Huge negative equity on apartments.

take everything

Gauss wrote: »

People were socially conditioned to think it wasn't.

Oh Jesus Christ.

Rayne Wooney

I am also in negative equity.. got a loan in 2007 for a new bicycle for €500,000

Must only be worth a tenner now, less than 1% of what I paid

Gauss

take everything wrote: »

Gauss wrote: »

People were socially conditioned to think it wasn't.

Oh Jesus Christ.

I'm not making excuses for anyone, people signed up to a legally binding document of their own free will. That doesn't mean they weren't socially conditioned.

MadsL

Gauss wrote: »

I'm not making excuses for anyone, people signed up to a legally binding document of their own free will. That doesn't mean they weren't socially conditioned.

Socially conditioned or utterly incapable of seeing the fact that if it cost €450,000 to buy an apartment but you can only rent out that apartment for €1200 a month then it is probably overvalued by quarter of a million.

Basic economics fail.

Dravokivich

shopaholic01 wrote: »

Yeah, because it's unlikey they have any details on the database in head office etc:rolleyes:.

then go all tyler durden and bomb head offices.

Procrastastudy

I never get these threads. Bought an apartment for 295K now worth about 75K - Mortgage €606 per month. Rent same apartment €700 a month. And I have an asset that will only go back up in value (eventually). Worst comes to worst I rent it out and rent somewhere else.

MadsL

Procrastastudy wrote: »

I never get these threads. Bought an apartment for 295K now worth about 75K - Mortgage €606 per month. Rent same apartment €700 a month. And I have an asset that will only go back up in value (eventually). Worst comes to worst I rent it out and rent somewhere else.

After a 75% hit you still believe you have an asset that will only go back up in value?

Still delusional eh.

You have at best a poor investment and a tiny amount of equity that that was completely washed away by the price drop. You are just about making some money on the financial transactions between taking money from your tenant and paying it to the bank. I doubt it covers the cost of wear and tear and your insurance on the property.

Keep dreaming.

Procrastastudy

MadsL wrote: »

After a 75% hit you still believe you have an asset that will only go back up in value?

Still delusional eh.

You have at best a poor investment and a tiny amount of equity that that was completely washed away by the price drop. You are just about making some money on the financial transactions between taking money from your tenant and paying it to the bank. I doubt it covers the cost of wear and tear and your insurance on the property.

Keep dreaming.

So whats the alternative? Dump it on you and everyone else? I signed the mortgage I'll pay it. Of course property prices will applicate from there current value. Well thats unless even more idiots manage to completely destroy the state by failing to live up to the obligations they signed up for.

MadsL

Procrastastudy wrote: »

So whats the alternative? Dump it on you and everyone else? I signed the mortgage I'll pay it. Of course property prices will applicate from there current value. Well thats unless even more idiots manage to completely destroy the state by failing to live up to the obligations they signed up for.

I applaud you paying the mortgage. (and I now realise you are not renting it out)
- but you don't have an asset, you have a utility that you pay for each month.

Your original decision to buy should have accounted for the cost of renting versus the cost of buying. In 2006 it was certainly better to rent. Sorry for your loss, but a house should never be considered an asset unless you are liquidating.

MadsL

Procrastastudy wrote: »

Of course property prices will applicate from there current value.

Of course they will....house prices only go up.

That's why house prices in Japan surged to a standstill for 15 years after their crash.

http://www.marketoracle.co.uk/images/2008/japan-house-prices--nov08.gif

DetectivFoxtrot

Kidchameleon wrote: »

Yes but I, like may others are well able to afford the mortgage, I just cant move because my apt will not sell for enough. I'm not looking for a hand out, not one cent, just to be able to move. I had an offer on the apt a couple of years ago, bank would not let me sell, it has come down another 30 grand since then If they had let me sell and carry the negative equity, I would have been fine.

AIB just announced a new trade up mortgage for those carrying negative equity but can pay more than their current instalment

http://www.irishexaminer.com/business/aib-and-ebs-launch-product-for-those-in-negative-equity-seeking-to-trade-up-208779.html

MadsL

DetectivFoxtrot wrote: »

AIB just announced a new trade up mortgage for those carrying negative equity but can pay more than they current instalment

http://www.irishexaminer.com/business/aib-and-ebs-launch-product-for-those-in-negative-equity-seeking-to-trade-up-208779.html

Fool me once shame on you, fool me twice....

