Mortgage write offs for all, silly billies to have debt written off

theg81der

smash wrote: »

If you realised this, then instead of working your ass off paying a mortgage on a modest house why did you not save all your money and buy a better house for a lot cheaper when you knew the market would collapse? :rolleyes:

We bought before it was crazy money and I did what I could which was to cover my debts, why would I want to still have that morgage and another house and morgage? I wasn`t earning that much! I did actually warm many friends who were buying but they didn`t listen so sorry no sympathy for people.

Captain Darling

Tordelback wrote: »

Not fishing for sympathy or anything like, just throwing out a personal anecdote by way of balance.

When my wife and I bought our 1000sq ft 3-bed terrace in the fringes of Dublin 24 in 2004, we did so with the intention of raising our family in it. We took an 85% mortgage, using our savings for the 15%, at a value of just under 3 times our combined salaries. Our combined total income is now 1/3 of what it was then, between unemployment and savage pay-cuts, and with all our savings now gone we have little hope of keeping up our repayments to the end of this year, and the supposed market value of the house (if you could sell it at all) is considerably less than the remaining mortgage . Incidentally we have no car- or holiday-loans to cover, driving a 14 year old 1 litre, and holidaying in a tent in Wicklow or Galway.

We were stupid, yes, but c*nts? Up to you.

Well said, thats what i hate about some of the crap being spouted here about people being idiots over being caught up with the property boom.

An awful lot of young families are caught up in a vice of negative equity and mortgage repayments just because they wanted to start a family and have a home. I know its After Hours, and some opinions in here are dubious at the best of times, but i fcuking hate with a vengeance the opinion that 'it serves them right.'

It boils my piss. Fcuking knobheads.

smash

theg81der wrote: »

why would I want to still have that morgage and another house and morgage?

That's not what I suggested. What I suggested is that if you knew there'd be a collapse then why did you buy at all instead of saving?

Now you're saying you bought "before it was crazy money", also that you weren't earning that much and did what you could to cover your bills.

See there are people out there who were earning over 100k a year, bought a house for 600k which they could well afford. Now they have no job and a house worth 200k with an outstanding mortgage of probably 580/590.

Dravokivich

smash wrote: »

It is the banks fault. It's a global crisis caused by banks. Not an Irish crisis caused by home buyers.

The mortgage/property market in Ireland is an Irish problem.

The banks would stipulate how much they are willing to loan out, then they would also assign their own people to determin the value of a property you wished to purchase. If someone was to value a porperty it should be an independant party who has no direct interest in the bank or the person seaking the mortgage.

In regards to a comment by someone else earlier advising people to save up to purchase, because of the above, the prices were kept too high to buy in such circumstances. Even with them coming down to "2001 levels," I would not consider myself be in a position to purchase a house either.

seamus

jackal wrote: »

So its a little rich for the borrows to claim this is all the banks fault.

It's not all the banks' fault by a long stretch, but there is an issue with lending in general in that the bank actually takes very little risk. Certainly in this country anyway.
Mortgages for the banks are investments in reality. They are investing money into a person on the basis that they will repay it at a higher return.

In the real world when you make an investment into anything which goes bust, you take the scraps and you walk away.

In the case of mortgages, this doesn't happen. The bank takes the scraps, and then everything else, and then requires the borrower to continue repaying until the debt is cleared.

So in Ireland the bank is taking little or no risk in lending a mortgage, the entire risk is loaded on the borrower.

In a sane market situation, the bank would shoulder much more risk and therefore make more reasonable loan decisions. The banks weren't all that concerned about whether property prices would go up or down, because the value of the loans on their books aren't actually dependent on the value of property, rather on the ability of the borrowers to repay.

If the law in Ireland allowed for "jingle mail", then banks would have kept a sterner and more rational eye on the market. This would have resulted in more stringent lending rules and prevented the market from growing so wildly in the first place.

While there will always be personal responsibility in borrowing what you can afford, people don't have degrees in accounting or economics. So the banks themselves should take a substantial risk in mortgage lending so that they make rational lending choices.

smash

Dravokivich wrote: »

The mortgage/property market in Ireland is an Irish problem.

