Mortgage Arrears Problem in Ireland.

Duke Leonal Felmet

fliball123 wrote: »

No one is but isnt this the fault of the bank and regulators for letting such people get such big mortgages

Sure, it's anyones fault but the person who borrowed too much.

CiaranC

fliball123 wrote: »

I have floated 3 ideas that does not impact on the tax payer and you forget that alot of these people have lost jobs income.

How the hell do you think allowing people to use money that they would normally pay in taxes to pay off their private debt would not affect the rest of us paying tax? Who will make up the shortfall?

jpb1974

Wow, you do sound bitter. If I am made redundant tomorrow, I will be entitled to exactly the same as anyone else. That's the system I paid into. But if I had - say - a 100k loan to pay for my Porsche (I don't, I paid cash for it) then I think it would be unfair to expect the Irish taxpayer to keep paying that loan for me. I should sell the car.

Ah Porsche... yet another extreme example to try and strengthen a point.

All the houses have to be €500K pads in Dublin City Centre and all the cars have to be in excess of €30K and preferably German.

Why do you keep going back to cars when we are talking about homes, roofs over families heads? I don't expect my family to live in a Porsche.

I'm concerned for families with kids, in modest family homes.

When I do buy, I will be well aware that property can both fall or rise in value, regardless of what vested interests are telling me.

But you still have explain your 'Buy a house using the Crystal Ball' method so please, please explain and give all us dopes the insight that you.

Monty Burnz

Rabidlamb wrote: »

The guy asked for assistance not a lecture.

He did not ask for assistance, he said:
"If there is any support out there for my very strong feelings on this problem, please let me know."

Now he knows. I think you should save your contempt for those who can't read simple messages such as the above.

fliball123

BluePlanet wrote: »

Can you please provide some clarity to your post?
I'm getting the distinct impression that you don't know what an Asset is, what counts as Income or what Credit is.

Infact i'm not confident of your making educated financial decisions.

Ok just for you blue planet

the arguement here is the fairness of a tax payer paying for people with mortgages???

I am saying we the tax payer are already subsidising
social welfare
childs allowance
etc

which you have quite right come back and said this is not an asset..

To which I countered that on any balance sheet. social or childs allowence and a house would be historically on the credit side of the balance sheet as a steady income, but the house is in most cases(500k I think I seen that figure bandied out) neg equity so its on the debit side..and I stated any company would want the steady income on there balance sheet before a depriciating asset...So to the argument is that we are still paying for these people for their steay income why not for people who are in trouble with neg equity..and why is it an invalid argument???

fliball123

Monty Burnz wrote: »

They all do impact the tax payer.

how do they...ok they will have to fork up money up front for the first idea but they will get it back? The interest rates were lower than they are currently so fixing them a little bit higher now how does that impact the tax payer???explain please and while your explaining think of how much it will cost the tax payer if a wave of repossesions happen

sarumite

citizenofeire wrote: »

I will give my No.1 vote to any political party who will bring in legislation to help the vast amount of citizens of Ireland who are in arrears with their mortgages through no fault of their own.

In Feb. 2010 a Special Group was set up by the Government to provide some solutions to this very huge problem in Ireland. I would imagine these people were paid very well for their services.

At the end of 2010 the Group came up with a number of recommendations, which quite frankly, were of little help to those facing the threat of re-possession.

With mortgage interest rates rising there will be many more Irish people falling into mortgage arrears.

I am calling on all candidates, who are seeking election, to make the mortgage arrears problem in this country one of your top priorities.

If there is any support out there for my very strong feelings on this problem, please let me know.

It's a nice idea, if morally and ethically untenable and I would think financially unworkable considering the current state of finances in the country.

Bankruptcy needs to become a viable option. People who cannot pay mortgages shouldn't be able to keep the property they can no longer afford, but they should be able to walk away without it ruining the rest of their lives.

BluePlanet

fliball123 wrote: »

So to the argument is that we are still paying for these people for their steay income why not for people who are in trouble with neg equity..and why is it an invalid argument???

None of those items listed above are Assets.
Again, you are asking taxpayers to help you own an asset. An asset that has value.
That's not the same thing as someone receiving social welfare.
If you consider sw as "income", you are mistaken.
It is not. SW is charity.

Like i said, go to the bank and apply for a credit card on the basis of your sw "income". They'll won't accept it.

Monty Burnz

jpb1974 wrote: »

But you still have explain your 'Buy a house using the Crystal Ball' method so please, please explain and give all us dopes the insight that you.