Procrastastudy

MadsL wrote: »

I applaud you paying the mortgage. (and I now realise you are not renting it out)
- but you don't have an asset, you have a utility that you pay for each month.

Your original decision to buy should have accounted for the cost of renting versus the cost of buying. In 2006 it was certainly better to rent. Sorry for your loss, but a house should never be considered an asset unless you are liquidating.

I disagree entirely. I'm pretty much on par with what a rental would cost me once I factor in management fee. Lets say I'm €1000 down a year on the transaction. Even in 30 years you cant tell me the property wont be worth at least €30,000. While I would be in a much better position if I'd have bought now I'm still better off than if I'd have never bought - or render myself unable to buy again.

DetectivFoxtrot

Procrastastudy wrote: »

I never get these threads. Bought an apartment for 295K now worth about 75K - Mortgage €606 per month. Rent same apartment €700 a month. And I have an asset that will only go back up in value (eventually). Worst comes to worst I rent it out and rent somewhere else.

Are you on a fixed repayment arrangement e.g. Interest Only? €606 seems to be a low instalment for €295. I say this because my mortgage is €290K and my repayment is €1400 (over 35 yrs)

Procrastastudy

DetectivFoxtrot wrote: »

Are you on a fixed repayment arrangement e.g. Interest Only? €606 seems to be a low instalment for €295. I say this because my mortgage is €290K and my repayment is €1400 (over 35 yrs)

We had a nice deposit and are on a frankly embarrassingly low interest rate. Granted interest rate could be our undoing. We're on a repayment mortgage.

DetectivFoxtrot

MadsL wrote: »

Fool me once shame on you, fool me twice....

It's all risk taking. People are still going to take out mortgages, even with the crisis that occurred. Don't know much about the product but I'd assume the criteria is tight, or at least not reckless.
It makes no sense to stay in a home that you've outgrown, say due to expanding family, if you can afford to trade up

MadsL

Procrastastudy wrote: »

I disagree entirely. I'm pretty much on par with what a rental would cost me once I factor in management fee. Lets say I'm €1000 down a year on the transaction. Even in 30 years you cant tell me the property wont be worth at least €30,000. While I would be in a much better position if I'd have bought now I'm still better off than if I'd have never bought - or render myself unable to buy again.

One word. Maintenance. Another word, interest.

You can't tell me you won't need to do work on the property in the next 30 years, especially if it is a typical boom-built breakfast roll special 'apartment'.

What is the total cost of your mortgage over the life of it's term?

Sir Pompous Righteousness

Shudda built your own house.

/exists.

Procrastastudy

MadsL wrote: »

One word. Maintenance. Another word, interest.

You can't tell me you won't need to do work on the property in the next 30 years, especially if it is a typical boom-built breakfast roll special 'apartment'.

What is the total cost of your mortgage over the life of it's term?

Fecking huge but that's not the equation we are entering into here. If you look at rent for life time v crap deal on ownership you are still better off with the crap deal on the ownership.

Admittedly with hindsight, and let be fair a little forethought, a better financial situation would be reached. The solution isn't for people to weasel out of their obligations. Granted where the banks have taken the piss in regard to afford-ability calculations the bank deserves to have an injunction awarded against them preventing them from repossesing a family home the loan however should stand.

MadsL

Sir Pompous Righteousness wrote: »

/exists.

You no longer exist

Cee-Jay-Cee

keithclancy wrote: »

Ghandee wrote: »

Do debts cross international borders?

Emigrate if they don't.

I don't believe it does but if theres a Judgement made against you in your absence and a bench warrant issued for your arrest you'll be detained the next time you enter Ireland.

No you won't, that's rubbish. There is no system in place to notify authorities that someone who has a judgement against them just entered the country. If that person has no contact with the bank, the guards, court services etc etc then they won't be arrested.

gara

Ivan Mealy Index wrote: »

Wow. Quite a nasty poster we have here!
This poster is trying to start a row. Please leave me alone.

Nice attempt at publicly playing the victim card whilst privately mailing abusive messages -not once but twice, despite my not replying.

Sergeant wrote: »

While their conclusions and beliefs may be correct, some people really lack any hint of tact and empathy when posting on the Internet.

People would be a lot less inclined to fcuk up in this country if there was a lot less 'empathy' (aka excuses) and a lot more consequences

KindOfIrish

Ivan Mealy Index wrote: »

I agree. Anyone who thinks they can or should just walk away is adding further to the dire state our nation is in. People should take responsibility for their past mistakes or whatever they want to call them. If you have a loan you should pay it back. It's your responsibility and if it's hard to pay back, talk to the bank about restructuring the loan.

