a woman on the radio this morning saying that she can pay her mortgage of €1800 a month but has nothing left over to spend on herself except for bills and food.

She can pay and is able to sustain a living... I don't see a problem there...

readyletsgo wrote: »

So i thought to myself (and i am so sure someone/many have come up with this idea so many times before already but just need to get this out)
why dont the gov. use these billions to clear everyones mortgages through the banks and set up 'New Mortgages' for say around €500pm for the rest of there lives so that people have money to put back into the economy here in Ireland.

I thought the Government are bailing out the banks to pay off the loans the banks owe out to their creditors, based on being able to get the money back from the people who are paying off their mortgages?

readyletsgo wrote: »

My thoughts would be that this 'New Mortgage' would go on until your death where upon it would be taken over by your children but if you didnt have kids you would have to nom someone (ie a sis bro friend etc) who is willing to take over the 'New Mortgage'. If you didnt have someone to take it over then the bank could in there right take the house and sell it on for a profit or loss but either way, even if you are on the dole people can still meet there monthly payments.

I always assumed any debts outstanding was passed onto Next of Kin any way?

UrbanSea

Now that I've gotten that off my chest.
OP,I think it's ridiculous that the banks can take houses off people who can't afford to pay their mortgage,yet it's from the same person's taxes that the banks are being bailed out. If the banks get money,the people should be relieved of some of their debt or at least,the timing of the payments they have to make.

SeaFields

readyletsgo wrote: »

I heard a woman on the radio this morning saying that she can pay her mortgage of €1800 a month but has nothing left over to spend on herself except for bills and food.

Jesus, pity about her. Many, many worse off.

Banned Account

Won't work.

Moral hazard

Passing on debts to children with no guarantee that the will be willing to sign up.

Allowing some people who can't pay to be subsidised by those who are struggling but can just about afford it


blah blah blah

Biggins

Here's a chap willing to sell his home for as little as a Euro:
http://www.independent.ie/national-news/house-for-sale-offers-over-euro1-considered-2321439.html

For Sale: New four-bed bungalow. Private sale. Offers over €1 considered. It's not a joke. Michael Dempsey is so disillusioned after trying to sell the property near Moylough, Co Galway, for the past two years that he will literally consider any offer.

Truck driver Michael (48), a single man, built the bungalow partly as a hobby and partly to provide himself with an income in retirement. He used direct labour in the construction of the house on a site between Moylough and Mountbellew.
It would have been worth €320,000 at the height of the boom, but the collapse in the economy has wrecked his plans to sell or let the bungalow.

"It's a beautiful new house with four bedrooms. It's a shame no one is living in it," he said.
Michael added: "When I decided to build it banks were giving out money all over the place. I went in at one stage looking for e25,000 and came out with €50,000.
"They ended up lending me 10 times my income, but it seems they were doing that to everyone.

"But the loan was secured against the house I live in, so I'm free to sell this house for any price. I have the deeds to it and am genuinely willing to consider any offer over €1.
"I didn't think things could get this bad in this country, but they have and this highlights it."

Dravokivich

greetings wrote: »

Now that I've gotten that off my chest.
OP,I think it's ridiculous that the banks can take houses off people who can't afford to pay their mortgage,yet it's from the same person's taxes that the banks are being bailed out. If the banks get money,the people should be relieved of some of their debt or at least,the timing of the payments they have to make.

These are 2 seperate issues. They should not be mixed up the way you are putting them forward.

My understanding is, The Government are paying off the loans owed by the banks on the pretance that the Government well get that money back on the loans owed to the banks.

FreudianSlippers

What do we get out of it as taxpayers? There seems to be some misinformation around regarding NAMA. We didn't give the banks any money - we purchased part of the banks and their assets.

Using billions to "clear" everyone's mortgages is a bad investment - it is throwing money away with absolutely nothing to show for it.

I understand and empathise with people who cannot afford their houses. It was bad banking practice to allow these people to buy houses which they could not afford in the first place, but it was the international standard of practice (not that it is an excuse).
But, I did not purchase a house which I could not afford. I did not take a 100%+ mortgage. Frankly, I don't want to pay to support people who made poor decisions.
Granted, they were enticed by the banks and I firmly believe that the people in charge of these banks should be punished... but that is no reason to punish the bank itself - that makes no sense.

We, as taxpayers, now own a vast chunk of assets which have real value and realisable profit potential. Simply clearing debts does nothing but leave us billions in debt and give people the idea that they can rack up huge debts and have it forgiven on a whim.