The banks would stipulate how much they are willing to loan out, then they would also assign their own people to determin the value of a property you wished to purchase. If someone was to value a porperty it should be an independant party who has no direct interest in the bank or the person seaking the mortgage.

So it is the banks fault...

Caoimhín

Sea Sharp wrote: »

This scheme has the potential to work. The bank now owns the house but there's no saying it will be able to sell the house in the next seven years. Probably what will happen is that you hand over your house to the banks and get to live there paying means tested rent for the next seven years.

Dont be so cynical!

Our dear leaders would never endorse such nonsense.






Would they?......

theg81der

smash wrote: »

See there are people out there who were earning over 100k a year, bought a house for 600k which they could well afford. Now they have no job and a house worth 200k with an outstanding mortgage of probably 580/590.

Em....so they could afford a 30 year morgage on a 600k house, cause thats what they signed up for??? Thats right no they couldn`t! They long term couldn`t afford to service their debt and had no reason to believe they could, no savings nothing for that rainy day.

I`m clearly not a genius if I wasn`t earning that much and I could see things were obviously not going to continue long term, they weren`t sustainable. So we had a lot of very overpaid morons then!

smash

theg81der wrote: »

Em....so they could afford a 30 year morgage on a 600k house, cause thats what they signed up for??? Thats right no they couldn`t! They long term couldn`t afford to service their debt and had no reason to believe they could, no savings nothing for that rainy day.

Yes they could! They had a good wage and didn't expect a global meltdown. They could have had savings too, but savings make no difference when you're long term unemployed.

theg81der wrote: »

I`m clearly not a genius if I wasn`t earning that much and I could see things were obviously not going to continue long term, they weren`t sustainable. So we had a lot of very overpaid morons then!

What you fail to realise is that even though you took out a modest mortgage because you didn't earn much, you took it out well before prices got high. And even at that, if there had been a global meltdown and you were made redundant, disregarding how small the mortgage was, there is still a high possibility that you would not have been able to afford it.

jackal

seamus wrote: »

Mortgages for the banks are investments in reality. They are investing money into a person on the basis that they will repay it at a higher return.

In the real world when you make an investment into anything which goes bust, you take the scraps and you walk away.

In the case of mortgages, this doesn't happen. The bank takes the scraps, and then everything else, and then requires the borrower to continue repaying until the debt is cleared.

Absolutely agree, the banks would be much more responsible if they only had recourse to the property securing the loan.

But at this stage, its a case of bolting the gate after the horse is gone. Mortgages in Ireland are and always were full recourse.

The law is not going to be changed to allow jingle mail now, as in a depressed market, many who can pay but fancy offloading their negative equity would strategically default.

theg81der

smash wrote: »

Yes they could! They had a good wage and didn't expect a global meltdown. They could have had savings too, but savings make no difference when you're long term unemployed.




What you fail to realise is that even though you took out a modest mortgage because you didn't earn much, you took it out well before prices got high. And even at that, if there had been a global meltdown and you were made redundant, disregarding how small the mortgage was, there is still a high possibility that you would not have been able to afford it.

No they couldn`t afford it longterm clearly as what has happened proves they didn`t sign up for a year or 2 it was a longterm debt. Wouldn`t have mattered what I was earning I would never have been THIS stupid, its just ridiculous!

I wouldn`t have signed up for the debts if I didn`t know I could afford it - and the evidence shows I could. Things are as they are smash sorry don`t know what planet you and anyone who thought these debts were servicable longterm were on.

token101

People who paid what they knew themselves was ridiculous money for houses have only themselves to blame. It's a harsh truth, and I feel some pity for their situation, but it's the truth nonetheless. To expect taxpayers to bail you out of your bad decision making isn't fair. What's so awful about renting? Irish people seem to have this obsession with 'owning' their house. This 'dead money' argument that I have heard so often is nonsense. It's just as dead now that people have to hand their houses back over and are still paying. It's not the governments' fault that people didn't make responsible decisions. Back in the 80's, when we had just as bad a government as probably most would agree, banks wouldn't touch anyone who didn't have 10-20% of the value of the property, and rightfully so. A 110% mortgage is not responsible decision making regardless of what you earn and it's even worse if you're basing your figures on what your job salary will increase to, and I have heard a girl getting her bank to sign off on this. Banks exist to sell you something and make money from you, not to help you own your house, regardless of what rubbish they put in nice pamphlets. There's something seriously wrong with you when you earn €25000 a year and think that a €300,000 mortgage is a good idea, and I know from work that this is the case with a LOT of people.

