Ireland, where repaying your mortgage is optional

Anynama141

newby.204 wrote: »

Should the banks not be given powers to repossess homes in certain instances, I would have grave concerns with repossessing family homes

What is so special about 'family homes'? What is your position on renters who can't afford their rents due to unemployment or other financial difficulty?

newby.204

Anynama141 wrote: »

What is so special about 'family homes'? What is your position on renters who can't afford their rents due to unemployment or other financial difficulty?

Well it's a simple one, if you take only 1 family as an example, if they cannot afford a mortgage they can hardly afford rent? So where do you house them once they've had their house repossessed? They then become a council housing problem and your taxes are still paying for them!! Now multiply that by every family home in the country who is in arrears, I would give a simple exception that if a family are in arrears for a home they simply cannot afford and could afford a smaller more modest home well then I think a forced repossession/sale/remortgage to a more affordable home would be a solution

If somebody isnt paying their rent I'd liken it to not paying your sky bill eventually they will cut you off! Similarly I think if a landlord isn't receiving rent he should evict the tenant/tenants and get paying ones!!

However that also brings about my point about controlled rent if you bring rents down it makes it more affordable to rent than buy!! More people would be inclined to rent I think if they could lease a house properly!! And not just for 6 months or a year!!

I do not believe simply taking back homes, evicting people and selling them on to cover the costs is the solution even if it is the simplest one!! They are still occupants who need a residence(children could also be involved)!! However I have no such sympathy with buy to let owners who are refusing to pay, it's an investment that didn pay off, like backing a horse or playin the lotto!!

Diarmuid

newby.204 wrote: »

Well it's a simple one, if you take only 1 family as an example, if they cannot afford a mortgage they can hardly afford rent?

You missed the point and then presented a false dichotomy.

Example: family with a monthly income of 3000 (say since the bust) paying out on a mortgage of 2500 for a 4 bed. they can't afford the house but they could easily rent a smaller house down the road for 1300.

Ray Palmer

Diarmuid wrote: »

You missed the point and then presented a false dichotomy.

Example: family with a monthly income of 3000 (say since the bust) paying out on a mortgage of 2500 for a 4 bed. they can't afford the house but they could easily rent a smaller house down the road for 1300.

While that sounds fair it is unlikely. The person will still owe the money for the large house in Ireland as it stands.

What is false is the belief that once somebody looses their home they will go straight to the state and the state will then provide for them. It won't happen as the state doesn't have the ability to provide for everybody.

First you will have to qualify to get RA or be allowed put your name down on the waiting list for a council house.

Secondly people have friends and family which will put them up or some kind of arrangement will be made.

Thirdly trying to find a LL who will take RA is difficult as is do you think many are going to jump to provide property for people who have a massive debit and have a record of not being able to pay their bills?

There will be a portion but is it the majority or a small amount. I suspect it will be small.

Ultimately if you can't afford something you have why should you have the state subsidize you? If you play out all the figures maybe it will be better to let them live there but I doubt it. There also isn't much choice IMF have effectively told the state to speed up repossessions so it is happening one way or the other.

Yes people will suffer but that is the reality as it is the situation that people put themselves in. Are all victims or responsible for their own choices? Ultimately it will be a bit of everything but so be it as it is having a bigger impact on everybody else and has to be treated.

The_Morrigan

jmayo wrote: »

......You are being economical with the truth there.
Banks were sending out unsolicited mail to customers offering them 20k in personal loans and some eejits took them up on this.
I have personal experience of going into a now merged building society, no not INBS, and was told by mortgage borker that with my deposit I should have no problem getting mortgages for a few places and that is how I should proceed.
Bank employees and brokers were often incentivised through bonuses on volume of business and the more they lent out the higher were bonuses.

They actually helped people lie.

Now saying all of that, it does not absolve mary or mickie from paying off their debts and people need to take personal responsibility for their fooking actions :mad:

To be fair, I don't think I am.
I am aware of the letters you are talking about, they were product offerings letting customers know that this is what we are offering - the same way service providers cold call you trying to get you to switch to their service.

Remember this is a time that the big UK banks came to Ireland and the likes of AIB & BOI had to stump up their products to try stay in the game. They increased their offerings, tried to retain customers by letting them know if they needed to get a new car based on their banking profile with them they have a 'pre-approval in principle' of X amount and the process would be easy rather than going to Halifax or RBS and having to deal with a longer process. No bank sent out blank cheques to clients and let them run amok, every customer still had to go through the process of signing legal documentation to draw down a loan, it was the customers choice which bank they went with, if any.