Punish those in charge of the banks, punish the government and politicians that allowed this to happen and reform the system so this cannot happen again. But do not punish the people by destroying the financial institutions of this country.

UrbanSea

Dravokivich wrote: »

These are 2 seperate issues. They should not be mixed up the way you are putting them forward.

My understanding is, The Government are paying off the loans owed by the banks on the pretance that the Government well get that money back on the loans owed to the banks.

Are they factoring debts or paying them in full?

Dravokivich

greetings wrote: »

Are they factoring debts or paying them in full?

I've honestly got no idea what you mean by "factoring."

readyletsgo

I just think it would be an idea to get money back into the shops in ireland. Of course this lady is fine, it was just an example that she is meeting her monthly payments but has nothing left to help the economy back on its feet, as in buying 'things' from shops so if this new mortgage idea reduced amounts going out on mortgages there would be more to get our country back up and running instead of this recession going on for maybe 20 more years.


As i said in my OP i am not the sharpest on curent affairs, so its just an idea.

UrbanSea

Say paying the loans off in one go for say about 90% of their value,as they're the third party intervening.

FreudianSlippers

greetings wrote: »

Now that I've gotten that off my chest.
OP,I think it's ridiculous that the banks can take houses off people who can't afford to pay their mortgage,yet it's from the same person's taxes that the banks are being bailed out. If the banks get money,the people should be relieved of some of their debt or at least,the timing of the payments they have to make.

The banks are not being bailed out. The government is purchasing the derivatives portfolio of each of the major banks and funding recapitalisation through purchase of equity in the banks. This means that NAMA is a shareholder in the banks and the government (read:we) are shareholders in NAMA and enjoy the rights that go along with that.

PS: this scheme was previously successful in the 90s in Sweden

readyletsgo

Biggins wrote: »

Here's a chap willing to sell his home for as little as a Euro:
http://www.independent.ie/national-news/house-for-sale-offers-over-euro1-considered-2321439.html

Heard this on Newstalk too lol

FreudianSlippers

readyletsgo wrote: »

I just think it would be an idea to get money back into the shops in ireland. Of course this lady is fine, it was just an example that she is meeting her monthly payments but has nothing left to help the economy back on its feet, as in buying 'things' from shops so if this new mortgage idea reduced amounts going out on mortgages there would be more to get our country back up and running instead of this recession going on for maybe 20 more years.


As i said in my OP i am not the sharpest on curent affairs, so its just an idea.

That's the point of recapitalising banks. The more money they have to lend the more money is spent in shops and other institutions. The crux of our economy is the movement of money - at the moment it is stagnant and that is what is causing most of the problems.

More money flowing = more jobs available = even more money flowing = even more jobs available... etc.

cynder

readyletsgo wrote: »

mortgage of €1800 a month

Must be a big house with that sort of mortgage,

Should have brought a smaller house with a smaller mortgage!

UrbanSea

1800 a month doesn't necessarily mean it was a big house. Depends on the life span of the mortgage. If it was Dublin,it might not be big,the house prices there were absolutely ridiculous.
My sister told me her friends dad bought a house in Dublin and was renting it out to students,that it cost a million.
I was expecting some absolute mansion.
It was a normal house in an estate in the D4 area. I lawled. A house in Sligo like that would set you back around 400,000 at the time,max. How people paid such ludacris prices is beyond me.

smurgen

I think mortgages are passed on to children in other coutries like japan.

FreudianSlippers

greetings wrote: »

1800 a month doesn't necessarily mean it was a big house. Depends on the life span of the mortgage. If it was Dublin,it might not be big,the house prices there were absolutely ridiculous.
My sister told me her friends dad bought a house in Dublin and was renting it out to students,that it cost a million.
I was expecting some absolute mansion.
It was a normal house in an estate in the D4 area. I lawled. A house in Sligo like that would set you back around 400,000 at the time,max. How people paid such ludacris prices is beyond me.

féck all use to students in Dublin to rent a house in Sligo.

mecanoman

I think its our whole mentality to houses and owning property.

It was wrong the way people were queueing and paying people

to queue on their behalf for houses that weren't even build.

Also speculators/landlords out to make a quick buck

helped fuel the situation by fleecing people for what they could get.

cynder

greetings wrote: »

1800 a month doesn't necessarily mean it was a big house. Depends on the life span of the mortgage. If it was Dublin,it might not be big,the house prices there were absolutely ridiculous.
My sister told me her friends dad bought a house in Dublin and was renting it out to students,that it cost a million.
I was expecting some absolute mansion.
It was a normal house in an estate in the D4 area. I lawled. A house in Sligo like that would set you back around 400,000 at the time,max. How people paid such ludacris prices is beyond me.

