Writing off mortgage debt

Diarmuid

mkdon05 wrote: »

It always amazes me when one of these threads crop up.
I never knew Ireland was producing so many economic experts back in 2004-2007 that were able to predict how it was going to pan out. Fair play to you all deciding not to buy a home when you were in a position to do so, but decided to rent instead. Bravo.

yes those economic experts. Or someone with an independent mind and a junior cert grasp of mathematics

Tigerandahalf

The Irish gov's hands are tied as any deal will require a large amount of debt to be written off. I think most people agree with that.
It has already happened in Greece. So it will happen in Ireland too but not before the election in Germany. Too many politicians there are trying to save their skins.

Tigerandahalf

BFDCH. wrote: »

That's a bit mental TBH. They voted for the politicians in good faith, the media was compliant in all of this, there were no real questions raised by them when all of this was going on.
Look at how the media is acting now (every second story is about waste in the PS, this was going on during the boom to a greater degree but there were few stories highlighting it). If the kind of focus that the media are applying now was applied in the past we would not be where we are and jokers like Bertie wouldn't have gotten away with doing as they pleased with our country.
The people who should've been punished further are the politicians who got off with mismanaging and misleading the public. They got out of government with their pensions and wealth intact, hardly the type of message you want to give an already sneaky group of people- fck up our country and we won't punish you.

Not getting a loan again and probably not being able to afford anything beyond what they can pay for with their income, while watching others who didn't live beyond their means reap the benefits of being able to take out loans should be punishment enough.

I agree that the media have got off relatively scoff free. They have a large responsibility for this whole mess. They gorged themselves on revenue from property advertising. I wonder how many whistleblower journalists were told to keep quiet. It will come out at some stage.

BFDCH.

Tigerandahalf wrote: »

I agree that the media have got off relatively scoff free. They have a large responsibility for this whole mess. They gorged themselves on revenue from property advertising. I wonder how many whistleblower journalists were told to keep quiet. It will come out at some stage.

I wasn't really saying that they needed to be punished in some way too, more that they weren't doing a good enough job at the time. The politicians got away scott-free because not many people knew what was going on due to the lack of scrutiny by the media.
There were a few who regularly claimed over and over again that property prices couldn't continue to rise as it didn't make economic sense, unfortunately there just wasn't enough of them and it was rarely if ever front page news.

Unrealistic

Tigerandahalf wrote: »

The Irish gov's hands are tied as any deal will require a large amount of debt to be written off. I think most people agree with that.
It has already happened in Greece. So it will happen in Ireland too but not before the election in Germany. Too many politicians there are trying to save their skins.

I don't understand this comment? Greece has had some of its sovereign debt written off. I don't think there have has been a write off for individual mortgage holders there but maybe you can point towards a link if there has? Even if Ireland gets some sovereign debt written off (necessary but will probably happen as some sort of a fudge with the ECB rather than overtly) how does that relate to the topic of this thread, writing off mortgage debt?

riclad

SO house is transfered to local authority, if customer gets transfer to another council house, its likely a woman with 2 kids will move in.
IF the neighbour next door paid 300k, for his house he may not like that. ITS likely his house value will decrease.
in certain cases the bank should write off ,x amount,but who gets a write off, is there a fair way of doing it.Will it be based on how much you can pay,The banks can,t afford to give everyone in difficulty a write off.

Sconsey

Tigerandahalf wrote: »

The Irish gov's hands are tied as any deal will require a large amount of debt to be written off. I think most people agree with that.
It has already happened in Greece. So it will happen in Ireland too but not before the election in Germany. Too many politicians there are trying to save their skins.

Emmm...No. You keep saying it will happen, that most people agree.... do you have any facts to back up your statements or is it more a case of you want it to happen?

Most people here don't seem to want it to happen (me included).

