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Ireland, where repaying your mortgage is optional

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    #152
    Nino Brown
    Closed Accounts Posts: 1,507 ✭✭✭Nino Brown


    Chop Chop wrote: »
    You just don't want anyone to get any help at all, regardless of what it will do to the country. "didn't do me any harm, throw them out on the street". It's just jealousy, other people have something you don't have and you have a big problem with it.

    What do you think people are jealous of?, I'm not jealous of people who have a house they can't pay for, I fell sorry for them. You make it sound like it's their house, it's not, not until it's paid for. There's nothing to be jealous of.
    What I would be jealous of is people being rewarded for making bad decisions.
    I made a conscious decision not to buy in the boom, I thought it was too risky. Other people took the risk, and fair play to them, they had more balls than me. Unfortunately for them it didn't work out, but that's the nature of investments.
    Now I can buy a property for less than half its boom value when the market bottoms out. My risk paid off. I think its extremely unfair to expect people like me to cover losses of other investors, if the market had kept going I would have made a loss. Its hardly fair to expect people to take a loss either way.


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    #153
    Anynama141
    Closed Accounts Posts: 964 ✭✭✭Anynama141


    Chop Chop wrote: »
    Those people are prety much in the minority, The OP said in the opening post that 100,000 people were not paying anything towards their mortgage, which is utter bollocks.
    Where is that in the opening post? Is your argument so feeble you have to resort to pure fiction?


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    #154
    Chop Chop
    Closed Accounts Posts: 343 ✭✭Chop Chop


    Anynama141 wrote: »
    By the way, for those of you looking to buy a place - why do you think it is so hard to find a good property? Could it be because there are over 100,000 properties occupied by people who aren't actually paying the mortgage?

    WOW!!

    Sorry a few posts after, Pure fiction you wrote there, where did you get the utter bollocks statistics from?


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    #155
    murphaph
    Registered Users Posts: 19,022 ✭✭✭✭murphaph


    cosbloodymick wrote: »
    I don't think this is the case but I am open to correction. For instance if you borrow 20k off a car dealer over 5 years to buy a car and after year 2 you lose your job or have a big pay cut and cannot make the repayments then the car dealer will repossess the car and you will have no further liability for the loan as the lender has repossessed the asset against which the loan was taken. This is not the case with a house. If you cannot make the repayments the lender can repossess the asset against which the loan was taken but you still have a liability for the loan if the sale of the house does not reach the mortgage value.
    In other countries once the house has been repossessed there is no further liability on the borrower for the mortgage.
    No, this is incorrect. If I take out an UNSECURED personal loan of 20k from a bank and go to a dealer and buy a car, then the car is mine outright. If I then default on loan repayments, the bank can sue me for the debt, but may not simply take my car. If they sue you for the debt and your car has to be sold to pay it and the car is only worth 10k now, you still owe the other 10k, same as a mortgage.

    What you are talking about is more like hire purchase, whereby ownership of the car passes to me only on final payment (this is not a loan at all). This is closer to a mortgage, but not the same as a mortgaged property does legally belong to me, but the bank has a charge on that mortgage.

    Finance through a car dealership will almost certainly be hire purchase (or if a loan will be with an outside bank). In this case, given that a decent deposit will likely be required, it would be difficult to cease repayments, have the car repossessed and for the dealer or finance house to lose out, because if you default later on, they have most of your money and if you default early, they have your deposit. You'd have to time it very well so that the finance house "lost" (and would have cause to "come after you" for the outstanding debt).

    The key here is....unsecured. The banks can "take a chance" on a 20k loan. The sums involved in property are generally much higher, so banks want some sort of security.


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    #156
    Anynama141
    Closed Accounts Posts: 964 ✭✭✭Anynama141


    Chop Chop wrote: »
    WOW!!

    Sorry a few posts after, Pure fiction you wrote there, where did you get the utter bollocks statistics from?
    So you were proved wrong, and then produce another straw man. If you are not paying ALL of your mortgage, you are not playing your mortgage. You don't hand the bar man half the price of a drink and claim you paid for it, do you?

    Or perhaps you do, and expect to be allowed drink it all?

    The statistics come from Deutsche Bank. Do have any evidence at all, or just insults and straw men?


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    #157
    purplepanda
    Registered Users Posts: 1,061 ✭✭✭purplepanda


    If you are renting & claiming assistance & not paying the rent to your landlord, the landlord should be able to claim the rent payments to be paid direct to his account. Plus payments towards the arrears.

    If a buy to rent landlord doesn't pay rent received from tenants towards his mortgage then the house should be subject to repossession.

    If you have mortgage arrears yet receive more than enough in salary, you can afford to pay & you should be subject to repossession. I don't care if you believe you will get your negative equity cancelled by some sort of bank & or government / EU deal in the future. You earn enough so pay your mortgage or lose your house.