Sean Quinn, is it you?

BostonB

Sergeant wrote: »

Any links or examples of this massive flight of people from the country who have decided to renege on paying their mortgages?

Unfortunately that would require some form of time travel. As I was extrapolating a possible future scenario. The best I can do is some dubious reporting in the media.

http://www.guardian.co.uk/world/2012/may/27/irish-dodge-debts-uk-bankruptcy-tourism

who_me

gara wrote: »

People would be a lot less inclined to fcuk up in this country if there was a lot less 'empathy' (aka excuses) and a lot more consequences

You think there aren't any/enough consequences now? Your part of Ireland sounds nice, can I move there?

....d'oh!!! Negative equity again.

Brain Stroking

Sergeant wrote: »

Where did I say they shouldn't accept personal responsibility? It's possible to put across a point fundamentally disagreeing with this position, without coming across as a holier-than-thou keyboard warrior.

It's entirely reasonable to be of the opinion that people do honour the commitments they have made. It doesn't have to involve belittling them for having made a mistake when they invested in property in the first place. Lots of lovely people who just wanted to make a better life for themselves made a fundamental error of judgement. They have to live with this. They could probably do without the pious gesturing from anonymous posters who would almost certainly not have the gumption to be so crass if they met the person face to face, or felt the worry of wondering if they can ever repay the debt.

Hurlers on the ditch.

I didnt belittle anyone.

the_syco

SEPT 23 1989 wrote: »

I would head to the shores of the United Kingdom if i was in that position

You'd have to head out of Europe if you didn't want the bank to chase you and sue the money out of you.

Then you'd be homeless, poor, and still owe the bank money.

gara

who_me wrote: »

You think there aren't any/enough consequences now? Your part of Ireland sounds nice, can I move there?

That's precisely my point, unfortunately Ireland isn't such a nice place right now, primarily due to lack of consequences and accountability.

BostonB

the_syco wrote: »

You'd have to head out of Europe if you didn't want the bank to chase you and sue the money out of you.

Then you'd be homeless, poor, and still owe the bank money.

Always with the negative waves...

http://www.youtube.com/watch?v=KuStsFW4EmQ

UCDVet

Gauss wrote: »

I know of people paying off 400k mortgages on apartments worth about 100k. I'm sure there plenty even worse off than that.

If I were them I'd hand in the keys to the bank and say good luck. See ya later.

I'd prefer to rent for the rest of my life than pay off a ridiculous mortgage.

Would you do the same?

The apartment hasn't changed. If you thought it was worth 400k and you agreed to pay 400k - you should pay 400k. The fact that you might not be able to find a sucker to pay you 450k for it tomorrow doesn't change your obligation to the bank. IMHO

Of course, that's easy enough to say. If it were me, truthfully, I'd probably seriously consider moving to another country. US/Canada/Australia...I'd never repay the mortgage.

Fuinseog

Gauss wrote: »

I know of people paying off 400k mortgages on apartments worth about 100k. I'm sure there plenty even worse off than that.

If I were them I'd hand in the keys to the bank and say good luck. See ya later.

I'd prefer to rent for the rest of my life than pay off a ridiculous mortgage.

Would you do the same?

a lot of the flats built here in recent years are ****holes- no storage at all. no access to a basement and some do not even give you a parking space.

if you turn the key in the door and f off to foreign shores they cannot come after you.

Thinkingaboutit

Mortgages should be non-recourse like in most of the US, and the debt should be forgiven on eviction like in most of Europe - banks often right off the debt anyhow. Some people in this thread treat money owed to the conmen and failures in Irish Banks as a profound moral obligation. It is sadistic to tie a person to something for a lifetime, because they made one error. The debts of the Irish banking system are well beyond payment. Mortgage negative equity is a massive weight on the economy. Harrumphing that it is a moral obligation, will mean 30 years of stagnation. A lot of it will simply have to be written off, like all the builder borrowing, if this economy is to show signs of life outside the MNC sector. Leaving Ireland, being exiled for that, is unjust to OP. Hang on, there will have to be some partial writedown at least, even in the interest of paying our masters in Germany and Brussels faster.

4zn76tysfajdxp

Fuinseog wrote: »

a lot of the flats built here in recent years are ****holes- no storage at all. no access to a basement and some do not even give you a parking space.

