Writing off mortgage debt

bbam

golfwallah wrote: »

I agree that dealing with the unsold / unfinished housing in villages needs to be addressed, but this is really off-thread to the mortgage arrears issue.

The growth in mortgage arrears points to an element of “strategic arrears” by people anticipating of some form of debt forgiveness. It appears to me that the banks have allowed this situation to develop and not done enough to correct it. This poses the risk of additional write downs that will ultimately fall on the taxpayer - that's the bit I don't like.

It is obvious from last Friday’s Irish Times interview with Fiona Muldoon, Director of credit institutions and insurance supervision at the Central Bank, that the Central Bank is far from happy with how the Banks have been dealing (or more failing to deal) with the mortgage arrears issue.

She said there would be “very robust conversations” with the banks about their responsibility to manage their own mortgage arrears problem. It wasn’t up to the Central Bank to do this for them by creating a “shop” of solutions and set up systems to deal with each type of borrower.

It is reported that the Central Bank has directed the banks to identify borrowers who cannot repay their mortgages and to develop new products such as split or trade-down mortgages for borrowers who cannot afford to repay loans in full and to repossess properties in the worst cases.

It seems the banks have been too busy dealing with other things – ah, sure why bother, won’t the taxpayer, the Germans or whoever pick up the tab if they don’t do their job? No wonder they went bust and had to be rescued by the state.

For links to reports see previous post #390 on previous page.

Surely the growth in those falling into arrears could just signal an increase in those who just can no longer make ends meet.

I think while there may be some level of strategic default the banks are quite happy to demonise anyone who they can as it lessens the appetite to deal with the real problem of toxic mortgages.
This is a legessy that will hamper any recovery in local economies, with ever lowering wages, increasing costs of living, increasing taxes people are genuinely just running out of money and then it's easy to loose interest in paying for a hugely overvalued poorly built houses.

Monty Burnz

bbam wrote: »

Surely the growth in those falling into arrears could just signal an increase in those who just can no longer make ends meet.

I think while there may be some level of strategic default the banks are quite happy to demonise anyone who they can as it lessens the appetite to deal with the real problem of toxic mortgages.

Nonsense, I would suggest - the banks would rather pretend that all the non-payers are hard-luck cases. That way they can avoid any repossessions (bad PR, driving prices down in the short term etc.) and can simply turn up at the government's doorstep again in a year or two and demand another few billion each in recapitalisation money.

BFDCH.

meglome wrote: »

It's a disgrace when you go around Ireland to see the number of houses that were built in small villages. The only option will be to pull them down.

or send the homeless down there...or those requiring housing and not in employment

BFDCH.

bbam wrote: »

Surely the growth in those falling into arrears could just signal an increase in those who just can no longer make ends meet.

I think while there may be some level of strategic default the banks are quite happy to demonise anyone who they can as it lessens the appetite to deal with the real problem of toxic mortgages.
This is a legessy that will hamper any recovery in local economies, with ever lowering wages, increasing costs of living, increasing taxes people are genuinely just running out of money and then it's easy to loose interest in paying for a hugely overvalued poorly built houses.

should those people not just move out into something they can afford then?

bbam

Nonsense maybe but tha banks and the government and the people of the country need at some stage to face the fact that there are too many mortgages out there that just shouldn't have been created.
If these are not dealt with the country will languish on and no real recovery will happen. It is a collective responsibility in this problem.

The government let developers create huge badly planned estates and then encouraged people to get into the property ladder before they were priced out of the market.

The banks lent money to people who didn't have an income to support the repayments or they arranged hugely inflated valuations of property in order to borrow more against it.

People signed up to payments they couldn't meet long term. They believed the hype that was spun to them about the longevity of the boom and the need to have property, even if it was a one bedroom appt in Leitrim.

This crisis is a collective one and heaping all expectations to pay for it on toxic mortgage holders is just crazy and isn't going to work.

BFDCH.

bbam wrote: »

Nonsense maybe but tha banks and the government and the people of the country need at some stage to face the fact that there are too many mortgages out there that just shouldn't have been created.
If these are not dealt with the country will languish on and no real recovery will happen. It is a collective responsibility in this problem.

The government let developers create huge badly planned estates and then encouraged people to get into the property ladder before they were priced out of the market.

The banks lent money to people who didn't have an income to support the repayments or they arranged hugely inflated valuations of property in order to borrow more against it.

People signed up to payments they couldn't meet long term. They believed the hype that was spun to them about the longevity of the boom and the need to have property, even if it was a one bedroom appt in Leitrim.

This crisis is a collective one and heaping all expectations to pay for it on toxic mortgage holders is just crazy and isn't going to work.

I bought a house during the boom, I’ve since sold it. I made a massive loss and now live in something I can afford. Why, as a tax payer, should I be expected to pay for someone else to live in a house they probably shouldn't of bought and cannot afford to keep? It's between the banks and the mortgage holders to sort out. No one else they were all adults.

as for the mismanagement of the country and bad advice from politicians in cahoots with developers, I would suggest punishing them rather than people who had nothing to do with it.

bbam

BFDCH. wrote: »

I bought a house during the boom, I’ve since sold it. I made a massive loss and now live in something I can afford. Why, as a tax payer, should I be expected to pay for someone else to live in a house they probably shouldn't of bought and cannot afford to keep? It's between the banks and the mortgage holders to sort out. No one else they were all adults.

as for the mismanagement of the country and bad advice from politicians in cahoots with developers, I would suggest punishing them rather than people who had nothing to do with it.

Indeed but the banks are going to have to right down huge chunks of their mortgage books as the value was fictional And didn't really exist in te first place.
It's happening already but needs to become more wholesale to fix the market.

And yes it will drive some of the banks to ask for more recapitalization. This is where the collective responsibility comes in.

If people want a recovery in the next ten years then it needs to be sorted. Otherwise a whole chunk of society will have no disposable income and no internal domestic recovery can happen. I know the notion of helping those who are in hard times is unpalatable to many, but it will have to happen, sooner or later.

Otherwise our children will grow up and see that nothing was done to create a recovery.

Monty Burnz

bbam wrote: »

Nonsense maybe but tha banks and the government and the people of the country need at some stage to face the fact that there are too many mortgages out there that just shouldn't have been created.

This is why we need bankruptcy reform in a hurry. You asked for a mortgage that you can't repay, so you declare bankruptcy, give up your valuable assets (house, car over a certain threshold value, etc) and live modestly for a few years. Then the debt is 'forgiven' (or more likely shared amongst us taxpayers now that we own most banks) and you start with a clean sheet.

