Negative equity-Whats the big deal?

The Corinthian

clairefontaine wrote: »

Well, if you set the precedent you set the precedent. Otherwise it's chaos.

What precedent exactly?

The banks were bailed out to essentially stop a collapse of the Irish banking system - remember there were more than a few people worried about whether even their money would be safe in the bank at the time. As a result, one major bank became nationalized and another semi-nationalized; the bank owners (the shareholders) ended up badly burnt as a result.

If we follow that precedent, some people (enough to stop any 'collapse') in negative equity may get bailed out, but they'll lose some or all of their property and the problem with this is that you'll get those same people screaming that this is unfair, even though they're being treated the same as the banks.

There was a thread here perhaps a year ago, where one option - of the government/bank buying the negative equity - was suggested, and many of the home owners posting began to baulk at the idea when it was pointed out that the government/bank would be buying a percentage of the home at current and not bubble prices.

For me, this is one of the biggest issues, also highlighted by the reaction recently to the proposed personal insolvency bill; those most likely to benefit from such measures are not those who bought prudently back in 2001, but more likely those who got 100% mortgages in 2006, over-stretching themselves and who still feel they are blameless and should not have to suffer any consequences.

And lest we forget, this was the kind of mentality that was not unusual back then.

clairefontaine wrote: »

That is my point. They cant cope with the increased taxes which is why they cant pay.

Yet others, also in negative equity, can still pay; so you really have to ask why. Honestly, around that time I came across so many people who were literally getting mortgages that I thought were dangerously high. And this was during a boom period, with low inflation and interest rates. In many cases, any increase in inflation, drop in income, or even a modest increase in tax alone would have pushed them over the edge.

But ultimately, this thread is about negative equity and the bottom line is that negative equity alone is not the end of the World. It only comes into play if you want to sell and liquidate your assets (typically because you can't afford to pay) or sell and upgrade and can no longer afford to pay.

clairefontaine

That makes a fair amount of sense.

Id imagine if you want to move it becomes a problem or in a divorce settlement [You take it! No YOU take it!! Eh eh YOU TAKE IT!! lol]

Yes good question why can some afford their tax hikes and other cannot? maybe some USC hikes are a lot bigger than others?

I had heard a lot of people falling for the peer pressure when they were all being told rent is just throwing money down the drain. Isn't the idea of home ownership that you wont be paying rent our outputs in retirement? But when you looked at the mortgages people were taking it it looked like it was defeating the purpose of that.

Maybe accept that common sense is not that common. But also accept that there are see saw affects to everything, and one might consider what widespread reposessions might cost EVERYONE in the end.

SBWife

Some can afford to continue to pay because they didn't over stretch themselves in the same way as others. There's a personal budgeting rule of thumb which says you shouldn't be spending more than 1/3 of your income on housing, if a person followed this when they purchased, even having to pay the full 7% USC wouldn't make the mortgage unpayable. They might save less, replace their car less frequently, or go on fewer holidays, but for the more prudent the USC wouldn't make the difference between paying and not being able to pay the mortgage. That's not to say that some of these people are not in trouble but for the most part you're adding a large collapse in gross income as well as the higher taxation rates.

All this talk about the USC fails to consider the interest rate environment, mortgage payers have continued to benefit from low interest rates, if we were to see a return to 7 or 8% variable rates. The whole issue of affordability would take on another dimension.

cson

clairefontaine wrote: »

if I were the government or banks with reposessed assets to sell I'd be looking to Saudi or China. Is that who you'd like to see buy up the property of your evicted neighbors?

What difference does it make who buys it so long as they buy it at the market rate?

That's a borderline xenophobic comment there imo.

jmayo

clairefontaine wrote: »

Ok Jmayo, you don't need to speak to me like that. I am not your daughter or younger sibling you are babysitting.

I am not advocating anything, I am illustrating natural consequences to policy already in place.

If you are happy with the status quo, fine.

If you think I am happy with the status quo then you have never read my posts.
And just because I am unhappy with the way things are, doesn't mean I want to bailout another tranche of people who often made reckless financial decisions or have decided that they deserve to get a bailout because their decisions didn't work out to their original plans.