People shouldn't have bought them, then.

MrMatisse

gara wrote: »

Not my intention at all but I'm wholeheartedly sick of the attitude that those of us who spent responsibly during the boom are somehow supposed to empathise with reckless spenders that ruined our country.

Yes, people make mistakes but these are mistakes that were fuelled by financial stupidity and personal greed that the rest us are all paying for and that is simply not ok -a modicum of reality and personal responsibility here please!

Excellent Post

milhous

Kidchameleon wrote: »

What about people who baught during the boom with the intention of trading up? Like myself, im perfectly able to pay the loan but to sell and move to a better house is impossible... Is there anything the gov / banks will do to help?

But you can transfer neg. equity if you want to trade up. So the bigger house you want reduced in price too.. You're selling for lower and buying for lower, no?

Thinkingaboutit

Well, the choice exists between a warped sort of moral rectitude towards debt and the economy, or economic revival. Economic moral rectitude was a path followed in the past, balance budgets, no foreign investment allowed, crucifying rates etc. It didn't really work. A person cannot be blamed for not predicting prices would collapse. Far too many people in this thread are being wise after the event. Nearly everyone here has such a tiny slice of the fiat currency cake, the Euro sponge cake, that the writedown will have next to no effect on them. Walking away is fine elsewhere, it's immoral here apparent. We are better than the rest of them.

woodoo

Procrastastudy wrote: »

I never get these threads. Bought an apartment for 295K now worth about 75K - Mortgage €606 per month. Rent same apartment €700 a month. And I have an asset that will only go back up in value (eventually). Worst comes to worst I rent it out and rent somewhere else.

That would take about 50 years to pay back at that rate

woodoo

Thinkingaboutit wrote: »

Some people in this thread treat money owed to the conmen and failures in Irish Banks as a profound moral obligation.

So true.

bnt

Gauss wrote: »

If I were them I'd hand in the keys to the bank and say good luck. See ya later.

In the USA, this is called jingle mail, and it's legal there. It's basically an attempt to trigger the foreclosure process from the bank i.e. the bank takes the property back as specified, and that's it because mortgages there are "non-recourse". It's different in Ireland, though: as already noted, banks here do have recourse, and can come after you. That process costs money, though, and they might not go to the trouble - depending on who you talk to (see linked article).

MadsL

Thinkingaboutit wrote: »

Some people in this thread treat money owed to the conmen and failures in Irish Banks as a profound moral obligation.

I don't recall people being tricked into signing mortage contracts, some people queued overnight for that 'privilege'. Do you believe there is no such thing as personal responsibility then?

BostonB

MadsL wrote: »

I don't recall people being tricked into signing mortage contracts, some people queued overnight for that 'privilege'. Do you believe there is no such thing as personal responsibility then?

Responsibility to whom? The Banks? The Govt? Your self, your family?

Bullseye1

The banks are run by truely dispicable people who have been bailed out but the people of this country. And now because of appalling decisions by the previous government they are in the ownership of the people when they should have been allowed to to the wall like all the other businesses who have been allowed to.

Thinkingaboutit

They often will write the debt off, as the pursuit is simply not worth it, but they don't always. Having a dodgy as fug debt management agency going after one, which could happen, mightn't be nice. Mortgages need to be non recourse. It might force the banks to make a better attempt to work out if a given loan is wise. No one should have to face a lifetime of penury because they make a mistake. OP should for the moment stick to the loan, and listen up for any relevant developments. One basic thing that needs to happen is what where negative equity is vast, an adjustment should be made to the loan. How can most people who bought a house in a town to commute to Dublin have predicted the prices of those houses, as an example, could so completely collapse? 450k to 99k is something I've seen. Imagine that sort of loan in a rotting half inhabited apartment block or housing estate.

Thinkingaboutit

MadsL wrote: »

I don't recall people being tricked into signing mortage contracts, some people queued overnight for that 'privilege'. Do you believe there is no such thing as personal responsibility then?

There is a matter of proportion here. If someone bought into hype in 2003 and bought something that later dropped from 450k to 99k, should they have to have that around their neck for a lifetime? A huge portion of the population are in stasis, adults who made one mistake and their blameless children, because the Party of Fail: the Irish Pirate Party allowed the housing market to become so highly distorted.