What I can't abide is this notion that you get let off a huge amount of debt and keep the sh!t you outbid other people for with the borrowed money. That's an outrage.

swampgas

bbam wrote: »

Indeed but the banks are going to have to write down huge chunks of their mortgage books as the value was fictional. And didn't really exist in the first place.

Not quite - the value of the asset may have been misjudged, but the value of the loan hasn't changed. If the bank lent you €250,000, you owe €250,000.

If the property you bought has dropped in value since, that's negative equity, and a separate if related issue. It has no direct bearing on what someone owes, it only affects their ability to repay the mortgage quickly by selling the property.

I know this being a bit nit-picky, but it's important to realise that a bank has no obligation to write down debt just because an asset bought with that debt has changed in value.

BFDCH.

bbam wrote: »

Indeed but the banks are going to have to right down huge chunks of their mortgage books as the value was fictional And didn't really exist in te first place.
It's happening already but needs to become more wholesale to fix the market.

And yes it will drive some of the banks to ask for more recapitalization. This is where the collective responsibility comes in.

If people want a recovery in the next ten years then it needs to be sorted. Otherwise a whole chunk of society will have no disposable income and no internal domestic recovery can happen. I know the notion of helping those who are in hard times is unpalatable to many, but it will have to happen, sooner or later.

Otherwise our children will grow up and see that nothing was done to create a recovery.

why can those in trouble not sell up and buy something they can afford? why does someone else have to pay for them to stay in there?

If anyone should pay for them to continue living in the house it's the banks who took the risk in lending to them in the first place. Everybody (most people) want to help out where they can, but subsidising a stranger to live in a house he shouldn't be in, while simultaneously maintaining unnaturally high house prices is not my idea of a fair solution.

moycullen14

It's too complicated for a one size fits all solution. Debt management options are determined by the value of the underlying security AND the capability of the debt holder to service the debt.

Much and all as it pains me to admit it, the solution to this crisis has to be done on a case-by-case basis, and the best people to do this are the banks. The solutions have to be private or at least shielded form public scrutiny because they will differ from person to person and hand wringing about things being 'fair' and the need for an equitable solution will mean that nothing ever gets done - and that's exactly where we are at the moment!

If person A is in negative equity (and this matters because it affects his ability to sell the asset) and cannot pay and person B is in the same negative equity but can pay, they MUST be treated differently, it is the only practical solution. Trying to come up with a strategy that treats them the same will only mean that nothing gets done - Why? because there is NO common solution.

Also, right or wrong, there are a bucketload of property related debts out there that will NEVER be paid, they will be written off. If this offends people's sensitivities, then tough. Them's the breaks. One way or the other, the tax payer pays because they own the banks, the banks can't go bust and the banks can't be repaid by the debtors.

The moral hazard argument doesn't come into it, and even if it did, would it be better for someone to have debt written off and a carpet-bagger to benefit or to have the debtor benefit?

Anyway, it is happening - debt write-off/restructuring - but it is being done quietly and will continue to happen because it is the only sensible thing to do.

bbam

Fine.
But huge wright downs are already out there but just being kept quiet via the lender insisting on non disclosure documents being signed. The cases where it doesnt suit the bank for them to become public are being dealt with by this method.
I have a family member workin in AIB and up to €100k wright downs are happening provided the borrower retains a fair ammount of a mortgage going forward and doesn't fall into arrears.
Wake up folks, this is happening, I'm just suggesting a structure to it rather than just what suits the banks to do.

golfwallah

bbam wrote: »

Fine.
But huge wright downs are already out there but just being kept quiet via the lender insisting on non disclosure documents being signed. The cases where it doesnt suit the bank for them to become public are being dealt with by this method.
I have a family member workin in AIB and up to €100k wright downs are happening provided the borrower retains a fair ammount of a mortgage going forward and doesn't fall into arrears.
Wake up folks, this is happening, I'm just suggesting a structure to it rather than just what suits the banks to do.

To keep as many people as possible in their homes, minimise the cost to the state, avoid inappropriate mortgage holder behaviour, etc., a number of approaches, such as mortgage to rent, split mortgages, trade-down mortgages, sale by agreement are outlined in Inter-Departmental Mortgage Arrears Working Group report, published as long ago as September 2011: (http://www.finance.gov.ie/documents/publications/reports/2011/mortgagearr2.pdf) .

The banks seem to have been dragging their feet on implementing the recommendations in this report (on a widely known basis) and now the newly appointed Central Bank Director responsible, Fiona Muldoon, has been urging them to get on with the job.

Irish Times report of 8th June last reported that the Central Bank has directed the banks to identify borrowers who cannot repay their mortgages and to develop new products such as split mortgages or trade-down mortgages for borrowers who cannot afford to repay loans in full and to repossess properties in the worst cases.

Interesting to hear acecdotal reports that “up to €100k write downs are happening provided the borrower retains a fair amount of a mortgage going forward and doesn't fall into arrears”, which looks to me like one of the solutions in the above mentioned report, but being done under cover of “non disclosure” agreements. Ah, but maybe they're just "testing the water".;)

Monty Burnz

golfwallah wrote: »

To keep as many people as possible in their homes

These properties are no more their 'homes' than the properties that renters live in - yet nobody is falling over themselves to keep renters in properties that they can't afford anymore. Why not?

golfwallah

Monty Burnz wrote: »

These properties are no more their 'homes' than the properties that renters live in - yet nobody is falling over themselves to keep renters in properties that they can't afford anymore. Why not?

Hey, I'm only quoting what's in the Inter-Departmental Mortgage Arrears Working Group report published last September.

But this report remains just a report and the bill for the taxpayer grows until resources are put in place to do something about it.

Hence, I have also provided an update on the follow-up by the Central Bank, through Fiona Muldoon.

Hope she gets the banks to become more pro-active with regard to reducing arrears.

MysticalRain

bbam wrote: »

Fine.
But huge wright downs are already out there but just being kept quiet via the lender insisting on non disclosure documents being signed. The cases where it doesnt suit the bank for them to become public are being dealt with by this method.
I have a family member workin in AIB and up to €100k wright downs are happening provided the borrower retains a fair ammount of a mortgage going forward and doesn't fall into arrears.
Wake up folks, this is happening, I'm just suggesting a structure to it rather than just what suits the banks to do.

The truth of the matter is that there are a bunch of cute hoors here who are making this out to be a far bigger problem than it actually is because it suits their own vested interests to do so.