If you are serious, I will suggest you read the following:

The Black Swan by Nicholas Nassim Taleb
Irrational Exuberance by Robert Schiller
Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets by Taleb
Famous First Bubbles: The Fundamentals of Early Manias by Peter Garber

Most importantly, common sense is what you need. You are old enough to remember the property crash in the UK in the late 80s. Do you think you will get caught if a similar bubble arises here in 25 years? Will you be able to warn your child if they are considering buying?

If the answer is yes, then I would have to ask you why you did not apply what you learned about property in the late 80's/early 90's UK crash to what happened here? That crashes were possible and that they do happen - once you knew that, then you have most of what you needed to avoid our bubble.

I highly recommend The Black Swan - it's not a difficult read, and it will open your eyes to a lot of things that may benefit you in the future.

jpb1974

But you still have explain your 'Buy a house using the Crystal Ball' method so please, please explain and give all us dopes the insight that you

I hope you're not going to let us down Monty. Do I have to read a book? Is it as simple as common sense? Come on, give us more detail, you seem to know it all.

Forget about property bubbles, lets assume that market today was as stable as it was ever going to be... tell us how you would go about buying a house using your crystal ball approach.

BTW - Going back to my 'hypothetical' post about me not wanting my tax money to go into your pocket because you didn't plan for tomorrow - Cash is an asset

fliball123

BluePlanet wrote: »

No thank you. I'll have 10% of the value of the loan, not 10% the price you get for it. As proposed, this is a bad deal for taxpayers

Unfair, you're penalising people that don't have mortages. Why?


Sounds nice but i think it's a little more complex than that.
False!

Ok fair enough maybe 10% of th loan value is a fairer way to go for the tax payer.

As for the penalising people who dont have mortgage..I have gone through the pyramid of payments the average tax payer pays that are unfair.

How is it fair that I have no kids yet I am paying to suppliment childrens allowence..All I am asking is that I pay some of my tax towards my mortgage and actually get some value for my money for once..I am not asking for anyone elses tax to pay..Its my money so why is that unfair?



and how is it unfair to fix interest rates..

For the last decade the ECB rate has been at an all time low. So the banks have been borrowing at this rate I think the average over the 10years has been about 2%. So to offer a rate of 3.5% to these people still get 1.5% more..How is it complex..its not complex in fact it is the most simplistic measure we can do as we almost own all banks and it gets over the panic that the banks are now increasing the interest rates even do the ECB has not...how is that fair?

BluePlanet

fliball123 wrote: »

how do they...ok they will have to fork up money up front for the first idea but they will get it back?

No they wont, because you want the taxpayer to buy 10% the value of the loan. But you'll turn around and sell the asset for a lot less, and you're proposing giving the taxpayer 10% of that. You're asking the taxpayers to take a hit.

explain please and while your explaining think of how much it will cost the tax payer if a wave of repossesions happen

I don't know, but at least we'll get to the bottom of this housing scandal. Only then can we recover.

fliball123

Monty Burnz wrote: »

In the example I gave, I was suggesting that if they only had 1k at the end of the month and a 2k mortgage, and had spent a year trying to fix their finances, they should default on the loan and rent instead. There would still be a hit to the taxpayer of course because the house would be sold at a fraction of the value of the loan - but it would be sold at a new, low, more realistic level.

The problem is that you cannot default on the loan and if you do you cannot get any credit for 12 years under the now defunked bankrupcy laws in this country

Monty Burnz

fliball123 wrote: »

how do they...ok they will have to fork up money up front for the first idea but they will get it back? The interest rates were lower than they are currently so fixing them a little bit higher now how does that impact the tax payer???explain please and while your explaining think of how much it will cost the tax payer if a wave of repossesions happen

Fliball, perhaps it would be best to open another thread to discuss those ideas? Trust me though, they do cost the taxpayer.

As to how much it would cost if there is a wave of repossessions - that's a very good question. It depends on whether we let the banks go bust or not - if we do, then it might not cost anything. And bear in mind that there is a benefit to the taxpayer if property prices are lower - less of our income needs to be spent on accommodation costs. That means we have more for everything else, and our economy is more competitive.

fliball123

Duke Leonal Felmet wrote: »

Sure, it's anyones fault but the person who borrowed too much.

I am not saying that people who bought are not at fault either...but the banks seem to have got away with it...

Monty Burnz

jpb1974 wrote: »

I hope you're not going to let us down Monty. Do I have to read a book? Is it as simple as common sense? Come on, give us more detail, you seem to know it all.

