Ireland, where repaying your mortgage is optional

Glenbhoy

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.

And that's quite an amazing assumption on which to base a statement of near certainty.

It's all very well the bond markets throwing out a few quid here and there when they know we are the poster boy of the bailout, do you think they'll be happy to fund our 13-15Bn deficit on an annual basis in the near future without the 'implicit guarantee' provided by the presence of the troika, unless of course we manage to get that deficit to a manageable level which is as we know, proving a little problematic.

Norwesterner

The simple fact is, if there are no repos of those who don't pay, quite simply no-one else will pay.
Who in their right mind would continue paying a mortgage if there was no penalty for not paying???
The whole house of cards would collapse, and you can forget about the banks giving more credit to ANYONE.

Ray Palmer

Glenbhoy wrote: »

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

They really don't have a choice it has to happen and there is outside pressure to do so. The only reason they don't want to do it is public opinion. A few choice articles on people milking the system will change opinion.

Glenbhoy wrote: »

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.

I don't think you understand that a tenant can stop paying rent and stay for a year pretty easily while cashing RA cheques. This can have a lasting effect on a LL. Easily losing €12k in the time and then having to play catch up which can take a few years to address. I don't know how small or big a proportion of people this effects. The thing is we aren't talking about people being greedy LL here or people who made bad financial decisions. We are talking about a system that favours tenants to the extent it can put LL in massive financial trouble. If it happens more than once your own house can be at risk.

You should read posts about people trying to get tenants out and you will see it is very difficult. There are also people doing this on a regular basis moving from property to property. Both repossessions and evicting tenants need to be addressed they are intertwined.

Glenbhoy

Ray Palmer wrote: »

They really don't have a choice it has to happen and there is outside pressure to do so. The only reason they don't want to do it is public opinion. A few choice articles on people milking the system will change opinion.

I agree with your points, but of course for politicians, public opinion is the be all and end all. I don't know if attitudes are easily changed as you suggest.

Ray Palmer wrote: »

I don't think you understand that a tenant can stop paying rent and stay for a year pretty easily while cashing RA cheques. This can have a lasting effect on a LL. Easily losing €12k in the time and then having to play catch up which can take a few years to address. I don't know how small or big a proportion of people this effects. The thing is we aren't talking about people being greedy LL here or people who made bad financial decisions. We are talking about a system that favours tenants to the extent it can put LL in massive financial trouble. If it happens more than once your own house can be at risk.

You should read posts about people trying to get tenants out and you will see it is very difficult. There are also people doing this on a regular basis moving from property to property. Both repossessions and evicting tenants need to be addressed they are intertwined.

I'm not anti LL in any way, but even in the cases you mention (which I imagine are uncommon), the LL should perhaps have been more thorough in his/her vetting procedures, particularly in the latter examples where contact with a previous LL would easily identify the culprits. As you would probably expect, I don't really see a huge correlation between eviction of tenants and repos, but i agree that in either case if payments are not being made, then appropriate action should be taken at the earliest opportunity in order to rectify the situation. Essentially both parties in any transaction have duties and responsibilities and they must honour the commitments they made on signing up to the agreement.

Ray Palmer

Glenbhoy wrote: »

I'm not anti LL in any way, but even in the cases you mention (which I imagine are uncommon), the LL should perhaps have been more thorough in his/her vetting procedures, particularly in the latter examples where contact with a previous LL would easily identify the culprits. As you would probably expect, I don't really see a huge correlation between eviction of tenants and repos, but i agree that in either case if payments are not being made, then appropriate action should be taken at the earliest opportunity in order to rectify the situation. Essentially both parties in any transaction have duties and responsibilities and they must honour the commitments they made on signing up to the agreement.

Vetting cannot weed out these people. It easily takes a year to get a tenant out. A fake reference is very easily done. You don't see a correlation to repos because there have been so few. LL in financial trouble due to tenants not paying rent is pretty common as a risk and as I pointed out it can have an effect for years.

You seem to think such tenants care about their responsibilities. Even with judgements against them they may never pay. LL paying tenants to move out after not paying rent is pretty common. They can even cost you other tenants if they are anti-social.

Villa05

keepingyourhome.ie is a state sponsored website from MABS and Citizens Information

About keepingyourhome.ie

Keepingyourhome.ie is provided by the Citizens Information Board and the Money Advice and Budgeting Service (MABS). The website aims to provide comprehensive information on the services and entitlements available if you are having difficulties paying your rent or making your mortgage repayments.