It can't be such a "huge problem" if only 15% of mortgage holders are either in arrears or have been restructured (a few tens of thousands of people at most). 85% of people are managing to pay their mortgages. I would be willing to bet that if the "won't pay crowd" were excluded, the real number would be closer to 10%.

If someone can't or won't pay their mortgage, I would be happy for the bank to reposess it and sell it cheaply to renters.

golfwallah

MysticalRain wrote: »

The truth of the matter is that there are a bunch of cute hoors here who are making this out to be a far bigger problem than it actually is because it suits their own vested interests to do so.

It can't be such a "huge problem" if only 15% of mortgage holders are either in arrears or have been restructured (a few tens of thousands of people at most). 85% of people are managing to pay their mortgages. I would be willing to bet that if the "won't pay crowd" were excluded, the real number would be closer to 10%.

If someone can't or won't pay their mortgage, I would be happy for the bank to reposess it and sell it cheaply to renters.

I guess that that’s why the abovementioned Mortgage Arrears report on Dept. of Finance site points out that each one of the suggested solutions will have consequences for the mortgage holder in arrears (up to and including loss of their homes) and that there will be no blanket “debt forgiveness” scheme (http://www.finance.gov.ie/documents/publications/reports/2011/mortgagearr2.pdf).

The report also describes the scale of the problem (as of last September, but this has grown a lot since then) and the broad challenges underpinning the group’s analysis:

• To keep people in their homes, where appropriate
• To avoid inappropriate mortgage holder behaviour thereby compounding the arrears problem
• To reduce the burden on home owners facing debt servicing difficulties
• To reduce the drag on the economy from a significant cohort of over-indebted people whose spending is constrained by mortgage debt obligations
• To strengthen and provide transparency on the loan portfolios of mortgage lenders
• To facilitate market funding of mortgage asset portfolios
• To minimise the cost to the State and to target scarce State resources for maximum efficiency

Looks to me like:
• The main part of the analysis phase on this issue has been over since September 2011.
• It has been well politicised and the next phase is implementation.
• That’s precisely the job Fiona Moloney of the Central Bank has been appointed to oversee and is now urging banks to take and continue to take the detailed actions needed for implementation (i.e. to find the “real bottom”).
• Reading the Irish Times article, the Central Bank has been resourced to ensure the banks carry out their responsibilities in this regard. Let’s hope this works.

bbam

Definitely the wont pay need to be identified and brought to rights, it would be hard going to identify these genuinely.
After that it needs to be looked at to see if te banks behaved appropriately. There are many many instances where the bank screwed round the numbers to give out mortgages where they shouldn't have. I wouldn't agree with evictions in these cases and a system of right downs would be appropriate rather than it just happen at the banks discression. Like it or not the state have responsibility as there was effectively no regulation or control of banking.
In the remainder of cases we definitely need a system in place where swift solutions are out in place. I'm not adverse to solutions that see families stay in the houses and the banks/state/nama retain part ownership.

Monty Burnz

bbam wrote: »

Definitely the wont pay need to be identified and brought to rights, it would be hard going to identify these genuinely.

Easy - don't incentivise people to lie by letting them stay in for years in property they are not paying for.

creedp

Monty Burnz wrote: »

These properties are no more their 'homes' than the properties that renters live in - yet nobody is falling over themselves to keep renters in properties that they can't afford anymore. Why not?

Renters have benefited from this property based recession as rents have fallen while mortgages have gone up. Some people are hell bent on getting people thrown out of their homes so that others can benefit from the carnage .. in nature these could be described as vultures. In my view if someone has genuinely fallen on hard times I see nothing wrong will trying to assist them during this period. However, where people are pulling the p1ss to see what they can get out of it for themselves they should be dealt with without delay and therefore remove the perverse incentive now building up in the system. There will always be those who like to make a fast buck at the expense of their neighbour and the problem in the media at the moment is the constant use of the words 'all' and 'everybody'. Those who wish to take advantage of others can hide behind 'everybody is sufferring', 'everybody has taken pay-cuts', etc, etc. Its time to sort out who needs help and help them and move on!

Maura74

I remember the propety crash in UK late eighties. When an owner of a mortgage could repay it the loan and handed back the keys to the bank, when the bank sold the property at a loss the owner of the property was still responsible for that loss made by the bank, not sure if it was 12 or 15 years, I expect it like that in Ireland.

bbam

Monty Burnz wrote: »

Easy - don't incentivise people to lie by letting them stay in for years in property they are not paying for.

No it's not "Easy".
The attitude where you can just put a stroke of a pen through a whole list of mortgage holders is what is wrong. Cases need to be looked at to see te circumstances. I'd say that there are very few who have just been sitting there for years without paying. Someone said earlier that a "one size fits all solution" won't work and they were right.

We can't stick our head in the sand and pretend this problem will go away without action. Equally we just can't throw whole groups of people out on the street without reviewing their situations.
If the situation warranted it I think a part right down and continuance to pay the balance would be a good aide to the toxic mortgage solution.

Monty Burnz

creedp wrote: »

Renters have benefited from this property based recession as rents have fallen while mortgages have gone up.

Not true at all. Mortgage interest rates are still low, while those on trackers are paying virtually no interest at all. Rents dipped by a few percent a couple of years ago but are largely the same as they were during the bubble.

But that has nothing to do with my point: if a person earning good money and renting a nice penthouse in D4 loses his job, why isn't he or she allowed to stay in it for a few years rent free? Where is that campaign?

creedp wrote: »

Some people are hell bent on getting people thrown out of their homes so that others can benefit from the carnage .. in nature these could be described as vultures.

And some people are determined to hold on to property they are not paying for. In nature, those people are called 'freeloaders' or 'thieves'.

creedp wrote: »

In my view if someone has genuinely fallen on hard times I see nothing wrong will trying to assist them during this period. However, where people are pulling the p1ss to see what they can get out of it for themselves they should be dealt with without delay and therefore remove the perverse incentive now building up in the system.

I think the state paying for your mortgage interest for a year certainly constitutes 'assistance'. But you can't let people stay indefinitely in property they are not paying for - and you can't also be surprised when other people see people living rent and mortgage free and decide to join in (moral hazard, remember all the warnings?)

creedp wrote: »

There will always be those who like to make a fast buck at the expense of their neighbour and the problem in the media at the moment is the constant use of the words 'all' and 'everybody'. Those who wish to take advantage of others can hide behind 'everybody is sufferring', 'everybody has taken pay-cuts', etc, etc. Its time to sort out who needs help and help them and move on!

Of course I agree with this - the difference is that I have proposed a way of doing this, while you haven't. If you have a better idea that is workable and fair, please share it.