If the mortgage has a short life span then she should really increase it, im sure if she is struggling with money she would realise that.


THe bold bit says it all.

FreudianSlippers

mecanoman wrote: »

I think its our whole mentality to houses and owning property.

It was wrong the way people were queueing and paying people

to queue on their behalf for houses that weren't even build.

Also speculators/landlords out to make a quick buck

helped fuel the situation by fleecing people for what they could get.

So, people wanting to own houses and people who want to build new buildings and rent property was the problem?

You don't believe people should buy houses yet you also don't believe people should rent out houses.

Where will people live?

FreudianSlippers

OisinT wrote: »

So, people wanting to own houses and people who want to build new buildings and rent property was the problem?

You don't believe people should buy houses yet you also don't believe people should rent out houses.

Where will people live?

As a side note, I think that repossessions should be put on hold for a period of 4 years for those that can make some arrangement that is suitable for the debt and income of both parties.

mecanoman

How many houses does a person need?

No problem with people buying selling, renting. Its our mentality.

Slumlord owning lots of run down properties, renting them out

when the should have being closed down.

People getting a mortgage on one house, buying a second or a third on

the strenght of it, renting it out buy using the Health Board to pay the

mortgage for them. Greed, greed and greed.

prinz

readyletsgo wrote: »

....I heard a woman on the radio this morning saying that she can pay her mortgage of €1800 a month but has nothing left over to spend on herself except for bills and food........lol

lol is right. I can pay my rent, food and bills and have nothing left over. Maybe the govt could stump up half my rent so I could blow then balance on myself. This is a serious situation but more and more all you hear are poor-mouth stories from people taking the absolute piss.

readyletsgo

grindelwald wrote: »

Must be a big house with that sort of mortgage,

Should have brought a smaller house with a smaller mortgage!

My bro inherited some land from my father and he build his dream home in 2005 in dublin. It was a nice house but did it on his own at the time and then lost his job and couldnt keep up with the payments, just like a lot of people. So now my bro has lost his house and the land my father gave him. Thats ****!


Does it not sound like a good idea to ANYONE on here the idea i put forward in my OP? Restucture mortgages to a smaller amount each month and pass on to the children when you pass on?
I mean the kids live in the house too lol why shouldnt they pay it too when they pass 18 years old.

SeaFields

grindelwald wrote: »

Must be a big house with that sort of mortgage,

Should have brought a smaller house with a smaller mortgage!

And she can still afford mortgage, bills and food. Just cant afford the odd shopping spree in Brown Thomas anymore. My heart bleeds.

FreudianSlippers

readyletsgo wrote: »

My bro inherited some land from my father and he build his dream home in 2005 in dublin. It was a nice house but did it on his own at the time and then lost his job and couldnt keep up with the payments, just like a lot of people. So now my bro has lost his house and the land my father gave him. Thats ****!


Does it not sound like a good idea to ANYONE on here the idea i put forward in my OP? Restucture mortgages to a smaller amount each month and pass on to the children when you pass on?
I mean the kids live in the house too lol why shouldnt they pay it too when they pass 18 years old.

No. Sounds to me like your brother mortgaged the land that was owned outright to build a house which he could not afford.

He made a gamble - rather than relying on his income and saving for a down payment, he gambled land which was owned outright (presumably from your description) and lost the gamble.

I'm very sorry to hear about people to whom this has happened because it seemed the sky was the limit and the banks were willing to give a lot of money. But at the end of the day, the responsibility is mainly that of the person that borrowed.

Banned Account

readyletsgo wrote: »

My bro inherited some land from my father and he build his dream home in 2005 in dublin. It was a nice house but did it on his own at the time and then lost his job and couldnt keep up with the payments, just like a lot of people. So now my bro has lost his house and the land my father gave him. Thats ****!


Does it not sound like a good idea to ANYONE on here the idea i put forward in my OP? Restucture mortgages to a smaller amount each month and pass on to the children when you pass on?
I mean the kids live in the house too lol why shouldnt they pay it too when they pass 18 years old.

OK so, you're born in a rural area, go to college and look for a job. You can't find it in your home location and may need to go abroad but you can't because your parents have become ill and can no longer make the payments on the house so it now falls to you to pay the mortgage and your loan for college because the government have introduced fees.