Ace2007

Thinkingaboutit wrote: »

There is a matter of proportion here. If someone bought into hype in 2003 and bought something that later dropped from 450k to 99k, should they have to have that around their neck for a lifetime? A huge portion of the population are in stasis, adults who made one mistake and their blameless children, because the Party of Fail: the Irish Pirate Party allowed the housing market to become so highly distorted.

so should the person who saw this all coming and decided not to put themselves in a world of debt find themselves worse off,

For example - the 30 year old who decided to rent instead of buying during the boom compared to a 30 year old who bought and is now in debt, if you forgive the debt, the one who bought will be better off as they now have a house. if you forgive all debt or reduce the the debt to today's market levels, the housing market will probably start to see more buyers, and hence the one who chose to rent is going to be worse off again.

they way ur talking, the gambler in the bookies should get his money back for backing USA on Sunday morning.

twinytwo

Rigol wrote: »

im with the op on this one. hand in the keys, declare bankruptcy, head abroad.
Let the state and bank do its worst...whatever that is it can't be much worse than sweating your life away for an apartment at 1/4 value.

Ya and in the process continue to **** the rest of us.

You took the loan, you pay it back.... its that simple.

Bullseye1

twinytwo wrote: »

Ya and in the process continue to **** the rest of us.

You took the loan, you pay it back.... its that simple.

The banks ****ed us over and then the government privatised that debt. People would not be trumpeting the banks if they were not publically owned. Billions were put into the banks to cover the loses. They gambled so should be made take a percentage of the loss (50% IMO) if people are forced to sell.

MysticalRain

Thinkingaboutit wrote: »

There is a matter of proportion here. If someone bought into hype in 2003 and bought something that later dropped from 450k to 99k, should they have to have that around their neck for a lifetime? A huge portion of the population are in stasis, adults who made one mistake and their blameless children, because the Party of Fail: the Irish Pirate Party allowed the housing market to become so highly distorted.

If it's a legally binding contract, then yes. If someone makes a mistake that costs them financially, it doesn't give them the right to take a leaf out of Sean Quinn's book, and act like the laws of the land don't apply to them. A functioning, law abiding society is what separates us from countries like Nigeria (as they say over there: if you are really smart, you'll get your neighbour to pay for your lunch).

It's easy to use the Bertie-made-me-do-it defense. But part of being a mature, responsible adult involves not taking at face value the lies peddled by idiot politicians and vested interests.

If you want to bring "blameless children" into you, then you had better start connecting the dots and seeing where this kind of cute hoorism leads to. Every penny written off in mortgage debt has to be covered by the Irish tax payer. That means even less money for schools, hospitals and kids with special needs.

The reality here is that 85% of mortgage holders are continuing to pay their mortgage. Relative to the numbers on the dole, that is a fairly small number of people.

JohnCleary

I hate to be a cnut, but the property crash is the best thing that's ever happened to some people.

I know a lot of idiots made bad choices, but on the positive, it has given a new generation great opportunity (the ones who didn't go mad spending when society encouraged it)

Thinkingaboutit

MysticalRain wrote: »

If it's a legally binding contract, then yes. If someone makes a mistake that costs them financially, it doesn't give them the right to take a leaf out of Sean Quinn's book, and act like the laws of the land don't apply to them. A functioning, law abiding society is what separates us from countries like Nigeria (as they say over there: if you are really smart, you'll get your neighbour to pay for your lunch).

It's easy to use the Bertie-made-me-do-it defense. But part of being a mature, responsible adult involves not taking at face value the lies peddled by idiot politicians and vested interests.

If you want to bring "blameless children" into you, then you had better start connecting the dots and seeing where this kind of cute hoorism leads to. Every penny written off in mortgage debt has to be covered by the Irish tax payer. That means even less money for schools, hospitals and kids with special needs.

The reality here is that 85% of mortgage holders are continuing to pay their mortgage. Relative to the numbers on the dole, that is a fairly small number of people.

They pay their mortgage and have nothing else. Most other western countries, largely more successful than this place, have non recourse, or highly limited legal recourse for banks, typically one case, so I cannot see the problem. A lot of mortgage debt by people who gave up on their houses is written off anyhow. Same with corporate debt incurred during and in connection with Celtic Tiger construction boom.

It is simply not reasonable, and happens nowhere else, to expect someone to live a mistake like this for a lifetime. They cannot discharge the debt through bankruptcy as the system remains insanely harsh. Only in 2011 could a person exit the process after 12 years. It is a waste of person's life on this earth.