Writing off mortgage debt

Tigerandahalf

Tigerandahalf wrote: »

Those write downs were going to happen. We have already seen it with the major developers. Whether people are bankrupted or not people are not capable of paying back the full amount.
More pay cuts in public service could now be a possibility given that debt is being written off.

Developers were an anomaly in the sense that they were in possession of unfinished properties.

The properties in question here will be either investment properties or homes, i.e. products which another person/people could move into straight away.

Maura74

daltonmd wrote: »

She bought the house in 2005 when she earned 70k per week (In a private nursing home), 50k basic and 21 hours O/T. She joined the prison service as a nurse and her salary fell to 40k. She then found it difficult to repay the mortgage, she appears to be originally from the west and wanted to return home (transfer to a jail there?).

She handed the keys back to the bank and from what I have heard they delayed in selling it. This delay in the bank selling the house, where it would have covered the debt is the core problem.

As I said in another thread, fair play to her - she lost the house, she's to repay 18k, she will, in all likliehood never be able to borrow from a bank again - I reckon given this experience and the lucky break she got, that she'll live with that punishment very easily.

I reckoned she will live with this very easily after been a nurse in a care home for 70k, knowing what i know about nursing home..............Grrrrrrrrrrrrrrrrr

daltonmd

Maura74 wrote: »

I reckoned she will live with this very easily after been a nurse in a care home for 70k, knowing what i know about nursing home..............Grrrrrrrrrrrrrrrrr

What's that supposed to mean? In another post you seem to imply that she is incapable of doing her job?

To my mind she's a very smart cookie who played a blinder. Couldnt afford the mortgage, handed back the keys, bank stalled in selling house and judge made a judgement that favoured her and not the bank - so how does this affect what she doies for a living?

daltonmd

daltonmd wrote: »

What's that supposed to mean? In another post you seem to imply that she is incapable of doing her job?

To my mind she's a very smart cookie who played a blinder. Couldnt afford the mortgage, handed back the keys, bank stalled in selling house and judge made a judgement that favoured her and not the bank - so how does this affect what she doies for a living?

I would have agreed until she went on every radio show/paper that would listen to tell of her plight. That's not shrewd, or very smart.

What I thought was a case of clever maneuvering has merely turned out, as per usual, to be a case of ignorance vs stupidity. Her vs the bank.

Needless to say, I'm very interested to see a breakdown of the figures: i.e. what the house was sold for to leave a bill of 170k on a 245k mortgage.

Nobody has won anything here, so there's no need for the enthusiasm. We've all lost.

daltonmd

Rojomcdojo wrote: »

I would have agreed until she went on every radio show/paper that would listen to tell of her plight. That's not shrewd, or very smart.

What I thought was a case of clever maneuvering has merely turned out, as per usual, to be a case of ignorance vs stupidity. Her vs the bank.

Needless to say, I'm very interested to see a breakdown of the figures: i.e. what the house was sold for to leave a bill of 170k on a 245k mortgage.

Nobody has won anything here, so there's no need for the enthusiasm. We've all lost.

Oh I think it was a very clever ploy by New Beginnings- they represented her pro - bono and got major free advertisement for their campaign. That's smart in my book.

Was it a house or an apartment? At 245k in 2005 it looks like an apartment. The bank certainly don't want to advertise what it sold for.

She won. New Beginnings won.

hmmm

As we're bailing out the banks, will ICS give an explanation to the taxpayer as to what has happened here and what their criteria used was?

golfwallah

History shows that it usually takes tragedies like the sinking of the Titanic or other similar events, to prompt legislators into action.

Thankfully, we are now somewhat along the road towards addressing debt and insolvency issues in Ireland but there is some distance to go before the required legislation and legal / administrative processes are in place.

Notable milestones along the way so far include:
16th December 2010: Law Reform Commission’s “Report on Personal Debt Management and Debt Enforcement”, dealing with “the reality of an indebtedness that cannot be repaid within a foreseeable time period” - (http://www.lawreform.ie/2010/report-on-personal-debt-management-and-debt-enforcement.325.html)

25th January 2012: Publication of the Heads of the Personal Insolvency Bill and proposals for its drafting in final legislative form (http://www.merrionstreet.ie/index.php/2012/01/personal-insolvency-bill-published-ministers-shatter-noonan/).

March 2012: FLAC Submission on Draft Personal Insolvency Scheme in which they say “Had such a scheme been introduced when FLAC specifically called for it in 2003, we believe that it would have prevented a significant amount of current over-indebtedness, by forcing the credit industry to adopt a more responsible approach to lending or face write-offs through the discharge of insolvent debtors”.
For FLAC submission see: http://www.flac.ie/download/pdf/submission_draft_personal_insolvency_scheme_2012.pdf

27th April 2012: Dublin nurse secures €152k mortgage debt write-down: http://www.independent.ie/national-news/dublin-nurse-secures-152k-mortgage-debt-writedown-3093817.html

Launching the proposals for the reform of personal insolvency law on 25/01/2012, Justice Minister Shatter said it would involve the introduction of the following new non-judicial debt settlement systems, subject to relevant conditions in each case:
 A Debt Relief Certificate to allow for the full write-off of qualifying unsecured debt up to €20,000, after a one-year moratorium period;
 A Debt Settlement Arrangement for the agreed settlement of unsecured debt of €20,001 and over;
 A Personal Insolvency Arrangement for the agreed settlement of both secured and unsecured debt of €20,001 and over.]
The Minister said that he would also continue the reform of the Bankruptcy Act 1988, including, critically, the introduction of automatic discharge from bankruptcy, subject to certain conditions, after 3 years in place of the current 12 years.