Also, in my 6 years in retail banking during the boom, including working in sales and lending I never once received a commission based payment or bonus. It was not the done thing in the bank I worked for, maybe for others it was common, but not all bankers were incentivised to help people lie on their applications.

Ray Palmer

The_Morrigan wrote: »

Also, in my 6 years in retail banking during the boom, including working in sales and lending I never once received a commission based payment or bonus. It was not the done thing in the bank I worked for, maybe for others it was common, but not all bankers were incentivised to help people lie on their applications.

While I don't agree with what was said with regard to banks pushing people to take more money and encouraging them to lie on applications there is the issue of brokers. Many people think brokers are bank employees and don't see the difference. The reality is the brokers are paid a commission and are not exactly known to care past that.

The brokers certainly did let people know the system and how to get more money. They also did let people know how they could buy a second property. That said they didn't put guns to peoples' heads.

The whole model of brokers for financial products needs to be addressed. The UK have just introduced a new system called RDR based on a Dutch model. No more ongoing commission paid for by the customer hidden among the charges. Restrictions on commission and full visibility. You know there are probably brokers getting paid by the banks for mortgages that are in arrears. They can get commissions for the entire lifetime of the mortgage.

Working in a bank doesn't mean you know the full system in place or people's experiences when they went looking for a mortgage. A lot of financially illiterate people can easily be fooled.

The_Morrigan

Ray Palmer wrote: »

While I don't agree with what was said with regard to banks pushing people to take more money and encouraging them to lie on applications there is the issue of brokers. Many people think brokers are bank employees and don't see the difference. The reality is the brokers are paid a commission and are not exactly known to care past that.

The brokers certainly did let people know the system and how to get more money. They also did let people know how they could buy a second property. That said they didn't put guns to peoples' heads.

The whole model of brokers for financial products needs to be addressed. The UK have just introduced a new system called RDR based on a Dutch model. No more ongoing commission paid for by the customer hidden among the charges. Restrictions on commission and full visibility. You know there are probably brokers getting paid by the banks for mortgages that are in arrears. They can get commissions for the entire lifetime of the mortgage.

Working in a bank doesn't mean you know the full system in place or people's experiences when they went looking for a mortgage. A lot of financially illiterate people can easily be fooled.

Ray I completely agree and in my first and second draft of my post (lost both on mobile) I had mentioned that brokers were a different breed and should not be confused with the bank staff in the branch networks.

And I wholeheartedly agree that some people were duped by bad eggs, but that is the same for all professions, it is not exclusive to financial services. At the end of the day, noone was forced into signing a loan agreement and people need to be responsible for their own actions.

I can see this from both sides, from working in the industry before and after the boom and I have a mortgage that is in negative equity, but I took it out and I will continue to pay it and sacrifice nights out, holidays etc to ensure I do everything in my power to keep up with the payments as it is my home and my responsibility.

FutureGuy

Met a guy I used to go to school with on Monday. The same guy who called me an idiot for not buying in 2007.

He's 2 months in arrears but fully blames the banks for his situation.

And I'm the idiot...

seamus

Ray Palmer wrote: »

While that sounds fair it is unlikely. The person will still owe the money for the large house in Ireland as it stands.

What is false is the belief that once somebody looses their home they will go straight to the state and the state will then provide for them. It won't happen as the state doesn't have the ability to provide for everybody.

This. If repossessions were as straightforward as taking your home and letting you walk away and rent somewhere else down the road, mortgage-free, everyone in arrears would jump at the offer.

Hell, I'm managing my mortgage just fine and I'd jump at that offer.

We are however, also culturally and politically very opposed to physical infringements on the family home*, and any legislation which is seen to give 3rd parties more access to take a person's home, would be enough to collapse a government.

As you say, it suits the government at present to have few repossessions. If people started getting thrown out of their family homes, the council housing lists would explode, and local authority costs would increase as they start paying rent on private properties to temporarily house those with nowhere to go.

For the moment, these costs lie as mortgage arrears on the banks' balances and the government are happy to leave them there. And people are happy that no-one is taking their home from them. So everyone's happy. Except that this is an ever-increasing powderkeg which must be dealt with eventually.

*Anyone who responds with the words, "property tax" instantly goes on my ignore list

jmayo

yosser hughes wrote: »

David Hall of New beginnings is also a director of several casinos around Dublin. I doubt many of his customers get debt forgiveness at the roulette wheel.
Is he ever asked about his own situation regarding property or indeed how he applies debt forgiveness in his own business? Is he f**ck!
When the person interviewing him is also up to their necks because they bought a rock in Dalkey or a few apartments in the Ritz Carlton.

You forgot about indulging in expensive court cases.