I like a little thing called personal responsibility and I detest people who have a sense of entitlement.
I don't want to see people left in penury while they try and pay off property they cannot afford and probably should never have bought in the first place.
The simple solution is they lose the property, maybe they suffer bankruptcy for a few years and they move on.
Under no circumstances should they get to hang on to their property at the expense of other people.
But a hell of a lot of the proponents of bailouts expect that they can hang onto their property.
That is what I mean by a fooking sense of entitlement.

If people have paid off big chunk or have wherewithal to pay then there is an accommodation reached with their lender where the repayments are strecthed out over longer time, switch to interest only, repayments parked, etc.

And under absolutely under no circumstances should anyone be bailed out of their negative equity.
It is as ludicrous an idea as bailing out Eircom shareholders, etc.

BTW I am not trying to be your babysitter or big brother, just challenge your proposals to sign me and my family up to take on other peoples' debts.

Ryder wrote: »

its a waste of time responding. peoples views are too entrenched, with the reality - that these debts arent going to be repaid - is ignored. eventually it will become undeniable. personally, i think thats its pointless expecting ireland to solve this. the government needs every bit of income it can get, and as per your example, will rob peter to pay paul. any solution needs to be pan eu.

And your idea is to basically rob me to pay for some paul down the road who can no longer afford the property he bought during a bubble.
Thanks for that.

Your one noteworthy point is that there is indeed a pan EU and more correctly pan Eurozone issue going on here.

The debts are not going to just disappear.
Someone somewhere will lose and I can't see many people around Europe or the world willing to take a hit so that the Irish who overspend on property get to stay in it.
Can you ?

The Corinthian

clairefontaine wrote: »

Yes good question why can some afford their tax hikes and other cannot? maybe some USC hikes are a lot bigger than others?

My take on it is that negative equity, while undesirable, is not in itself a killer; indeed, if trading up you can actually be better off now when trading up as the negative equity on a larger property is more likely and accordingly a greater amount than one on a smaller one.

The problem arises when you can't keep up with payments and in this regard. If you can't afford the payments for what you have now, you certainly won't be able to afford to trade up and take advantage there, and trading down or liquidating may also be impossible.

I had heard a lot of people falling for the peer pressure when they were all being told rent is just throwing money down the drain. Isn't the idea of home ownership that you wont be paying rent our outputs in retirement? But when you looked at the mortgages people were taking it it looked like it was defeating the purpose of that.

Problem was many didn't look that closely; as I said earlier, back in 2004 I looked and realized that the rent I was going to be paying the next few years, waiting for the bubble to burst, would be more than likely less than the actual drop in prices. And I know I wasn't the only one who figured this out.

Being reminded of this is not something that many who did not like to hear, but I think it important because as long as many of them continue to portray themselves as blameless victims, we're unlikely to find an equitable solution; or worse still we'll end up was a bad solution.

Maybe accept that common sense is not that common. But also accept that there are see saw affects to everything, and one might consider what widespread reposessions might cost EVERYONE in the end.

No matter what happens there's going to be a cost to everyone in the end. Spending money just to prop up prices is probably going to do more harm than good though, IMHO.

clairefontaine

The borrowers weren't the only ones who took the risks though, so did the lenders, and let's not forget the role mortgage brokers and real estate dealers played in all of this. The lawyers backed them up too. Where are their consequences? I personally know of two people, locally who put down deposits on land. The same land was then sold to someone else, the realtor took the deposit [having not informed them it was non refundable] as well as commission for the sale to who he ended up selling it too. The local solicitor who deals with land transfers told both these people there was no legal comeback at all. The two people I know ended up losing a lot of money because of it. I have no doubt this is on the tip of the fraud iceberg.

No one is saying that [or at least I am not] that tax payers should prop up struggling mortgage holders, but what I am saying is they don't bear sole accountability here. My impression, and maybe it's the wrong one, that those wagging their fingers at them are suggesting they should bear the full brunt of the consequences.

And don't or didn't all mortgage holders get mortgage relief? Even the ones who are able to pay them? How is that not using the tax payer to prop up prices? Rent allowance? Doesn't that also prop up prices?