Publication of the Bill has now been postponed until June, before the Dail recess (let’s hope we end up with a workable solution and Bank objections / lobbying don’t result in a half-baked damp squib): http://www.independent.ie/national-news/banks-dig-in-as-flood-of-mortgage-demands-is-forecast-3094692.html

Farmer Pudsey

Maura74 wrote: »

She should have had the intelligence to know that extra working would dry up or she could be become ill and not be able to meet such commitments. Why did she not take out insurance for unemployment? Sorry it not about unemployment it about being greedy, make hay while the sun shine mentality.

This nothing to do about borrowing fiver until the next pay day, it is hundreds of thousands of pounds and as a nurse her judgement was lacking, would not like someone like her to look after someone who is seriously ill.

One of the issue's that is the cause of all this is that from 2000-2008 an awful lot of mortgages were done by brokers. These same Brokers were on up to 2% commission to arrange these mortgages, alot were part of auctioneers firms or the punter who way trying to buy a house when they had not enough of a mortgage were send to a broker who got them a bigger mortgage.

There was more than a smell of insider trading, I wonder what fraction of the troubled mortgage's went through brokers. There are an awful lot of people here who are holier that thou about this. I do not believe that people in negative equity should get a write down but I do believe that if people cannot pay back crazy mortgage's that were sold to them by professionals who should know better they should be allowed to go down the bankrupty or personnel insolvency route

I also think that the government should change the law to make all mortgages sold from now on non recourse loan's and the banks might weel think twice about posting out letters offering people crazy loans.

And Maura it has everything to do about borrowing a fiver or fifty because these are the same people that cannot pay back loans and if I could spot them when I was teenager I expect a professional in a bank to spot them as well and know not to lend people too much money.

Unemployment insurance would be no good to her as she is not unemployed and also it only pays for 6-18 months

MysticalRain

Farmer Pudsey wrote: »

One of the issue's that is the cause of all this is that from 2000-2008 an awful lot of mortgages were done by brokers. These same Brokers were on up to 2% commission to arrange these mortgages, alot were part of auctioneers firms or the punter who way trying to buy a house when they had not enough of a mortgage were send to a broker who got them a bigger mortgage.

There was more than a smell of insider trading, I wonder what fraction of the troubled mortgage's went through brokers. There are an awful lot of people here who are holier that thou about this. I do not believe that people in negative equity should get a write down but I do believe that if people cannot pay back crazy mortgage's that were sold to them by professionals who should know better they should be allowed to go down the bankrupty or personnel insolvency route

I also think that the government should change the law to make all mortgages sold from now on non recourse loan's and the banks might weel think twice about posting out letters offering people crazy loans.

And Maura it has everything to do about borrowing a fiver or fifty because these are the same people that cannot pay back loans and if I could spot them when I was teenager I expect a professional in a bank to spot them as well and know not to lend people too much money.

Unemployment insurance would be no good to her as she is not unemployed and also it only pays for 6-18 months

I don't think it's acting "holier than thow" to expect people to act like mature, responsible adults when managing their own personal finances. I see a lot of people hear blaming everybody else except for themselves for the mess they have landed themselves in. As another poster said, it takes two to tango.

I would be happy enough with a reform of the bankruptcy laws. If someone in arrears can't pay, then let them lose their house and spend at least a decade renting. What I really hope doesn't happen is a free-for-all where every cute hoor in this country thinks they can get a write on their mortgage while keeping their house. Like what we saw happening with those two chancers in Kiliney last week.

golfwallah

MysticalRain wrote: »

I don't think it's acting "holier than thow" to expect people to act like mature, responsible adults when managing their own personal finances. I see a lot of people hear blaming everybody else except for themselves for the mess they have landed themselves in. As another poster said, it takes two to tango.

I would be happy enough with a reform of the bankruptcy laws. If someone in arrears can't pay, then let them lose their house and spend at least a decade renting. What I really hope doesn't happen is a free-for-all where every cute hoor in this country thinks they can get a write on their mortgage while keeping their house. Like what we saw happening with those two chancers in Kiliney last week.

The proposed non-judicial scheme for people unable to meet mortgage repayments does provide for write down and retention of the principal private residence.