I know the above doesn't apply to everyone, and there are people who were just horrendously unlucky, but I'd seriously doubt they are the majority. The majority made bad choices based on hype and easy credit and are now suffering for it. I don't see why I as a taxpayer should pay for it. If someone can tell me why I should then I'm all ears.

Son Of A Vidic

Rabidlamb wrote: »

The additional repayments will be based on means & is decided by some independent body.
This is Ireland, people will claim the poor mouth & "fail" to inform the bank or body when their situation improves.
Great success.

Let's not forget that if the banks had of means tested people properly in the first place, then it would not have come to this. Of course they were only too happy to promote the delusional credit boom. I feel no sympathy for these Banksters, being the scum that they are. We after all, will be paying for their recklessness for decades.

jackal

smash wrote: »

Yes they could! They had a good wage and didn't expect a global meltdown. They could have had savings too, but savings make no difference when you're long term unemployed.


What you fail to realise is that even though you took out a modest mortgage because you didn't earn much, you took it out well before prices got high. And even at that, if there had been a global meltdown and you were made redundant, disregarding how small the mortgage was, there is still a high possibility that you would not have been able to afford it.

Go away out of that, the "Global Meltdown" has not caused these problems, though it has made them worse.

Using extremes to justify everything.

So all the brickies, builders, architects, estate agents, builders suppliers, etc who were creaming it during the property bubble expected that Irish house prices would continue to rise in double digits for the next 20-30 years, keeping them in the style they were accustomed to?

If someone loses all their income, and has no hope of getting another job that will pay the mortgage, then yes you are right. However, in a lot of cases people have not lost their jobs, they have had salary cuts, or had kids and become a one income household, or thought they could rent a room if they needed... etc etc. ANYTHING to get on the ladder as the ladder only went up.

There were people who were "SO sick of renting" who bought a big house and rented out all the other rooms to pay the massive mortgage, thinking they would have a free ride and in 20 years the renters would have paid for their house for them...

There are people on both sides of the fence, but when it comes down to it, buying a property is not a human right, despite what Irish people seem to think.

BraziliaNZ

Buford Tannen wrote: »

The same stupid comment made by the same stupid c**ts who probably still live at home with mammy & daddy

Jesus I'd much rather be living with mummy and daddy than having 300k ball and chain around my neck, get your priorities straight!

irelandspurs

BraziliaNZ wrote: »

Jesus I'd much rather be living with mummy and daddy than having 300k ball and chain around my neck, get your priorities straight!

And watch mammy and daddy struggle to pay there mortgage,and people saying renting is better where do you think the rented house comes from most of the time all your doing by renting is paying someone elses mortgage for them.

token101

keithob wrote: »

i do think the govt & banks are gona have to deal with mortgage and personal debt asap before **** hits the fan..... but usually in the country we act after the problem implodes...

Mortgages, there's an argument for write downs to somewhere near current value, NOT write offs and some sort of system to help those who are, in essence, totally ****ed. Even if I disagree with the principle, it's probably essential for any kind of economic growth.

But, and I'm making an assumption here, if by personal debt you mean loans for things other mortgages, like credit cards, holiday loans and car loans, then no. That's your own problem. I never bought anything I couldn't afford and I don't feel like shelling out what little I have saved and working overtime for people who did. There's a limit to what taxpayers should be obliged to pay for, and it doesn't include trips to Dubai.

token101

irelandspurs wrote: »

And watch mammy and daddy struggle to pay there mortgage,and people saying renting is better where do you think the rented house comes from most of the time all your doing by renting is paying someone elses mortgage for them.