Do you not feel that the lenders and the brokers should share some of the accountability?

cson

clairefontaine wrote: »

The borrowers weren't the only ones who took the risks though, so did the lenders, and let's not forget the role mortgage brokers and real estate dealers played in all of this. The lawyers backed them up too. Where are their consequences? I personally know of two people, locally who put down deposits on land. The same land was then sold to someone else, the realtor took the deposit [having not informed them it was non refundable] as well as commission for the sale to who he ended up selling it too. The local solicitor who deals with land transfers told both these people there was no legal comeback at all. The two people I know ended up losing a lot of money because of it. I have no doubt this is on the tip of the fraud iceberg.

I don't think you can even attempt to use that as a generic example of evidence of fraud across the board. Thats a very specific case with a specific set of circumstances.

clairefontaine wrote: »

No one is saying that [or at least I am not] that tax payers should prop up struggling mortgage holders, but what I am saying is they don't bear sole accountability here. My impression, and maybe it's the wrong one, that those wagging their fingers at them are suggesting they should bear the full brunt of the consequences.

And don't or didn't all mortgage holders get mortgage relief? Even the ones who are able to pay them? How is that not using the tax payer to prop up prices? Rent allowance? Doesn't that also prop up prices?

Do you not feel that the lenders and the brokers should share some of the accountability?

I think what those wagging the finger as you put it are suggesting is, quite simply, they do not want to pick up the tab for the mistakes of others.

clairefontaine

SBWife wrote: »

Some can afford to continue to pay because they didn't over stretch themselves in the same way as others. There's a personal budgeting rule of thumb which says you shouldn't be spending more than 1/3 of your income on housing, if a person followed this when they purchased, even having to pay the full 7% USC wouldn't make the mortgage unpayable. They might save less, replace their car less frequently, or go on fewer holidays, but for the more prudent the USC wouldn't make the difference between paying and not being able to pay the mortgage. That's not to say that some of these people are not in trouble but for the most part you're adding a large collapse in gross income as well as the higher taxation rates.

All this talk about the USC fails to consider the interest rate environment, mortgage payers have continued to benefit from low interest rates, if we were to see a return to 7 or 8% variable rates. The whole issue of affordability would take on another dimension.

I remember quoting that 33% rule to someone and they laughed in my face.

At the same time I also remember my aunt getting promoted and getting less take home pay because she got launched into the higher tax bracket. I don't know what someone does in that situation, turn down their promotion?

Negative equity would not bother me but the threat of losing a family home would. PEople say, it's not a problem unless you want to move? Well I would think then that is a serious problem. Otherwise you are trapped and stuck right? I'd like to know I can move if I need to.

cson

clairefontaine wrote: »

I remember quoting that 33% rule to someone and they laughed in my face.

At the same time I also remember my aunt getting promoted and getting less take home pay because she got launched into the higher tax bracket. I don't know what someone does in that situation, turn down their promotion?

That situation, quite frankly, is an impossibility.

clairefontaine wrote: »

Negative equity would not bother me but the threat of losing a family home would. PEople say, it's not a problem unless you want to move? Well I would think then that is a serious problem. Otherwise you are trapped and stuck right? I'd like to know I can move if I need to.

To be honest if you're of a nomadic disposition then you shouldn't be buying property.

clairefontaine

cson wrote: »

That situation, quite frankly, is an impossibility.



To be honest if you're of a nomadic disposition then you shouldn't be buying property.

If it's an impossibility, why did it happen?

Eh I didn't buy property btw, I have no personal interest in seeing mortgage relief.

I am of a disposition that thinks being able to move is an essential part of one's survivorship, has nothing to do with nomadic dispositions. Boil it down to fire drills in primary schools, but I can't enter a building or an airplane without clocking exactly where the exits are.

Negative equity blocks your exits.

SBWife

Sometimes a job promotion can result in lower take home if someone moves from a overtime eligible position into a managerial position where overtime is unpaid, but it won't happen because of taxes. For each rate of tax, both income and USC you pay the lower amount until you hit the threshold then you pay the higher rate on income above the threshold, but overall your take home will still increase.