Keepingyourhome.ie is based on content from the citizensinformation.ie website and the Money Advice and Budgeting Service website, mabs.ie.

What are keepingyourhome.ie views on tenants and mortgage holders

Mortgage Holders: Everything is being done at great expense to keep you in a home you cannot afford.
http://www.keepingyourhome.ie/overview_for_homeowners.html.en

Tennants: Feic off down to social
http://www.keepingyourhome.ie/overview_for_tenants.html.en

For those who make comparisons with the famine, they are dead right. Protect the landlord at whatever cost to the country/future generations.
The tenants can f*** right off.

The thing is that the vast majority of tenants accept there lot while the state supports the mortgage holders/Bankers in there complete denial of reality.

You really could not make this stuff up - Only in Ireland

Ray Palmer

Villa05 wrote: »

keepingyourhome.ie is a state sponsored website from MABS and Citizens Information


What are keepingyourhome.ie views on tenants and mortgage holders

Mortgage Holders: Everything is being done at great expense to keep you in a home you cannot afford.
http://www.keepingyourhome.ie/overview_for_homeowners.html.en

Tennants: Feic off down to social
http://www.keepingyourhome.ie/overview_for_tenants.html.en

For those who make comparisons with the famine, they are dead right. Protect the landlord at whatever cost to the country/future generations.
The tenants can f*** right off.

The thing is that the vast majority of tenants accept there lot while the state supports the mortgage holders/Bankers in there complete denial of reality.

You really could not make this stuff up - Only in Ireland

Completely misguided understanding you have there. If you lose your home with a mortgage you still owe the money. So you can be out of your home and still owe the exact same money.

If you aren't paying rent some individual is supporting you at a cost to their financial stability.

They aren't comparable as there is a massively different outcome. There is protection for tenants that massively outweighs those of LLs with a mortgage. If you can't afford rent the state will look after you but can't afford your mortgage and you can end in financial ruin for decades.

A system of realistic recouping of mortgages needs to come in and a life long debit without the benefit is not the solution. How to investigate and insure fairness is the difficult task

Nino Brown

I don't know much about bankruptcy, but if somebody can't pay their mortgage, why cant they be forced into bankruptcy? If they made an investment that didn't work out, they knew the risk going in, they must accept the consequences. Likewise for the banks, they didn't perform due diligence, so they too should also take a loss.
So my very basic understanding of bankruptcy is, the debtor hands over all their assets and pays what they can for 3 years, then walks away from the remaining debt, seems reasonable enough. And the bank takes what they can get from the debtor and eats the remaining loss.
I'm sure there's more to it than that, but it seems reasonable enough to me. Is there something I'm missing here?

gaius c

Anynama141 wrote: »

He says he doesn't expect to pay the loan in full, and when he says 'deal with the shortfall', presumably he means dump it on the taxpayer - otherwise he IS repaying the debt in full, isn't he?

He probably can't get mortgage approval in the UK for anything decent with it hanging over him and he'd be able to get approval for a better sum if he just sold it and swallowed the negative equity.

newby.204 wrote: »

I would have grave concerns with repossessing family homes

Why should a family who can only afford to live in Ongar get to live in Knocklyon?

hfallada wrote: »

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

Wise up. Why is Pat Kenny constantly pushing debt forgiveness? Anything to do with his numerous property investments? Start with him and work your way down. Once people realise that they are bailing out their landlords, they might think twice about it.

SeventySix wrote: »

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.

Tempting and politically easier but you could spend all our limited resources trying to fix that and then have nothing left to deal with PPR arrears.

Joe Hart

Villa05 wrote: »

keepingyourhome.ie is a state sponsored website from MABS and Citizens Information


What are keepingyourhome.ie views on tenants and mortgage holders

Mortgage Holders: Everything is being done at great expense to keep you in a home you cannot afford.
http://www.keepingyourhome.ie/overview_for_homeowners.html.en

Tennants: Feic off down to social
http://www.keepingyourhome.ie/overview_for_tenants.html.en

For those who make comparisons with the famine, they are dead right. Protect the landlord at whatever cost to the country/future generations.
The tenants can f*** right off.

The thing is that the vast majority of tenants accept there lot while the state supports the mortgage holders/Bankers in there complete denial of reality.

You really could not make this stuff up - Only in Ireland

This is where we need a strong Irish Renters Association.

Anynama141

Joe Hart wrote: »

This is where we need a strong Irish Renters Association.

