Getting out of negative equity - regain your freedom! Interested? [Mad thread]

the_syco

Del2005 wrote: »

Can someone please translate?

English must not be his/your first language, so I'll rewrite it slightly differently.

If you're in Negative Equity, it's not a disaster if you're single, on a good wage and happy to continue living where you are. I know someone who bought a one bedroom apartment, but I don't think she cares that it's in Negative Equity by 40%, as far as i know. It's a lovely apartment in a nice quiet area.

At some point the Irish banks may make it easy to transfer a NE loan, eg; if you're on a good wage , and want to buy a larger house, eg; move from a one bed to a three bed dwelling.

The banks had been lending recklessly, and I believe in some cases they should be made to write off x amount, especially if the person sells the house.
My friend sold a "buy to let" three bedroom house, bank wrote off 20k, house was sold for 80k.

Her lawyer said "that's it case closed", and that they (the bank) did not ask them for another cent. "The house was empty for 2 years", she told her bank "and I can't afford to pay you", and had not paid a cent since January 2010. She had been offered 80k in March 2010, but the bank blocked the sale saying the offer was too low.

Maybe banks are doing deals, write offs now, on Buy to Let (BTL) houses that are in NE, but it's not in the papers, and not reported in papers unless there's a court case.
She rented the BTL for 9 years, and had to put in about 110 euros on top of the rent income , to cover mortgage, each month.
I think banks would write off x amount, if you put house up for sale,maybe 20%, if you paid 200k, as if house is worth 100k, 20% would not make much difference.

StillWaters

Cuddlesworth wrote: »

In theory there is a few things you could do.

If you were to gather the support of 3,000 mortgage holders with a average value of 100,000 left on their mortgage(yes I know that's low) who have this mortgage with a single institution.

Organize a strategic default with all 3,000 people for the renegotiation of their debt. There would have to be a awareness that the bank may try to initiate proceedings against a couple of people to try set a example.

Keep it out of the media but hold the threat of the media over their heads in negotiations. The chance of copy cats would be high as well as the way the markets would react if the news got out. But you don't want to let this get out, once its in the press they will never let any debt off. Its a final screw you if they fail to negotiate.

Do the maths. 3k mortgages at a average debt value of 100k is 300 million in debt. Assuming 30 years of payments, a single month payments withheld would be close to 850k in revenue lost on average. This would cripple our already crippled institutions. And if the bank wanted to regain the houses they would have to initiate proceedings against each policy holder individually at great cost and time before trying to recover the remain debt off each person after. They do not want to do this.

Most important thing is to remain unified and not to be greedy. An offer of 10% on 100k is not to be sniffed at.


Never going to happen though. People just don't have that sort of organisation or resolve in large numbers.

Not bad, I was thinking some sort of housewap scheme where owners can trade up or down with others.

What timing though, with the personal insolvency bill through both houses today.

Zamboni

Cuddlesworth wrote: »

In theory there is a few things you could do.

If you were to gather the support of 3,000 mortgage holders with a average value of 100,000 left on their mortgage(yes I know that's low) who have this mortgage with a single institution.

Organize a strategic default with all 3,000 people for the renegotiation of their debt. There would have to be a awareness that the bank may try to initiate proceedings against a couple of people to try set a example.

Keep it out of the media but hold the threat of the media over their heads in negotiations. The chance of copy cats would be high as well as the way the markets would react if the news got out. But you don't want to let this get out, once its in the press they will never let any debt off. Its a final screw you if they fail to negotiate.

Do the maths. 3k mortgages at a average debt value of 100k is 300 million in debt. Assuming 30 years of payments, a single month payments withheld would be close to 850k in revenue lost on average. This would cripple our already crippled institutions. And if the bank wanted to regain the houses they would have to initiate proceedings against each policy holder individually at great cost and time before trying to recover the remain debt off each person after. They do not want to do this.

Most important thing is to remain unified and not to be greedy. An offer of 10% on 100k is not to be sniffed at.


Never going to happen though. People just don't have that sort of organisation or resolve in large numbers.

This would actually work in theory. But you are right in pointing out that it would be like herding cats trying to acheive it.
I could see smaller groups of upper/professional classes in financial trouble mangaing to pull it off nice and quietly.

i57dwun4yb1pt8

https://www.youtube.com/watch?v=P4qWJKXMWXw

ChRoMe

Cuddlesworth wrote: »

In theory there is a few things you could do.

If you were to gather the support of 3,000 mortgage holders with a average value of 100,000 left on their mortgage(yes I know that's low) who have this mortgage with a single institution.