A summary the proposed new debt settlement schemes is as follows (will not lead to "free for all", if properly managed):

Debt Relief Certificate (forgiveness of debt for debtors with no assets / income who are unable to meet qualifying unsecured debt up to €20K): Requires full disclosure of income and outgoings and allows full write-off after 1 year. Applicants cannot apply for a further DRC before 6 years has elapsed and a DRC may not be availed of more than twice in a lifetime.

Debt Settlement Arrangement (repayment of an amount of unsecured consumer type debt over €20K over a set period): Financial statement of affairs, proposing amounts to be repaid over a five year period, is submitted to creditors for agreement. If approved by a vote of 65% in value of qualifying creditors, all qualifying debts would be discharged in full after 5 years. Applicants cannot apply for another DSA within a ten-year period.


Personal Insolvency Arrangement (secured & unsecured debt over €20K, including mortgages): Eligibility includes inability to meet debts as they fall due, unforeseeable that this will change for next 5 years, DSA is not a viable alternative. The Insolvency Service carries out certain checks in relation to the application, notifies the creditors and sends them prescribed information, including information as to the applicant’s financial situation. The personal insolvency trustee considers any submissions from creditors and prepares a proposal for a PIA, taking into account what applicant can afford to pay but leaving him/her with sufficient income to maintain a reasonable standard of living.
Proposed repayments could provide for:
• payment of 40% of unsecured debt (credit cards, etc.)
• write down and restructure of mortgage on principal private residence (with claw-back of any uplift in property value if property sold)
• sale of buy-to-let property and repayment of shortfall reduced to same proportion as for unsecured debt (40%) over 6 years.

For worked examples of how the new debt settlement schemes (Debt Relief Certificate, Debt Settlement Arrangement and Personal Insolvency Arrangement) would work:
http://www.finance.gov.ie/documents/publications/presentation/examplesperinsolv.pdf

Monty Burnz

golfwallah wrote: »

The proposed non-judicial scheme for people unable to meet mortgage repayments does provide for write down and retention of the principal private residence.

A summary the proposed new debt settlement schemes is as follows (will not lead to "free for all", if properly managed)

Why will it not lead to a free-for-all? Where is the sting that will stop people volunteering themselves into financial difficulty (and thus debt sharing)?

Do we have a good history of properly managing things that may be subject to corruption in this country?

Do we fruit.

murphaph

Monty Burnz wrote: »

Why will it not lead to a free-for-all? Where is the sting that will stop people volunteering themselves into financial difficulty (and thus debt sharing)?

Do we have a good history of properly managing things that may be subject to corruption in this country?

Do we fruit.

Indeed. I would be extremely concerned about this scheme being taken advantage of while the ordinary decent taxpayer (mug) gets shafted yet again.

There should be absolutely no debt writedown that involves retaining the ownership of the property involved. A scheme allowing the occupier to continue in-situ as a tenant would be somewhat acceptable, but it's simply not fair to allow other struggling people to share the debt of those cheeky enough to take advantage.

moycullen14

murphaph wrote: »

Indeed. I would be extremely concerned about this scheme being taken advantage of while the ordinary decent taxpayer (mug) gets shafted yet again.

There should be absolutely no debt writedown that involves retaining the ownership of the property involved. A scheme allowing the occupier to continue in-situ as a tenant would be somewhat acceptable, but it's simply not fair to allow other struggling people to share the debt of those cheeky enough to take advantage.

Surely those that won't benefit from this are the people who had the foresight to see what was going to happen to the property market & the bubble economy. Presumably they will use the same 'sixth sense' to figure what course of action is best for them and the country in the future?

Monty Burnz

moycullen14 wrote: »

Surely those that won't benefit from this are the people who had the foresight to see what was going to happen to the property market & the bubble economy. Presumably they will use the same 'sixth sense' to figure what course of action is best for them and the country in the future?

You think it required a 'sixth sense' to notice the mass property hysteria of the bubble? Seriously?

You thought that tiny 2-bed apartments in ordinary areas of Dublin were worth half a million? You thought that made sense? :rolleyes:

moycullen14

Monty Burnz wrote: »

You think it required a 'sixth sense' to notice the mass property hysteria of the bubble? Seriously?

You thought that tiny 2-bed apartments in ordinary areas of Dublin were worth half a million? You thought that made sense? :rolleyes:

Not at all, I never bought or had any interest in 2 bed flats in Dublin so I didn't know that they were going for such money.

That said, I'm constantly amused at the number of people who crop up on these threads to say they knew twould all end in tears. 'I decided not to buy and put myself in debt servitude. I could see that it was a bubble. I'm waiting until prices are affordable yada, yada, yada'

If you're so perspicacious, tell us how the next five years are going to play out?

murphaph

moycullen14 wrote: »

If you're so perspicacious, tell us how the next five years are going to play out?

It's irrelevant.

The issue is not whether people made good or bad investments. The issue is whether or not other people should have to cover their poor investments. We've covered enough poor investments as it is.

People should be able to go bankrupt etc. but should not be able to retain ownership of their property. That's beyond the pale for those who have to pay more tax to cover it.

Monty Burnz

moycullen14 wrote: »

Not at all, I never bought or had any interest in 2 bed flats in Dublin so I didn't know that they were going for such money.