Anynama141 wrote: »

Just on a point of information, I believe that solicitors (and barristers?) can't practice if they are bankrupt. Also solicitors have been up to their necks in building property empires, presumably having seen their clients 'making money' hand over fist during the good times.

It's worth noting that New Beginning and Irish Mortgage Holders Association, two of the main lobbyists for debt forgiveness, are both founded and fronted by lawyers.

It isn't just solicitors.
I remember a thread, around here I think, about some "poor" pharmacist who wanted a debt writedown because he developed the postoffice in a small rural Clare village adding some retail units and appartments.

There are a huge swath of the so called Irish professional class and middle class e.g doctors, pharmacists, solicitors, accountants, vets, diown to teachers and guards, etc who all climbed aboard the jolly property ladder and the less astute or probably more correctly the less greedy and luckier ones got off in time.

newby.204 wrote: »

Well it's a simple one, if you take only 1 family as an example, if they cannot afford a mortgage they can hardly afford rent? So where do you house them once they've had their house repossessed? They then become a council housing problem and your taxes are still paying for them!! Now multiply that by every family home in the country who is in arrears, I would give a simple exception that if a family are in arrears for a home they simply cannot afford and could afford a smaller more modest home well then I think a forced repossession/sale/remortgage to a more affordable home would be a solution

Yes, but I am not paying so that they can have an asset in 20 to 40 years time.

newby.204 wrote: »

If somebody isnt paying their rent I'd liken it to not paying your sky bill eventually they will cut you off! Similarly I think if a landlord isn't receiving rent he should evict the tenant/tenants and get paying ones!!

Of course tenants are of course of lesser importance than "home owners". :rolleyes:
Tenants are fair game for eviction, but mortgage defualters are not. :rolleyes:
Some are more equal than others ehhh ?

newby.204 wrote: »

I do not believe simply taking back homes, evicting people and selling them on to cover the costs is the solution even if it is the simplest one!! They are still occupants who need a residence(children could also be involved)!!

You do know that some tenants have children as well ??

jmayo

The_Morrigan wrote: »

To be fair, I don't think I am.
I am aware of the letters you are talking about, they were product offerings letting customers know that this is what we are offering - the same way service providers cold call you trying to get you to switch to their service.

There is a big bloody difference between a product offering from Eircom, Dell, Tesco, etc and a personal loan of 20k from a bank.

The_Morrigan wrote: »

Remember this is a time that the big UK banks came to Ireland and the likes of AIB & BOI had to stump up their products to try stay in the game.

Ah FFS lets not start blaming the Brits.

Lets shine a light on the Irish banks to see their track record of responsible governance. :rolleyes:

AIB for one has always been a shoddly run, if not bordering on downright fraudalent, organisation.
If we had a decent regulation system in this country half of it's board/directors/executives would have seen a jail cell down the years.
Or maybe we should start forgetting about Nevis funds, stockbroking subsidaries advising clients to buy parent's bank shares, non resident accounts with tax avoidance, ICI, Eugene McErlean, etc.

INBS has been shown to have also been engaged in highly dubious activites including facilitating breeches of company law with other institutions, the ignoring of lending rules of the organisation, etc.

And of course then we have Anglo which I think needs no explanation.

And the others are no shining lights of ethical behaviour either when a light is shone on them.
So please lets not start the sh** about how it was all the fault of the likes of Halifax/BOSI.

The_Morrigan wrote: »

They increased their offerings, tried to retain customers by letting them know if they needed to get a new car based on their banking profile with them they have a 'pre-approval in principle' of X amount and the process would be easy rather than going to Halifax or RBS and having to deal with a longer process. No bank sent out blank cheques to clients and let them run amok, every customer still had to go through the process of signing legal documentation to draw down a loan, it was the customers choice which bank they went with, if any.

FFS at the same time as you claim the banks were trying to retain customers, my customer experience with one major bank was going down the toilet to the point where I had to rely on foreign banks to correct their errors.
And I bet if we did a poll you woukld find the customer experience many got was cr** where branches were being shut, tellers were replaced with machines which half the time did not work.

The_Morrigan wrote: »

Also, in my 6 years in retail banking during the boom, including working in sales and lending I never once received a commission based payment or bonus. It was not the done thing in the bank I worked for, maybe for others it was common, but not all bankers were incentivised to help people lie on their applications.

Would you consider advancement a commission of sorts.
I bet if you did not lend enough you didn't get promotion ?
Hell it worked for richie boy boucher didn't it. :rolleyes:

The industry you worked in, and whose behaviour you are apologising for, has helped sink this country for generations and deserves no quarter.

