House repossession rates are far too low

Boombastic

KyussBishop wrote: »

So, the people who went to the banks and took out mortgages, that were perfectly sustainable before the crisis, who have now lost jobs and run into financial difficulties because of the banks causing the financial crisis, should now be forced to give up their properties (losing all the expenditure they already sunk into them) to those same banks? (the ones we also threw massive shítloads of public money to, in order to bail them out? the ones who caused the inflation in house prices in the first place, and thus the crisis?)

Banks which will then sell-on the properties, probably to investors some of which who grew rich out of exploiting the property bubble and who got out at the right time, who can then buy them up cheap while us plebs are unable to while being bled through high taxes/living-expenditure, so that they can sell them on to us again at-profit once the housing bubble mill starts rolling again?

Ah sure what next, soon we'll be hearing that the banks create money out of nothing, so they can lend it out to us at interest.

yes, the should have stress tested their mortgages for all eventualities and read the contract they were signing

.jacksparrow.

KyussBishop wrote: »

So, the people who went to the banks and took out mortgages, that were perfectly sustainable before the crisis, who have now lost jobs and run into financial difficulties because of the banks causing the financial crisis, should now be forced to give up their properties (losing all the expenditure they already sunk into them) to those same banks? (the ones we also threw massive shítloads of public money to, in order to bail them out? the ones who caused the inflation in house prices in the first place, and thus the crisis?)

Banks which will then sell-on the properties, probably to investors some of which who grew rich out of exploiting the property bubble and who got out at the right time, who can then buy them up cheap while us plebs are unable to while being bled through high taxes/living-expenditure, so that they can sell them on to us again at-profit once the housing bubble mill starts rolling again?

Ah sure what next, soon we'll be hearing that the banks create money out of nothing, so they can lend it out to us at interest.

It's everyone else's fault except mine.

Princess Consuela Bananahammock

Three Seasons wrote: »

A well functioning market provides fair valued housing for families to live in. A poorly functioning market causes more pain and gives less value to the market participants.

I'm in the boat with the rest of the non-economists, but wasn't it the markets that got people into this mess in the first place?

galwayrush

I know someone who bought a reposessed house, he and his family have had a very negetative experience from the original owner's neighbours.

sock puppet

Seaneh wrote: »

The IMF and every respected econimist in the world disagree with you. but sure do they know.

Bit off topic but I doubt whether any of us could even name a respected economist that isn't Krugman, Stiglitz or a central banker. Leading economists generally don't make tv or media appearances.

Seaneh

sock puppet wrote: »

Bit off topic but I doubt whether any of us could even name a respected economist that isn't Krugman, Stiglitz or a central banker. Leading economists generally don't make tv or media appearances.

Well, people like Morgan Kelly, Constantin Gurdgiev and Hernando de Soto Polar have been very clear and open with their opinions. They are pretty well respected on not just a European level.

KyussBishop

.jacksparrow. wrote: »

It's everyone else's fault except mine.

Conversely, it's only the homeowners fault, and they should bear the total cost, seeing as it's up to them to make sure fraudulent lending isn't inflating the price of the house they are buying, and it is their fault for not being prescient, and seeing the massive financial crisis coming? (the one that practically every economist, bar a small minority, missed coming)

In the same vein, the fraudulent and excessive lending is not the banks fault in any way either, and neither was the ensuing property bubble, because it is not the banks fault for ignoring regulations or the law, it is up to the regulator to tell them when they are breaking the law, or engaging in excessive risk (ignorance is a valid excuse).

It's everyone elses fault except the banks, right? Fault/blame is 100% black/white, and there is no such thing as shared culpability; thus the full cost should fall on the homeowner?

gurramok

Seaneh wrote: »

Well, people like Morgan Kelly, Constantin Gurdgiev and Hernando de Soto Polar have been very clear and open with their opinions. They are pretty well respected on not just a European level.

Either the banks take the hit, the borrowers or the taxpayer. Looks like the taxpayer but it all depends on these "restructuring agreements".

I agree with the OP, there are vast amounts of property(90,000 mortgages in arrears, if even 20% of these are repossessed it will help the market find the true bottom) been withheld from the market in a bankrupt country being run by the IMF, you couldn't make it up.

jimmycrackcorm

galwayrush wrote: »

I know someone who bought a reposessed house, he and his family have had a very negetative experience from the original owner's neighbours.

They should invite the neighbours around for a house party and provide free beer with all the money they saved from the low price they paid.