Monty Burnz

bbam wrote: »

No it's not "Easy".
The attitude where you can just put a stroke of a pen through a whole list of mortgage holders is what is wrong. Cases need to be looked at to see te circumstances.

And rely on people just telling the truth? Who is to look into these 'circumstances'? Who will these people be working for? What powers of investigation/discovery will they have?

bbam wrote: »

I'd say that there are very few who have just been sitting there for years without paying. Someone said earlier that a "one size fits all solution" won't work and they were right.

I'd say there's a large contingent who are doing this. And I'd say there's a very large segment who figure they 'can't' pay the mortgage, but still go on foreign holidays, have Sky Sports, have a nice car outside etc. etc. - they think they can't pay, but they are just reluctant to make the real sacrifices that would allow them to pay.

And of course there's the genuine 'can't pay' cohort - what is to be gained from letting these people retain ownership of the property they aren't paying for? Repossess and let them rent it from the bank or rent somewhere they can afford.

bbam wrote: »

We can't stick our head in the sand and pretend this problem will go away without action. Equally we just can't throw whole groups of people out on the street without reviewing their situations.
If the situation warranted it I think a part right down and continuance to pay the balance would be a good aide to the toxic mortgage solution.

I'm not proposing anyone is thrown onto the street. There are 300,000 empty properties in Ireland - plenty for everyone. There are loads of people who have never owned a property - where is your pity for those people who have always been 'out on the streets'? (or 'renting', as it is called) But if you don't pay your mortgage for - say - 18 months, you just don't keep the house. That gives a year and a half of breathing space to genuine strugglers, and a simple way of dealing with the 'won't pay' people.

creedp

Monty Burnz wrote: »

Not true at all. Mortgage interest rates are still low, while those on trackers are paying virtually no interest at all. Rents dipped by a few percent a couple of years ago but are largely the same as they were during the bubble.

But that has nothing to do with my point: if a person earning good money and renting a nice penthouse in D4 loses his job, why isn't he or she allowed to stay in it for a few years rent free? Where is that campaign?

And some people are determined to hold on to property they are not paying for. In nature, those people are called 'freeloaders' or 'thieves'.

I think the state paying for your mortgage interest for a year certainly constitutes 'assistance'. But you can't let people stay indefinitely in property they are not paying for - and you can't also be surprised when other people see people living rent and mortgage free and decide to join in (moral hazard, remember all the warnings?)

Of course I agree with this - the difference is that I have proposed a way of doing this, while you haven't. If you have a better idea that is workable and fair, please share it.

I am not in any way advocating that a persons should be allowed to remain in their house indefinitely without paying anything just like a renter shouldn't be allowed to stay on without paying any rent. The point I made is that renters have experienced a reduction in rent which (again I'm going on anecdotal evidence here) is more significant that a couple of % and certainly has not reverted back to pr-recession rates. Unless you are on a tracker (whose at fault for that?) your mortgage payment has increased during the recession and has not reverted back to pre-recession rates.

As to a solution it is up to the banks to deal with individual customers and take pragmatic decisions. If a persons has been made unemployed or loses substantial income then the backs need to decide if this is a temporary or permanent situation and either go interest only for a period until the situation improves or write down a part of debt if a more permanent situation or as you advocate reposses the house.

The point that you don't own the house is valid but also is the point that the banks do not want large numbers of negative equity houses on their books is equally valid. In busines there is the well know process of receivership where the banks would, among other thinks, look at restructuring the business debt with some creditors taking severe hits on the premise that the business is better off alive than dead. Why would that not be a option open to banks in this scenario? I agree though that there should be no blanket write down of mortgage debt especially where a person has suficient income to pay their mortgage. Negative equity is the curse of a generation but does not justify a write down - again another favourite of the media.

golfwallah

@ Monty Burnz & Creedp,
The time for analysis of this problem and proposing solutions is largely over.

It's now implementation time for the banks (under much closer supervision and accountability processes by the Central Bank) as per outline solutions put forward in the Inter-Departmental Mortgage Arrears Working Group report, published as long ago as September 2011: (http://www.finance.gov.ie/documents/...rtgagearr2.pdf).

These solutions include mortgage to rent, split mortgages, trade-down mortgages, sale by agreement and the banks have been tasked with finding other ones.

We can't keep analysing this situation forever. It's about time someone like Fiona Muldoon was tasked to see the job through and good luck to her.

Monty Burnz

golfwallah wrote: »

These solutions include mortgage to rent, split mortgages, trade-down mortgages, sale by agreement and the banks have been tasked with finding other ones.

Action should have been taken since day one - but of course it wasn't politically expedient, so we resorted to the usual Irish government tactic when it comes to hard decisions - kick the can down the road and hope something turns up.

Lots of these proposed solutions are bull**** - 'mortgage to rent' for example will probably see people staying in 'their' home that would rent on the open market for 2k-3k per month but only paying a fraction of that. And who determines the market rent anyway?

The scope for corruption, backhanders, nepotism, croneyism and string-pulling with most of these solutions is enormous. And if there's any scope at all, it will happen in spades.

OldNotWIse

Deleted User wrote: »

here is a fair question:

What about renters who are also as you state "genuine people" who can no longer afford to pay their current level of rent?

Also, I cannot afford to pay my credit card debt - will I get a bail out?

OldNotWIse

bbam wrote: »

I have no problem with the won't pay being identified and full recourse being extracted on them. However who can make this decision on the line between can't and won't pay.
On the cant pay I think that in a great many cases the banks have serious responsibility for the irresponsible lending that occurred. The banks had professional sales people making hard sell tactics to ordinary people and a great number have been lumbered with unserviceable mortgages, this happened during a time when the government neglected their responsibility to ensure good regulation occurred. I believe that mortgage right down is the sensible solution in many cases. It's happening in a hap hazard way at te moment, I'm just suggesting that it be more structured.

I can think of 3 people off the top of my head who borrowed against their means, and lied about their incomes to get inflated mortgages. This is nobodys fault but their own. They were not forced to buy houses (or rather, borrow vast sums of money to buy them). We have such a culture of entitlement in this country. You gamble, you take the fallout.

bbam

OldNotWIse wrote: »

I can think of 3 people off the top of my head who borrowed against their means, and lied about their incomes to get inflated mortgages. This is nobodys fault but their own. They were not forced to buy houses (or rather, borrow vast sums of money to buy them). We have such a culture of entitlement in this country. You gamble, you take the fallout.

Good for you.
I know three people who got paper cuts when doing their mortgage documents !

