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Morgan Kelly calls for debt forgiveness for struggling mortgage holders
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What do the people who decided not to pay silly money for over priced house's & decided to rent and wait until the right time to buy came along in the future...
What do these people get??...do they get compensated as well??0 -
They get the benefit of the falling house market by being able to buy cheap, affordable housing.
This will allow them to manage their finances well into the future without having to be burdened by paying a huge percentage of their income to service their mortgage.
I'd say that in itself would be seen as a massive advantage to most people?Spiritofthekop wrote: »What do the people who decided not to pay silly money for over priced house's & decided to rent and wait until the right time to buy came along in the future??
What do these people get??...do they get compensated as well??0 -
Spiritofthekop wrote: »What do the people who decided not to pay silly money for over priced house's & decided to rent and wait until the right time to buy came along in the future??
What do these people get??...do they get compensated as well??
Yes.
We get to 'do the right thing' and watch the smug bastards get to be smug to us all over again as they get let off the hook.
If this BS goes through it will be far more divisive than the civil war ever was.0 -
They get the benefit of the falling house market by being able to buy cheap, affordable housing.
This will allow them to manage their finances well into the future without having to be burdened by paying a huge percentage of their income to service their mortgage.
I'd say that in itself would be seen as a massive advantage to most people?
The house market is collapsing anyway.
Not because of potential debt forgiveness.
The problem is they are trying to throw the losses at the conservative, rational, saving, prudent, renting, taxpayer.0 -
They get the benefit of the falling house market by being able to buy cheap, affordable housing.
This will allow them to manage their finances well into the future without having to be burdened by paying a huge percentage of their income to service their mortgage.
I'd say that in itself would be seen as a massive advantage to most people?
What about all the 100,000's of lovely overpriced bubble houses that where taken of the market during the bubble that the people cannot not afford to live in anymore....should these people not have to downgrade to houses/apartments/rent that they can actully afford or will the country & our tax money help them keep that lovely house that they could never afford in the first place by paying of their debts to keep that house??...does that sound right to you??
Should those houses not be put back on the market and repossed if you cant afford to pay for them??
While at the same time the goverment can help those people into one of the 100,000's of free empty 1 or 2 bed apartments around the country....0 -
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They get the benefit of the falling house market by being able to buy cheap, affordable housing.
This will allow them to manage their finances well into the future without having to be burdened by paying a huge percentage of their income to service their mortgage.
I'd say that in itself would be seen as a massive advantage to most people?
Firstly house prices are collapsing anyway meaning they are becoming more affordable without any debt forgiveness or shoudl we just call it the bailout for "the keeping up with the jones set".
Secondly I will not be better able to manage my finances when I am being asked to pay yet more taxes to bail out people who for the most part fooked up in their financial decisions.
The amount of pure bulls** in this thread should mean it would be more at home in Farming and Forestry.
You have an apt handle btw.
If any government try to implement this they will alienate a huge chunk of the population, the chunk who have been the fiscal conservative ones carrying this damm country.I am not allowed discuss …
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antiskeptic wrote: »I think you're focusing unnecessarily on the detail of UB/UA and not on the principle involved. There is welfare that is contribution based and welfare that isn't. The welfare that isn't contribution based examines your means in deciding on whether you get welfare and on the level of that welfare.
I am pointing out it is as equally unfair as the system suggested. I know the social welfare system inside out I helped design the processing system. I have seen who gets what and who contributes. The principle is fundamentally flawed. I understand means testing but it is unfair. You save and take care of yourself and those who don't end up with more disposable income and some in a better situation as a whole.antiskeptic wrote: »I'm not suggesting crucifying them. I'm suggesting they contribute towards the solution of the problem they played a central role in getting themselves into - with the State taking steps to ensure their negative equity can be taken with them as a way of giving legs to the idea.
In fairness they have contributed to the system. The point would be that they are one of three groups that took a central role, the banks and the government were the other parties. These people have bailed out the banks too as it was there taxes used as much as yours.
I agree they should be able to take the negative equity with them. One massive problem with that would be you would actual cause a property increase on the starter home market as they downgrade. We really need to stabilize the market.antiskeptic wrote: »I recall tax cuts and massive infrastructural projects too. I'm not sure what you mean by transfer of debt - which implies the government paying off national debt necessarily resulted in an increase of personal debt. It didn't - it was the taking out of large mortgages irrespective of the wisdom of doing so that causes folk to get into trouble when the tide went out.