Mammy and Daddy probably own their house because they got a better deal on a mortgage all those years ago and were prudent. Yeah you're paying their mortgage, but you can walk away and downsize when you can't afford it. There's more security in being able to walk away than anything surely.

irelandspurs

we have a mortgage that i took out when we could afford it now we are struggling to pay it as i lost my job and my wife only has part time work.We pay what we can toward it and there is no way they will be taking the house off me because i didn't pay anything,I have put to much money into this house when i could afford it and there is no way i'm just going to walk away from it because i'm struggling.

paddy147

Rabidlamb wrote: »

http://www.independent.ie/business/personal-finance/latest-news/banks-will-take-back-homes-under-mortgage-writeoff-plan-2986613.html



The free gravy train is about to arrive, choo choo.
Who will pick up the tab for these bad debt write offs ?...
The Magic Money Fairy of course.
This is all great:rolleyes:

Seen as you posted this thread,then maybe you can bother to explain to me and many other people here how its a "free gravy train".

Id love to hear your reasons and or excuses????

You clearly have no clue or inkling as to what this is and how it works,and what it does to people in the long term,if you think its a free gravy train.

marienbad

Without going into the details this seems to be a reasonable scheme to get us out of the mess we find ourselves in.

I can't see the banks selling property out from under tenants if they are paying agreed ''rents''. If there was any large scale selling of such houses it would devalue property prices even more, would it not.

I suspect NAMA is already withholding the sale on many house for this very reason.

Tayla

pickarooney wrote: »

Who came up with the idea of a mortgage in the first place? It's a terribly flawed system. A house is the last thing in the world you want to take a massive gamble with so why is not standard practice for people to save up until they can afford to buy a house, the same as it is with everything else?

The thing is that a lot of people naively didn't realise it was a gamble. Sounds stupid now yes, but at the time an awful lot of people didn't realise that a recession could happen in Ireland. Amazing now how everyone old enough to remember the last one goes on about it, noone mentioned it until just before it hit. I had always heard the stories about Ireland being a third world country until we joined the EU so I presumed we would keep getting stronger.

Why don't they explain the basic cycles of growth and recession in schools?

We got our mortgage at 18 on apprentice wages during the boom, we're not in negative equity so it's not an issue and we can afford the mortgage but why didn't the banks ever warn of recessions considering they're the ones in the line of fire.

I know with my kids I will educate them on the risks and how although everything may seem brilliant now (unlikely even by the time my kids are grown up but anyway) that when a recession hits even the most hardworking and educated people may not be able to get jobs and may lose everything.

paddy147

marienbad wrote: »

Without going into the details this seems to be a reasonable scheme to get us out of the mess we find ourselves in.

I can't see the banks selling property out from under tenants if they are paying agreed ''rents''. If there was any large scale selling of such houses it would devalue property prices even more, would it not.

I suspect NAMA is already withholding the sale on many house for this very reason.

Banks are that sly and will do anything it takes if the see a chance or get an oppertunity.

The bank would be the "landlord",and if the bank wants to sell the property,then they can.

Its no different to a private landlord giving notice to his or her tennants and deciding to sell the property.

MysticalRain

Tayla wrote: »

The thing is that a lot of people naively didn't realise it was a gamble. Sounds stupid now yes, but at the time an awful lot of people didn't realise that a recession could happen in Ireland. Amazing now how everyone old enough to remember the last one goes on about it, noone mentioned it until just before it hit. I had always heard the stories about Ireland being a third world country until we joined the EU so I presumed we would keep getting stronger.

Why don't they explain the basic cycles of growth and recession in schools?

We got our mortgage at 18 on apprentice wages during the boom, we're not in negative equity so it's not an issue and we can afford the mortgage but why didn't the banks ever warn of recessions considering they're the ones in the line of fire.

I know with my kids I will educate them on the risks and how although everything may seem brilliant now (unlikely even by the time my kids are grown up but anyway) that when a recession hits even the most hardworking and educated people may not be able to get jobs and may lose everything.

The last recession was in 2000, and would have been fresh in the minds of most people at the time. Recessions generally come every 10 years or so like a tide that ebs and flows as part of the normal economic cycle.

Where the banks really got it wrong was mis-judging the severity of the next downturn in the economic cycle. Not assuming that there wouldn't be one. Hence the talk of a "soft landing etc" at the time.

marienbad

paddy147 wrote: »

Banks are that sly and will do anything it takes if the see a chance or get an oppertunity.