I had no interest in them either, but as I read the newspapers and think about stuff (not just accept what I'm told) then I both knew about it and thought it was ridiculous. No special sense needed - just common sense (which is admittedly rare).

moycullen14 wrote: »

That said, I'm constantly amused at the number of people who crop up on these threads to say they knew twould all end in tears. 'I decided not to buy and put myself in debt servitude. I could see that it was a bubble. I'm waiting until prices are affordable yada, yada, yada'

You are really amused, or embarrassed at how you were suckered in? Because I can point to posts I made (on other forums) predicting the crash in the years before it happened, even pointing to the credit crunch that we are seeing today.

moycullen14 wrote: »

If you're so perspicacious, tell us how the next five years are going to play out?

I can't give a confident prediction from here as we are no longer in the realm of economics, but rather the realm of politics. Economically, the crash should already have ended and the recovery begun, but this has been prevented by the scams that the government has come up with since the crash to try to prop up prices (at the expense of the taxpayer).

Most likely we will see prices slide down for another few years and then bump along the bottom for a decade, with a few 'false dawns' as prices tick up for a couple of months before resuming their downward or flat trajectory.

Perhaps you shouldn't be so sarky to people who clearly have/had a better track record on this stuff than you do, and reflect on the reasons for your own failure to understand or (apparently) even perceive one of the biggest property bubbles in human history?

moycullen14

murphaph wrote: »

It's irrelevant.

The issue is not whether people made good or bad investments. The issue is whether or not other people should have to cover their poor investments. We've covered enough poor investments as it is.

People should be able to go bankrupt etc. but should not be able to retain ownership of their property. That's beyond the pale for those who have to pay more tax to cover it.

OK, so answer me this: 2 scenarios with our friend the nurse. a) she gets to keep the property with, say, 100K knocked off the debt. This is the write-down that the bank have already taken on the property (for the sake or argument) so they're just writing off what was written down or b) She loses the house and the bank sell it but end up writing off 170K - 70K of which is a new loss for the bank.

So, is it the fact that it is costing you money or the fact that she ends up keeping the house that annoys you?

liammur

Monty Burnz wrote: »

I had no interest in them either, but as I read the newspapers and think about stuff (not just accept what I'm told) then I both knew about it and thought it was ridiculous. No special sense needed - just common sense (which is admittedly rare).

You are really amused, or embarrassed at how you were suckered in? Because I can point to posts I made (on other forums) predicting the crash in the years before it happened, even pointing to the credit crunch that we are seeing today.

I can't give a confident prediction from here as we are no longer in the realm of economics, but rather the realm of politics. Economically, the crash should already have ended and the recovery begun, but this has been prevented by the scams that the government has come up with since the crash to try to prop up prices (at the expense of the taxpayer).

Most likely we will see prices slide down for another few years and then bump along the bottom for a decade, with a few 'false dawns' as prices tick up for a couple of months before resuming their downward or flat trajectory.

Perhaps you shouldn't be so sarky to people who clearly have/had a better track record on this stuff than you do, and reflect on the reasons for your own failure to understand or (apparently) even perceive one of the biggest property bubbles in human history?

I agree it was fairly obvious that there was a bubble underway. however, I would like to see debt forgiveness for a few reasons:

The governement led and fed the property bubble, and people wanted that government like never before. We have taken over the banks in worst case scenarios type situations, so now is the time to have the worst case scenario and get people out of holes. My mortgage is paid off years ago so it doesn't affect me, but I'd like to see people in trouble cut free from debt.

golfwallah

murphaph wrote: »

Indeed. I would be extremely concerned about this scheme being taken advantage of while the ordinary decent taxpayer (mug) gets shafted yet again.

There should be absolutely no debt writedown that involves retaining the ownership of the property involved. A scheme allowing the occupier to continue in-situ as a tenant would be somewhat acceptable, but it's simply not fair to allow other struggling people to share the debt of those cheeky enough to take advantage.

A lot of people will be annoyed about the proposed new debt settlement arrangements (when finally published / passed into law) and, rightly, so. People with unsustainable debt shouldn’t have got themselves into that situation in the first place. Plus, it’s not fair on the rest of us, who have played by the rules, resisted the temptation to jump onto the debt bandwagon and were often “looked down” on by the very same people we are now being asked to bail out.

It’s just not fair, is it? But then, life’s not fair and it’s in the broader interest of the country and the economy as a whole that we try to move forward from where we are now to a better place.... whatever the risks along the way.

The debt write offs are already provided for in the banks’ accounts (i.e. we taxpayers have already paid the price and will continue to pay for many years to come). It’s time to put processes in place that will enable debtors and creditors to move forward and make the best of things from now on.

The fact that indebted people will get off (at least in part) and retain their principal private residence should be viewed as an unfortunate side effect of putting thing right for the country and economy as a whole.

