Mortgage Arrears Problem in Ireland.

jimmycrackcorm

Monty Burnz wrote: »

I'd suggest that one of the main reasons is that people are unwilling to read books and such on the subject.

Do any of these books explain for example where the billions that were loaned out are now?

Monty Burnz

jpb1974 wrote: »

They should start teaching economics in primary school and make it a mandatory subject throughout primary and secondary education.

Not a bad idea. Certainly in secondary school.

Monty Burnz

jimmycrackcorm wrote: »

Do any of these books explain for example where the billions that were loaned out are now?

Yes. There's actually quite a good thread about it here on Boards, I think Scofflaw made a good post that explained a lot of it. I'll look for it.

fliball123

Monty Burnz wrote: »

No, taxes go into a pool. I don't have kids yet so see no benefit from taxes to pay for schools. You can't pick and choose where your tax payments go - it's impossible and unworkable.

Without wanting to sound like a patronising git (too late), the way banks work is a bit more complex. They roll over their debts rather than repaying them, so that the money that (you correctly point out) they borrowed cheaply has since been repaid, but replaced with more expensive borrowings. At this stage, the Irish state can't borrow at less than 6%, never mind the banks backed by the state. So, simplifying things slightly, that means that when the bank charges you 5% interest on your mortgage, but they are paying 6% for the money they borrowed to lend to you, you are actually getting a subsidy from the taxpayer.

But isnt this the fundamental problem of taxation..ala you pay road tax. It doesnt actually go for paying for roads..as if it did we would have gold plated tarmac. so do you not see how when 1million people in the area of owing a mortgage half are evidently struggling do not get some kind of assistance via the taxes that they pay??? It is workable via a tax credit very very workable

As for your analogy..If the banks borrowed x amount to cover say a mortgage...or lets put in figures..

if AIB borrowed 1 billion to cover say 10,000 mortgages at 1%. They are already charging 3% odd so making 2% already of the homeowners bakc. Now to increase this to 4% they make 10million off the already overburdened in debt home owner...how is that fair regardless of how or what they have borrowed since...People who bought a house should be offered a fixed rate at maybe a .5 or 1 % higher than the now average variable rate...Ala France Germany

BluePlanet

fliball123 wrote: »

But isnt this the fundamental problem of taxation..ala you pay road tax. It doesnt actually go for paying for roads..as if it did we would have gold plated tarmac.

I hate when people come out with this rubbish.
Fliball123, you don't pay "road tax". There is no such thing.
You pay "motor tax" and it goes into the general tax pool.
There is NO leglislation that ring-fences this tax for exclusive use.
Roads are paid for by all.

jpb1974

Roads are paid for by all.

And a grossly disproportionate amount is invested in the roads in and around Dublin.

Then those those city centre €500k pad owners can drive their Audis and Porches on them whilst us poor old folk here in Wexford officially have the worst roads in the country.

I begrudge them... the roads up there are better, they can keep their auto-mobile assets in better health at my expense!

(I do jest of course)

Monty Burnz

fliball123 wrote: »

if AIB borrowed 1 billion to cover say 10,000 mortgages at 1%. They are already charging 3% odd so making 2% already of the homeowners bakc.

That is normal banking. They sell money - you don't have to buy it if you don't want to.

fliball123 wrote: »

Now to increase this to 4% they make 10million off the already overburdened in debt home owner...how is that fair regardless of how or what they have borrowed since...People who bought a house should be offered a fixed rate at maybe a .5 or 1 % higher than the now average variable rate...Ala France Germany

The borrowers agreed who signed up to a variable rate mortgage or a tracker were told that the rate could go up or down. They were borrowing at a time of historically low interest rates (indeed, we still have them) so there was only one way that they could move anyway - up. Believe me, if the banks were behaving rationally, and charging a couple of percent margin over their cost of funds, in a year or two we could have 8% interest rates.

That will be a much better time to buy - always buy when 'affordability' is bad.

fliball123

BluePlanet wrote: »

I hate when people come out with this rubbish.
Fliball123, you don't pay "road tax". There is no such thing.
You pay "motor tax" and it goes into the general tax pool.
There is NO leglislation that ring-fences this tax for exclusive use.
Roads are paid for by all.

And yet people see it right that 1million people who have a mortgage and 1/2 are in trouble cannot get some help from taxes which they pay??? Ring fence or no ring fence..I hate when people have kids and I have to suppliment them but those are the breaks?

fliball123

Monty Burnz wrote: »

That is normal banking. They sell money - you don't have to buy it if you don't want to.

The borrowers agreed who signed up to a variable rate mortgage or a tracker were told that the rate could go up or down. They were borrowing at a time of historically low interest rates (indeed, we still have them) so there was only one way that they could move anyway - up. Believe me, if the banks were behaving rationally, and charging a couple of percent margin over their cost of funds, in a year or two we could have 8% interest rates.