Organize a strategic default with all 3,000 people for the renegotiation of their debt. There would have to be a awareness that the bank may try to initiate proceedings against a couple of people to try set a example.

Keep it out of the media but hold the threat of the media over their heads in negotiations. The chance of copy cats would be high as well as the way the markets would react if the news got out. But you don't want to let this get out, once its in the press they will never let any debt off. Its a final screw you if they fail to negotiate.

Do the maths. 3k mortgages at a average debt value of 100k is 300 million in debt. Assuming 30 years of payments, a single month payments withheld would be close to 850k in revenue lost on average. This would cripple our already crippled institutions. And if the bank wanted to regain the houses they would have to initiate proceedings against each policy holder individually at great cost and time before trying to recover the remain debt off each person after. They do not want to do this.

Most important thing is to remain unified and not to be greedy. An offer of 10% on 100k is not to be sniffed at.


Never going to happen though. People just don't have that sort of organisation or resolve in large numbers.

Thats a cute idea However you are correct the organisation makes it unfeasible.

Reminds me a lot of the ,very effective, Saul Alinsky tactics used in the states.

donalg1

djimi wrote: »

Its because too many people bought into the notion of a property ladder; they felt that they had to buy something, anything, to get their "foot on the ladder" with it only being a view to being a short term purchase rather than a home they were going to be in for years. These people are now stuck in a house that is too small for their needs, and dont stand a chance of selling it as it is worth half what they owe on it.

Whoever came up with the concept of a property ladder should be taken out and publically flogged. Such a fundementally stupid concept that has screwed so many people over.

But sure thats their own fault, they took a risk in the hope of making a fortune and it didnt work out for them, are we supposed to feel sorry for them now?

fricatus

donalg1 wrote: »

But sure thats their own fault, they took a risk in the hope of making a fortune and it didnt work out for them, are we supposed to feel sorry for them now?

I'm in negative equity, although still well able to afford the mortgage, and the way I see it is that the blame goes three ways:

- it's the government's fault for not properly regulating the housing market and allowing a consumer credit bubble. They could have imposed a maximum LTV of 85% and brought in property taxes at the stroke of a pen in 2003/2004 to cool the housing market, which was an obvious bubble to anyone whose job it is to oversee these things, like the DoF and the Central Bank.

- it's the bank's fault for lending a Joe Soap like me that amount of money for a house that was way overvalued. They could have run their business sensibly and then they wouldn't have needed to be bailed out by the taxpayer.

- it's my fault for not having a degree in economics, because let's face it, if the government say it's OK and the bank are willing to lend me the money, what reason do I have to think they're wrong?

Yet I'm supposed to pick up the tab 100%? How about the blame be shared out three ways? Say someone is €120k in negative equity. How about the government pay over €40k for their mistakes, the bank take the hit of another €40k for theirs, and the homeowner takes the hit on the remaining €40k? Remember they've already lost their deposit...

Sounds fair to me...

DoraDelite

Doesn't sound fair to me as in reality the Government and the Banks are the taxpayer.

hmmm

- it's the government's fault for not properly regulating the housing market and allowing a consumer credit bubble.

It's not the government's responsibility to ensure that you only make a profit when you buy property. No different to pensions, shares, land etc.

which was an obvious bubble to anyone whose job it is to oversee these things, like the DoF and the Central Bank.

If it was so obvious why did you buy? The people of this country voted in governments that perpetrated the property bubble - including yourself
http://www.boards.ie/vbulletin/showpost.php?p=52865046&postcount=12

- it's the bank's fault for lending a Joe Soap like me that amount of money for a house that was way overvalued.

It's not the banks problem if you decide to spend too much on something. It's their problem to make sure you can repay your debt, and you can as you've admitted.

- it's my fault for not having a degree in economics, because let's face it, if the government say it's OK and the bank are willing to lend me the money, what reason do I have to think they're wrong?

Clearly you accept no responsibility yourself, yet you seem to think that everyone else who didn't buy a property at the prices you paid should now have to take on your debts. No thanks.

I see also you're already thinking of buying a second house, so what makes you so certain that prices are correct today? You say in that post that you'd have no scope for saving if you have to pay both mortgages, so are you not over-extending yourself if you can't rent your old house? Who would you like to bail you out if this goes wrong also?
http://www.boards.ie/vbulletin/showpost.php?p=79092244&postcount=1

beaner88

You can bet if you made a killing on a property you'd be the first to say you did your sums and the investment made sense. Investment goes bad and all the people are claiming they could never do maths and the big bad banks took advantage of them.

the_syco

fricatus wrote: »

I'm in negative equity

So you bought a small place with the attention of selling it for more, and getting a bigger place? Joe Soap wanted a loan for stupid amount of money, got it, and is now complaining that he got it?