I still stand by the idea that for particular situations mortgage right down is a good solution. There will always be examples of people screwing the system and I've said earlier those intentiOnally doing this need to be held to account for it.

The mortgage situation is quickly becoming a social issue as it will suppress the economy for a decade or more if not dealt with. And by dealt with I don't mean just evicting everyone in arrears as has been suggested as a simple solution.

Writing off some mortgage debt is a fact of the market, get used to it as I'd expect there will be more rather than less going forward. I would rather see a structure round it so only genuine cases are dealt with in this way rather than just those who can best bargain with the bank.

Monty Burnz

bbam wrote: »

I still stand by the idea that for particular situations mortgage right down is a good solution.

So dumping the debt on the taxpayer - meaning more tax rises or more cuts in health, education, etc. - is 'a good solution'? Its only good for those who want to keep the property without paying their debt.

By the way, this 'supress the economy' argument is bull**** too for obvious reasons.

bbam

Fine.
We disagree to the extreme on this point. However I'm reassured by the Fact that the banks are already engaged in the process and it's my belief that it will be more common than people know off due to the non disclosure papers being insisted on.

Sometimes society has to shoulder the burden for the better good, I quoted the example of the motor insurance levy which is ongoing.

I can align your atitude to that of those who don't want schools built with their tax money as they don't have children or those who think building roads with their tax money is a waste just because they don't drive.

swampgas

bbam wrote: »

The mortgage situation is quickly becoming a social issue as it will suppress the economy for a decade or more if not dealt with. And by dealt with I don't mean just evicting everyone in arrears as has been suggested as a simple solution.

Writing off some mortgage debt is a fact of the market, get used to it as I'd expect there will be more rather than less going forward. I would rather see a structure round it so only genuine cases are dealt with in this way rather than just those who can best bargain with the bank.

What about the following scenarios, from a similar discussion a while back.

(Solution being proposed by jackbetal)
Home was worth €300k. Now worth €140k. Home owner cannot service €300k debt but if home is written down will service €140k debt.

Options

1. Bank writes down loan and gets payments for loan of €140k. Bank loses €160k which it already has made provisions for. Family stays in home.

2. Bank will not write down the loan and repossesses the house. Bank loses €300k as person will never pay back debt. Family loses home. Local council will have to provide alternative accommodation at cost to the taxpayer. Increasing the lower class of society. Increasing the gap between the rich and poor as we already know that the rich have had their write-downs in NAMA.

My problems with these proposals are as follows - imagine the following scenarios:

(1) Next door neighbour is in the same boat, but can just barely service his 300k mortgage by living extremely frugally. Nobody is helping him.

(2) Bank writes down loan to 140k, two years later mortgagee gets a better job and could actually service the 300k loan again. Mortgagee has now got 160k for free from everyone else.

(3) House price recovers to 200k - mortgagee sells, clears the (reduced) 140k mortgage, puts 60k minus expenses into his pocket and sods off to Australia.


I can't see a way that simply writing down debt is a workable or fair solution - at the very least the borrower should lose equity in the property, so that if he does sell in the future, the bank gets a decent cut.

Monty Burnz

bbam wrote: »

I can align your atitude to that of those who don't want schools built with their tax money as they don't have children or those who think building roads with their tax money is a waste just because they don't drive.

You can align it all you like, but it's quite different. The schools are educating children that will pay for everyone's pensions in years to come. There is a societal benefit. There is no benefit from taking money from people who made good decisions and would like to spend the money in restaurants or shops and giving it to people who made bad decisions to pay their debts for them.

Monty Burnz

swampgas wrote: »

What about the following scenarios, from a similar discussion a while back.

Options

1. Bank writes down loan and gets payments for loan of €140k. Bank loses €160k which it already has made provisions for. Family stays in home.

2. Bank will not write down the loan and repossesses the house. Bank loses €300k as person will never pay back debt. Family loses home. Local council will have to provide alternative accommodation at cost to the taxpayer. Increasing the lower class of society. Increasing the gap between the rich and poor as we already know that the rich have had their write-downs in NAMA.

SG, I know you are not advocating this stuff, but just to comment on point 2 - why does the bank suddenly lose 300k when they now can sell the house? Somebody was blowing smoke out of their bottom when they wrote that stuff.

swampgas

Monty Burnz wrote: »

SG, I know you are not advocating this stuff, but just to comment on point 2 - why does the bank suddenly lose 300k when they now can sell the house? Somebody was blowing smoke out of their bottom when they wrote that stuff.

Whoops - I mangled the quoting there - I'll go edit it.

*edit * Made it clearer where the quote as coming from. And you're correct that the 300k loss is not correct, as the house will sell for something.

golfwallah

Monty Burnz wrote: »

Action should have been taken since day one - but of course it wasn't politically expedient, so we resorted to the usual Irish government tactic when it comes to hard decisions - kick the can down the road and hope something turns up.

Lots of these proposed solutions are bull**** - 'mortgage to rent' for example will probably see people staying in 'their' home that would rent on the open market for 2k-3k per month but only paying a fraction of that. And who determines the market rent anyway?

The scope for corruption, backhanders, nepotism, croneyism and string-pulling with most of these solutions is enormous. And if there's any scope at all, it will happen in spades.

You're entitled your opinion but, as far as I can see, the solutions outlined in the Mortgage Arrears report are the ones being implemented, albeit piece meal up to now.

The Central Bank now has the resources to press the banks to sort out their own mess and are setting about monitoring their progress in this regard.

This is the only realistic approach IMHO, rather than your extreme approach of putting up the shutters on anything other than mass evictions, akin to those of the land wars of the 1880s.

As I read it now, project scope has been decided and they are getting on with the job (pending the proposed insolvency bill & legislation). So it's now down to project management to keep the powers that be advised of progress and up to date on emerging risks / issues.

We were promised the insolvency bill by end June, so hopefully, Alan Shatter will have a better handle on how much all this is going to cost by then and if further bank recapitalisation will be required.

BFDCH.

golfwallah wrote: »

You're entitled your opinion but, as far as I can see, the solutions outlined in the Mortgage Arrears report are the ones being implemented, albeit piece meal up to now.

The Central Bank now has the resources to press the banks to sort out their own mess and are setting about monitoring their progress in this regard.

This is the only realistic approach IMHO, rather than your extreme approach of putting up the shutters on anything other than mass evictions, akin to those of the land wars of the 1880s.

As I read it now, project scope has been decided and they are getting on with the job (pending the proposed insolvency bill & legislation). So it's now down to project management to keep the powers that be advised of progress and up to date on emerging risks / issues.