    I'm all for helping those in negative equity or mortgage arrears if possible but not at massive costs to the rest of society.

    If you have a mortgage, you signed the forms & it was all it the small print, especially the advice house prices can decrease as well as increase!!!

    The IMF, EU governments & bond market will force the government to act soon on this issue, "strategic defaulters" should be dealt with first.


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    #158
    murphaph
    Registered Users Posts: 19,022 ✭✭✭✭murphaph


    Chop Chop wrote: »
    Strategic defaulters is a minority also.
    Nobody can say this for certain. What we can say is that as a percentage of total mortgages, Ireland has approximately 14% in arrears, compared to figures of 3 and 4% for places like GREECE and SPAIN and PORTUGAL and the UK. Something is clearly afoot with strategic default in Ireland.


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    #159
    Chop Chop
    Closed Accounts Posts: 343 ✭✭Chop Chop


    murphaph wrote: »
    Nobody can say this for certain. What we can say is that as a percentage of total mortgages, Ireland has approximately 14% in arrears, compared to figures of 3 and 4% for places like GREECE and SPAIN and PORTUGAL and the UK. Something is clearly afoot with strategic default in Ireland.

    I don't think so, I think it's unemployment that is driving so called "strategic defaulters" and wage cuts that's driving arrears. It was the bank and government that started this rhetoric in the first place.

    Wages have been cut drastically, which is why we have mortgage arrears, this seems to be driving the restructuring program of split mortgages etc...

    If 100,000 mortgage holders were not paying anything then these options would not be on the table.


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    #160
    Nino Brown
    Closed Accounts Posts: 1,507 ✭✭✭Nino Brown


    Chop Chop wrote: »
    I don't think so, I think it's unemployment that is driving so called "strategic defaulters" and wage cuts that's driving arrears. It was the bank and government that started this rhetoric in the first place.

    Wages have been cut drastically, which is why we have mortgage arrears, this seems to be driving the restructuring program of split mortgages etc...

    If 100,000 mortgage holders were not paying anything then these options would not be on the table.


    You think unemployment and wage cuts are worse here than Greece?


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    #161
    NIMAN
    Registered Users Posts: 33,621 ✭✭✭✭NIMAN


    Nino Brown wrote: »
    Of course it does, in countries experiencing high unemployment and wage cuts, late stage arrears seem to be as high as 4%.

    In Ireland it's 14%, where are we getting that extra 10% from, Greece is in far worse shape than us with far fewer late stage arrears.

    But isn't that the whole angle the article is taking?

    That many people who could afford to pay have decided not to?


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    #162
    Nino Brown
    Closed Accounts Posts: 1,507 ✭✭✭Nino Brown


    NIMAN wrote: »
    But isn't that the whole angle the article is taking?

    That many people who could afford to pay have decided not to?

    Yeah that's the point I'm making, if unemployment and wage cuts were the problem, we'd be in line with other countries. There's clearly something else going on Ireland, and that's strategic default.


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    #163
    StillWaters
    Closed Accounts Posts: 1,799 ✭✭✭StillWaters


    Anynama141 wrote: »
    So you were proved wrong, and then produce another straw man. If you are not paying ALL of your mortgage, you are not playing your mortgage. You don't hand the bar man half the price of a drink and claim you paid for it, do you?

    Are you advocating that people who have reached agreement with the bank regarding a payment plan and have split or capitalised arrears should be repossessed? That's the craziest thing I've read on here!!


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    #164
    StillWaters
    Closed Accounts Posts: 1,799 ✭✭✭StillWaters


    lima wrote: »
    Jealous of bitter people who are stuck on a grim wet island forever..
    Renting means being free from the shackles of the boom/bust where everyone is living with this horrendous hangover that has no end in sight.
    !
    No it doesn't, that is a fallacy. We do not have rent control in Ireland. You are correct that rent allows more mobility. It is more expensive than buying though, so there is a price to be paid for that mobility!


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    #165
    Nino Brown
    Closed Accounts Posts: 1,507 ✭✭✭Nino Brown


    StillWaters wrote: »
    No it doesn't, that is a fallacy. We do not have rent control in Ireland. You are correct that rent allows more mobility. It is more expensive than buying though, so there is a price to be paid for that mobility!

    How is renting more expensive?


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    #166
    Anynama141
    Closed Accounts Posts: 964 ✭✭✭Anynama141


    StillWaters wrote: »
    Are you advocating that people who have reached agreement with the bank regarding a payment plan and have split or capitalised arrears should be repossessed? That's the craziest thing I've read on here!!
    Is there some sort of straw man competition running today and nobody told me?

    OK - my go: are you seriously advocating enslaving Mexicans and making them mind turnips for us? That's the craziest thing I've ever read on here!!