SBWife

I'm not nomadic (despite having lived all over the place as a child and younger adult) I still like to think that the rental on my place would cover the mortgage payment giving me the ability to live elsewhere if necessary.

The Corinthian

clairefontaine wrote: »

The borrowers weren't the only ones who took the risks though, so did the lenders, and let's not forget the role mortgage brokers and real estate dealers played in all of this. The lawyers backed them up too. Where are their consequences?

One major bank ended up being nationalized and then wound down. Another, one of the two biggest retail banks, is now nationalized and the owners (shareholders) have essentially been wiped out. The other ended up partially nationalized and the owners (shareholders) have almost been wiped out.

Of the mortgage brokers and real estate dealers; the vast majority are gone, the few left are a shadow of what they once were. Many solicitors, who specialized in conveyancing during the boom, have gone out of business or are at best surviving, having downsized. There's no shortage of estate agents, solicitors and others associated with the construction industry who are now unemployed, retraining or taking whatever scraps of work they can to survive.

Instead people focus not on the banks or developers, but a small group of individuals at the top of these organizations; and there, while many have also been burnt badly, others have survived relatively unscathed. But that's because the laws that were, and still largely are, in place allowed this to happen - and before we blame the government for this, never forget that we the people are ultimately responsible for that government (it's amazing how Fianna Fail got re-elected so many times given how many nowadays deny ever voting for them).

Overall almost nobody got away 'scot free'.

No one is saying that [or at least I am not] that tax payers should prop up struggling mortgage holders, but what I am saying is they don't bear sole accountability here.

I agree; all I'm saying is the same, but from the other perspective - that the banks, et al bare responsibility, but ultimately so do those who rolled the dice and bought.

Do you not feel that the lenders and the brokers should share some of the accountability?

Absolutely they should. Much of the problem is that it is very difficult for someone to default on a mortgage in Ireland. Historically, this is so as a means of protecting the mortgage holder from losing their home, probably a reaction to the evictions of past centuries under British rule. Ironically, it works both ways; just as it is difficult for a bank to repossess a property it is for a mortgage holder from abandoning it.

Yet there's two of them in this: The banks are culpable for offering irresponsible mortgages. The mortgage holders are culpable for taking on irresponsible mortgages. Note that you really can't have one without the other, because if a mortgage holder claims they didn't take on an irresponsible mortgage, then you can't really accuse the bank of offering one either.

So there is probably a need to allow both banks and mortgage holders to terminate a mortgage, better spreading out the consequences between the two. But that doesn't mean the mortgage holders can walk away scot free - at the very least they will have a bad credit rating following them for years, if not financial restrictions too, but unless mortgage holders actually accept that they share culpability, I can't see much support for such reform from the mortgage holders themselves given many of the opinions you get here.

And bare in mind, such reform would also have other consequences; the cost of borrowing would increase (as risk to the bank will have been increased) and the previous protection against foreclosure in Irish law would have been removed, people would become more vulnerable to involuntarily losing their homes.

There's no 'getting away with it' for anyone.

The Corinthian

SBWife wrote: »

I'm not nomadic (despite having lived all over the place as a child and younger adult) I still like to think that the rental on my place would cover the mortgage payment giving me the ability to live elsewhere if necessary.

I agree. I feel that during the bubble, such basic 'bread and butter' assessments were displaced by some bizarre belief that capital appreciation would last forever or at worst flatten out.

clairefontaine

The Corinthian wrote: »

One major bank ended up being nationalized and then wound down. Another, one of the two biggest retail banks, is now nationalized and the owners (shareholders) have essentially been wiped out. The other ended up partially nationalized and the owners (shareholders) have almost been wiped out.

Of the mortgage brokers and real estate dealers; the vast majority are gone, the few left are a shadow of what they once were. Many solicitors, who specialized in conveyancing during the boom, have gone out of business or are at best surviving, having downsized. There's no shortage of estate agents, solicitors and others associated with the construction industry who are now unemployed, retraining or taking whatever scraps of work they can to survive.