Tigerandahalf

There seems to be a lot of people on here who want the man in negative equity to drown. I don't have a mortgage by the way. I find some of the statements to be along the lines of...'he/she went on a splurge during the boom...I didn't...so now he has to pay.'
The bottom line is that people will never be capable of paying back all these debts. The gov bears huge responsibility for misleading its people. We are the people behind the gov and unfortunately we are going to have to pay back some of the debt. Hopefully we can get some of it written off through a sovereign default of some sort. Most personal debt is tied up in mortgages and as the gov guaranteed the banks all debts are effectively sovereign at this stage.

jmayo

Tigerandahalf wrote: »

It seems like some mortgage debt will be written off as people simply can't afford to pay their mortgages.

You think ?

Tigerandahalf wrote: »

Many genuine people are unemployed. So what will happen? Will those who were prudent lose out? Or could some other scheme be done to make it more fair to everyone?

And there are also a fair not so genuine people who are also hoping that some of their debt can be written off and they can hang onto their property.
There is one such couple over in Kiliney who it appears are of this opinion.
Even Karl Deeter raised this spectre a few weeks ago pointing out the banks were aware of people who do not pay their mortgage rather than cannot afford to pay their mortgage.

Tigerandahalf wrote: »

For example, if a person had a 400,000 mortgage. The gov/banks agree to write off 100,000. The gov/banks however take a 1/4 stake in the house. Thus the person is not getting off completely. If the person sold the house 10 years down the road the gov would get 1/4 of the price.
Would this be fair and possible?

Let's keep this reasonable as I'm sure there could be strong feelings on both sides.

Sorry I am not reasonable when I see people who now want me to pay for the p*** up they had during the good times, all the while they bloody rubbed my nose in it.
And I know more than a few people personnally who fit that category who now would hope to avail of such a scheme. :mad:

BTW where do you suppose the banks/gov get the money to writeoff all these mortgages ?

Oh and just to add another spoke to wheel of your proposal, what happens to those who are in negative equity and cannot repay the mortgages they have with non Irish owned banks ?

What happens to those people who have loans with NIB, Rabobank, BOSI/Halifax, Start Mortgages?
Do you suggest that the Irish taxpayer helps the balance sheets of foreign owned institutions ?

So far there are kites been flown about this in every possible media outlet in this country.
One would think that there is a concerted effort been made to influence public opinion.

Fecking hell half of RTE must have made as big a fook up in investing in property as ould Gaybo what with the relish they have adopted this topic. :rolleyes:
Oh and not to mention that bastion of moral rectitude that the Indo/Sindo.

Lets hope one possible positive outcome of ould Dinny O'Brien taking control of the media group maybe that the ff gutter snipes and property toadies may be fooked out on their earholes.

Sadly for the propoents of the bailout for "the unlucky, the greedy, the complacent and the downright chancers", the case of the kellys highlighted just how wrong it would be to have any form of blanket bailout.

Tigerandahalf wrote: »

There seems to be a lot of people on here who want the man in negative equity to drown.

I couldn't give a sh** whether they drown or not.
I just don't want to be offering my fooking lifejacket to them.

Tigerandahalf wrote: »

I don't have a mortgage by the way. I find some of the statements to be along the lines of...'he/she went on a splurge during the boom...I didn't...so now he has to pay.'

No but you are pedalling this so I smell vested interest somewhere.

Well do your seriously think those of us who didn't splurge during the boom should now pay ?

Tigerandahalf wrote: »

The bottom line is that people will never be capable of paying back all these debts. The gov bears huge responsibility for misleading its people.

And people bear no responsibilty ?

creedp

Tigerandahalf wrote: »

The bottom line is that people will never be capable of paying back all these debts.

That's not fully correct. Its more correct to say that some people will never be able to repay their mortgage debts (I presume your limiting this to mortgages?). A lot will be able to, although it may mean they cannot move as they may have planned or not as soon as they have planned. I am in significant negative equity but hopefully I will be able to repay my mortgage and some time in the future (15 years or so) my house will be mortgage free. What it will be worth at that time is anybodys guess. There are many people in the same position as me and its an over simplification/sweeping generalisation to say that I or many like me will never be capable of paying back our mortgage. I can't understand why 'not being able to make mortgage repayments' and 'negative equity' are treated the same. Blame this on the Sindo and its ilk who find it easier to generalise with sensational headlines than actually undertake quality investigative journalism that might inform people ehat is actually going on out there.

golden lane

negative equity is irrevelant to how mortgage's are paid back.....income does that...