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    #167
    StillWaters
    Closed Accounts Posts: 1,799 ✭✭✭StillWaters


    Anynama141 wrote: »
    Is there some sort of straw man competition running today and nobody told me?

    OK - my go: are you seriously advocating enslaving Mexicans and making them mind turnips for us? That's the craziest thing I've ever read on here!!
    Can you answer the question please, are you advocating repossessions for all arrears cases?


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    #168
    StillWaters
    Closed Accounts Posts: 1,799 ✭✭✭StillWaters


    Nino Brown wrote: »
    How is renting more expensive?

    The maths has been done many times on this forum, calculated over ones lifetime, buying is cheaper than renting.


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    #169
    MMAGirl
    Registered Users Posts: 484 ✭✭MMAGirl


    StillWaters wrote: »
    The maths has been done many times on this forum, calculated over ones lifetime, buying is cheaper than renting.

    If you can pay off a mortgage in 10 or 15 years, which is easier than it seems, its even better.
    No need to ever worry about rent or mortgage payments ever again.
    Still have to worry about property tax though :)

    I hear the renting is better argument all the time. I just ask someone to add up what they will pay in rent for another 50 years and tell me the answer. And most of these people are renting a room rather than a house. I hope they dont mind sharing for 50 years.


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    #170
    Nino Brown
    Closed Accounts Posts: 1,507 ✭✭✭Nino Brown


    StillWaters wrote: »
    The maths has been done many times on this forum, calculated over ones lifetime, buying is cheaper than renting.

    Maybe so, I'm not going to try to do the maths. But interest rates won't be low forever, and when they rise I seriously doubt a mortgage will be cheaper. Put property tax, water rates and the fact you're tied down to one place, on top of that and buying to occupy definitely isn't for me.
    I like to be able to move around, I spent a few years in the states recently and it was great that that I could just back my bags and leave. But i guess its just a lifestyle choice, I'm not going to arguing that buying a home is wrong...as long as you can afford it of course.


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    #171
    makeorbrake
    Registered Users Posts: 4,664 ✭✭✭makeorbrake


    StillWaters wrote: »
    Can you answer the question please, are you advocating repossessions for all arrears cases?
    I think that has to be left at the discretion of the bank. They are entitled to make a judgement call on that themselves if they want to review that. However, they (the banks) should not be allowed to maintain a house of cards by not realising the trash they have on their balance sheets on a wholesale basis. There should be some way by which the regulator steps in if that continues...as their inaction is holding the country as a whole - back.

    Getting the unpleasantness out of the way is in the interests of all in the long run.


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    #172
    StillWaters
    Closed Accounts Posts: 1,799 ✭✭✭StillWaters


    Nino Brown wrote: »
    Maybe so, I'm not going to try to do the maths. But interest rates won't be low forever, and when they rise I seriously doubt a mortgage will be cheaper. Put property tax, water rates and the fact you're tied down to one place, on top of that and buying to occupy definitely isn't for me.
    I like to be able to move around, I spent a few years in the states recently and it was great that that I could just back my bags and leave. But i guess its just a lifestyle choice, I'm not going to arguing that buying a home is wrong...as long as you can afford it of course.
    You're right. It's a lifestyle choice, but it's also forward planning.
    If interest rates go up, inflation goes up, rents go up.
    Water rates will be paid by the user, not the landlord. It is a utility bill.

    I bought my first house over 20 years ago, so am mortgage free now. I cam pack up and head off too, safe in the security that I have somewhere to come back to.


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    #173
    murphaph
    Registered Users Posts: 19,022 ✭✭✭✭murphaph


    Nino Brown wrote: »
    How is renting more expensive?
    Renting an apartment in Dublin City right now will cost you more per month in rent than the mortgage you'd require to buy same and by a good margin in some cases. Sure the mortgagee has other costs: maintenance, management fees and a property tax to pay for that the tenant wouldn't but the mortgagee will finish paying his mortgage off in 20 years. The tenant will still be paying rent until the day he dies.

    It was not like this 7 years ago. Renting a place then was a touch cheaper than the equivalent mortgage repayment, but right now, renting (in Dublin at least) renting is clearly going to work out much more expensive over one's lifetime.

    Renting is great for flexibility a freedom, but it is currently not cheap.


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    #174
    Anynama141
    Closed Accounts Posts: 964 ✭✭✭Anynama141


    StillWaters wrote: »
    Can you answer the question please, are you advocating repossessions for all arrears cases?
    Not at all. If you can pay, you pay. If you can't, but you can pay - say - two thirds of the mortgage, then there should be some solution workable whereby the government or the bank takes a stake in your property, so that the taxpayer gets some value for money too. Cases that can't manage that should be looking at repossession and renting, with the possibility of debt overhang write-offs.