We were promised the insolvency bill by end June, so hopefully, Alan Shatter will have a better handle on how much all this is going to cost by then and if further bank recapitalisation will be required.

it's nothing like the land wars- where poor tennant farmers had their rents raised (rack renting) by their land lords.
The only similarity is that renters are being asked to pay for their rents and pay additional tax for someone else to own a house which they can no longer afford- not because the repayments have gone up, but because they overstretched/got too greedy or have lost the means to repay their massive loans for over priced houses which they helped over price in the first place.
So the renters are being asked to keep paying their rent, now pay for people in arrears to live in their over priced houses which is also helping to keep the price of houses in general high which is keeping the renters out of the housing market in the first place.

Monty Burnz

golfwallah wrote: »

This is the only realistic approach IMHO, rather than your extreme approach of putting up the shutters on anything other than mass evictions, akin to those of the land wars of the 1880s.

This emotive nonsense is quite annoying - we can only play the victim card for so long before we have to face reality. Presumably if I get stopped for drunk driving tonight I can tell the guards that they are akin to the Black and Tans, and was it for this that Pearse died? :rolleyes:

golfwallah wrote: »

We were promised the insolvency bill by end June, so hopefully, Alan Shatter will have a better handle on how much all this is going to cost by then and if further bank recapitalisation will be required.

It's nice that you can be so blasé about further recapitalisations - that means torching the billions that have been put into the banks already (rather than earning a return on them) and ploughing further billions into the hole so that people can stay in 'their' homes. And not a thought given to renters who can't keep up the payments on their homes and have to move out. The whole thing reeks of hypocrisy and double standards, and is an epidemic of corruption in the making.

creedp

BFDCH. wrote: »

The only similarity is that renters are being asked to pay for their rents and pay additional tax for someone else to own a house which they can no longer afford- not because the repayments have gone up, but because they overstretched/got too greedy or have lost the means to repay their massive loans for over priced houses which they helped over price in the first place.
So the renters are being asked to keep paying their rent, now pay for people in arrears to live in their over priced houses which is also helping to keep the price of houses in general high which is keeping the renters out of the housing market in the first place.

I know I shouldn't ask this! but why is there a distinction being drawn between renters and owners. A lot of discussions become unecessarily polarised because of this. Are you saying that there is a difference between a person renting a house for a now reduced rent (allowing him/her to more easily raise a deposit for a now much reduced price house) and an owner who bought a overpriced house (and despite the difficulties involved continues to pay the mortgage whilst living with negative equity to the extent that he can't get rid of the house and move on) when it comes to bailing out an owner who is less than enthuastic in discharging his mortgage responsibilities?

I suppose sectoral interests take precedence but I wuold imagine if a landord sought massive increases in rent to cover his increased mortgage payments that would that be viewed negatively by the renter!

Monty Burnz

creedp wrote: »

I know I shouldn't ask this! but why is there a distinction being drawn between renters and owners. A lot of discussions become unecessarily polarised because of this. Are you saying that there is a difference between a person renting a house for a now reduced rent (allowing him/her to more easily raise a deposit for a now much reduced price house) and an owner who bought a overpriced house (and despite the difficulties involved continues to pay the mortgage whilst living with negative equity to the extent that he can't get rid of the house and move on) when it comes to bailing out an owner who is less than enthuastic in discharging his mortgage responsibilities?

You are persisting with this claim that rents have fallen, but haven't provided any evidence. In my experience, they are broadly the same as they were during the height of the bubble.

The distinction being drawn is this:

The property that someone rents is their home.
The property that someone buys is their home.

Nobody cares if people in the first category have to leave their homes because they lose their jobs and can't make the payments.

Everybody is up in arms at the idea of people in the second category having to leave their homes because they lose their jobs and can't make the payments.

Do you see the distinction? Do you think this is a fair distinction? Nor do I.

golfwallah

Monty Burnz wrote: »

This emotive nonsense is quite annoying - we can only play the victim card for so long before we have to face reality. Presumably if I get stopped for drunk driving tonight I can tell the guards that they are akin to the Black and Tans, and was it for this that Pearse died? :rolleyes:


It's nice that you can be so blasé about further recapitalisations - that means torching the billions that have been put into the banks already (rather than earning a return on them) and ploughing further billions into the hole so that people can stay in 'their' homes. And not a thought given to renters who can't keep up the payments on their homes and have to move out. The whole thing reeks of hypocrisy and double standards, and is an epidemic of corruption in the making.

It's a bit late now to be arguing against the solutions outlined in the Inter-Departmental Mortgage Arrears Working Group report - we are now at the implementation stage. The stage of working out solutions for public debate is over and now the Central Bank is pressing the banks to flesh out and implement the solutions outlined in this document and develop some more.

And I not being blasé about further recapitalisations either - just referring to the fact that Fiona Muldoon, the director responsible in the Central Bank has refused to rule out this possibility until the banks have "bottomed out" the mortgage arrears situation on a case by case basis.

I don't see this as a renters versus owners scenario but the real politic now is not about the rights and wrongs of any solutions but about implementing the solutions already decided upon.

All I am saying is that the people in power have set the train in motion on implementing solutions (and not all these solutions will leave people in their homes) and unless you or someone else gets the power to change it, that is the reality of where we are.

As for corruption, there are always risks of abuse and all the legislators can do is ensure we have laws to enable wrongdoers to be prosecuted. Unfortunately, the Irish track record in this area has been very poor but "doing nothing" because there might be corruption is not acceptable either as it won't solve the mortgage arrears problem.

Monty Burnz

golfwallah wrote: »

It's a bit late now to be arguing against the solutions outlined in the Inter-Departmental Mortgage Arrears Working Group report - we are now at the implementation stage. The stage of working out solutions for public debate is over and now the Central Bank is pressing the banks to flesh out and implement the solutions outlined in this document and develop some more.

I find your faith in the efficacy of these sorts of governmental plans rather touching. They could still wring years of complete inaction out of this - a few more reviews, a few more implementation plans and perhaps another moratorium or two. We'll see.

golfwallah wrote: »

Unfortunately, the Irish track record in this area has been very poor but "doing nothing" because there might be corruption is not acceptable either as it won't solve the mortgage arrears problem.