Ok, you are not serious, you are just trying to score some points. I wish you told me that before I wasted time on writing that post. But if the idea of reading a little bit about the world seems alien to you, then I'm not surprised you are struggling here.

jpb1974 wrote: »

Forget about property bubbles, lets assume that market today was as stable as it was ever going to be... tell us how you would go about buying a house using your crystal ball approach.

It seems that the basics of a market analysis might be wasted on you, so I won't waste my time on this.

jpb1974 wrote: »

BTW - Going back to my 'hypothetical' post about me not wanting my tax money to go into your pocket because you didn't plan for tomorrow - Cash is an asset

Yes, I know cash is an asset. And grass is green. Do you have a point?

BluePlanet

I've asked jpb1974 this question but he will not answer:

What's preventing you from selling the house for whatever you can get, renting a small apt somewhere and paying the remainder of the debt off to the bank over time

What about you fliball123?

jpb1974

Monty, it's like this -

Either tell us how you would buy a house in the most stable of markets using your crystal ball approach or we'll all just accept that you're talking out of your hole.

You're saying people should have know this, and people should have know that and people should've have planned 100% accurately for the future... and now I ask you for an example of how you would actually go about it (seeing as you seem to know so much) and you can't.

fliball123

CiaranC wrote: »

How the hell do you think allowing people to use money that they would normally pay in taxes to pay off their private debt would not affect the rest of us paying tax? Who will make up the shortfall?

hang on a sec what I am saying and this is fundamental...hands up here who feel they are getting value for money for their taxes..

What does our tax go on

infrastructure - I think we have one of the worse road networks and public transport systems in the supposedly first world countries.

Public services
- health - Need I say more
- education - I actually think we have good education - teachers are over paid and underworked especially during the summer months

Public sector pay - I wont go near this one as I dont want this turning into a ps debate

Other benefits for other people social/childs allowence etc

So I pay about 40% of my wage to tax and I am not getting value for money not to mention the likes of the income tax on goods/petrol etc

So all I am purposing is that instat of me paying 40% of my tax to this I pay 30% and the other 10% goes to my mortgage...how is that impacting on anyone elses tax???

sarumite

fliball123 wrote: »

how do they...ok they will have to fork up money up front for the first idea but they will get it back? The interest rates were lower than they are currently so fixing them a little bit higher now how does that impact the tax payer???explain please and while your explaining think of how much it will cost the tax payer if a wave of repossesions happen

Of your ideas,

1) could work.....I am not against the government giving a 10% interest free loan, it would need to be an across the board policy, not just for a select few for it to be fair. That would require a significant amount of cash up front that the government wouldn't see for 25-30 years. Where does that cash come from?

2) A complete no-go. You can't have a two teir system where those earning the same amount pay different amount of income taxes depending on whether one person owns a house or not.

3) Not all banks operating in the country are owned by the government. Forcing banks to give fixed rates would be anti-competitive and I would guess the government would find itself in deep water with the EU etc.

fliball123

BluePlanet wrote: »

None of those items listed above are Assets.
Again, you are asking taxpayers to help you own an asset. An asset that has value.
That's not the same thing as someone receiving social welfare.
If you consider sw as "income", you are mistaken.
It is not. SW is charity.

Like i said, go to the bank and apply for a credit card on the basis of your sw "income". They'll won't accept it.

but the arguement should not be about an asset vs income vs charity..Its about how people are in trouble and by not helping them out what are the alternitives...I have listed them if you care to look. but if a wave of defaults happen we are picking up the tab anyway...Is it not better to try to come up with ideas to lesson the burden and try to help people pay their mortgage??

Unrealistic

fliball123 wrote: »

What people need to understand is if there is not some kind of debt forgiveness for these people what are the alternitives????

Let the bank take the house back but allow the defaulting mortgage holder to continue to rent it. The mortgage holder still has a roof over his head and it's even the same roof. And then, when the economy has stabilised again so that a functioning property market exists and the mortgage owner is in a position to fend for himself, the bank can sell the property and maybe recoup some of the €100+ billion of tax payers money that has kept them afloat and allowed the forbearance on mortgages to date. It might even work out that the original owner can be the one to buy the house back.

jpb1974

What's preventing you from selling the house for whatever you can get, renting a small apt somewhere and paying the remainder of the debt off to the bank over time

To answer (using a hypothetical scenario):

Nothing is preventing me.

Let's say I own the bank €250K. My mortgage is €1K a month.