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    #175
    Anynama141
    Closed Accounts Posts: 964 ✭✭✭Anynama141


    StillWaters wrote: »
    The maths has been done many times on this forum, calculated over ones lifetime, buying is cheaper than renting.
    Isn't that at present prices, and in only some cases? I'm not sure how many Defaulters bought at present prices...


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    #176
    Nino Brown
    Closed Accounts Posts: 1,507 ✭✭✭Nino Brown


    StillWaters wrote: »
    You're right. It's a lifestyle choice, but it's also forward planning.
    If interest rates go up, inflation goes up, rents go up.
    Water rates will be paid by the user, not the landlord. It is a utility bill.

    I bought my first house over 20 years ago, so am mortgage free now. I cam pack up and head off too, safe in the security that I have somewhere to come back to.

    True, but if rents go up and I can't pay, I just move to where rent is cheaper.

    You're lucky, I'd love to own my own house outright, I just wouldn't like having to pay for it, but looking at that chart I guess there's a lot of that going around:)


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    #177
    Anynama141
    Closed Accounts Posts: 964 ✭✭✭Anynama141


    MMAGirl wrote: »
    If you can pay off a mortgage in 10 or 15 years, which is easier than it seems, its even better.
    No need to ever worry about rent or mortgage payments ever again.
    Still have to worry about property tax though :)

    I hear the renting is better argument all the time. I just ask someone to add up what they will pay in rent for another 50 years and tell me the answer. And most of these people are renting a room rather than a house. I hope they dont mind sharing for 50 years.
    You should take your message about the foolishness of renting to those renowned short-termists, the Germans. I'm sure they never thought about it.


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    #178
    Joe Hart
    Closed Accounts Posts: 358 ✭✭Joe Hart


    Buying is cheaper than renting? Tell that to my mate with a 400K mortgage that will cost about 800K over his life. He can only get 1K a month for the place.


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    #179
    murphaph
    Registered Users Posts: 19,022 ✭✭✭✭murphaph


    Anynama141 wrote: »
    You should take your message about the foolishness of renting to those renowned short-termists, the Germans. I'm sure they never thought about it.
    42% of Germans are homeowners. This trend is increasing. Most Germans aspire to home ownership but realise it won't happen as they won't get finance due to more conservative lending criteria than in Ireland during the crazy years.


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    #180
    StillWaters
    Closed Accounts Posts: 1,799 ✭✭✭StillWaters


    Anynama141 wrote: »
    Not at all. If you can pay, you pay. If you can't, but you can pay - say - two thirds of the mortgage, then there should be some solution workable whereby the government or the bank takes a stake in your property, so that the taxpayer gets some value for money too. Cases that can't manage that should be looking at repossession and renting, with the possibility of debt overhang write-offs.

    I think everyone is on the same page then. Well I wouldnt necessarily agree with debt for equity if someone is managing 2/3 of their mortgage, capitalisation or extending the term would be more appropriate.
    Anynama141 wrote: »
    Isn't that at present prices, and in only some cases? I'm not sure how many Defaulters bought at present prices...

    No, believe it or not, even if one bought during the anomoly of the bubble, if you got a tracker rate, you would still be better off than someone who never bought (except you'd be stuck due to negative equity, but economically you would be better off).
    Anynama141 wrote: »
    You should take your message about the foolishness of renting to those renowned short-termists, the Germans. I'm sure they never thought about it.

    The German rental sector is no utopia, there is a poster here who has given a good synopisis a few times. Murtaph perhaps?


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    #181
    Nino Brown
    Closed Accounts Posts: 1,507 ✭✭✭Nino Brown


    murphaph wrote: »
    Sure the mortgagee has other costs: maintenance, management fees and a property tax to pay for that the tenant wouldn't but the mortgagee will finish paying his mortgage off in 20 years. The tenant will still be paying rent until the day he dies.

    It was not like this 7 years ago. Renting a place then was a touch cheaper than the equivalent mortgage repayment, but right now, renting (in Dublin at least) renting is clearly going to work out much more expensive over one's lifetime.

    Renting is great for flexibility a freedom, but it is currently not cheap.

    That's true. But right now I have no kids, I rent a small apartment. Now If was to buy, I would have to buy a house, because I'm likely to have kids at some stage in the next 20 years, that means if I was to buy now I'd need at least a 3 bed house, and it would cost far more than I'm paying now.
    If I lost my job and had to move back down the country I'd be screwed if I owned up here, and there isn't many secure jobs right now. I could end up paying a mortgage I cant afford on a house it makes no sense to live it. That wouldn't work out cheaper.
    I'm not arguing here, there is no right or wrong, just saying that buying might seem like the smart thing to do financially, but as we see from the topic of this thread that isn't always the case.


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