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Boom time purchasers & no bail outs

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  • 06-07-2012 10:37am
    #1
    mozattack
    Registered Users Posts: 1,908 ✭✭✭


    This sucks, a friend works in an accountancy firm and he can list off lots of clients getting deals with the bank where their property investment debt is written off subject to the sale of the properties…e.g. one guy owes €2.2m and had property worth €600k and the bank will accept full proceeds in lieu of debt provided the individual pays back X amount over the next 5 years. X being what can be afforded by him based on salary etc.
    Contrast that to Mr and Mrs Soap who have 3 houses all bought in the boom. Why 3, because they owned 1 each before getting together and then bought the 3rd to live in themselves and kept the others to rent as they have no pension fund. They owe €700k but the properties are worth around €400k. There is no bail out here.
    Please explain why?


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    #2
    wmpdd3
    Registered Users Posts: 9,624 ✭✭✭wmpdd3


    Because, example 2 are showing they can pay. If they were in 3 years arrears things might be different.


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    #3
    Jim2007
    Moderators, Business & Finance Moderators Posts: 10,272 Mod ✭✭✭✭Jim2007


    In a fire sale the objective is to get as much as you can as fast as you can. It is not about being fair or reasonable.... I expect there will be may more of these deals in the next couple of years


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    #4
    oldyouth
    Closed Accounts Posts: 4,754 ✭✭✭oldyouth


    If you bet on red and it comes up black, you lose. No one forced you to gamble, you're an adult, suck it up.


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    #5
    mozattack
    Registered Users Posts: 1,908 ✭✭✭mozattack


    oldyouth wrote: »
    If you bet on red and it comes up black, you lose. No one forced you to gamble, you're an adult, suck it up.

    Very insightful, shows how little you know.


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    #6
    DoubleBogey
    Closed Accounts Posts: 141 ✭✭DoubleBogey


    mozattack wrote: »
    This sucks, a friend works in an accountancy firm and he can list off lots of clients getting deals with the bank where their property investment debt is written off subject to the sale of the properties…e.g. one guy owes €2.2m and had property worth €600k and the bank will accept full proceeds in lieu of debt provided the individual pays back X amount over the next 5 years. X being what can be afforded by him based on salary etc.
    Contrast that to Mr and Mrs Soap who have 3 houses all bought in the boom. Why 3, because they owned 1 each before getting together and then bought the 3rd to live in themselves and kept the others to rent as they have no pension fund. They owe €700k but the properties are worth around €400k. There is no bail out here.
    Please explain why?
    Because Mr and Mrs soap and their ilk are the Muppets responsible for the inflated market and hence the downfall of the country and should be made responsible for their bad investment decisions. If they were smart they would have setup a company and could declare bankruptcy instead of buying homes in their kids names. Everyone knows one and everyone has to listen yo their sob story's.


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    #7
    chris85
    Registered Users Posts: 4,502 ✭✭✭chris85


    mozattack wrote: »
    Very insightful, shows how little you know.

    Show your insight then. Property bubble was caused not only by banks loosening their lending criteria and giving out cheap credit, this was driven by an inherent desire for people to own a property. This demand caused a lot of bad things. Coupled with a corrupt banking system it has put us where we are now.

    Everyone thought they were investers buying. We all know the phrase "Get on the property ladder", People were purchasing based on moving on later on. This meant they had not given much consideration to property losing value.

    I didnt buy, I dont want my taxes bailing out people who were foolish and their gambles didnt pay off. I have no issues with assistance to people who are struggling to keep a family home but why should we be helping people with investment properties or properties they dont live in. Waste of money.


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    #8
    oldyouth
    Closed Accounts Posts: 4,754 ✭✭✭oldyouth


    Mozattack, what am I not following here? Who is to blame in this specific circumstance? Who MADE this individual follow this course of action?

    "Everybody was doing it" doesn't cut it with me, I didn't.


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    #9
    StillWaters
    Closed Accounts Posts: 1,799 ✭✭✭StillWaters


    mozattack wrote: »
    Contrast that to Mr and Mrs Soap who have 3 houses all bought in the boom. Why 3, because they owned 1 each before getting together and then bought the 3rd to live in themselves and kept the others to rent as they have no pension fund. They owe €700k but the properties are worth around €400k. There is no bail out here.
    Please explain why?
    What is mr and mrs soap's problem if they kept the houses in order to provide a pension for themselves? They will still have income from the 2 properties in their retirement, so negative equity doesn't matter.

    Now, mr and mrs shampoo had their pension fund in aib shares? Should they get a bailout?


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