Instead people focus not on the banks or developers, but a small group of individuals at the top of these organizations; and there, while many have also been burnt badly, others have survived relatively unscathed. But that's because the laws that were, and still largely are, in place allowed this to happen - and before we blame the government for this, never forget that we the people are ultimately responsible for that government (it's amazing how Fianna Fail got re-elected so many times given how many nowadays deny ever voting for them).

Overall almost nobody got away 'scot free'.

I agree; all I'm saying is the same, but from the other perspective - that the banks, et al bare responsibility, but ultimately so do those who rolled the dice and bought.

Absolutely they should. Much of the problem is that it is very difficult for someone to default on a mortgage in Ireland. Historically, this is so as a means of protecting the mortgage holder from losing their home, probably a reaction to the evictions of past centuries under British rule. Ironically, it works both ways; just as it is difficult for a bank to repossess a property it is for a mortgage holder from abandoning it.

Yet there's two of them in this: The banks are culpable for offering irresponsible mortgages. The mortgage holders are culpable for taking on irresponsible mortgages. Note that you really can't have one without the other, because if a mortgage holder claims they didn't take on an irresponsible mortgage, then you can't really accuse the bank of offering one either.

So there is probably a need to allow both banks and mortgage holders to terminate a mortgage, better spreading out the consequences between the two. But that doesn't mean the mortgage holders can walk away scot free - at the very least they will have a bad credit rating following them for years, if not financial restrictions too, but unless mortgage holders actually accept that they share culpability, I can't see much support for such reform from the mortgage holders themselves given many of the opinions you get here.

And bare in mind, such reform would also have other consequences; the cost of borrowing would increase (as risk to the bank will have been increased) and the previous protection against foreclosure in Irish law would have been removed, people would become more vulnerable to involuntarily losing their homes.

There's no 'getting away with it' for anyone.

I think there is a general problem with accountability in this whole crisis. We have never heard, as far as I am aware, any public statement from Bertie or a bank rep addressing the issues of the crisis or their part in it. So it's no surprise that others haven't either.

If you want to win an election in Ireland, or make a new best friend, just say "It's not your fault" as if this were all about fault and blame and exoneration from some deep seated beaten into you Stockholm syndrome national guilt complex and not about a very screwed up problem that needs to be solved by thinking way outside the box and coming up with new solutions, like more growth, more jobs, etc.... Instead everyone is sniping at each other or emmigrating. If people fear punishment or exaggerated finger pointing, they wont hold their hands up. If they can expect some understanding, they most likely will take on some accountability.

So much for progress. This is not the first time a discussion on accountability has hit an impasse. It beats me why the famine is not discussed in history classes along side economic theory and who exactly is responsible in a natural disaster. It is a great opportunity for bringing to the national conciousness, but sadly and relentlessy skipped over.

Anyhow I have digressed from talking about negative equity. Maybe someone can answer this. Are their pockets of Ireland where the bust did not hit because the boom didn't either? I know in the US there were many parts of the country that the crisis missed because they were very conservative.

SBWife

clairefontaine wrote: »

who exactly is responsible in a natural disaster.

Did you read that before posting?

clairefontaine

SBWife wrote: »

Did you read that before posting?

Yes.

KELTICKNIGHTT

SBWife wrote: »

A property bought in 2002 is not down 50-60% from its purchase price. Most likely given a reasonable down payment and a the principal payments on a 25 or 30 year mortgage such a property has some positive equity. If I recall correctly property prices were pretty stagnant between 2000 and 2002, and I know that my home which I bought in late 2000 has significant amount of positive equity.

and what has this to do with a property being alot less than a mortgage on it ?
easy to quote stats, means nothing today
very simple
the mortgage is more than the house is worth as a lot of people who in same position

KELTICKNIGHTT

The Corinthian wrote: »

A downside of 20% to 25% after a property bubble bursting is pretty optimistic and sounds like the wishful thinking that many were coming out with about 'soft' landings.

But let's consider one simple scenario for a moment; it's 2004, you've got a chunk of change that you can put down as a deposit to buy a two bedroom apartment in Dublin, rather than rent it.