I loose my job.

I sell the house for €150K and give this to the bank. I still owe the bank €120K.

I rent a house. The Government are giving me €600 a month to pay the rent.

I can't pay the bank. So €120K goes down the drain and the tax payer is still giving me €600 a month for rent till the day I day (suppose I never find another job for one reason or another).

I'm 35 now and let's say I rent till I'm 80 years old. That's 45 years worth of rent, 540 months @ €600 = €324K + €120K debt write off = €444K.

Totally hypothetical and high level... but there you go.

fliball123

Monty Burnz wrote: »

Fliball, perhaps it would be best to open another thread to discuss those ideas? Trust me though, they do cost the taxpayer.

As to how much it would cost if there is a wave of repossessions - that's a very good question. It depends on whether we let the banks go bust or not - if we do, then it might not cost anything. And bear in mind that there is a benefit to the taxpayer if property prices are lower - less of our income needs to be spent on accommodation costs. That means we have more for everything else, and our economy is more competitive.

Open another thread look at the OP I think this is fundamental to the problem..and to posters here I am an actual renter I have not bought a house..but I see the clusterFcuk coming down the line and I do not want to see my tax increased even more ...I have given 3 ideas that could lesson the burden on these people ...Has anyone any other suggestions?

fliball123

BluePlanet wrote: »

I've asked jpb1974 this question but he will not answer:

What about you fliball123?

I am renting have not bought

but to answer your question neg equity ... You still have to pay the bank back and then rent aswell. also why would you when there is a 2 year mometorium on repossessions

BluePlanet

jpb1974 wrote: »

To answer:

Nothing is preventing me.
Let's say I own the bank €250K. My mortgage is €1K a month.
I loose my job.
I sell the house for €150K and give this to the bank. I still owe the bank €120K.
I rent a house. The Government are giving me €600 a month to pay the rent.
I can't pay the bank. So €120K goes down the drain and the tax payer is still giving me €600 a month for rent.

At least the bank have recovered 150K of the loan.
The remainder can be re-assessed by the bank, they could also garnish a % your SW each week to pay towards the 120K.

BluePlanet

fliball123 wrote: »

I am renting have not bought

but to answer your question neg equity ... You still have to pay the bank back and then rent aswell. also why would you when there is a 2 year mometorium on repossessions

Isn't paying off the debt better than lobbying for taxpayer assistance?

fliball123

sarumite wrote: »

Of your ideas,

1) could work.....I am not against the government giving a 10% interest free loan, it would need to be an across the board policy, not just for a select few for it to be fair. That would require a significant amount of cash up front that the government wouldn't see for 25-30 years. Where does that cash come from?

2) A complete no-go. You can't have a two teir system where those earning the same amount pay different amount of income taxes depending on whether one person owns a house or not.

3) Not all banks operating in the country are owned by the government. Forcing banks to give fixed rates would be anti-competitive and I would guess the government would find itself in deep water with the EU etc.

Not sure where the cash comes from..It could just go straight in as a cut in the actual loan amount and when the loan is paid off. Tell them there is still the 10%

As for the 2 tier thing...simple give a tax credit simular to the mortgage interest rates and then if someone is buying in the future they can avail of this aswell

Yes but banks operating in Ireland could be forced via regulation

fliball123

Unrealistic wrote: »

Let the bank take the house back but allow the defaulting mortgage holder to continue to rent it. The mortgage holder still has a roof over his head and it's even the same roof. And then, when the economy has stabilised again so that a functioning property market exists and the mortgage owner is in a position to fend for himself, the bank can sell the property and maybe recoup some of the €100+ billion of tax payers money that has kept them afloat and allowed the forbearance on mortgages to date. It might even work out that the original owner can be the one to buy the house back.

Thats assuming that the market will come back which I would say this will not happen for a couple of decades at least.

So let me understand this..the now owner losses their home ..they have to rent it and then when the market reopens they have the option to re buy at possibly a higher price and definately a higher interest rate...Not sure it would work but at least it could be a solution..and that is what we need guys...You cant just bury your head in the sand and say jobdaws bought at the height of the bubble tough..It doesnt work not when there are over 1million people with mortgages and nearly 1/2 in neg equity

jpb1974

At least the bank have recovered 150K of the loan.

€444K - €150K = €294K

The remainder can be re-assessed by the bank, they could also garnish a % your SW each week to pay towards the 120K.

But would they? €10 a week, just over €21K.

€444K - €150K - €21k = €273K