You have now been inducted into a contract before you were able to understand the implications of it and are now stuck in a bywater, unable to lease the house because your parents need a roof over their heads.

FreudianSlippers

Fitzcaraldo wrote: »

OK so, you're born in a rural area, go to college and look for a job. You can't find it in your home location and may need to go abroad but you can't because your parents have become ill and can no longer make the payments on the house so it now falls to you to pay the mortgage and your loan for college because the government have introduced fees.

You have now been inducted into a contract before you were able to understand the implications of it and are now stuck in a bywater, unable to lease the house because your parents need a roof over their heads.

How are you in a contract?

Banned Account

OisinT wrote: »

How are you in a contract?

This is the point. OP is suggesting that the lender reduces the payments thus stretching out the term, with the overlap being passed onto the mortgagees children, it now become incumbent on them to clear the remainder of the mortgage.

In contract law, there has to be offer, acceptance and consideration between the parties for it to be enforceable - this could not be shown to have existed on behalf of an infant, or unborn child. Therefore, it will not work.

readyletsgo

Fitzcaraldo wrote: »

OK so, you're born in a rural area, go to college and look for a job. You can't find it in your home location and may need to go abroad but you can't because your parents have become ill and can no longer make the payments on the house so it now falls to you to pay the mortgage and your loan for college because the government have introduced fees.

You have now been inducted into a contract before you were able to understand the implications of it and are now stuck in a bywater, unable to lease the house because your parents need a roof over their heads.

Yup, life's hard! Especially now.

I think mortgages are passed on to children in other coutries like japan.

Smurgen, how do the Japanese do it?

FreudianSlippers

Fitzcaraldo wrote: »

This is the point. OP is suggesting that the lender reduces the payments thus stretching out the term, with the overlap being passed onto the mortgagees children, it now become incumbent on them to clear the remainder of the mortgage.

In contract law, there has to be offer, acceptance and consideration between the parties for it to be enforceable - this could not be shown to have existed on behalf of an infant, or unborn child. Therefore, it will not work.

That isn't correct, the only one responsible for insolvency is the estate of the deceased. If there if not enough money to repay the debts (via insurance or assets etc) then there is nothing to be passed to the child (unless they guaranteed the debts).

Since the mortgage is over property, the person set to inherit the property can accept the property inheritance and the mortgage that comes along with it. That is, they are contracting with the bank to accept responsibility for the mortgage.

I was saying how are you in a contract if your parents are just sick? Your parents have a contract, but you have none with anyone.

20Cent

grindelwald wrote: »

Must be a big house with that sort of mortgage,

Should have brought a smaller house with a smaller mortgage!

Not for Dublin.

Would have got you an average size house in Crumlin or Drimnagh at the height of the boom.

cynder

readyletsgo wrote: »

Does it not sound like a good idea to ANYONE on here the idea i put forward in my OP? Restucture mortgages to a smaller amount each month and pass on to the children when you pass on?
I mean the kids live in the house too lol why shouldnt they pay it too when they pass 18 years old.

Im not one for passing my debt on to my 3 kids, That's why i have life insurance so the mortgage is paid off when i die. Kids get the house no strings attached.

My kids are going to have their own debts when they are older for one reason or another, so why add to it.

If you think about it at 18 they get stuck with their parents mortgage how the hell will they get a mortgage of their own , buy a car or rent a house. If that's the way it goes the next generation will be screwed, more then they are now.

FreudianSlippers

grindelwald wrote: »

Im not one for passing my debt on to my 3 kids, That's why i have life insurance so the mortgage is paid off when i die. Kids get the house no strings attached.

My kids are going to have their own debts when they are older for one reason or another, so why add to it.

If you think about it at 18 they get stuck with their parents mortgage how the hell will they get a mortgage of their own , buy a car or rent a house. If that's the way it goes the next generation will be screwed, more then they are now.

This is the best way to ensure your children get the house, but they cannot inherit your debts. They can inherit the effects of your debts (eg. getting nothing from your estate).

But again, unless they have secured your debts they will not inherit your debts.

Banned Account

OisinT wrote: »

That isn't correct, the only one responsible for insolvency is the estate of the deceased. If there if not enough money to repay the debts (via insurance or assets etc) then there is nothing to be passed to the child (unless they guaranteed the debts).

Since the mortgage is over property, the person set to inherit the property can accept the property inheritance and the mortgage that comes along with it. That is, they are contracting with the bank to accept responsibility for the mortgage.