Of course you also need to do something about the scum who go around ripping off landlords and trashing their properties, driving prices up for other renters.

murphaph

Joe Hart wrote: »

This is where we need a strong Irish Renters Association.

The Mietervereine in Germany are paid for by renters (there's a membership fee). Irish tenants are free to form their own if they are willing to pay for it

In Germany it should also be remembered that there are strong lobby groups representing property owners which play a counterweight role to the tenants' associations. At present we really only have the lukewarm IPOA in Ireland, with limited interest and membership. I would imagine a proper Irish Tenants' Association forming, would spur more landlords in to IPOA membership, so I wouldn't mind seeing that.

I see more apathy on both sides than anything else, so doubt either will happen.

makeorbrake

murphaph wrote: »

The Mietervereine in Germany are paid for by renters (there's a membership fee). Irish tenants are free to form their own if they are willing to pay for it ....In Germany it should also be remembered that there are strong lobby groups representing property owners which play a counterweight role to the tenants' associations.

Well, if the German rental scenario is being held up as a model, there will have to be a cultural change amongst tenants also. With rare exceptions, apartments come unfurnished (you literally have to bring the kitchen sink with you). Furthermore, it's common practice for the tenant to be obliged to paint the apartment in totality - regardless of the duration of their time there - before moving out.

murphaph

makeorbrake wrote: »

Well, if the German rental scenario is being held up as a model, there will have to be a cultural change amongst tenants also. With rare exceptions, apartments come unfurnished (you literally have to bring the kitchen sink with you). Furthermore, it's common practice for the tenant to be obliged to paint the apartment in totality - regardless of the duration of their time there - before moving out.

Indeed, the German model is often referred to by tenants in Ireland as if it would be a dream come true for them. In practice a German tenant has a few more rights (tenure is NOT guaranteed however, despite what some Irish tenants seem to think) but far more responsibilities (often including small repairs up to a total of €400 per year...Irish tenants don't even have to buy their own microwave, while a German tenant could be paying to repair his toilet flush mechanism!).

Under Irish law the landlord is now a sort of surrogate mammy, having to provide microwaves, fire blankets, fire extinguishers, smoke alarms and fridge freezers for his tenants. In Germany you get 4 white walls that you'll be expected to return in the same brilliant white condition (not with a few marks on them) that you got them in. A kitchen, light fittings, shower curtains? You'll have to sort those out yourself! In Germany if you don't care enough about your own life to fit a smoke alarm, nobody will blame the landlord when you die in a house fire in your rented flat. In Ireland, the same landlord would be portrayed as a villain who more or less murdered his tenants. Personal responsibility generally has taken a real nose dive in Ireland in the last 20 years. The tenancy laws are just symptomatic of that "litigation culture" that we've grown so fond of.

Irish tenants want the German tenants' associations (without paying for them) but don't want anything else from the "German model".

MMAGirl

in all those countries if your house is repossessed does the the debt follow you?
and even if it does going bankrupt im sure is a much easier process.

UDP

makeorbrake wrote: »

Furthermore, it's common practice for the tenant to be obliged to paint the apartment in totality - regardless of the duration of their time there - before moving out.

That used to be the case but not as of a few years ago due to a law change although when I lived there a few years back (after the law changed) some landlords were still requesting it to be done but there was no legal obligation on the part of the Tennant to comply. The good thing is the deposit is held in escrow so while the landlord can delay you getting it back at least they cannot just take the money as is the case here (another thing here that seriously needs to change to protect tenants).

Chop Chop

Ahh a thread for the "begrudging renting association"

Villa05

Joe Hart wrote: »

This is where we need a strong Irish Renters Association.

No, We just need to face up to the fact that if you can't pay your mortgage, you can't keep the house. The same situation must exist for mortgage holders as exists for tenants.

We have far too many interest groups and the taxpayer is being gouged left, right and centre. We need an interest group for taxpayers and future generations interests. We cannot continue to spend ourselves into Armageddon.

Anynama141

makeorbrake wrote: »

Well, if the German rental scenario is being held up as a model, there will have to be a cultural change amongst tenants also. With rare exceptions, apartments come unfurnished (you literally have to bring the kitchen sink with you). Furthermore, it's common practice for the tenant to be obliged to paint the apartment in totality - regardless of the duration of their time there - before moving out.

This is much better - you don't have to use somebody else's broken down, tatty furniture from 40 years ago. Obviously short-term and student renters will still have to put up with that.