The bank would be the "landlord",and if the bank wants to sell the property,then they can.

Its no different to a private landlord giving notice to his or her tennants and deciding to sell the property.

I understand that completely, but if there was massive eviction and sale it would seriously depress property prices even further and that would affect the banks .

I don't think the country would stand for such agressive behaviour from the banks either. It could be the one thing that brings us out on to the street.

But then maybe that is why the 7 years rent clause is there , thus allowing them to hold on to an asset effectively having the interest paid and giving them the time to offload property over a longer timeframe minimising the effect on property prices nationwide. Or am I venturing into conspiracy theory country ?

paddy147

Banks told a pack of blatant lies to Cowan and Co (which has been proved,yet none of the bank chiefs will admit this) and thats part of what got us into this mess.

So why would anyone trust a bank and what it says again??

jackal

irelandspurs wrote: »

we have a mortgage that i took out when we could afford it now we are struggling to pay it as i lost my job and my wife only has part time work.We pay what we can toward it and there is no way they will be taking the house off me because i didn't pay anything,I have put to much money into this house when i could afford it and there is no way i'm just going to walk away from it because i'm struggling.

Sorry for your situation. You pay what you can, would that cut it if you were renting a private house, or would you be out on your ear?

The scheme is for those people who have NO HOPE of paying it back. If that is the case, then the fact of the matter is private home ownership is no longer for you, and you owe a load of cash to the bank on top of what the house is now worth. This is a scheme to resolve that.

Bullseye1

If the banks were not owned by the people we wouldnt be having so much negative reaction. Funny how that works.

Buford Tannen

marienbad wrote: »

I understand that completely, but if there was massive eviction and sale it would seriously depress property prices even further and that would affect the banks .

I don't think the country would stand for such agressive behaviour from the banks either. It could be the one thing that brings us out on to the street.

Property tax will depress prices further too, yet the majority of people will pay it.

Tayla

MysticalRain wrote: »

The last recession was in 2000, and would have been fresh in the minds of most people at the time. Recessions generally come every 10 years or so like a tide that ebs and flows as part of the normal economic cycle.

I was 12 then so I wasn't aware of it.

MysticalRain wrote: »

Where the banks really got it wrong was mis-judging the severity of the next downturn in the economic cycle. Not assuming that there wouldn't be one. Hence the talk of a "soft landing etc" at the time.

The banks misjudged the severity but yet people regularly complain about people who took out mortgages at the time calling them gamblers and greedy c*unts etc. The banks ****ed up big time but some people want to blame it all on someone who just wanted to have a roof over their families heads.

paddy147

Im waiting for the OP to tell me how its a "free gravy train"

paddy147

Buford Tannen wrote: »

Property tax will depress prices further too, yet the majority of people will pay it.

I wonder how may cells they have allocated in Mountjoy and Portlaoise for the non payers then????

How can FG expect people to pay this 100 euro tax,when they (FG) break the rules themselves repeatedly and give big pay rises to their "friends" in high places.:mad::mad::mad:

MysticalRain

Tayla wrote: »

I was 12 then so I wasn't aware of it.

The bank would have told you that was your problem if you had ended up in negative equity and complained about it. You have to remember that the bank almost always wins in these scenarios. The same way the house usually wins a in gambling casino.

The banks misjudged the severity but yet people regularly complain about people who took out mortgages at the time calling them gamblers and greedy c*unts etc.

I certainly wouldn't call someone who bought a house purely to raise a family in it a greedy fcker. Gullible, perhaps. I would reserve terms like greedy that for the cute hoors who thought they were onto a winner by purchasing buy-to-let mortgages to fleece renters for all they were worth or treating their own house as a private ATM machine to fund foreign holidays and expensive cars.

The banks ****ed up big time but some people want to blame it all on someone who just wanted to have a roof over their families heads.

Sure, but people have to take responsibility for their own personal actions as well. Nobody forced them to sign the contract. There was nothing stopping people renting for a few years before the bubble burst, and then buying like a lot of smart people I know did. Plenty of people raise families on the continent while living in rental accommodation. So owning a house is more of a lifestyle choice than anything else really.