And no matter if I hate bankers, banks, etc it doesn't mean I absolve anyone that owes them, and by direct conseuqnce of the banks actions, the rest of us money.

The_Morrigan

jmayo at no point in my post did I blame the Brits, I simply mentioned that the reactions of the national banks was to the establishment of much bigger players in the market that they dominated for years without interruption.


I'm quite insulted that you have compared me and my personal experience as a staff member of a retail bank during the time all these mortgages were being taken out by customers to the religious child abuse scandals.

hfallada

RTE are making people believe they're will be debt forgiveness. That if you don't pay your mortgage you'll get x% knocked off your mortgage. They are always comparing ireland to countries not in any shape or form like Ireland eg japan.

RTE need to stop telling what people want to hear and what they need to hear. If you dont pay your mortgage for the next 12 months you may not lose your house today but in 2-3 years

Anynama141

newby.204 wrote: »

If somebody isnt paying their rent I'd liken it to not paying your sky bill eventually they will cut you off! Similarly I think if a landlord isn't receiving rent he should evict the tenant/tenants and get paying ones!!

So if someone isn't paying their rent, they must be kicked out of their home, but if they aren't paying their mortgage, they get to stay there?

Isn't that just a little bit inconsistent?

Ray Palmer

seamus wrote: »

This. If repossessions were as straightforward as taking your home and letting you walk away and rent somewhere else down the road, mortgage-free, everyone in arrears would jump at the offer.

Hell, I'm managing my mortgage just fine and I'd jump at that offer.

We are however, also culturally and politically very opposed to physical infringements on the family home*, and any legislation which is seen to give 3rd parties more access to take a person's home, would be enough to collapse a government.

As you say, it suits the government at present to have few repossessions. If people started getting thrown out of their family homes, the council housing lists would explode, and local authority costs would increase as they start paying rent on private properties to temporarily house those with nowhere to go.

For the moment, these costs lie as mortgage arrears on the banks' balances and the government are happy to leave them there. And people are happy that no-one is taking their home from them. So everyone's happy. Except that this is an ever-increasing powderkeg which must be dealt with eventually.

*Anyone who responds with the words, "property tax" instantly goes on my ignore list

Why should repossessions be straightforward where you can just walk away from the debit you have? You'd do it if you could which pretty much points out to why it can't be done.

You seemed to completely misunderstand me. I don't think that it suits the government to not have repossessions. I outlined why it specifically won't cost the government money to house people. The government haven't done it due to public opinion but have little choice now as the IMF will push them.

Considering the housing list has a 4 year waiting list in many places increasing the waiting list isn't exactly going make much difference is it?

Lots LL don't rent to RA tenants so increase in demand with no increase in price won't increase supply.

Some people will suffer but it certainly won't be everybody who has their house repossessed left in the gutter.

SeventySix

The banks dont need to start the repossessions with family homes, start with the Buy-To-Let crowd. Its less emotive and might shock those Landlords that are currently pocketing rent in to starting to live up to their responsibilites.

Nino Brown

I just saw the OP's chart on Bloomberg this morning. This issue is becoming mainstream news not just in Ireland but worldwide, it will have to be acted upon now, we cant sweep it under the carpet anymore.
I'm so tired of people taking the most extreme situations possible to argue against evictions. People won't be homeless, they can move back in with family if they have to, or rent a cheaper place that they afford. In fact if they foreclosed on every mortgage in the country that was over 1 year in arrears next week, I bet there wouldn't be a single homeless person. And there wont be nearly as many foreclosures as people are saying, because as soon as foreclosures start, the people are taking the piss wont be long about paying up, so the amount of people who are supposedly struggling, will be proven to be a lot less than it appears.

who_ru

Ray Palmer wrote: »

You seemed to completely misunderstand me. I don't think that it suits the government to not have repossessions. I outlined why it specifically won't cost the government money to house people. The government haven't done it due to public opinion but have little choice now as the IMF will push them.

if the Govt can fudge the issue until the end of the year, and lets face it they have done so so far, maybe with the expectation that the bailout will be exited in 2014, the govt may not bother pushing repos too hard.

but of course the people renting enjoy no such protection.

Ray Palmer

who_ru wrote: »

if the Govt can fudge the issue until the end of the year, and lets face it they have done so so far, maybe with the expectation that the bailout will be exited in 2014, the govt may not bother pushing repos too hard.

but of course the people renting enjoy no such protection.

That doesn't make any sense. There is no way we will be out of the bailout in 2014 and the IMF have a say regardless. The laws have to change you do get that it isn't the government actually stopping the banks directly?