Unrealistic

Tigerandahalf wrote: »

There seems to be a lot of people on here who want the man in negative equity to drown.

I think that attitude, if it exists, is a minority one. A more reasonable analogy would be that people don't want the man in negative equity to drown but neither do they want to pay for him to stay in a yacht when they themselves are stuck in rowing boats.

Tigerandahalf wrote: »

The bottom line is that people will never be capable of paying back all these debts.

Some will and some won't. There are plenty of people in negative equity who are doing just fine. They bought a house for X and they're still paying the mortgage on that, no problem there. They were earning Y when they bought it and that increased a bit after that but then the increase got clawed back through increased taxes, harsh but that's life. So the don't have as much disposable income as they thought they might, and it sticks in their craw a bit to be paying back more than their house is worth, but so what. They can still pay their mortgage and they should keep paying it. For those who can't pay the new insolvency laws, when they come into force, should apply.

Tigerandahalf wrote: »

The gov bears huge responsibility for misleading its people. We are the people behind the gov and unfortunately we are going to have to pay back some of the debt.

The government bears responsibility for lax regulation but adults who took out loans of their own free will cannot absolve themselves of responsibility. The government, by instituting new mortgage arrears arrangements that have kept hundreds of thousands of people in their homes who would otherwise have been evicted, has taken steps to meet that responsibility.

Tigerandahalf wrote: »

Hopefully we can get some of it written off through a sovereign default of some sort. Most personal debt is tied up in mortgages and as the gov guaranteed the banks all debts are effectively sovereign at this stage.

Um, the money is owed to the state not by the state.

votecounts

A lot of supposedly smart people thought that property would continue to go up. I remember in UCC about 10 years ago asking my lecturer what would happen to the Irish economy if property prices took a nosedive. The laughter in the boole is still in my memory.Who's laughing now.
Btw, people who gambled should take the hit and not be bailed out by others. The idea of paying for the Kellys mansion makes me want to throw up.

Mr.Micro

votecounts wrote: »

A lot of supposedly smart people thought that property would continue to go up. I remember in UCC about 10 years ago asking my lecturer what would happen to the Irish economy if property prices took a nosedive. The laughter in the boole is still in my memory.Who's laughing now.
Btw, people who gambled should take the hit and not be bailed out by others. The idea of paying for the Kellys mansion makes me want to throw up.

Too right. Sure there is a whole brigade of people out there not paying the mortgages, but renting out the property and collecting rent, now wanting debt forgiveness. Cute hoorism Irish style.

Monty Burnz

BFDCH. wrote: »

Possibly in the same country that bailed out those foreign institutions that made a bad investment in this country.

Many people in the country did buy because they believed what the government and media were preaching at the time (prices were going to keep going up and so they needed to buy ASAP). You should be able to believe the advice coming from a govenrment, you shouldn't have to second guess them all the time, they are elected and paid to guide the country. how was the average punter to know that they were a bunch of power mad clowns and gombeen men when the media was telling everyone that would listen what a good job they were doing.

the country would be better off people were allowed to hand the houses back the bank who own them. It'lll allow the house prices to fall to their natural level rather than being kept artifically high.
The people that walk away from their loans wouldn't be able to get another loan except at very high rates, so this should be enough punishment for them.

I believed all the same lies and bought loads of shares in AIB and Bank of Ireland which I was going to later sell and buy a house.*

Where is my compensation?

*Example. May not have happened.

Monty Burnz

mkdon05 wrote: »

It always amazes me when one of these threads crop up.
I never knew Ireland was producing so many economic experts back in 2004-2007 that were able to predict how it was going to pan out. Fair play to you all deciding not to buy a home when you were in a position to do so, but decided to rent instead. Bravo.