I'm not advocating 'doing nothing' though, am I? I outlined exactly what should be done, and said it should have started 4 or 5 years ago. And my suggestion obviates the risk of corruption - you pay your mortgage or you find somewhere else to live. Simple.

golfwallah

Monty Burnz wrote: »

This emotive nonsense is quite annoying - we can only play the victim card for so long before we have to face reality. Presumably if I get stopped for drunk driving tonight I can tell the guards that they are akin to the Black and Tans, and was it for this that Pearse died? :rolleyes:


It's nice that you can be so blasé about further recapitalisations - that means torching the billions that have been put into the banks already (rather than earning a return on them) and ploughing further billions into the hole so that people can stay in 'their' homes. And not a thought given to renters who can't keep up the payments on their homes and have to move out. The whole thing reeks of hypocrisy and double standards, and is an epidemic of corruption in the making.

Monty Burnz wrote: »

I find your faith in the efficacy of these sorts of governmental plans rather touching. They could still wring years of complete inaction out of this - a few more reviews, a few more implementation plans and perhaps another moratorium or two. We'll see.

I'm not advocating 'doing nothing' though, am I? I outlined exactly what should be done, and said it should have started 4 or 5 years ago. And my suggestion obviates the risk of corruption - you pay your mortgage or you find somewhere else to live. Simple.

I have a lot more faith in people like Patrick Honohan, Mathew Elderfield and Fiona Muldoon to get the job done than I have in any government that is subject to the changing whims of the electorate.

None of these people are pretending there is a quick solution to the mortgage arrears problem and I believe they are doing a reasonably good job in this very difficult area since their appointments. The reality is that the mortgage arrears and negative equity situations will be with us for years and require long term methods to solve them.

Thankfully we are now seeing reports that the Central Bank, which is independent of government and banks, is pressing banks to clean up their own mess and to report on progress in a structured way.

There are no magic solutions and the extent to which it is possible to sort out the mess without further recapitalisation still remains to be determined fully.

This is the reality of the situation. Maybe we should have started 4 or 5 years ago but we are where we are and the people appointed to sort it out are now doing just that.

I, for one, hope they are successful.

creedp

Monty Burnz wrote: »

You are persisting with this claim that rents have fallen, but haven't provided any evidence. In my experience, they are broadly the same as they were during the height of the bubble.

The distinction being drawn is this:

The property that someone rents is their home.
The property that someone buys is their home.

Nobody cares if people in the first category have to leave their homes because they lose their jobs and can't make the payments.

Everybody is up in arms at the idea of people in the second category having to leave their homes because they lose their jobs and can't make the payments.

Do you see the distinction? Do you think this is a fair distinction? Nor do I.

Have you evidence to prove they haven't fallen. Again anecdotal but friends in a rented apartment rent has fallen from €1,400 pm to €1,100 per month. From talking to them they sought rent reductions as other people they knew achieved similar reductions. Landlord didn't object too strongly either I understand. Maybe a very isolated and atypical e.g. but that it where I am coming from.

As you ask I can see one big difference - negative equity. A renter can walk away from their house and walk into another one without any financial implication. Try comparing that to an owner whose house has up to €200k in negative equity, i.e. 'market value' is €200k less than mortgage. You're telling me there is no distinction between these 2 cases. Whether its a fair distiction or otherwise is a matter of opinion but I do think there is an distinction.

Monty Burnz

creedp wrote: »

Have you evidence to prove they haven't fallen. Again anecdotal but friends in a rented apartment rent has fallen from €1,400 pm to €1,100 per month. From talking to them they sought rent reductions as other people they knew achieved similar reductions. Landlord didn't object too strongly either I understand. Maybe a very isolated and atypical e.g. but that it where I am coming from.

Ok, seeing as neither of us can manage more than anecdotes, we'd better let this one slide!

creedp wrote: »

As you ask I can see one big difference - negative equity. A renter can walk away from their house and walk into another one without any financial implication. Try comparing that to an owner whose house has up to €200k in negative equity, i.e. 'market value' is €200k less than mortgage. You're telling me there is no distinction between these 2 cases. Whether its a fair distiction or otherwise is a matter of opinion but I do think there is an distinction.

The negative equity is irrelevant in that you can just as easily say that the person with equity in their home can move and have a load of cash in their pocket. So what? It's not like not repossessing people makes their negative equity go away, is it?

The point I'm making is that when people can't make the payments for their homes that they agreed to due to losing their job or whatever, renters are treated totally different to 'owners'. Renters can f*ck off, while owners (of stuff they aren't paying for) are treated like blameless victims of famine and callous colonial indifference - which is of course nonsense.

MysticalRain

golfwallah wrote: »

I have a lot more faith in people like Patrick Honohan, Mathew Elderfield and Fiona Muldoon to get the job done than I have in any government that is subject to the changing whims of the electorate.

None of these people are pretending there is a quick solution to the mortgage arrears problem and I believe they are doing a reasonably good job in this very difficult area since their appointments. The reality is that the mortgage arrears and negative equity situations will be with us for years and require long term methods to solve them.

Thankfully we are now seeing reports that the Central Bank, which is independent of government and banks, is pressing banks to clean up their own mess and to report on progress in a structured way.

There are no magic solutions and the extent to which it is possible to sort out the mess without further recapitalisation still remains to be determined fully.

This is the reality of the situation. Maybe we should have started 4 or 5 years ago but we are where we are and the people appointed to sort it out are now doing just that.

I, for one, hope they are successful.

The problem with that cunning plan is that it is all being done on borrowed money and taxes taken from an already over-taxed workforce. It all works fine until the country runs out of money and has to go back to the IMF/EU looking for a second bailout. Then you run into the problem of having having to convince Hans the German taxpayer that he is now expected to pay for reckless Irish homeowners as well as feckless Greeks. This despite the fact that Hans himself thinks it's perfectly acceptable to rent his own house. Like many people on the continent typically do.

Releasing reports and mouthing off is one thing. Implementing plans are another matter. Unless we suddenly strike oil off the coast and become another Norway, I cannot see where all this money will come from to bail these people out.

soupdrinker

I don't think a one size solution fits all but I think the banks really need to get their act together and do something.

I know it can be argued that people took out the loans and therefore should be repaid but no-one ever expected things to get so bad. Obviously the banks didn't either or they shouldn't have loaned out the money.

I think the banks should bear some of the pain and in cases where people genuinely can't continue to pay the full mortgage, a percentage of the loan should be written off. The banks have probably already written a percentage of the loans off, hence the need for recapitalisation but still they want the full payment of the loan as well.

What about the scenario, where a couple owe approx 300K on their mortage, if this could be written down to 200K, payments reduced based on the 200K mortgage, then when the couple die could the banks be repaid the 100K writedown from the sale of the house.

Then, the banks are going to get their full money (maybe a bit less if the house sale doesn't cover the full writedown but hopefully not too much of a loss), the couple have more spending money - which will have the positive effect of boosting the economy, and no-one is being kicked out of their home.