As loan value increased and personal debt increased the government debt decreased. The revenue the government got was in large part to the housing boom. It is both correct and accurate to say that this equates to a debt transfer. This is where you have to back away from individuals and look at the big picture.antiskeptic wrote: »The point remains however: stamp duty wasn't intended to act as a buffer for over-indebtedness anymore that income tax/motor tax/tv licence. There isn't any point in appealing to our having paid it as a undergirding for the argument of debt forgiveness.
None of the tax was meant to help the banks either but that was what it was used for. I am not suggesting it was designed to bail people out, I am saying it was and is a very unfair tax which home buyers paid. They got nothing for it. Stamp duty was never meant to be what it was. Nobody got anything from it and they also will bring in property tax. That is a double taxation. Part of this idea would allow stabilizing of the property income.antiskeptic wrote: »Yet you seem to be blaming all and sundry - bar the purchaser - for the predicament they now find themselves in. I'm proposing a system whereby the person is relieved of some of the burden. And relieved of some of the assets they aren't actually able to pay for.
What are you proposing by way of spreading the pain evenly?
If you look back I have not suggested a single thing. If you think I don't think people should be personally responsible you have me wrong. I have been talking about the suggestion by an economist. The problem is there are so many individuals involved it becomes a collective problem that threatens the country. People are more bothered about the trees than the forest. Like bailing out the banks and the insurance companies in the past the greater good actually does come into it.antiskeptic wrote: »Debt forgiveness comes from the taxpayer. You can tax the taxpayer to stabilize bank assets without forgiving debt..
My understanding is that the concept is we devalue the banks and their assets that we already own so as such not costing us more. It would decrease our assets but due to the uncertainty our assets have such an uncertain value that they are worth so little.
Look if this is the best idea it will be so unpopular it will never happen it is akin to legalizing drugs. No matter what people can't accept it.
People wouldn't get free houses as people are saying it still involves bailing out the banks. No matter what the taxes paid by home buyers might actually equate to this cost. The big problem is that money has been spent. People are arguing their taxes are being used maybe they aren't.
People who didn't buy have benefited and they will also suffer if people keep defaulting. It will have a massive long term effect. Bare in mind i do think people were stupid and greedy. I am doing fine but some people were caught in something way beyond a simple housing bubble.
I don't even know if this is a good idea but anger about it is more apparent whether it is or not.
People are too emotional about it and obviously don't understand the suggestion given some of the flippant remarks here. I paid massive taxes and could also see people receiving more than my payments. So I am paying for somebody with 3 kids by different men to stay at home and do nothing. Yeah the whole system has been fair until this point. :rolleyes:0 -
Well in fairness the fiscally conservative will always get it in the neck with schemes like these.
They couldn't enjoy the excesses of the Celtic Tiger era but now find themselves being called on to bail out a section of those who did .If any government try to implement this they will alienate a huge chunk of the population, the chunk who have been the fiscal conservative ones carrying this damm country.0 -
What a pisspot of a country to even be thinking about introducing this. Over my dead body.0
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Well in fairness the fiscally conservative will always get it in the neck with schemes like these.
They couldn't enjoy the excesses of the Celtic Tiger era but now find themselves being called on to bail out a section of those who did .
At the end of the day though. It can't and must not happen.
Its just totally immoral and wrong and would destroy whats left of this country morals.0 -
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What a pisspot of a country to even be thinking about introducing this. Over my dead body.
Where was your 'Over my dead body' stance when we were spending €100 billion bailing out the banks and developers? I'd much rather see €5 billion going to helping struggling families than developers and bankers.0 -
Quite a number of those 'struggling' were wiping my face in the fact that I was not changing my six year old Toyota for a new BMW. Or not buying in Spain, Bulgaria etc. Or indeed not buying a rental property or two. They are no different from the bankers you talk of, whom I have rallied against.
Common denominator.........GREED.Wile E. Coyote wrote: »Where was your 'Over my dead body' stance when we were spending €100 billion bailing out the banks and developers? I'd much rather see €5 billion going to helping struggling families than developers and bankers.0 -
All over the place. The same people thought the developers should all have been forced to go bankrupt or do you think "Let's take their loans off their hands and give them a nice salary working for NAMA" is a popular position with anyone except developers?Wile E. Coyote wrote: »Where was your 'Over my dead body' stance when we were spending €100 billion bailing out the banks and developers?0 -
Ray Palmer wrote: »I am pointing out it is as equally unfair as the system suggested. I know the social welfare system inside out I helped design the processing system. I have seen who gets what and who contributes. The principle is fundamentally flawed. I understand means testing but it is unfair. You save and take care of yourself and those who don't end up with more disposable income and some in a better situation as a whole.