Thanks. Some of us can even point to posts we made predicting the crash.

Tigerandahalf

jmayo wrote: »

Do you suggest that the Irish taxpayer helps the balance sheets of foreign owned institutions ?

No, but I feel something will have to be done to help the Irish people in that situation. Those banks will have to give debt relief. This is why the solution has to be European wide. Otherwise people will leave the keys in the letterbox.



Sadly for the propoents of the bailout for "the unlucky, the greedy, the complacent and the downright chancers", the case of the kellys highlighted just how wrong it would be to have any form of blanket bailout.

The Kellys are not the kind of people I am talking about. I am about people with a single residence. The Kellys gambled and lost. Tough.



I couldn't give a sh** whether they drown or not.
I just don't want to be offering my fooking lifejacket to them.

I just hope you are not in a similar situation at some later stage in your life. Not everyone who bought a house was greedy or living the high life. They just wanted to settle down and start a family and perhaps now one parent is unemployed.


No but you are pedalling this so I smell vested interest somewhere.

I have no vested interest. But I believe in some sort of fairness and in getting the country going again.

Well do your seriously think those of us who didn't splurge during the boom should now pay ?

I didn't splurge during the boom. We are already paying.



And people bear no responsibilty ?

People have some responsibility but the gov has most. The fact that a whistleblower in the Dept of Finance was shouting stop and nothing happened says it all.
I think people should put their energy into demanding justice against the politicians and civil servants who didn't do their job.

.

golden lane

houses were bought off somebody for these high prices....why are these people never mentioned.....

JoeGil

golden lane wrote: »

houses were bought off somebody for these high prices....why are these people never mentioned.....

Exactly. That's the nub of the issue.
A lot of builders and all of the landowners who sold at inflated prices are now sitting on huge piles of cash which will take generations to find it's way back into the economy.
Meanwhile those who bought are struggling to make ends meet.
A rebalancing of these extremes would sound logical but as you say the topic seems to be taboo.

Tigerandahalf

Ya something that is often forgotten. Landowners made a killing. Auctioneers even more so as they were just the middle man with nothing to lose. However, many of these very people invested in shares in the banks and got wiped. Undoubtedly there is still money there. However FG is a landowners party and would be unlikely to agree to any move where their affairs would be subject to the taxman.

Unrealistic

Tigerandahalf wrote: »

No, but I feel something will have to be done to help the Irish people in that situation. Those banks will have to give debt relief. This is why the solution has to be European wide. Otherwise people will leave the keys in the letterbox.

So what if people just leave the keys in the letterbox? How is that the end of the world? The bank takes the house and sells it to someone else to get part of the money back. Someone who thus far hasn't owned a home gets to own one and you can be damn sure that ownership will be more sustainable then the person who has just put the keys in the letterbox. If they person who put the keys in the letterbox has assets then the bank can go after those for the balance of the loan and, if they don't, then the bank writes it off as not worth pursuing. That is exactly what the banks were recapitalised to do; write off the remaining balance on individual loans after clawing back everything it can. Not to give a handout to every Tom, Dick and Harry who doesn't like the fact that his house is now worth less than he paid for it.

Tigerandahalf

But isn't it better to keep people in their houses and try to get them to pay. If they don't the gov/banks take a gradual increasing equity in the house. I think no matter what approach is taken there are going to be negatives and not just for the people involved.
I can see why the bankrupcy laws are not being changed too quickly. If you put a 3 year limit on bankrupt homeowners many would be glad to leave the house, rent for 3 years and be free to buy again. So how do you sort that? Do you stop them from buying property for a period of 10/20 years?

jmayo

Monty Burnz wrote: »

I believed all the same lies and bought loads of shares in AIB and Bank of Ireland which I was going to later sell and buy a house.*

Where is my compensation?

*Example. May not have happened.

There is this bloody attitude ever since a fooking party proposed offering bailouts for people who got too greedy when they bought Eircom shares and fooking taxy plates.
And yes for all the ffers around here, I do know some of that sh**e was pedalled by fecking Fine Gael.