The alternative of staying with the situation “as is” is even worse, i.e. people saddled with the consequences of their financial mistakes for the rest of their lives. Plus, you can’t get blood from a stone, so making arrangements whereby some portion of the debt gets repaid is better for creditors than getting nothing at all.

So letting some people “off the hook”, so to speak, is the only way forward, IMO, provided there are sufficiently resourced structures in place to insure people engage with the debt settlement arrangements in good faith and the criminal consequences of fiddling the system are rigorously enforced.

moycullen14

Monty Burnz wrote: »

I had no interest in them either, but as I read the newspapers and think about stuff (not just accept what I'm told) then I both knew about it and thought it was ridiculous. No special sense needed - just common sense (which is admittedly rare).

You are really amused, or embarrassed at how you were suckered in? Because I can point to posts I made (on other forums) predicting the crash in the years before it happened, even pointing to the credit crunch that we are seeing today.

I can't give a confident prediction from here as we are no longer in the realm of economics, but rather the realm of politics. Economically, the crash should already have ended and the recovery begun, but this has been prevented by the scams that the government has come up with since the crash to try to prop up prices (at the expense of the taxpayer).

Most likely we will see prices slide down for another few years and then bump along the bottom for a decade, with a few 'false dawns' as prices tick up for a couple of months before resuming their downward or flat trajectory.

Perhaps you shouldn't be so sarky to people who clearly have/had a better track record on this stuff than you do, and reflect on the reasons for your own failure to understand or (apparently) even perceive one of the biggest property bubbles in human history?

You are assuming that I have been suckered in? Why, is it not possible for someone to take an objective, unbiased view on this mess, without trying to validate their past decisions?

I think Morgan Kelly did a study on 20+ bubbles (most of them property) and they all seem to follow the same path. Tell me, if the taxonomy of a bubble is so well know, why is there ever another one? Surely (sorry for calling you that), people will see it and react accordingly? I'll tell you why, it's because a bubble isn't a bubble until it bursts. It's the bursting that makes it a bubble.

What I dislike is hubris & cant - both of which are present in abundance - on every discussion about what to do with mortgage debt.

I know it's going to really incense people but there is a vast swathe or mortgage debt in this country that will NEVER be paid off. Thanks to our great leaders, this will fall squarely on the taxpayer's shoulders.

Oh, and by the way, the property bubble was politics too, not economics.

murphaph

moycullen14 wrote: »

So, is it the fact that it is costing you money or the fact that she ends up keeping the house that annoys you?

Being honest it's the fact that she gets to keep the property moreso.

No lessons will be learned if people can default on their insane mortgages with no real repercussions. It'll lead straight to another fake boom, mark my words.

Monty Burnz

moycullen14 wrote: »

You are assuming that I have been suckered in? Why, is it not possible for someone to take an objective, unbiased view on this mess, without trying to validate their past decisions?

I think Morgan Kelly did a study on 20+ bubbles (most of them property) and they all seem to follow the same path. Tell me, if the taxonomy of a bubble is so well know, why is there ever another one? Surely (sorry for calling you that), people will see it and react accordingly? I'll tell you why, it's because a bubble isn't a bubble until it bursts. It's the bursting that makes it a bubble.

There are repeated bubbles because of human nature - fear and greed. There's a bubble underway right now in New Zealand, and probably in Australia too. If you go to the forums their you see the exact same conversation between the bubble-believers (the majority) and those who know what is going on. It's eerie. Are you telling me that in a year or two, when those bubbles burst, that no bubble existed today as I tell you this?

moycullen14 wrote: »

What I dislike is hubris & cant - both of which are present in abundance - on every discussion about what to do with mortgage debt.

And I dislike being told that 'nobody knew it was a bubble' and 'nobody foresaw it' and 'you were just lucky' after I spent years making myself unpopular with friends and colleagues banging the drum about the bubble to try to save them heartache. Sometimes you have to accept that you got caught up in the delusion, and that others didn't.

moycullen14 wrote: »

I know it's going to really incense people but there is a vast swathe or mortgage debt in this country that will NEVER be paid off. Thanks to our great leaders, this will fall squarely on the taxpayer's shoulders.

I agree entirely - but the amount that falls on the taxpayer should be as small as possible, and every effort must be made to ensure that those who made poor decisions do not benefit from them. Surrender the house, and we'll see what we can do about the extra debt - that seems reasonable.

moycullen14 wrote: »

Oh, and by the way, the property bubble was politics too, not economics.

There was certainly a political element as FFail rode and stoked the bubble euphoria and did nothing to quell it, but the sight of deluded people scrambling to out-borrow and outbid each other due to fear and greed was classic economics.

From Australia today: http://australianpropertyforum.com/topic/9525194/1/

http://www.peet.com.au/freecar/

For a limited time Peet are offering a FREE Toyota Yaris, Corolla, Rav4, Kluger or Prado with selected blocks* across a variety of Peet's quality communities. Simply click on one of the estates on the map to choose your ideal community.


This is exactly the same word for word garbage spluttered out at the end of the Irish boom. Developers really just throwing marble tables, cars, boats full packages I wouldn't be surprised if others follow suit and the cars turn into jet skis and bmw's by the time it's through.