Pointing out the flaws in a system isn't the same as pointing out flaws in the principles behind the system. There is nothing wrong with the principle of welfare which sees the State supporting those who cannot support themselves. That principle isn't the thing which permits the abuse of the system which renders it inequitable like you say.In fairness they have contributed to the system. The point would be that they are one of three groups that took a central role, the banks and the government were the other parties. These people have bailed out the banks too as it was there taxes used as much as yours.
We're not so much concerned with that which is common to all taxpayers (all contributed to the 'system'). We're interested in why one grouping should be baled out at the expense of another grouping.I agree they should be able to take the negative equity with them. One massive problem with that would be you would actual cause a property increase on the starter home market as they downgrade. We really need to stabilize the market.
I'm supposing current starter-homers distressed and as much in need of downgrading as anyone else. When they do downgrade, they create space for those above them. The country is awash with apartments awaiting occupiers after all.
At the moment the housing market is moribound with folk sitting waiting for the bottom before they'll buy. This measure will crystalize what everyone knows but nobody will act on: houses are worth half (of less) than what many paid for them. There are lots of people with money. Lots with jobs rendering them good bets for mortgage lenders. Why not stimulate things that way?As loan value increased and personal debt increased the government debt decreased. The revenue the government got was in large part to the housing boom. It is both correct and accurate to say that this equates to a debt transfer. This is where you have to back away from individuals and look at the big picture.
None of the tax was meant to help the banks either but that was what it was used for. I am not suggesting it was designed to bail people out, I am saying it was and is a very unfair tax which home buyers paid. They got nothing for it. Stamp duty was never meant to be what it was. Nobody got anything from it and they also will bring in property tax. That is a double taxation. Part of this idea would allow stabilizing of the property income.
Let's say the burden sharing of "national debt paid back" was rendered inequitable by higher loan values producing inordinate stamp duty levels. Let's say the government forgives half of that stamp duty debt. We'd be about back at the level of stamp duty I paid in 2001. Pre-bubble..
Call this 'limited debt forgiveness' (50% forgiven stamp duty being paid for by increased national debt > which is paid for by more equitable taxing)If you look back I have not suggested a single thing. If you think I don't think people should be personally responsible you have me wrong. I have been talking about the suggestion by an economist. The problem is there are so many individuals involved it becomes a collective problem that threatens the country. People are more bothered about the trees than the forest. Like bailing out the banks and the insurance companies in the past the greater good actually does come into it.
It remains to be seen whether the greater good will be served by the bank bailout.
Perhaps you could comment now on where you see personal accountability playing it's part in a rubber meets the road kind of way. If not by asset degradation then how do you suggest things should be dealt with.My understanding is that the concept is we devalue the banks and their assets that we already own so as such not costing us more. It would decrease our assets but due to the uncertainty our assets have such an uncertain value that they are worth so little.
The asset is debt backed up by a depreciating security (the property). If yo depreciate the asset (i.e. write off debt) to increase bank debt. How are the banks books to be balanced? (Clue: see what happened the last time the banks books didn't balance)
In the (admittedly back-of-an-envelope) solution I suggest - which involved a downgrade from a 300k property to a 150k property. The bank realised 150k hard cash and the property owner realised a reduction in his debt to the tune of 33%. And the market is freed up for those who have the funds to pay for property.Look if this is the best idea it will be so unpopular it will never happen it is akin to legalizing drugs. No matter what people can't accept it
People wouldn't get free houses as people are saying it still involves bailing out the banks. No matter what the taxes paid by home buyers might actually equate to this cost. The big problem is that money has been spent. People are arguing their taxes are being used maybe they aren't.
I wasn't supposing anyone suggesting debt forgiveness to the tune of a whole house. The problem lies in debt being forgiven those who had a major hand in racking it up - without those who racked it up contributing in fairly significant fashion.
It would rankle precisely along the lines of those scammers who manage to earn a better wage on welfare than those who go out to do an honest days work. Not that the forgivees would be scammers of that ilk but it's not like their going to refuse a free lunch.People who didn't buy have benefited and they will also suffer if people keep defaulting. It will have a massive long term effect.