Tigerandahalf wrote: »

Originally Posted by jmayo View Post
Do you suggest that the Irish taxpayer helps the balance sheets of foreign owned institutions ?

No, but I feel something will have to be done to help the Irish people in that situation. Those banks will have to give debt relief. This is why the solution has to be European wide. Otherwise people will leave the keys in the letterbox.

Ah FFS.
Forum rules prevent me from responding as I would like.

Do you seriously think that the shareholders of a Dutch, Uk, or Danish registered company, nevermind their governments/taxpayers are going to take a loss so that some dumb or hard luck paddy can stay in their gaff ?

This is an Irish problem, not a European problem.
The problems of Greece, Spain, Italy has nothing to do with mortgage holders defaulting.

Tigerandahalf wrote: »

Sadly for the propoents of the bailout for "the unlucky, the greedy, the complacent and the downright chancers", the case of the kellys highlighted just how wrong it would be to have any form of blanket bailout.

The Kellys are not the kind of people I am talking about. I am about people with a single residence. The Kellys gambled and lost. Tough.

What about when the single residence is a 6 bedroom 4,000 sq ft house ?

Tigerandahalf wrote: »

I have no vested interest. But I believe in some sort of fairness and in getting the country going again.

I believe in fairness too, although you seem to believe it is fair that I pay up for everyone elses hardluck.

Tigerandahalf wrote: »

People have some responsibility but the gov has most. The fact that a whistleblower in the Dept of Finance was shouting stop and nothing happened says it all.
I think people should put their energy into demanding justice against the politicians and civil servants who didn't do their job.
.

What about the people who voted for these politicans.
BTW i never voted for that shower of fookwits.
I voted for the shower that thought it was a good idea to bailout people who can't understand shares can go and down. :mad::mad:

Next time can you not answer within a quote as it makes it very difficult to then respond ?

Tigerandahalf

Re the non-Irish banks.
These banks will have to take losses either way. They lent money to people that simply will not be able to pay back or at least it will take them a hell of a long time to pay back. If they bankrupt the homeowner they will take a loss in selling the house. Maybe they want to do this and I'm surprised it hasn't been done already but I wonder why that hasn't happened. Have they being stopped by Europe?

Unrealistic

Tigerandahalf wrote: »

Re the non-Irish banks.
These banks will have to take losses either way. They lent money to people that simply will not be able to pay back or at least it will take them a hell of a long time to pay back. If they bankrupt the homeowner they will take a loss in selling the house. Maybe they want to do this and I'm surprised it hasn't been done already but I wonder why that hasn't happened. Have they being stopped by Europe?

The ones with less to lose because they don't plan a future in Ireland - Bank of Scotland (Ireland), Start, etc. - are repossessing. All the others are still helping to support the fiction that prices have 'only' fallen by 57% because if they opened the taps the prices would plummet further and their balance sheet provisions would skyrocket.

Farmer Pudsey

Unrealistic wrote: »

So what if people just leave the keys in the letterbox? How is that the end of the world? The bank takes the house and sells it to someone else to get part of the money back. Someone who thus far hasn't owned a home gets to own one and you can be damn sure that ownership will be more sustainable then the person who has just put the keys in the letterbox. If they person who put the keys in the letterbox has assets then the bank can go after those for the balance of the loan and, if they don't, then the bank writes it off as not worth pursuing. That is exactly what the banks were recapitalised to do; write off the remaining balance on individual loans after clawing back everything it can. Not to give a handout to every Tom, Dick and Harry who doesn't like the fact that his house is now worth less than he paid for it.

In the US there is no problem with people leaving the keys in the letterbox and that is the end of the issue if it is a residental owner as they have non recourse morgtage's in the next few years this will become common in the EU. The problems we hae now would not be an issue if you had a non recourse morgtage's as you have no personel indemnity for the balance. In Ireland we do not even have bankrupty I do not believe in a free ride or debt forgiviness however if people are willing to hand back keys and start again I believe they should be able to.
However in the case of second/third homes etc I believe that people should have to sort out themselves. If I was in the situtation of some of the young people in Ireland I be looking for bankrupty in England.