From Ireland 2007: http://www.breakingnews.ie/ireland/mhcwcwgbkfau/

Meadowcraft Developments is offering a car or home fittings worth €20,000 to the first three buyers who snap up houses at a development in Wexford town.

The Irish Auctioneers and Valuers Institute (IAVI) said incentives from developers are becoming more common, and follow a 2% drop in house prices in the first half of the year.

liammur

golfwallah wrote: »

The debt write offs are already provided for in the banks’ accounts (i.e. we taxpayers have already paid the price and will continue to pay for many years to come). It’s time to put processes in place that will enable debtors and creditors to move forward and make the best of things from now on.


So letting some people “off the hook”, so to speak, is the only way forward, IMO, provided there are sufficiently resourced structures in place to insure people engage with the debt settlement arrangements in good faith and the criminal consequences of fiddling the system are rigorously enforced.

Correct. Also the taxpayer has paid far more for commercial loans, this is where the bulk of the money went...Anglo's 30 odd bln and AIB's 20bln.

golfwallah

I’m afraid ignoring evidence and warnings of impending doom is part of the human condition – there are plenty of examples out there.

This applies to the economy as much as to any other sphere of activity.

The reality is that immediate priorities of day to day living just take over and fixing systemic problems, like a property bubble funding government spending, just takes too much time ..... and there are no votes or short-term profits in it. The Germans seem to have learned how to achieve general public consensus on managing their political economic systems. But then, they experienced 2 World Wars, hyperinflation and massive re-building of the entire country as part of their general education.

Just look at the air transport industry, with lots of examples of disasters that could have been avoided but are only now fixed ..... after the disasters took place. Sea transport has as many examples ... the Herald of Free Enterprise going to sea with bow doors open, insufficient lifeboats on the Titanic, etc. The big difference is that such disasters bring about official enquiries and trying to hold at least some people to account.

As for blaming FF on everything, and some senior people in FF Governments do have cases to answer ...... always good to be able to blame someone, even if all the opposition during the bubble were calling for even more spending at the time.

It’s time for people to adopt a more mature approach to the political / economic system, become a bit more engaged with what is going on .... rather than leaving everything to “them” (i.e. the politicians or foreign creditors). I guess we all like to have a moan, blame others on our misfortunes .... but then it’s easier to be a pundit than to engage in any meaningful way with boring processes like politics!!

moycullen14

Rojomcdojo wrote: »

From Australia today: http://australianpropertyforum.com/topic/9525194/1/




From Ireland 2007: http://www.breakingnews.ie/ireland/mhcwcwgbkfau/

I wonder is the car or the fixtures and fittings worth more than the house today?:D

liammur

golfwallah wrote: »

As for blaming FF on everything, and some senior people in FF Governments do have cases to answer ...... always good to be able to blame someone, even if all the opposition during the bubble were calling for even more spending at the time.

It’s time for people to adopt a more mature approach to the political / economic system, become a bit more engaged with what is going on .... rather than leaving everything to “them” (i.e. the politicians or foreign creditors). I guess we all like to have a moan, blame others on our misfortunes .... but then it’s easier to be a pundit than to engage in any meaningful way with boring processes like politics!!

This isn't entirely true. FF have to take 100% blame. When the likes of Dempsey was calling €5m loose change, everyone should have known we had complete muppetts in charge.
At least the opposition were calling for the PS to be reformed.

creedp

liammur wrote: »

This isn't entirely true. FF have to take 100% blame. When the likes of Dempsey was calling €5m loose change, everyone should have known we had complete muppetts in charge.
At least the opposition were calling for the PS to be reformed.

What has "at least the opposition were for the PS to be reformed" got to do with writing off mortgage debt? The current Govt were calling for measures to support the property market to try and extend the bubble while they were comfortable in opposition. Not sure if they are any whiter that FF in this context. But sure I suppose all sins are forgiven since they called for PS reform!

liammur

creedp wrote: »

What has "at least the opposition were for the PS to be reformed" got to do with writing off mortgage debt? The current Govt were calling for measures to support the property market to try and extend the bubble while they were comfortable in opposition. Not sure if they are any whiter that FF in this context. But sure I suppose all sins are forgiven since they called for PS reform!

They were able to see that the PS benchmarking etc was a further threat to the economy. You cannot say they were wrong, can you?.
Therefore even in opposition they were vastly superior to FF.

Monty Burnz

Here's an article that's a great example of the sort of routine bias you see in the media:

Cost of keeping roof over your head soars by €138 a week
That's before you buy food and clothes

THE average cost of keeping a roof over your head has soared from €275 to more than €400 a week since the boom -- due mainly to larger and more expensive mortgages.

That means couples now have to find €21,466 a year after tax, or an extra €138 a week, before they buy food or clothes.

The increase is five times higher than inflation and highlights the burden on families who have taken on mortgages since 2006. In many cases, couples are paying these higher bills on incomes cut by redundancy and higher taxes.