But oh no, you were not able to sell it for a profit as the crash happened. So like any gambler, you'll have to suck it up and get on with paying back what you owe. The banks are only in debt because people think they don't have to pay what they borrowed.

And how do I know you were planning on doing this? I know because it's only called negative equity if you planned on selling anytime soon. Otherwise it's called your home.

Zamboni

fricatus wrote: »

- it's my fault for not having a degree in economics, because let's face it, if the government say it's OK and the bank are willing to lend me the money, what reason do I have to think they're wrong?

You don't need a degree in economics to know the government does not have your best interests at heart.

murphaph

fricatus wrote: »

if the government say it's OK and the bank are willing to lend me the money, what reason do I have to think they're wrong?

Your own common sense as my dad used to say.

There was a distinct lack of it about during the Celtic Pyramid days, but some of us kept ours and don't feel much inclined towards picking up 1/3 of your mistake (in reality up to 2/3 as the bank may be state owned).

I bought a flat in Berlin. The building now has had 2 cases of dry rot detected and I've had to fork out an additional 5k to the building fund to pay (with the other owners) for the repairs to the structural members in the floors affected. Can I have some money from the taxpayer please? It wasn't my fault after all (surveyor didn't, nor couldn't have found the problems at time of purchase), so why should I pay?

ted1

fricatus wrote: »

I'm in negative equity, although still well able to afford the mortgage, and the way I see it is that the blame goes three ways:

- it's the government's fault for not properly regulating the housing market and allowing a consumer credit bubble. They could have imposed a maximum LTV of 85% and brought in property taxes at the stroke of a pen in 2003/2004 to cool the housing market, which was an obvious bubble to anyone whose job it is to oversee these things, like the DoF and the Central Bank.

- it's the bank's fault for lending a Joe Soap like me that amount of money for a house that was way overvalued. They could have run their business sensibly and then they wouldn't have needed to be bailed out by the taxpayer.

- it's my fault for not having a degree in economics, because let's face it, if the government say it's OK and the bank are willing to lend me the money, what reason do I have to think they're wrong?

Yet I'm supposed to pick up the tab 100%? How about the blame be shared out three ways? Say someone is €120k in negative equity. How about the government pay over €40k for their mistakes, the bank take the hit of another €40k for theirs, and the homeowner takes the hit on the remaining €40k? Remember they've already lost their deposit...

Sounds fair to me...

Why should the government pick up the bill for those on negative equity? It's only the value of the house that's affected not the cash in ones pocket continue living in the property you original choose to buy, problem solved.

fricatus

Jesus lads, fair amount of vitriol there. Nice to see solidarity alive and well in this country! :mad:

With apologies to the OP for derailing the thread, I'll just address a few of the points and then bow out, because I've better things to be doing:

- I'm not accepting responsibility for my actions:
Wrong, I'm saddled with 100% of the responsibility of sorting my situation out, whereas in my view there were three parties who made mistakes - and the two who had armies of highly paid advisors and economists at their disposal refuse to make any amends. If you had read my earlier post at all, you would see that I'm prepared to accept my share of the overall responsibility.

- If the bubble was so obvious, why did I buy?
It wasn't obvious to me, but it was obvious to David McWilliams, Morgan Kelly, the Economist, etc. Why didn't the banks and government pay heed to them? I have my day job to do, and I do it well. Their day job is to know what's going on in the economy, but they fcuked it up big time - yet they walk away with fat pensions - paid for by my taxes! You couldn't make this sh1t up!

- I was "gambling" on being able to sell my current place and buy a bigger place:

Jesus, you'd swear I took the mortgage money and put it on the 2.45 at Kempton! :rolleyes:

I presume many of your parents own or owned their own homes. They probably saved up for five years to afford a deposit, started small, furnished it bit by bit, suffered high mortgage payments every month, and then when they had reduced the mortgage enough, they sold and bought a bigger place, maybe when the family expanded.

Were they "gamblers"? Is it not a reasonable expectation in a stable country, to buy your own home, and to be able to sell it on so as to buy a bigger place when your family expands?

- Why am I buying again?
Because our family has expanded and we are tripping over stuff in the house we have, and we need to move. I can buy a nice place now for less than the cost of renting.