Tayla

MysticalRain wrote: »

The bank would have told you that was your problem if you had ended up in negative equity and complained about it.

They would have and I know that i'm in the minority but they gave us a mortgage during the boom on terrible wages when we were barely out of school, the bank had an obligation to make sure people could pay.

A lot of people bought at the time because they thought if they didn't buy one then that they would never be able to afford one at all.
Doesn't that prove that most people weren't aware that something like this could have happened? I just feel like the banks or the government should have made people aware of this.

MysticalRain wrote: »

Sure, but people have to take responsibility for their own personal actions as well. Nobody forced them to sign the contract.

I agree but I noticed you said that people must take responsibility for their own actions as well........the problem is that the banks aren't taking responsibility for it at all.

hmmm

Some people seem to think that they went into property buying in a partnership with a bank.

All a bank cares about is your ability to repay the loan. It'll value the property to make sure it has some assets available to sell if you can't, but ultimately what it really cares about is whether or not you can repay.

They're not your partner, friend or buddy in property investing.

MysticalRain

Tayla wrote: »

They would have and I know that i'm in the minority but they gave us a mortgage during the boom on terrible wages when we were barely out of school, the bank had an obligation to make sure people could pay.

The mistake you're making here is in assuming that a ruthless money making machine like a bank will behave in a moral manner. The only obligation a bank has is to make a profit for their shareholders, and that typically involves screwing their customers in some shape or form.

A lot of people bought at the time because they thought if they didn't buy one then that they would never be able to afford one at all.
Doesn't that prove that most people weren't aware that something like this could have happened? I just feel like the banks or the government should have made people aware of this.

The only thing that proves is the following the herd and doing what a bunch of gangsters like Bertie Ahern and Seanie Fitz tell you to do is the easiest way in the world to go bankrupt. You would have had better luck doing the complete opposite of what they were encouraging you to do. As bad as either of them were, they didn't force people to do anything against their will.

Also, the government warns people on lots of things. Like smoking, eating too much, and driving too fast. That still doesn't stop people doing it.

I agree but I noticed you said that people must take responsibility for their own actions as well........the problem is that the banks aren't taking responsibility for it at all.

That's only partially true. The banks did suffer some consequences, although clearly not enough in most people's eyes. The bank's share prices collapsed. Lucrative foreign operations were sold off. Some, but not all, senior management were fired or let go. Thousands of rank and file staff lost their jobs as well.

token101

Tayla wrote: »

They would have and I know that i'm in the minority but they gave us a mortgage during the boom on terrible wages when we were barely out of school, the bank had an obligation to make sure people could pay.

A lot of people bought at the time because they thought if they didn't buy one then that they would never be able to afford one at all.
Doesn't that prove that most people weren't aware that something like this could have happened? I just feel like the banks or the government should have made people aware of this.

I agree but I noticed you said that people must take responsibility for their own actions as well........the problem is that the banks aren't taking responsibility for it at all.

You weren't in the minority that's the problem. They gave mortgages to anyone who asked. But they're there to do that. They're profiteers, not a social charity. They wouldn't be able to give anyone any money if they weren't in the business of making as much money as possible. Why is it the bank's responsibility to ensure you can pay? As somebody else said, this is a debt you owe, not some sort of partnership or anything like that. you've agreed to all the terms. And if you didn't thoroughly read through every detail on the biggest debt of your life the

I'm older than you from what the looks of what you've said and I didn't buy. Not because I'm a prophet or smarter than anyone, but because I knew that if I bought a €300,000 house there was no way I'd ever pay that mortgage off. Particularly if I'd lost my job. That's basic maths and people should be held accountable for the debts they agreed to pay.

Banks have taken massive hits, despite what people will have you believe. Top guys may still have their jobs, but to suggest that anyone is individually responsible is stupidity. This was a systemic problem, and there is systemic suffering because of it. It was branch management vetted people for mortgages, they've probably lost their jobs and homes aswell. Ulster Bank cut almost 1,000 staff today. Doesn't get much worse than that. Banks aren't sitting as pretty as you think.

Rabidlamb

paddy147 wrote: »

Seen as you posted this thread,then maybe you can bother to explain to me and many other people here how its a "free gravy train".