NIMAN

whatever happened to

"your home may be at risk if you do not keep up repayments on a mortgage or other loan secured on it"?

This was on every contract that was signed in Ireland, signed by all the people of their own freewill.

Zambia

NIMAN wrote: »

whatever happened to

"your home may be at risk if you do not keep up repayments on a mortgage or other loan secured on it"?

This was on every contract that was signed in Ireland, signed by all the people of their own freewill.

In the middle of the boom you could have replaced "Your home" with "Your genitals" and people would still have signed.

stevedublin

NIMAN wrote: »

whatever happened to

"your home may be at risk if you do not keep up repayments on a mortgage or other loan secured on it"?

This was on every contract that was signed in Ireland, signed by all the people of their own freewill.

In case you haven't noticed, property prices have been falling and the banks don't want the home back.

Chop Chop

Zambia wrote: »

In the middle of the boom you could have replaced "Your home" with "Your genitals" and people would still have signed.

Now it's so hard to get a mortgage, you need to earn about 80k to get considered. Lucky I bought mine before all the madness started.

makeorbrake

UDP wrote: »

That used to be the case but not as of a few years ago due to a law change although when I lived there a few years back (after the law changed) some landlords were still requesting it to be done but there was no legal obligation on the part of the Tennant to comply.

That's interesting. 10+years since I lived there and wasn't aware of the law change.

NIMAN

stevedublin wrote: »

In case you haven't noticed, property prices have been falling and the banks don't want the home back.

But that's going to change soon, they will have no option but to start taking them back if people aren't paying anything.

Anynama141

Nino Brown wrote: »

I don't know much about bankruptcy, but if somebody can't pay their mortgage, why cant they be forced into bankruptcy? If they made an investment that didn't work out, they knew the risk going in, they must accept the consequences. Likewise for the banks, they didn't perform due diligence, so they too should also take a loss.
So my very basic understanding of bankruptcy is, the debtor hands over all their assets and pays what they can for 3 years, then walks away from the remaining debt, seems reasonable enough. And the bank takes what they can get from the debtor and eats the remaining loss.
I'm sure there's more to it than that, but it seems reasonable enough to me. Is there something I'm missing here?

The problem is that people want to be let off their debt, but keep the property they bought with the debt. Madness - basically asking the taxpayer to pay the difference between the bubble value of the property and what it is worth today, or even worse, asking them to pay the difference between what it cost and what they can afford to pay with a third of their post-tax income (which could be peanuts).

I'm sorry, but as a taxpayer I'd rather see that money spent on schools, roads and hospitals.

Chop Chop

Anynama141 wrote: »

The problem is that people want to be let off their debt, but keep the property they bought with the debt. Madness - basically asking the taxpayer to pay the difference between the bubble value of the property and what it is worth today, or even worse, asking them to pay the difference between what it cost and what they can afford to pay with a third of their post-tax income (which could be peanuts).

I'm sorry, but as a taxpayer I'd rather see that money spent on schools, roads and hospitals.

Jealous much?

Villa05

Ray Palmer wrote: »

Completely misguided understanding you have there. If you lose your home with a mortgage you still owe the money. So you can be out of your home and still owe the exact same money.

If you aren't paying rent some individual is supporting you at a cost to their financial stability.

They aren't comparable as there is a massively different outcome. There is protection for tenants that massively outweighs those of LLs with a mortgage. If you can't afford rent the state will look after you but can't afford your mortgage and you can end in financial ruin for decades.

A system of realistic recouping of mortgages needs to come in and a life long debit without the benefit is not the solution. How to investigate and insure fairness is the difficult task

You signed up to a mortgage contract of X years duration. You own the house at the end of it. If you can't keep up to your end of the contract, yes of course there should be consequences.

My landlady took great care in choosing her tenants, she picked us after 2 months screening. We are in our 6th year in the house no complaints on either side. A previous landlord just took the first person that called, I could tell you some stories from that house. Too many amateurs in the game

Debt forgiveness is inevitable in the arrears resolution process, I suspect Landlords are more likely to be recipients of this. A charge on your income for 3 to 5 years is a small price to pay to get out of an unsustainable situation of their own creation. Bank and Borrower both suffer a little in return for a taxpayer bailout

Anynama141

Chop Chop wrote: »

Jealous much?

Jealous of children getting an education, or cared for in hospitals?

Chop Chop

Anynama141 wrote: »

Jealous of children getting an education, or cared for in hospitals?

Of people with mortgages, because you can't get one.