The effect will be to cause the prices of houses to fall to pre-bubble levels. Which will benefit a whole lot more people coming down the line than sustaining them at in-bubble prices.People are too emotional about it and obviously don't understand the suggestion given some of the flippant remarks here.
You need to be including an element of contribution on the part of the those who racked up the debt. Include that and you might find it a bit easier to push the door open on partial debt forgiveness. So far I've suggested.
- asset downgrading (borrower pays)
- partial stamp duty relief (taxpayers pays)
- debt/equity swop at preferential rates (borrower + taxpayer pays)0 -
Quite a number of those 'struggling' were wiping my face in the fact that I was not changing my six year old Toyota for a new BMW. Or not buying in Spain, Bulgaria etc. Or indeed not buying a rental property or two. They are no different from the bankers you talk of, whom I have rallied against.
Common denominator.........GREED.
Not a single person I know ever commented on the fact I didnt change my 99 D car or bought in a holiday home.
Your either significantly exagerating or keep a poor level of company. Either way the insinuation that everybody stuggling is doing so because of greed is absurd.
I dont agree in any kind of bailout, if your that bad off file for bankruptcy. If people took their medicene this crap of the government, trioka and banks kicking the can down the road would be forced to a conclusion, but this exagerated crap that everybody who bought in the boom or is struggling now is becasue they were greedy is inflamtory, untrue and seriously detracts from any validity that perhaps exists in the same posts.0 -
When you put it like that it really makes me want them to do it. The morals of this country include those that believed the church could do know wrong. The moral argument is completely irrelevant. It ignores all the other immoral acts that have happened over time.Spiritofthekop wrote: »At the end of the day though. It can't and must not happen.
Its just totally immoral and wrong and would destroy whats left of this country morals.0 -
This can't float, too divisive in the real world.
Instead make the banks carry the burden of increased TRS to those who bought during between 2004-2008.
Now I know the banks will try & pull this back by sticking up their variable but they'd do this anyway if they were asked to bring in mortgage forgiveness.0 -
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erm the government pay for TRS .......
so this is a bailout in a different form :rolleyes:
I've called it in increased TRS but you could call it Banker Mortgage Reduction Levy as it's the banks who will live with the shortfall.
Everyone in NE should qualify but that's too hard to work out so just limit it to the years that are being bandied about.
It's a bailout in the same way that free bus travel is a bailout for the elderly.0 -
I've called it in increased TRS but you could call it Banker Mortgage Reduction Levy as it's the banks who will live with the shortfall.
Everyone in NE should qualify but that's too hard to work out so just limit it to the years that are being bandied about.
It's a bailout in the same way that free bus travel is a bailout for the elderly.
No its still a bailout. Nobody should get bailed out period. If you cant hack it again file for bankruptcy.
And Im not a begrudger Im ne NE myself. Tough sh*t nobody forced me to buy nor did they force anybody else.
Im not even going to get into the fact that the banks are a) owned by teh taxpayer so bank hit = taxpayers hit and b) banks would just hike variable rates to cover it so the only peopel screwed would be those on variable mortgages.
no bailout for anybody. Period0 -
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You can't do that here and walk away from the debt. That is part of the proposal. It is just a form of bail out to be able to walk away from the debt anyway so you do appear to want it.No its still a bailout. Nobody should get bailed out period. If you cant hack it again file for bankruptcy.0 -
Change bankruptcy legislation to five year period.
Repossess houses on distressed mortgages.
Sell all the properties and realise the losses.
House the evictees in the plethora of government owned properties - see Nama, County Council etc.
Massively reduce Rent Allowance, potentially scrap altogether.
Scrap all tax reliefs related to renting/buying property.
Let the cards fall where they may.0 -
You people realize 5 billion euros is 5,000 euros per tax payer in Ireland, right?
I don't know how people got desensitized to big numbers but really?
I don't think the 1 million who do pay tax in Ireland needs another 5,000 euro slap in the face to forgive peoples debt. I couldn't care less about what people paid for their houses or if they are in infinite negative equity. Not my problem, peoples financial decisions are their own. The sense of entitlement some people have. Geez.
"Boohoo my house is in negative equity, someone should bail me out".
The fact is, we're broke. There's no money left. Where the hell do we find the money to pull off insane stunts like these?