Id love to hear your reasons and or excuses????

You clearly have no clue or inkling as to what this is and how it works,and what it does to people in the long term,if you think its a free gravy train.

I Choo Choo Choose You . . . .
Sweet jebus, it's after hours, I was stiring with my big ****ty stick.

Were we in Irish Economy I would have used a more financially sensitive term.
I'd describe "free gravy" as a government sanctioned write off of a large outstanding debt.
Should you propose a better wording of my OP then I promise I'll cut & paste it in for you.

Oh . . . & Choo Choo

Tayla

MysticalRain wrote: »

Also, the government warns people on lots of things. Like smoking, eating too much, and driving too fast. That still doesn't stop people doing it.

Big difference there though, a lot of people are at risk of repossessions etc, the country can't work without banks and now the government by not regulating the banks properly have left the banks in massive danger when a wave of repossessions start. We've seen how much of an impact bank debt has on our nation so yes it was in the interest of the state to warn people.

Warning against driving too fast makes sense, we don't want road casulties.
Warning against people eating too much makes sense too as obesity is a massive problem and a strain on the HSE.
Warning against smoking.....well short term they need the taxes from cigarettes but long term it's another leech on the HSE.
They should have tried to educate people about these risks with house prices and ensured the banks were regulated properly because these mortgage defaults right now are a massive risk to the banks/state.

token101 wrote: »

Why is it the bank's responsibility to ensure you can pay?

Legally they were supposed to ensure that people could pay. Mortgages were supposed to legally be stress tested at a certain percent and if the person couldn't afford that then they shouldn't have got the mortgage. They didn't do this properly. Banks do actually have responsibilities you know! Granted, these stress tests were supposed to ensure people could afford higher interest rates on their current wages and not to stress test against job losses but at the end of the day they gave out mortgages to people who wouldn't have met the criteria at the time, if they hadn't done that then we may not have as much of a problem.

token101 wrote: »

I'm older than you from what the looks of what you've said and I didn't buy. Not because I'm a prophet or smarter than anyone, but because I knew that if I bought a €300,000 house there was no way I'd ever pay that mortgage off.

I'm not personally in a bad situation as a result of buying, even now buying was still the best decision for me (unless we leave the euro of course and have to service a mortgage with a new currency)

MysticalRain

Tayla wrote: »

Big difference there though, a lot of people are at risk of repossessions etc, the country can't work without banks and now the government by not regulating the banks properly have left the banks in massive danger when a wave of repossessions start. We've seen how much of an impact bank debt has on our nation so yes it was in the interest of the state to warn people.

Warning against driving too fast makes sense, we don't want road casulties.
Warning against people eating too much makes sense too as obesity is a massive problem and a strain on the HSE.
Warning against smoking.....well short term they need the taxes from cigarettes but long term it's another leech on the HSE.
They should have tried to educate people about these risks with house prices and ensured the banks were regulated properly because these mortgage defaults right now are a massive risk to the banks/state.

To be honest, I don't think it's the government's responsibility to advise people on how to manage their own personal finances any more so than I would expect them to tell me how to tie my own shoe laces in case I might trip myself up. That's part of what being a mature, responsible adult is all about.

Besides, that was never going to happen with a FF led government anyway. FF were a bigger bunch of gangsters than the bankers were, and quite a few were property speculators themselves who had a vested interest in promoting the construction boom.

Tayla

MysticalRain wrote: »

To be honest, I don't think it's the government's responsibility to advise people on how to manage their own personal finances any more so than I would expect them to tell me how to tie my own shoe laces in case I might trip myself up. That's part of what being a mature, responsible adult is all about.

Obviously it's not a problem to them if 1 person can't afford a mortgage and ends up absolutely broke because of it but when tens of thousands of people can't afford their mortgage, it becomes the states problem. They can't get blood from a stone.

If they had made it their responsibility to advise people then maybe we wouldn't be kicking the can down the road now in relation to mortgage debt, it probably wouldn't have been that much of an issue!