Madam_X

Nah, a person/couple who bought a modest 3-bed semi-D in an ordinary area and who were in full employment and the repayments were manageable... and then lost their job/got their salary or hours cut... doesn't deserve to be made homeless for not predicting the future. They should keep paying their mortgage of course, but repayments that they can manage, and if that means making sacrifices, so be it, and if they get another job with the old salary, then repayments should increase in accordance. But baying for them to be made homeless... is just sad really.

clairefontaine

Can someone explain to me how bailing out the banks was a preferable option to bailing out the mortgage holder?

If they bailed out the mortgage holder the banks would still be getting their money right?

Three Seasons

Madam_X wrote: »

Nah, a person/couple who bought a modest 3-bed semi-D in an ordinary area and who were in full employment and the repayments were manageable... and then lost their job/got their salary or hours cut... doesn't deserve to be made homeless for not predicting the future. They should keep paying their mortgage of course, but repayments that they can manage, and if that means making sacrifices, so be it, and if they get another job with the old salary, then repayments should increase in accordance. But baying for them to be made homeless... is just sad really.

No one here wants people to be homeless. I'd like to see the government set up emergency shelters as a fail safe against families of repossessed homes becoming homeless.

But there needs to be rules by which we operate our society and economy. People can't be allowed to live in their house indefinitely without paying their mortgage. What's the point of giving the deeds as collateral in the first place if otherwise?

Then without a form if collateral the mortgage market dies and sh1t hits the fan and the potential for many more repossessions could crystallise.

When you sign a contract to pay a series of mortgage payments with the caveat that the house can be reposed in the event of default you can't complain when your house is repossessed upon default. If contracts mean nothing our society is fukced.

If you don't agree to the terms and conditions don't sign the fukcing contract.

The risk of losing your job at a future date is your own risk. Take that into account before deciding to sign the contract. Maybe more people would actually save up a reserve fund before signing the contract and not put themselves in a situation where they can barely cover their bills from the outset.

And do you know what would happen if people saved up a reserve fund before signing the contract. House prices would drop and become more affordable. Personal responsibility needs to be encouraged as it works out better for all long term.

BrokenArrows

Madam_X wrote: »

Nah, a person/couple who bought a modest 3-bed semi-D in an ordinary area and who were in full employment and the repayments were manageable... and then lost their job/got their salary or hours cut... doesn't deserve to be made homeless for not predicting the future. They should keep paying their mortgage of course, but repayments that they can manage, and if that means making sacrifices, so be it, and if they get another job with the old salary, then repayments should increase in accordance. But baying for them to be made homeless... is just sad really.

A person who takes out a mortgage takes the risk of owing that much money and not being able to repay it.

Banks should do their best to arrange payments with them so they are manageable but at the end of the day its not a charity.

Granted some people are in a ****ty position but if the banks don't take the houses back they start to make a loss and the tax payer will end up paying for that persons house.

clairefontaine

Three Seasons wrote: »

No one here wants people to be homeless. I'd like to see the government set up emergency shelters as a fail safe against families of repossessed homes becoming homeless.

But there needs to be rules by which we operate our society and economy. People can't be allowed to live in their house indefinitely without paying their mortgage. What's the point of giving the deeds as collateral in the first place if otherwise?

Then without a form if collateral the mortgage market dies and sh1t hits the fan and the potential for many more repossessions could crystallise.

When you sign a contract to pay a series of mortgage payments with the caveat that the house can be reposed in the event of default you can't complain when your house is repossessed upon default. If contracts mean nothing our society is fukced.

If you don't agree to the terms and conditions don't sign the fukcing contract.

The risk of losing your job at a future date is your own risk. Take that into account before deciding to sign the contract. Maybe more people would actually save up a reserve fund before signing the contract and not put themselves in a situation where they can barely cover their bills from the outset.

And do you know what would happen if people saved up a reserve fund before signing the contract. House prices would drop and become more affordable. Personal responsibility needs to be encouraged as it works out better for all long term.

Contracts get renegotiated all the time, or nullified.

It may be an idea to revise the mortgage contract altogether.

It may also be an idea to drop some of the frivolous subjects in school and start consumer economics from third class onwards.

Irish people were not used to having money. It was new to them. It was like handing a 19 year old a credit card with a 20k limit on it. There is little fiscal education in the curriculum. They were bad consumers and therefore inflated prices left right and center. I would agree with this portion of taking responsibility. But the banks committed fraud against a naive population.

galwayrush

BrokenArrows wrote: »

A person who takes out a mortgage takes the risk of owing that much money and not being able to repay it.

Banks should do their best to arrange payments with them so they are manageable but at the end of the day its not a charity.