If things carry on the way they are, we are going to have a whole generation of people working just to pay the mortgage with no quality of life whatsoever, I'm not talking brand new cars every year, 3 foreign holidays etc but for people to even be able to treat themselves to a takeaway occasionally, be able to go out and buy a pair of shoes if they need to , get work done on the house etc etc etc - all spending, which helps the economy.

I know its not fair on the taxpayer, but its not fair on the taxpayer that all the bondholders are paid, and the likes of the big business men can get away with having their loans written off and carry on with their lives as if nothing happened.

OK people borrowed to buy houses, but its not a crime to have wanted to set up a base, a family home and put down roots, but now they are suffering..... I think people need to have some empathy for their fellow citizens. I wouldn't begrudge a write down for the ordinary joe soap but do get angry when I see the rich business men getting away with it.

When the new insolvency bill comes in, the tax payer will be footing the bill for the unpaid loans when people go bankrupt so why can't they make an effort to leave people in their homes and try to help them in some way.

My reasoning is if someone can't afford to pay a 1300 per month mortgage payment for example, they can't afford to pay say 800 euro rent and 500 euro off the shortfall from the sale of the house if the house is repossessed. Why not leave them in the house, let them pay 800 per month and take the shortfall from the sale of the house after the death of the mortgage holder?

Unrealistic

bbam wrote: »

Good for you.
I know three people who got paper cuts when doing their mortgage documents !

You don't like anecdotal evidence? Fair enough. How about some simple facts instead. The most common category of new mortgage during the boom wasn't a first time buyer loan and it wasn't a trading up loan. The most common type of mortgage during the boom was the top up. These aren't borrowings by innocent people trying to 'put a roof over their head'. These were borrowers using a home that they had not even fully paid for as a sort of virtual Visa card to fund SUVs, extensions, holiday homes, buy to lets etc. These are the mortgages that are in trouble now more than any other. Mortgages taken out not to pay for a family home but to pay for a car that the borrower thought they deserved even though they hadn't saved for it or because the borrower decided that one house wasn't enough and they needed two or more. And you wonder why people are reluctant to make them a gift of their own hard earned money via the tax system?

Unrealistic

soupdrinker wrote: »

I don't think a one size solution fits all but I think the banks really need to get their act together and do something.

I know it can be argued that people took out the loans and therefore should be repaid but no-one ever expected things to get so bad. Obviously the banks didn't either or they shouldn't have loaned out the money.

I think the banks should bear some of the pain and in cases where people genuinely can't continue to pay the full mortgage, a percentage of the loan should be written off.

Another month, another thread and another poster who hasn't joined the dots between the banks being bailed out, public ownership of the banks and the banks being funded solely by the tax payer.

The banks are not some amorphous entity with limitless cash at their disposal. At the end of the day any loss is ultimately born by human beings and the corporate entity is just a means of assigning the loss. The people who were ultimately responsible for the banks at the time the mortgages were issued, the shareholders, have already lost 100% of their money. They have been completely wiped out. So if you say 'the banks should bear some of the pain' then you are effectively saying that you and I should bear that pain because you and I own the banks now through the mechanism of the state's shareholding. Every €1 written off a loan is €1 coming straight out of our pockets.

soupdrinker wrote: »

What about the scenario, where a couple owe approx 300K on their mortage, if this could be written down to 200K, payments reduced based on the 200K mortgage, then when the couple die could the banks be repaid the 100K writedown from the sale of the house.

That might make sense for certain circumstances but it is vital to recognise that it is not without cost. For every six houses for which you come to an arrangement like this you incur a cost equal to employing one nurse in A&E. Is that worth it? Maybe it is. But how many households nationwide should get this deal? How many nurses are we prepared to forgo in A&E?

soupdrinker wrote: »

If things carry on the way they are, we are going to have a whole generation of people working just to pay the mortgage with no quality of life whatsoever, I'm not talking brand new cars every year, 3 foreign holidays etc but for people to even be able to treat themselves to a takeaway occasionally, be able to go out and buy a pair of shoes if they need to , get work done on the house etc etc etc - all spending, which helps the economy.

A whole generation? How did you work that out? As the government is so fond of pointing out 86% of the workforce still have their jobs. Some are probably earning a bit less, which is unfortunate, but any sensible person would not mortgage themselves to the hilt such that losing a fraction of their income immediately puts them in penury. The people living in households with mortgages in arrears represent less than 7% of the total population. Something needs to be done to address the situation, certainly, but gross exaggeration does not bring us any closer to a solution.

soupdrinker wrote: »

I know its not fair on the taxpayer, but its not fair on the taxpayer that all the bondholders are paid, and the likes of the big business men can get away with having their loans written off and carry on with their lives as if nothing happened.

It's most definitely not fair that the bondholders are paid, and its also not fair that some business people are not having the personal guarantees called in, although I think the likes of Sean Quinn, David Drumm, Brian O'Donnell etc. would not agree with you that they are being allowed to carry on with their lives as if nothing happened. What are you proposing? That two undeserving minorities have unfairly benefitted to the cost of the tax payer so now we should have the tax payer throw further billions at another random minority? If you are you might pick a more deserving minority than people in mortgage arrears who will never be left without a home to live in, just maybe not the one they live in now.

soupdrinker wrote: »

OK people borrowed to buy houses, but its not a crime to have wanted to set up a base, a family home and put down roots, but now they are suffering..... I think people need to have some empathy for their fellow citizens. I wouldn't begrudge a write down for the ordinary joe soap but do get angry when I see the rich business men getting away with it.

That would be fine if it was actually true but the reality, as described in my previous post, was that top of the list for mortgage funding was not setting up base it was actually the purchase of non-essential luxuries.

soupdrinker wrote: »

My reasoning is if someone can't afford to pay a 1300 per month mortgage payment for example, they can't afford to pay say 800 euro rent and 500 euro off the shortfall from the sale of the house if the house is repossessed. Why not leave them in the house, let them pay 800 per month and take the shortfall from the sale of the house after the death of the mortgage holder?

But maybe someone who can't afford to pay a €1,300 mortgage can afford to pay €800 rent. If the house they are in will rent for €1,300 then let them move to a different house that rents for €800 so they can afford to pay the bank. If John and Joe can both afford to pay €800 per month for housing, but John has always rented and Joe took out a boom time mortgage, then why should John have to pay extra taxes to keep Joe in a better home than him when Joe, through his excessive borrowing, was far more directly responsible for contributing to the country's current crisis?