MysticalRain

It would be a huge issue for the state if we were talking about 250,000 people, not 25,000-30,000. That is a negligible figure compared to the 400,000+ currently on the dole. The fact is the vast majority of people who took out an over-priced mortgage during the boom years will pay back every single penny they owe. Even if it means shopping in Adli for the rest of their lives, and kissing good bye to any chance of returning to the kind of Celtic Tiger lifestyle they enjoyed during the boom years.

It's not a free ride for the mortgage defaulters either. The banks will still get their pound of flesh when they repossess the houses of anyone who can't or won't pay.

Rabidlamb

http://www.independent.ie/business/personal-finance/latest-news/mortgage-debt-scheme-leaves-power-with-banks-2988065.html

Mortgage debt scheme 'leaves power with banks'

By Charlie Weston Personal Finance Editor

Friday January 13 2012

PLANS for struggling homeowners to give up their homes and get some of the balance written off once the house is sold have been condemned as too favourable to the banks.

The debt deal would make people more inclined to go to the courts to declare bankruptcy, Paul Joyce of the Free Legal Advice Centres said.

Justice Minister Alan Shatter is considering plans that will see banks take ownership of homes of those unable to make repayments.

The new debt settlement scheme will not be a debt "free-for-all" as those who tap into it will lose their homes and still have to make repayments based on what they can now afford for between five and seven years.

But Mr Joyce said the arrangements being considered were too bank-friendly, adding: "This still leaves the balance of power with the banks."

bryaner

Yet another renter v mortgage thread brilliant..

opinion guy

This plan is retarded.

Its designed to protect the asset value of the banks whilst shafting the homeowner. Its also absolutely NOT a mortgage write off OP.

There is and only is one solution to the current issue. A devaluation of the housing market carried out by blanket mortgage forgiveness of a set percentage for all mortgages. It has been obvious for some time now that this needs to be done. Such a move, would ease the pressure on home mortgage repayers - all of them - , and would allow the housing market to start moving again which is ultimately what needs to happen. Except they won't do it as the banks are then taking the cut and their asset values will effectively be reduced by the percentage. But f**k em I say. They got too much help already.

But Mr Joyce said the arrangements being considered were too bank-friendly, adding: "This still leaves the balance of power with the banks."

As it should.. If I lend a friend 50euro, he's indebted to me. He asked me for the lend, I didn't offer.

jackal

Rabidlamb wrote: »

http://www.independent.ie/business/personal-finance/latest-news/mortgage-debt-scheme-leaves-power-with-banks-2988065.html

Any article written by the Indo's "Personal Finance" Chief should always be read in the context of this gem: http://www.independent.ie/opinion/columnists/charlie-weston/charlie-weston-100000-is-not-rich-when-the-bills-are-huge-1953730.html

Sample quote:

The idea that someone on €100,000 is "very wealthy" is simplistic, to put it kindly. To be more crude about it, it is economic illiteracy.

The reality is that most families on that sort of an income -- whether there are two or just one earner in the household -- are drowning in a sea of debt.

They are the very ones who heeded the calls to borrow and borrow heavily. So they have jumbo mortgages from buying or trading up at the height of the boom. They are now likely to be stuck in negative equity.

OK, they made a mistake by over-borrowing, but they have to live with that now.

Joshua Jones

Does anyone know if the banks will be paying the household charge on all the properties on their books from defaulters. Call me cynical but I doubt it somehow.

Bad Panda

Tordelback wrote: »

Not fishing for sympathy or anything like, just throwing out a personal anecdote by way of balance.

When my wife and I bought our 1000sq ft 3-bed terrace in the fringes of Dublin 24 in 2004, we did so with the intention of raising our family in it. We took an 85% mortgage, using our savings for the 15%, at a value of just under 3 times our combined salaries. Our combined total income is now 1/3 of what it was then, between unemployment and savage pay-cuts, and with all our savings now gone we have little hope of keeping up our repayments to the end of this year, and the supposed market value of the house (if you could sell it at all) is considerably less than the remaining mortgage . Incidentally we have no car- or holiday-loans to cover, driving a 14 year old 1 litre, and holidaying in a tent in Wicklow or Galway.

Stinger.

fro9etb8j5qsl2

Bankers and defaulters should be forced to watch this

https://www.youtube.com/watch?v=a37sRjkLtWw

Before being slapped with a wet rag and told how silly they are.