Granted some people are in a ****ty position but if the banks don't take the houses back they start to make a loss and the tax payer will end up paying for that persons house.

Some people kicked out of their homes will end up getting council houses, guess the tax payer ends up paying for thatas well.

Three Seasons

clairefontaine wrote: »

Contracts get renegotiated all the time, or nullified.

It may be an idea to revise the mortgage contract altogether.

It may also be an idea to drop some of the frivolous subjects in school and start consumer economics from third class onwards.

Irish people were not used to having money. It was new to them. It was like handing a 19 year old a credit card with a 20k limit on it. There is little fiscal education in the curriculum. They were bad consumers and therefore inflated prices left right and center. I would agree with this portion of taking responsibility. But the banks committed fraud against a naive population.

Yes education about finances should be a big priority now after this mortgage crisis. We need to pummel it into kids heads like we do anti drink driving campaigns or seatbelt campaigns.

What fraud are you referring to that the banks committed?

Three Seasons

galwayrush wrote: »

Some people kicked out of their homes will end up getting council houses, guess the tax payer ends up paying for thatas well.

And it will teach everyone a valuable lesson to be more wise with their money or their house will be repossessed. This is healthy for the economy and the well being of its citizens. I want to see as many happy citizens as possible. Low repossessions rates will lead to a lot of unhappy citizens.

JRant

I can't even begin to understand the strain a lot of those families are under. The sleepness nights and tears cried worrying about their plight. But I think in some cases the families would be nearly better off losing the house and reaccessing their situation.
I hope the new insolvency bill will offer some relief for people that will eventually lose their homes.

One possible solution would be to use some of the 200,000+ properties under the control of NAMA, belonging to us citizens, to possibly rehouse people unfortunate enough to lose their homes and many others on the housing list.

Boombastic

Madam_X wrote: »

Nah, a person/couple who bought a modest 3-bed semi-D in an ordinary area .............

So only townies who live in estates? what if I borrowed the same amount, but built a six bedroom house on a site given to me and did all the labour myself? Why should I not be entitled to a write off aswell?

Dwork

Three Seasons wrote: »

And it will teach everyone a valuable lesson to be more wise with their money or their house will be repossessed. This is healthy for the economy and the well being of its citizens. I want to see as many happy citizens as possible. Low repossessions rates will lead to a lot of unhappy citizens.

It's funny really. I've two mates, both were listed on Irelands rich lists. Both were personally worth over 170m at one stage. Both are bust, and owe c.a 400million between them.(For the brighter types, that is an oxymoron in itself, give me 30million and I'd own Dublin, never mind go bust but anyhoo). Now, both are absolutely bust, buried. I know others, run of the mill lads, who owe 2, 3, 10 million or thereabouts each. None of these are homeless. No-one wants to re-posess their houses(HUH???) They all still drive very nice 4*4s. Yet, some ordinary couple, with their cardboard semi and a measly 200k debt, are going onto the street? There's somthing very fcuked up with the system we have, sorry, but there just is. If you name most of the big guns of the boom(The bust ones), I know them, some very well as it happens. I do not know of one with no home or car. I just do not get it. I didn't borrow, despite the banks hassling me to do so as I worried about losing my home. looks like I was the mug, eh.

Balmed Out

why every time someone mentions repossession do we hear such complete and utter rubbish.
There is a large portion of the population who do not own a house but guess what, their not homeless!!!!!!
They do this thing called renting.

The most important thing is the taxpayers is out of pocket as little as possible, that means certain properties have to be repossessed but there are others where some sort of deal has to be done IF the gains of repossessing and selling the property is less then the cost of some sort of debt forgiveness / restructuring.

Madam_X

Boombastic wrote: »

So only townies who live in estates? what if I borrowed the same amount, but built a six bedroom house on a site given to me and did all the labour myself? Why should I not be entitled to a write off aswell?

I didn't say it applies only to the example I gave. I just gave one example. And I didn't say anything about a write-off.

Bullseye1

Three Seasons wrote: »

If they want to keep their house then they should not break their contract that they signed.

Families which could afford houses if they weren't overpriced and the market was more liquid are missing out on being able to have a "roof over their heads" as a result of a clogged up housing market.

Ah yes.

JRant

Madam_X wrote: »

I didn't say it applies only the example I gave. I just gave one example. And I didn't say anything about a write-off.

I think a lot of people automatically think that restructuring a loan is akin to a write-down unfortunately.

Grayson

To be fair to to OP, he's right. By changing the system so people can go a while without repaying or allowing them to renegotiate their mortgages, we are manipulating the housing market. The system is doing its best to keep the prices high. If more houses went on the market, the overall price would drop putting more people into negative equity. It would also lower the balance that's banks currently have because all the real estate that's locked up in mortgages they own would be worth less.