The figures were compiled by the Irish Independent based on data made available by the Central Statistics Office (CSO). While mortgages remain the single biggest element of increased expense, they also reflect stiff increases in the cost of home heating oil, gas and electricity, telephone, maintenance and repair, and insurance.

Recent increases in variable mortgage repayments have also added considerably to the burden on householders.

Interesting stuff, isn't it? Getting more expensive to put a roof over your head.

Read the whole article: they manage to write the whole thing without ONCE mentioning the word 'rent'. Renters are non-people.

creedp

Monty Burnz wrote: »

Here's an article that's a great example of the sort of routine bias you see in the media:



Interesting stuff, isn't it? Getting more expensive to put a roof over your head.

Read the whole article: they manage to write the whole thing without ONCE mentioning the word 'rent'. Renters are non-people.

This may be becasue rent has reduced over the same time period making it much easier financially for renters to keep a roof over their heads and under time honoured Irish journalistic principles, unless there is something sensational to say there is nothing to say!

Monty Burnz

creedp wrote: »

This may be becasue rent has reduced over the same time period making it much easier financially for renters to keep a roof over their heads and under time honoured Irish journalistic principles, unless there is something sensational to say there is nothing to say!

Regardless of whether it was more or less expensive, you would think that it would merit some mention in an article about how much it costs 'to keep a roof over your head'. But no, not a sausage. Second class citizens.

creedp

Monty Burnz wrote: »

Regardless of whether it was more or less expensive, you would think that it would merit some mention in an article about how much it costs 'to keep a roof over your head'. But no, not a sausage. Second class citizens.

One of the reasons why we are where we are ... the media ..

golfwallah

liammur wrote: »

They were able to see that the PS benchmarking etc was a further threat to the economy. You cannot say they were wrong, can you?.
Therefore even in opposition they were vastly superior to FF.

Calling for Public Sector reform in opposition and delivering on it in Government are 2 different things.

Accepted, some progress has been made ... but mostly on the low hanging fruit so far.

There is still a long way to go towards reducing public spending, of which public service pay is a very high percentage.

It's getting time to stop diverting attention with the blame game and get on with delivering on reducing Government spending / PS costs to more manageable levels.

I hope for all our sakes that Government succeeds in achieving their targets but the jury is still out in that regard right now.

buddhababe

I have been wondering about this debt forgiveness thing... can anyone advise me.... bought hse for 192k in 2005 ... Took out 60k top up in 07 .... At present I owe 212k to ebs and 50 to credit union.... have 4k credit card .... I have never missed a payment on mortgage or cu but I have nothing to live on... after debts are met I have 30 euro a week.... my husband covers household bills.... he also pays 120 a week on loans... we just had baby and are really really struggling.... so will they forgive the mortgages only in arrears or Wud they look at the whole picture?? Do I stop paying mortgage!?!

Monty Burnz

buddhababe wrote: »

I have been wondering about this debt forgiveness thing... can anyone advise me.... bought hse for 192k in 2005 ... Took out 60k top up in 07 .... At present I owe 212k to ebs and 50 to credit union.... have 4k credit card .... I have never missed a payment on mortgage or cu but I have nothing to live on... after debts are met I have 30 euro a week.... my husband covers household bills.... he also pays 120 a week on loans... we just had baby and are really really struggling.... so will they forgive the mortgages only in arrears or Wud they look at the whole picture?? Do I stop paying mortgage!?!

'Struggling' is not the same as 'unable to pay'. My parents struggled to buy their house back in the 70s, furnished it one piece of furniture at a time, got extra work in the evenings etc. etc.

I wonder is anyone in government looking at this and seeing the can of worms that has been opened?

And I wonder are certain posters - who disagreed that the number of strugglers (and thus the cost to the taxpayer) was flexible depending on how we deal with this issue - still following the thread?

I hope you get through this sticky patch Buddhababe - life isn't always a bed of roses, as my parents could tell you! Don't be fooled into thinking that the Celtic Bubble was representative of how easy life usually is...

liammur

golfwallah wrote: »

Calling for Public Sector reform in opposition and delivering on it in Government are 2 different things.

Accepted, some progress has been made ... but mostly on the low hanging fruit so far.

There is still a long way to go towards reducing public spending, of which public service pay is a very high percentage.

It's getting time to stop diverting attention with the blame game and get on with delivering on reducing Government spending / PS costs to more manageable levels.

I hope for all our sakes that Government succeeds in achieving their targets but the jury is still out in that regard right now.

Yes, but the fact that they wanted reform was a big positive. Many PS workers got caught in the property trap after they were given unsustainable wages. I believe the FF government strategically rose PS pay to unsustainable levels to further fuel the property boom.

liammur

buddhababe wrote: »

I have been wondering about this debt forgiveness thing... can anyone advise me.... bought hse for 192k in 2005 ... Took out 60k top up in 07 .... At present I owe 212k to ebs and 50 to credit union.... have 4k credit card .... I have never missed a payment on mortgage or cu but I have nothing to live on... after debts are met I have 30 euro a week.... my husband covers household bills.... he also pays 120 a week on loans... we just had baby and are really really struggling.... so will they forgive the mortgages only in arrears or Wud they look at the whole picture?? Do I stop paying mortgage!?!