For simplicity's sake, let's sat that around that time, such a place would set you back €300k and prices during the bubble were increasing by 15% p.a. This would mean that in 2005, your apartment would be valued at €345k - and if the bubble were to continue to grow up until today, the same apartment would be valued at the bargain price of €1,055,362.89.

But here's the thing, bubbles do not continue to grow indefinitely. Neither do they simply stop growing and stabilize. They burst. Google it if you don't believe me. And that brings us to the the single biggest presumption (a pretty safe one) eventually the bubble would burst - and let's say that would see a 20% drop in value.

Even given this mythical soft landing, if you bought in 2004 you'd have to keep your fingers crossed that it wouldn't burst until 2006 - otherwise you're in negative equity (€60k if it happened in 2004 and €24k if in 2005).

Presuming, instead, you decide to hold off and pay rent (say a fairly stable €1,500 p.m. as rents really did not change that much, compared to property prices during the same period), you still be better off not buying and instead paying rent for 18 months overall.

And that's with a 20% drop in value when the music stopped, which was wildly optimistic. At 25%, you're already better off buying in 2006 and renting until then; indeed there if you buy 2004 you'd better hope the bubble keeps growing until 2007, otherwise you're going to be in negative equity.

Of course, the media, the bankers, property developers and political establishment were wildly optimistic about what the 'adjustment' that would eventually look like, but that is no excuse to avoid digging further for what is likely to be the biggest financial investment of your life. And it didn't take long to do so; all I needed was Google, a blank spreadsheet and a Sunday afternoon, back in Q4 2004, and I certainly wasn't alone in realizing that:

1. We were not going to get a 'soft' landing; there's never been any 'soft' landing in history and so property values were going to drop by considerably more than 20% or 25%.
2. Given the importance of the property market to the Irish economy, a recession was guaranteed to follow. I would have thought this point would have been obvious, but clearly some didn't join the dots on this.
3. The bubble was not going to continue for another ten years - the hypothetical apartment was not going to end up being worth over a million Euro. Instead the bubble would be very lucky to last five years at best, and in the end it managed to last just under half that before the music stopped.

And that's what it came down to; the music was going to stop, we just didn't know when and what the fallout level would be, but we could slot in a few numbers and see what we came up with.

And when you started crunching the numbers and they began to argue that you needed unrealistically low levels of value depreciation and that the bubble would continue growing for two or three years it didn't make sense to buy to me in 2004.

Now, I don't know when you bought (although if you've lost 60% I suspect you got in late), but this is the kind of research and analysis that many did and as it became increasingly apparent that we were dealing with an economic bubble it became increasingly apparent that the numbers didn't crunch and that the music was going to stop playing before too long.

No one could seriously know it get this bad, but it didn't take a genius to figure out that it would still get bad. Of course, you might be forgiven had you bought in 2001 or 1999, as it became obvious much later, but then again you wouldn't have 60% of the value of your home wiped out if you had.

One thing that stands out in what you've said is that you could never have predicted "in less than 10 yr period to have 50-60% loss, a rescission and loss of income at same time"; you're joking, seriously? A slowdown and/or collapse of the property bubble would result in an effective decimation of an industry that was universally recognised to be the single most important driver of the Irish economy at the time. Oddly, a recession isn't that difficult to expect if that happens and with it harder, at least, times and loss of income. How did you miss that? Seriously?

All the information needed to arrive to these conclusions was online ten years ago and even if you didn't know how to use a spreadsheet to crunch your numbers, that alone should have given people to pause.

If they choose to look, of course - and honestly I think many didn't care to.

most of this doesn't mean anything to most people
simple fact is people are trapped in property [ there house/ home ]
because they can't sell it, the house is worth less than the mortgage , doesn't have to be a big amount but still is a problem for most

The Corinthian

KELTICKNIGHTT wrote: »

most of this doesn't mean anything to most people
simple fact is people are trapped in property [ there house/ home ]
because they can't sell it, the house is worth less than the mortgage , doesn't have to be a big amount but still is a problem for most

Oh, let's just plead ignorance, ignore the facts and rely upon an appeal to emotion instead?