Sometimes, bad things happen and people will just have to live with that and the hardship that goes with it. Literally right now the state is in no shape to do this.0 -
Not a single person I know ever commented on the fact I didnt change my 99 D car or bought in a holiday home.
Your either significantly exagerating or keep a poor level of company. Either way the insinuation that everybody stuggling is doing so because of greed is absurd.
I dont agree in any kind of bailout, if your that bad off file for bankruptcy. If people took their medicene this crap of the government, trioka and banks kicking the can down the road would be forced to a conclusion, but this exagerated crap that everybody who bought in the boom or is struggling now is becasue they were greedy is inflamtory, untrue and seriously detracts from any validity that perhaps exists in the same posts.
And where, exactly, did you see the word 'everybody' in my post ?
I believe you would be well advised to read a post properly before having a
go.
I consider most of my company to be fine thank you, and I would like to think I don't exaggerate.0 -
You do realise you totally have misunderstood how the costs work if you think this right? Effectively it means devaluing the assets of the banks that aren't worth that anywayYou people realize 5 billion euros is 5,000 euros per tax payer in Ireland, right?
I don't know how people got desensitized to big numbers but really?
I don't think the 1 million who do pay tax in Ireland needs another 5,000 euro slap in the face to forgive peoples debt.
It is the same incorrect theory it means people get a free house.
There is the fat if they don't do something it will cost a lot more than 5k a person0 -
Which ones "aren't worth that"?Ray Palmer wrote: »You do realise you totally have misunderstood how the costs work if you think this right? Effectively it means devaluing the assets of the banks that aren't worth that anyway
The ones where people say they can't afford it? And the only impact for them claiming that is they have to repay less?
Furthermore if they can't afford it why do they get to keep the house?0 -
The principle is really simple if too many people default the whole thing crashes. How we work out which ones are "worth it" is difficult to calculate. It.Which ones "aren't worth that"?
The ones where people say they can't afford it? And the only impact for them claiming that is they have to repay less?
Furthermore if they can't afford it why do they get to keep the house?
It really comes down to an accounting principle which is one of the reason the banks are too high risk. The mortgages are held against assets that aren't worth the money. The antiquated laws here mean it is actually against the person. Realistically it still remains against the asset. The laws in place also mean that there is a loophole anyway.
Again the fact people get to keep the house is a moral objection. If too many people default EVERYTHING crashes nobody will win and we will all lose. I don't get why people don't understand that. I get being annoyed but people don't live in isolation. This is a much better idea than bailing out the banks IMHO.
I still don't know if it will work but people aren't talking about what is being suggested or aware of what is actually in place at the moment. Moral outrage is blinding them to actually discussing the idea.0 -
This is irrelevant. You could reset every mortgage in the country to the property value (before you even get into the problem of calculating the property value) and there would still be people unable to afford it.Ray Palmer wrote: »It really comes down to an accounting principle which is one of the reason the banks are too high risk. The mortgages are held against assets that aren't worth the money.
The price of the asset makes no difference to the bank's balance sheets and your proposal would cost a lot more than €6bn, you're talking about a reduction in every mortgage taken out probably since 2003.0 -
Unfortunately the reality for most people looking for debt forgiveness is that they will have have to pay back what they owe in full, across the board mortgage writedowns for all and sundry is simply not going to happen. People in trouble will have to work out a solution with their lenders, if they genuinely can't pay then perhaps the lender will decide to write off some of the debt or take an equity stake in the home which can be leased back to the borrower, or even bought back in the future. I get the idea of personal responsibility but the banks are culpable here too. A case by case basis with a rigorous examination of the mortgage holders ability to pay is the only way of dealing with this, and if the mortgage holders situation changes (i.e. their income increases), then they will be obliged to declare that information to their lenders. There is no point in demanding that a bankrupt household repay their debts in full and on schedule, we must face up to the problem, but not let people off the hook easy at the same time.0
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This is irrelevant. You could reset every mortgage in the country to the property value (before you even get into the problem of calculating the property value) and there would still be people unable to afford it.
The price of the asset makes no difference to the bank's balance sheets and your proposal would cost a lot more than €6bn, you're talking about a reduction in every mortgage taken out probably since 2003.
The point is the balance sheet is not what the bank is being valued on but on the appropriate risk it has.
It isn't going to happen even if it is the best idea as it is too complicated a principle to explain . Very evident by the comments here.
I am not even defending the idea I tried to explain it to people who obviously didn't get it and still don't.0
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