- Couldn't you just rent?
Sure, but then what if the landlord wanted to sell up? Then we're moving house again. And then in 25 years' time when we retire, will our pension cover the rent? At least this way the house will be paid off, and we'll only have to worry about the property tax, repairs, etc.

All these people promoting a renting culture have to remember that we will need to have the sort of laws they have in Germany before we should even consider such a cultural shift. Rents here are basically determined by the market, so what do you do when you're 75 and the rent is rising at twice the rate your pension is?

And if people now in their 20s in this country decide en masse not to buy their own home, what level will the state pension have to be at so that they can afford to continue renting a house of the standard they've become accustomed to?

This is a serious question that needs answering, because traditionally people here bought their own homes, and the pension could be at a level that didn't really have to take accommodation costs into consideration. If you decide to rent all your life, you will have to make sure you can afford it in retirement, but from what I can see, few people are making any provision either for their accommodation in retirement, or the retirement itself.

Zamboni wrote: »

You don't need a degree in economics to know the government does not have your best interests at heart.

Well you got that right!

Zamboni

fricatus wrote: »

And if people now in their 20s in this country decide en masse not to buy their own home, what level will the state pension have to be at so that they can afford to continue renting a house of the standard they've become accustomed to?

This is a serious question that needs answering, because traditionally people here bought their own homes, and the pension could be at a level that didn't really have to take accommodation costs into consideration. If you decide to rent all your life, you will have to make sure you can afford it in retirement, but from what I can see, few people are making any provision either for their accommodation in retirement, or the retirement itself.

There is definitely a whole new time bomb in the making - people who are renting and cannot afford to make provisions for future accomodation (+ likely reduction in level of state pension).
The key point I've learned from the past decade is that nobody, absolutely nobody/state/organisation should be relied on.

Every individual in this state should;

• understand personal responbility
• evaluate the lifestyle they wish to have
• assess the means of acquiriing that lifestyle through education and labour/enterprise
• contingency planning to maintain that lifestyle

If this is not at an acceptable level, then migration should be the next port of call (no pun intended).

jmayo

fricatus wrote: »

Jesus lads, fair amount of vitriol there. Nice to see solidarity alive and well in this country! :mad:

Ehh I always love how people now speak about solidarity when they are broke or in deep financial trouble and they want to share their losses.
It is like how particular organisations (banks, car makers, insuyrance companies) became interested in socialism and getting the state involved when they were staring at massive losses.
This goes for Ireland, Germany, Britain and even the bastion of capitalism without state involvement, the US.

When people were making money I don't recall them offering to share the proceeds. :rolleyes:

fricatus wrote: »

- If the bubble was so obvious, why did I buy?
It wasn't obvious to me, but it was obvious to David McWilliams, Morgan Kelly, the Economist, etc.

Ehh a fair few of us non economists, non TV pundits actually saw it, but we were dismissed as cranks by both the powers that be and people like yourself who wanted to get on the property ladder and foresaw themselves trading up in a few years.

fricatus wrote: »

Why didn't the banks and government pay heed to them?

Because the banks/bankers were making loads of money and that is what their game is about.
For the government it was about ensuring the trough was well filled so that they could ensure re election by letting more have greater access to it.

They are both effectively sales people who ensure their jobs and salaries by selling you sh** you often don't need for money that you don't have.
Call me cynical, but when are people going to wise up that the only one that ultimately has your best interests at heart is yourself.

fricatus wrote: »

I have my day job to do, and I do it well. Their day job is to know what's going on in the economy, but they fcuked it up big time - yet they walk away with fat pensions - paid for by my taxes! You couldn't make this sh1t up!

True the ones at the top deserve penury rather than our taxes being used to support them in a lfiestyle they became accustomed.

fricatus wrote: »

- I was "gambling" on being able to sell my current place and buy a bigger place:

Jesus, you'd swear I took the mortgage money and put it on the 2.45 at Kempton! :rolleyes:

You were speculating.
Nothing wrong with that if you realise that you were speculating with your home and you were buying an overpriced asset.
Speculating on something that is already overpriced is danagerous, particularly in the long run.
Fine if you plan on selling in a short time where you can make some money.

fricatus wrote: »

I presume many of your parents own or owned their own homes. They probably saved up for five years to afford a deposit, started small, furnished it bit by bit, suffered high mortgage payments every month, and then when they had reduced the mortgage enough, they sold and bought a bigger place, maybe when the family expanded.

No they weren't, because AFAIK they bought a house with a view to living in it for a good number of years.
They also spend what they could afford, not what some financial institution was firing at them.
People bought things overtime, not went out and bought everything at once, for the most part through even more credit.