People renting can stop paying rent and pretty much stay there without any penalty for a long time. You do understand some of the buy to let people are in trouble precisely because of such people?

Really strange post.

hmmm

Ray Palmer wrote: »

That doesn't make any sense. There is no way we will be out of the bailout in 2014 and the IMF have a say regardless.

As we are now able to raise money on the bond markets at reasonable prices, and because payments on the promissory notes have been pushed out to the distant future, it is almost certain that we will not need a second bailout - assuming nothing happens which scares investors.

carpejugulum

hmmm wrote: »

If someone has a second property and isn't paying the mortgage in full, I cannot understand why that property should not be repossessed immediately. Yet there are 48,000 buy to let loans "in difficulty". 48,000. Property investors. 48,000. And taxpayers are effectively subsidising them by propping up the banks.

And also subsidising some of them twice through rent allowance. Mad system.

carpejugulum

hmmm wrote: »

As we are now able to raise money on the bond markets at reasonable prices, and because payments on the promissory notes have been pushed out to the distant future, it is almost certain that we will not need a second bailout - assuming nothing happens which scares investors.

That was the second bailout. And we may need a third one. We are able to raise money on the bond markets, but it may be mainly thanks to junk bonds being more popular than ever.
Central banks keep spouting trillions into economies, and the money needs to go somewhere.

hmmm

carpejugulum wrote: »

That was the second bailout. And we may need a third one. We are able to raise money on the bond markets, but it may be mainly thanks to junk bonds being more popular than ever.
Central banks keep spouting trillions into economies, and the money needs to go somewhere.

I've no idea what you're on about.

bmwguy

I remember years ago paying the mortgage was the first thing people did with their wages, were repissessions more prevalent then? This whole situation is intruiging to me, I missed a mortgage payment last year when the Ulster Bank debacle in their IT system made funds in my account unavailable. I got calls and letters from AIB immediately. I started reading about it a lot then. What is the longest that anybody knows of someone defaulting and remaining in their house? It seems like respect for the banks is gone. I'm not in arrears anymore, only was for about 2 weeks

Zamboni

seamus wrote: »

We are however, also culturally and politically very opposed to physical infringements on the family home*, and any legislation which is seen to give 3rd parties more access to take a person's home, would be enough to collapse a government.

I think this is a false perception.
The sentiment on this thread alone would indicate the same.
If I heard a local politician demanding repossessions tomorrow he'd be in my memory come next poll.

hmmm wrote: »

As we are now able to raise money on the bond markets at reasonable prices, and because payments on the promissory notes have been pushed out to the distant future, it is almost certain that we will not need a second bailout - assuming nothing happens which scares investors.

Investing in a country that owns banks that won't allow the normal business consequence of repossession for a non-performing mortgage would scare the sh1t out of me.

Why anyone would invest in a company that flippantly writes of bad debt and shores it up with unsustainable long-term borrowings is beyond me.

gurramok

Investor confidence in Ireland will be wiped out if there is no action on arrears, it will be back to square one preparing for another bailout. The govt knows this and have successfully kicked the arrears can down the road for the past few years, 2013 the game is up.

true

bmwguy wrote: »

It seems like respect for the banks is gone.

Not surprising with the way some banks and building societies behaved during the bubble period, and how they helped destroy the country, and how heads have not rolled in these institutions. Quite the opposite actually - for example the head of one little building society retired with a pension pot worth 20 million.

joebloggs32

A question on making payments. I am about 3 months ahead of repayments due to a lump sum being lodged a few years back.
Cash is very tight at the moment though, so if I held off payment for one month I know I would not be in arrears, but would it cause me problems down the line the next time I looked for a loan?

Norwesterner

joebloggs32 wrote: »

A question on making payments. I am about 3 months ahead of repayments due to a lump sum being lodged a few years back.
Cash is very tight at the moment though, so if I held off payment for one month I know I would not be in arrears, but would it cause me problems down the line the next time I looked for a loan?

I'd talk to your bank to be honest.
Be upfront with them.
Don't take advice from us random punters on the internet.

Glenbhoy

Ray Palmer wrote: »

The laws have to change you do get that it isn't the government actually stopping the banks directly?

The govt may not be actually stopping repos, but do they actually want repos to start?

Ray Palmer wrote: »

People renting can stop paying rent and pretty much stay there without any penalty for a long time. You do understand some of the buy to let people are in trouble precisely because of such people?

That may be the case in a very small minority of cases, but certainly not for the majority, simply because people can't actually stop paying rent and remain in a property for a very long time, unlike the current mortgage situation where owners can choose to stop paying rent and remain in the property for a very long time.