I would advise you to contact New Beginnings. Paying massive debts now is just silly, plain and simple. The banks' books have been written down for the likes of you, I would be giving back the keys if I were trapped in serious neg equity

Monty Burnz

liammur wrote: »

I would advise you to contact New Beginnings. Paying massive debts now is just silly, plain and simple. The banks' books have been written down for the likes of you, I would be giving back the keys if I were trapped in serious neg equity

I'd disagree with you there Liam - the banks have been recapitalised to cover expected defaults of people who simply can't pay (due to unemployment or whatever). They haven't been recapitalised to the extent that people who are just finding money a bit tight can voluntarily abandon their debts. It seems that Buddhababe is just finding money tight but is able to meet her obligations.

If we start sharing the debts of everybody, we are looking at another round of bank recapitalisations paid for by our taxes and those of our children and grandchildren. And every extra euro spent on this is a euro that can't be spent on hospitals, schools or law and order.

liammur

Monty Burnz wrote: »

I'd disagree with you there Liam - the banks have been recapitalised to cover expected defaults of people who simply can't pay (due to unemployment or whatever). They haven't been recapitalised to the extent that people who are just finding money a bit tight can voluntarily abandon their debts. It seems that Buddhababe is just finding money tight but is able to meet her obligations.

If we start sharing the debts of everybody, we are looking at another round of bank recapitalisations paid for by our taxes and those of our children and grandchildren. And every extra euro spent on this is a euro that can't be spent on hospitals, schools or law and order.

That is true, but the central bank today claim house prices are undervalued by 26%. So handing back keys is a gamble for both parties. I think it's ridiculous holding people to big mortgages against their wishes. There is no money in the economy as a result.

buddhababe

buddhababe wrote: »

I have been wondering about this debt forgiveness thing... can anyone advise me.... bought hse for 192k in 2005 ... Took out 60k top up in 07 .... At present I owe 212k to ebs and 50 to credit union.... have 4k credit card .... I have never missed a payment on mortgage or cu but I have nothing to live on... after debts are met I have 30 euro a week.... my husband covers household bills.... he also pays 120 a week on loans... we just had baby and are really really struggling.... so will they forgive the mortgages only in arrears or Wud they look at the whole picture?? Do I stop paying mortgage!?!

we're fcuked, lads.

:pac:

Monty Burnz

liammur wrote: »

That is true, but the central bank today claim house prices are undervalued by 26%.

They are talking out of their asses, as they did throughout the bubble. For informed discussion, have a look here.

liammur wrote: »

So handing back keys is a gamble for both parties. I think it's ridiculous holding people to big mortgages against their wishes. There is no money in the economy as a result.

But it's a zero-sum game - you have to take money out of the economy to pay the debts that these people are leaving behind anyway. There will be no new money in the economy!

liammur

Monty Burnz wrote: »

They are talking out of their asses, as they did throughout the bubble. For informed discussion, have a look here.

But it's a zero-sum game - you have to take money out of the economy to pay the debts that these people are leaving behind anyway. There will be no new money in the economy!

You make good arguments. Central bank can't have it everyway, on the one hand they forced banks to meet very stringent stress tests with a property price collapse, now they are saying prices could shoot up.

It's this type of scenario that tricked many people, hence I favour the U.S situation where the individual can hand back the property.

liammur

liammur wrote: »

You make good arguments. Central bank can't have it everyway, on the one hand they forced banks to meet very stringent stress tests with a property price collapse, now they are saying prices could shoot up.

It's this type of scenario that tricked many people, hence I favour the U.S situation where the individual can hand back the property.

But how exactly does one hand back a "60k topup"? Or what happens there?

liammur

Rojomcdojo wrote: »

But how exactly does one hand back a "60k topup"? Or what happens there?

The bank would take the hit. The only people who seem to have lost in the banks are the shareholders. Time for others to lose as well, and if need be, let a bank fail.

liammur

liammur wrote: »

The bank would take the hit. The only people who seem to have lost in the banks are the shareholders. Time for others to lose as well, and if need be, let a bank fail.

And what is "The bank would take the hit." code for?

liammur

Rojomcdojo wrote: »

And what is "The bank would take the hit." code for?

bondholders

Monty Burnz

liammur wrote: »

The bank would take the hit. The only people who seem to have lost in the banks are the shareholders. Time for others to lose as well, and if need be, let a bank fail.

Who?

I agree re. letting the banks fail, but it's an article of faith with Irish politicians that this would be a total disaster.

Edit: Ah - the bondholders. Unfortunately they only get hit after the shareholders (the taxpayer) are wiped out. And I don't know if there are any bondholders left! The banks are now funder largely by the ECB - the same guys (more or less) who are funding our budget deficit...

liammur

liammur wrote: »

bondholders

Taxpayers, you mean?