I was saying how are you in a contract if your parents are just sick? Your parents have a contract, but you have none with anyone.

So, from this, there is no legal way for the OP's plan to be put into force as a child will not be able to guarantee the mortgage if below the age of consent and the banks will not leave an open ended mortgage which is subject to providence?

cynder

20Cent wrote: »

Not for Dublin.

Would have got you an average size house in Crumlin or Drimnagh at the height of the boom.

No one was forced to buy a house there, they chose to. Just because they want a posh Dublin 12 address, should have bought one in Dublin 11 same size 200k cheaper.

20Cent

grindelwald wrote: »

No one was forced to buy a house there, they chose to. Just because they want a posh Dublin 12 address, should have bought one in Dublin 11 same size 200k cheaper.

Drimnagh is posh?

FreudianSlippers

Fitzcaraldo wrote: »

So, from this, there is no legal way for the OP's plan to be put into force as a child will not be able to guarantee the mortgage if below the age of consent and the banks will not leave an open ended mortgage which is subject to providence?

AFAIK or can remember (not my area of law tbh) it depends on the will. I guess the trustee would have to make the decision - it is likely they would sell the house and repay the mortgage and keep whatever is leftover on trust for the beneficiary.
It's doubtful IMO that a trustee could accept debt in the form of a mortgage on behalf of a beneficiary.

cynder

20Cent wrote: »

Drimnagh is posh?

Not too familiar with the all of Dublin (only phibsboro/ drumcondra) but doesn't drimnagh fall under the dublin 12 address which everyone is after.

Banned Account

OisinT wrote: »

AFAIK or can remember (not my area of law tbh) it depends on the will. I guess the trustee would have to make the decision - it is likely they would sell the house and repay the mortgage and keep whatever is leftover on trust for the beneficiary.
It's doubtful IMO that a trustee could accept debt in the form of a mortgage on behalf of a beneficiary.

That would be my suspicion. Funnily enough, in the area of shareholder protection for company directors, there can be a contract which forces beneficiaries to sell shares in the company to surviving directors despite the fact that they were never party to the agreement.

FreudianSlippers

grindelwald wrote: »

Not to familiar with the all of Dublin (only phibsboro/ drumcondra) but doesn't drimnagh fall under the dublin 12 address which everyone is after.

ew Drimnagh is a kip.

It is part of D12, but I've never heard of anyone wanting to live there. Raghnallach is quite popular at the moment

20Cent

grindelwald wrote: »

Not to familiar with the all of Dublin (only phibsboro/ drumcondra) but doesn't drimnagh fall under the dublin 12 address which everyone is after.

Never heard that one lived all my life in Dublin.
Wouldn't consider Crumlin or Drimnagh posh at all.

The point I was making was that her 1,800 mortgage may not necessarily be some big house. At the height of the boom it wouldn't have gotten you that much in Dublin.

readyletsgo

Ok so my idea is crap, ah well, lets be glad it was a bum plan so!

I'll never post anything like this again as most of this has kinda gone over my head lol

UrbanSea

OisinT wrote: »

féck all use to students in Dublin to rent a house in Sligo.

Aw ya because that's what my suggestion was.

FreudianSlippers

Fitzcaraldo wrote: »

That would be my suspicion. Funnily enough, in the area of shareholder protection for company directors, there can be a contract which forces beneficiaries to sell shares in the company to surviving directors despite the fact that they were never party to the agreement.

That stems from the concept that only one person should be legally entitled to particular shares and is contained in Model Reg29. That is, it is contained in the articles of association of the company.

FreudianSlippers

greetings wrote: »

Aw ya because that's what my suggestion was.

I'm just teasing. My point was really that why is it so ridiculous that property costs different amounts in different areas?
Clearly supply and demand is weighted differently in Dublin than in different areas of the country. Rental income has higher potential thus property investment at higher value is also more abundant.

Banned Account

OisinT wrote: »

That stems from the concept that only one person should be legally entitled to particular shares and is contained in Model Reg29. That is, it is contained in the articles of association of the company.

It is still a bit of an anomally though. If a director dies leaving only a spouse, these put and call agreements can force her to sell the shares to the surviving director despite the fact that she was never party to the agreement and may wish to keep the shareholding. I presume that the articles of association would have little to do with this?

20Cent

readyletsgo wrote: »

Ok so my idea is crap, ah well, lets be glad it was a bum plan so!

I'll never post anything like this again as most of this has kinda gone over my head lol

Not a bad idea. Can see something like this happening actually.