That will be a much better time to buy - always buy when 'affordability' is bad.

They aggreed but the lender also aggreed too on the premise that the person getting the loan was employed at a certain rate of income..So how is it fair that when both parties enter this contract / mortgage that the person lending does not share any burdon...As i say guys I am trying to get ideas...as this clusterfcuk is coming no point burying your head in the sand?

Monty Burnz

fliball123 wrote: »

And yet people see it right that 1million people who have a mortgage and 1/2 are in trouble cannot get some help from taxes which they pay??? Ring fence or no ring fence..I hate when people have kids and I have to suppliment them but those are the breaks?

That's about the size of it. Basically, we all know the rules - you pay the same taxes even if you don't have kids, don't drive, don't get sick. But some day you might want or need those services.

On the other hand, there has never been an entitlement to keep an asset that you can't afford to pay for.

Lu Tze

fliball123 wrote: »

But monty as soon as this house is sold you no longer own it..The bank get some money back at the least the debt or neg equity should be split 50/50 its a deal that went dead for silly lending and silly borrowing a 50/50 problem so a 50/50 result in any debt

Presumably then in the event of a sale when a profit is realised, the bank gets 50% of the profit?

Dannyboy83

Well, plenty of pages gone by and no closer to a solution as I can see.

Haven't seen such a divisive issue on here since around the time this went up:
http://www.boards.ie/vbulletin/showthread.php?t=2055750520

I think people need to get real on this particular issue.
There will be no "reverse-Robin Hood" stuff.
You cannot tax people who have no assets to pay for those who have assets, and unless the banks discover oil under their premises, that means the only conceivable solution is ruled out.

Try to tax the asset-less and they will simply emigrate.
They are the ones who can after all.

Monty Burnz

fliball123 wrote: »

They aggreed but the lender also aggreed too on the premise that the person getting the loan was employed at a certain rate of income..

No, the lender gave them a money at a certain point in time. The income etc. of the borrower was just to help them determine the odds they would get paid back. The contract does not specify what the borrower has to do for a living for the next 25 years or anything like that.

fliball123 wrote: »

So how is it fair that when both parties enter this contract / mortgage that the person lending does not share any burdon...As i say guys I am trying to get ideas...as this clusterfcuk is coming no point burying your head in the sand?

They both share a burden - the banks are going to/have been taking a huge pasting on people defaulting.

sarumite

fliball123 wrote: »

And yet people see it right that 1million people who have a mortgage and 1/2 are in trouble cannot get some help from taxes which they pay??? Ring fence or no ring fence..I hate when people have kids and I have to suppliment them but those are the breaks?

Thats a bit of a strawman since you don't own the roads that your taxes pay for (Those recieving rent relief don't own the property). Kids are not property, so I am leaving that one to sail right past me.

jpb1974

There is no silver bullet for issues like this.

But rather than just give up and allow for repossessions to kick in left, right and centre a bit of time, space & a common understanding will help and some might manage to find a way out of these problems.

It won't solve every case... but it will help.

CiaranC

jpb1974 wrote: »

There is no silver bullet for issues like this.

But rather than just give up and allow for repossessions to kick in left, right and centre a bit of time, space & a common understanding will help and some might manage to find a way out of these problems.

It won't solve every case... but it will help.

Who is paying for this time, space and common understanding then? I think I can guess.

Highly Salami

Deleted User wrote: »

how about bankruptcy law reform so they can go bankrupt and hand back the keys? 3 - 5 years and they come out of bankruptcy......?

Good idea, Irelands bankrupcy laws are excessively punitive and stifle risk-taking and innovation.
We should update them so Ireland would be more like normal countries who run things properly (for a change).

jpb1974

Who is paying for this time, space and common understanding then? I think I can guess.

I estimate that I've paid circa €200K in PAYE, PRSI and Levies on my income since I joined the workforce.

Do you believe that this does not entitle me to say to the state "Times are hard, I need a little breathing space to try and get back on my feet?"

A lot of the people that are facing these difficulties either were or are tax payers so I think they have the right to ask for help.

CiaranC

jpb1974 wrote: »

I estimate that I've paid circa €200K in PAYE, PRSI and Levies on my income since I joined the workforce.

Do you believe that this does not entitle me to say to the state "Times are hard, I need a little breathing space to try and get back on my feet?"

A lot of the people that are facing these difficulties either were or are tax payers so I think they have the right to ask for help.

What you are talking about is money. You can dress it up any way you want. What you are demanding is other peoples money, not to save you from homelessness, or to treat your sickness, or to educate your kids, but to help you continue to own property.

You have no right to that, not now, not ever.

BluePlanet

Shed your Assets and join the dole queues then.

jpb1974

What you are talking about is money. You can dress it up any way you want. What you are demanding is other peoples money to help you continue to own property.

You have no right to that, not now, not ever.

Eh, other people's money... it's my money too.