A lot of the younger buyers during the bubble bought an apartment, a townhouse, a house miles from work and where they really wanted to live, a property unsuitable for growing/rearing families, just so that they got on this mythical property ladder and all with a view to flipping it for a profit in a few years down the road.
That was damm dangers gambling.

fricatus wrote: »

Were they "gamblers"? Is it not a reasonable expectation in a stable country, to buy your own home, and to be able to sell it on so as to buy a bigger place when your family expands?

Except in most cases they expected to sell it on for a profit or as much as they paid for it, even though it was obvious to anyone anyway switched on that they had paid way too much in the first place.

I do agree that rental market needs to be overhauled and that there are serious pension issues coming down the road, and they will affect not only renters but also home owners.

Ipso

djimi wrote: »

Whoever came up with the concept of a property ladder should be taken out and publically flogged. Such a fundementally stupid concept that has screwed so many people over.

For every stupid idea to take hold you need a lot of people to buy into it.

donalg1

fricatus wrote: »

I'm in negative equity, although still well able to afford the mortgage, and the way I see it is that the blame goes three ways:

- it's the government's fault for not properly regulating the housing market and allowing a consumer credit bubble. They could have imposed a maximum LTV of 85% and brought in property taxes at the stroke of a pen in 2003/2004 to cool the housing market, which was an obvious bubble to anyone whose job it is to oversee these things, like the DoF and the Central Bank.

- it's the bank's fault for lending a Joe Soap like me that amount of money for a house that was way overvalued. They could have run their business sensibly and then they wouldn't have needed to be bailed out by the taxpayer.

- it's my fault for not having a degree in economics, because let's face it, if the government say it's OK and the bank are willing to lend me the money, what reason do I have to think they're wrong?

Yet I'm supposed to pick up the tab 100%? How about the blame be shared out three ways? Say someone is €120k in negative equity. How about the government pay over €40k for their mistakes, the bank take the hit of another €40k for theirs, and the homeowner takes the hit on the remaining €40k? Remember they've already lost their deposit...

Sounds fair to me...

Seriously?

You took out the mortgage so its up to you to pay it back.

If someone in the example above is €120k in negative equity well thats their own fault for paying way over the odds for their house, so its up to them to pay it not the government and not the bank.

If you take out a mortgage you are signing an agreement to repay the amount in full plus interest, deciding after a few years that its not fair because the market value of the house has dropped doesnt change any part of the mortgage agreement.

Yes the banks should have been run better and regulated better but the borrower signed the mortgage agreement so they are liable for the debt.

Ipso

Back to the OP, the only way to get out of negative equity if for prices to go up or find domeone to over pay you for your house. I can't wait to see this scheme.

lima

Nice to see people on this thread are on the same page as me, I've been giving out on the 'repossessions' thread and there are lots of NE suckers giving me nothing but stick!

hmmm

fricatus wrote: »

Jesus lads, fair amount of vitriol there. Nice to see solidarity alive and well in this country! :mad:

You're asking everyone else to take on your debts and you say this is "solidarity"?

I don't remember anyone sharing their property profits with me.

riclad

The government let the market get out of control, the regulator, central bank were not doing their job.I think if someone is will to sell the house, or property than the banks should be made to write off x amount which would be decided by an independent body .Depending on your wage,how much you owe ,how much you borrowed.
IN many cases banks were stupid ,and greedy and reckless in lending especially to single people.
OF course i don,t have much sympathy for a single person who borrowed 300k, for a 1bed apartment in dublin.
i don,t think its a good idea to bring in personal, bankruptcy
laws ,if the banks will have a veto or whether you can go bankrupt.
ITS not fair to put total blame on the people
who borrowed too much,the average person is not a financial expert.
There should be a formula,or guidance,put in place
if i sell my house, I,m in ne, the bank will write off
x per cent,off my loan, depending on my wage ,
how much i owe, how much the house is worth.
EG house is sold for 100k, i have loan for 200k,
bank writes off 30-40k.
I still owe 60k , eg in case where person is still working ,and can afford to rent ,or even buy a cheaper residence,
eg i buy something for 70k, so i owe bank ,70 plus 60
= 130k.
If a bank lends too much to a small company,
they often lose out, eg if company shuts down,
most of the loan is left unpaid due to limited liability laws.

riclad

Some people bought a house, thinking ,ill live here for 30 years, if they have a good job, being in negative equity is not a major problem.ie They pay the mortgage every month.