Monty Burnz

Farmer Pudsey wrote: »

In the US there is no problem with people leaving the keys in the letterbox and that is the end of the issue if it is a residental owner as they have non recourse morgtage's in the next few years this will become common in the EU. The problems we hae now would not be an issue if you had a non recourse morgtage's as you have no personel indemnity for the balance. In Ireland we do not even have bankrupty I do not believe in a free ride or debt forgiviness however if people are willing to hand back keys and start again I believe they should be able to.
However in the case of second/third homes etc I believe that people should have to sort out themselves. If I was in the situtation of some of the young people in Ireland I be looking for bankrupty in England.

Well we do have bankruptcy, but it takes 12 years. There's a reform bill going through the Dail which should reduce that to 3 or 4.

Bear in mind that many of the young people in Ireland didn't buy because they thought prices were crazy, and are still not able to buy houses because their foolish friends borrowed more than they can pay back but are still allowed to stay in the houses. The careful are punished and the foolish are rewarded. What can go wrong with such a system?

carm

Bannasidhe wrote: »

So rather then the State acting to help people stay in their mortgaged homes we should have a situation where people are evicted and the State then subsidises their rent?

Plus - not everyone is 'entitled' to rent allowance.

My point exactly.

green123 wrote: »

Anybody who can't afford to pay their mortgage should have their house repossessed as per the agreement that they signed up to.

Nobody gets made homeless. The house is transferred over to the local authority or council and the previous owners start paying rent or get rent allowance.

That's my point Bannasidhe. There is a belief like the post above that just moving the person out of the home or turning the house over to the Council and making the previous owners pay rent is the answer. In many cases, the rent they would require will be far more and far more generous than the mortgage supplements they may be 'entitled to' at present.

In essence, they could be getting more money from the government than if they were in the house paying the mortgage with interest supplements. Obviously, there are cases where the mortgage is beyond that but it could, in many cases, mean the taxpayer paying more for the person to rent.

daltonmd

Tigerandahalf wrote: »

There seems to be a lot of people on here who want the man in negative equity to drown. I don't have a mortgage by the way. I find some of the statements to be along the lines of...'he/she went on a splurge during the boom...I didn't...so now he has to pay.'
The bottom line is that people will never be capable of paying back all these debts.
The gov bears huge responsibility for misleading its people. We are the people behind the gov and unfortunately we are going to have to pay back some of the debt. Hopefully we can get some of it written off through a sovereign default of some sort. Most personal debt is tied up in mortgages and as the gov guaranteed the banks all debts are effectively sovereign at this stage.

You see this is the nub of the issue that some people just refuse to get. As soon as you mention "writedown" it is immediately a "write off for all the greedy fools who live in 6 bed houses in Killiney".

The real thing that gets me is that there are people here who are fighting for the rights of banks to get their pound of flesh - imagine that.

The question they should ask themselves is - why is there is not more repo's? We are now in year 5 from the collapse and no (or very few )repo's? Why?

Why are the banks not repossessing those in arrears?

Monty Burnz

carm wrote: »

That's my point Bannasidhe. There is a belief like the post above that just moving the person out of the home or turning the house over to the Council and making the previous owners pay rent is the answer. In many cases, the rent they would require will be far more and far more generous than the mortgage supplements they may be 'entitled to' at present.

In essence, they could be getting more money from the government than if they were in the house paying the mortgage with interest supplements. Obviously, there are cases where the mortgage is beyond that but it could, in many cases, mean the taxpayer paying more for the person to rent.

Presumably these people would not be on rent allowance forever if their difficulties are temporary - over a couple of years, say?

Meanwhile you think it is fairer to take tax money from renters to keep other people in the houses that they themselves have not had the chance/were too smart to buy during the bubble?

And at what cost? How much is it costing the Irish taxpayer to subsidise these people in the houses they can't afford?