But this means we're doing our best to keep prices at bubble levels. And those levels were artificially high.

That means that it's locking out other buyers from the market. Which causes it to stagnate.

the government should allow the worst of these mortgage holders to be foreclosed on. But at the same time, they need to create more social housing. This means that people won't go homeless, and the prices will drop. Everyone else will be stuck paging a mortgage for a property that has lost more value.
But that's fair because technically all normal home-owners bought as somewhere to live. If they bought it with the idea of selling it for more, they were investing, and the government shouldn't be helping them.

AlekSmart

clairefontaine wrote: »

Contracts get renegotiated all the time, or nullified.

It may be an idea to revise the mortgage contract altogether.

It may also be an idea to drop some of the frivolous subjects in school and start consumer economics from third class onwards.

Irish people were not used to having money. It was new to them. It was like handing a 19 year old a credit card with a 20k limit on it. There is little fiscal education in the curriculum. They were bad consumers and therefore inflated prices left right and center. I would agree with this portion of taking responsibility. But the banks committed fraud against a naive population.

A good point on the renegotiation of contracts.

I would suggest that those committed enough to the process will have a degree of success in this.
I would imagine that "Renegotiation" will rapidly become a growth sector for the Legal profession and that's not a bad way to ensure future borrowers open their eyes about how the real world works.

I do however,disagree about this view that "The Banks" defrauded a naive populace.

Remember we are talking 21st Century Ireland here in the main,and to infer that those born in the 1970's and 80's were a lumpen mass of educationally disadvantaged dullards is,I fear,somewhat wide of the mark.

I suggest that the explanation is somewhat simpler,and has less to do with naivety and more to do with greed,both individual and corporate.

Bullseye1

We are well below bubble levels. People talk about the banks being the property of the tax payer and there shouldn't be a write down of debt, yet I see alot of the same people calling for repossessions which effectively reduces the value of the banks anyway.

Boombastic

JRant wrote: »

I think a lot of people automatically think that restructuring a loan is akin to a write-down unfortunately.

So for example would it be extending a 25/30 year mortgage to a fifty year mortgage? If the person took out the mortgage when they were 30, they'd be 80 again it was paid off. What if the person never gets job at the same wages again?

A person would need to factor in the rise in the mortgage in relation to their wages. Then you have a situation where it may be too expensive for people to take the higher paid job, kind of like the trap of costing more to go to work than stay on the dole. The rise in their mortgage payment would cancel out the increase in wages.


ETA: The only people that wouldn't benefit would be those that saved and planned accordingly.


The whole of the EU had easy access to the same credit, not just the Irish, yet we seemed to have went mad

JRant

Bullseye1 wrote: »

Ah yes.

There is a valid point being made though regarding the low repossesion rates and its somewhat unfair to infer anyone with this opinion as a scavanger. Some people just want to be able to afford their own homes. As it stands now anyone looking to buy now has to contend with;
difficulty getting approval due to the banks reluctance to lend
Higher interest rates to cover the bad debt already in the system
Unrealistic house prices, with the market price still being rigged.

Now i'm in no way advocating wholesale repossessions as it would be terrible for society as a whole but in some cases there is just no other option.

KyussBishop

Those going on about personal responsibility, never seem to pay any attention to the responsibility shared by others, and their requirement to share the burden; things such as:
- Banks deliberately and fraudulently inflating property prices
- Banks lending recklessly
- Both of the above causing homeowners to go into greater debt, in order to buy houses
- Lack of adequate government regulation, in preventing/counteracting the above
- The economic crisis caused by banks and the government, putting people out of jobs, and making them unable to meet mortgage payments
- Massive incompetence on behalf of government and the EU, in failing to put in place proper recovery policies (which would have resolved much of this issue, by providing jobs that allow people to pay their mortgages)

Massive shared fault there, with barely any responsibility being put onto parties in the banks (barely anyone held accountable, or in jail for fraud), and people are blind to the need for banks as well as government, to share the cost of this, not to lump it all onto homeowners.

The grand majority of these indebted homeowners had perfectly sustainable mortgages before the crisis, and they have been screwed by circumstances, that the banks created, and which government negligently failed to prevent or resolve; kicking these homeowners out onto the street, and wiping away everything they've already put into the homes (years of their lives working, to earn the money to meet mortgage payments), would be a pretty callous and needless act, which would benefit the banks (and many of the investors) that caused and contributed to the crisis, at a massive social cost.