A time, space and understanding approach isn't asking for much. The intention would be to defer the loan and repay it within a re-arranged time-frame.

You have no right to that, not now, not ever.

You must have a crystal ball yourself by the sounds of it?

westendgirlie

I'll just class myself as an 18yr old with no dependants for this......

37.5hr week @min wage €287 gross
less
travel to work € 60
rent a room € 65
motor tax/insurance € 30
tv licence/phone/broadband € 20
food € 50

left to save for house € 62.00 x 52 weeks = € 3224.00
x 10 years = €32240

Please bear in mind I haven't taken tax, prsi or usc from income. Also I am 18 and have no qualifications other than leaving cert so probability is I will be on or near min wage for a very long time. How much is a house realistically gonna cost me? 20 or 30 yrs of wearing the same clothes as i'm saving????

BluePlanet

jpb1974 you seem to come from that "entitlement" culture.
You seem to believe you are "entitled" by automatic right, to own a 300K home.
If you can't pay for it, your "entitled" to payback what you what, when you want to.

I understand that selling up for a lose, renting a small apartment and paying back the loan is unpalatable, but home ownership is NOT an automatic right. You took a gamble when you bought.

BluePlanet

westendgirlie wrote: »

I will be on or near min wage for a very long time. How much is a house realistically gonna cost me? 20 or 30 yrs of wearing the same clothes as i'm saving????

Nobody can say for certain.
But if your a minimum wage earner, why are you thinking of buying such an expensive asset as a house?

dolphin city

fliball123 wrote: »

They aggreed but the lender also aggreed too on the premise that the person getting the loan was employed at a certain rate of income..So how is it fair that when both parties enter this contract / mortgage that the person lending does not share any burdon...As i say guys I am trying to get ideas...as this clusterfcuk is coming no point burying your head in the sand?

because you must read the small print in the mortgage agreement.

Duke Leonal Felmet

westendgirlie wrote: »

I'll just class myself as an 18yr old with no dependants for this......

37.5hr week @min wage €287 gross
less
travel to work € 60
rent a room € 65
motor tax/insurance € 30
tv licence/phone/broadband € 20
food € 50

left to save for house € 62.00 x 52 weeks = € 3224.00
x 10 years = €32240

Please bear in mind I haven't taken tax, prsi or usc from income. Also I am 18 and have no qualifications other than leaving cert so probability is I will be on or near min wage for a very long time. How much is a house realistically gonna cost me? 20 or 30 yrs of wearing the same clothes as i'm saving????

If you are working a min wage job then you should not even be contemplating purchasing a house.

jpb1974

jpb1974 you seem to come from that "entitlement" culture.
You seem to believe you are "entitled" by automatic right, to own a 300K home.
If you can't pay for it, your "entitled" to payback what you what, when you want to.

I understand that selling up for a lose, renting a small apartment and paying back the loan is unpalatable, but home ownership is NOT an automatic right. You took a gamble when you bought.

To start with I'd like to say that I've never claimed a penny in welfare my entire life. I went straight from school to Uni and from Uni into the workplace where I've been ever since.

What I think I am entitled to is in the event that I lose my job and have problems making payments is a chance to find a job, get back earning and get back paying my mortgage.

If after an agreed period I am still struggling then handing back the house is acceptable, but I would like the chance to get back out there working should I find myself unemployed.

I don't think this is an unreasonable request at all.

Welease

I don't actually think it's too unfair to require the banks/government to restructure some personal mortgage debt.. The key is to restructure not wipe out, and it needs to be done in a manner which doesn't force the taxpayer to bail out further.

We now essentially own the bulk of the banking system, and with that we (the taxpayer/majority share holders within the bank) should be allowed to force a new banking ethos whereby those banks work for the good of the owners (i.e. us), and maximising profit should not be the primary aim in the short term.

20 year mortgages could be converted into 50-100 year mortgages which would drastically lower the monthly payments for customers who wished to avail..
Obscene future profits (if they occurred) should be ploughed back into the banks to offset the cost of loans or to make existing loans marginally cheaper etc.

Our banks should be run on more of a co-op nature from now on.. They had their own way and they blew it.. Now it's the taxpayer who should be calling the shots.

th3 s1aught3r

I am sick of people saying that they are now wonderful and insightlful just becasue they didnt buy a house at inflated prices back then
They go on about how they had to listen to others telling them rental was a 'waste of money' and to 'get on the ladder asap'
They dont seem to realise they are now just as annoying as those others with this I TOLD YOU SO crap

Duke Leonal Felmet

th3 s1aught3r wrote: »

I am sick of people saying that they are now wonderful and insightlful just becasue they didnt buy a house at inflated prices back then
They go on about how they had to listen to others telling them rental was a 'waste of money' and to 'get on the ladder asap'
They dont seem to realise they are now just as annoying as those others with this I TOLD YOU SO crap

What goes around, comes around. :-P