Do you feel you had the competency to purchase? And no, solely relying upon the advice of a few 'experts' does not denote competency.

If so, do you not think that you have a personal responsibility for your actions?

If not, you then feel that you should not have had the right to purchase, for your own safety?

KELTICKNIGHTT

The Corinthian wrote: »

Oh, let's just plead ignorance, ignore the facts and rely upon an appeal to emotion instead?

Do you feel you had the competency to purchase? And no, solely relying upon the advice of a few 'experts' does not denote competency.

If so, do you not think that you have a personal responsibility for your actions?

If not, you then feel that you should not have had the right to purchase, for your own safety?

a complete load of horse
most people got a mortgage to buy or build a home,
Not everyone over stretched themselves , that includes me.
i thought i was well ahead of the game as they say, then a lot of personal things happened , then house went below 56-60 % of original,
then work lessened , there's lots of fractures that caused it it
tried to sell it , couldn't because 2 couples who showed interested , couldn't get a mortgage because banks wheren't giving out mortgages , had it for sale for years and gave up selling it as now its worth less than mortgage
like some posters here who keep going on about people with mortgages a help out or write off
i don't , many don't , just make it a little easier for use to pay,
so to make it simple for you, I'm not looking for a hand out . just better options to pay off over time , till maybe i can sell it .
i can tell you not all banks are helping people get through this .

SBWife

KELTICKNIGHTT wrote: »

and what has this to do with a property being alot less than a mortgage on it ?

EVERYTHING

KELTICKNIGHTT

SBWife wrote: »

EVERYTHING

THATS YOUR OPINION ONLY
but most would care less ,, its easy to post on a forum here without knowing peoples facts to why and how

SBWife

clairefontaine wrote: »

Yes.

From Wiki (seems to be a preferred source around here)

A natural disaster is a major adverse event resulting from natural processes of the Earth; examples include floods, volcanic eruptions, earthquakes, tsunamis, and other geologic processes.

clairefontaine

SBWife wrote: »

From Wiki (seems to be a preferred source around here)

A natural disaster is a major adverse event resulting from natural processes of the Earth; examples include floods, volcanic eruptions, earthquakes, tsunamis, and other geologic processes.

What is your point?

gaius c

mariaalice wrote: »

I do feel sorry for SOME people, however I was listening to Joe Duffy yesterday and the discussion was about people not being able to pay the mortgage etc the usual very sad stories.

BUT

This guy phones in and says after numerous adjustments form the bank the bank has now advised him to sell his house he was not happy with this because he wanted either debt write off or part of his mortgage parked and then written off!!! i.e he wanted to keep his house while the bank take a 50% write down on the loan they gave him. Then there was the woman who is not happy because she lives too far from her work/parents and some how wants her mortgage to disappear so she can buy where she grew up!!

Mortgages can be terribly inconvenient things. Look at noted landlord Brendan Kelly who managed to live in his house for free for two years. I wonder would he have been as "understanding" of tenants doing the same to him?

gaius c

SBWife wrote: »

I'd consider the 6 years under the proposed personal insolvency regime a long time.

If you don't like it, pay off your 35 year mortgage in full then.

SBWife

clairefontaine wrote: »

What is your point?

No one is responsible for a natural disaster.

clairefontaine

SBWife wrote: »

No one is responsible for a natural disaster.

The question is not who is responsible for a natural disaster, who is responsible IN one.

And you asked ME if I read that sentence?

Responsible, as in RESPOND. As in TAKE ACTION.

Why do so many people confuse responsibility with blame?

SBWife

gaius c wrote: »

If you don't like it, pay off your 35 year mortgage in full then.

Relax, I'm not looking for a handout. I've no problem paying the remaining few years of my significantly shorter mortgage off, and if I had I'd sell my current home and use the equity I've built up to buy another less well situated dwelling, or if my circumstances changed to rent out my place and rent elsewhere. I'm one of those boring farts who never overextended themselves.

SBWife

clairefontaine wrote: »

The question is not who is responsible for a natural disaster, who is responsible IN one.

And you asked ME if I read that sentence?

Responsible, as in RESPOND. As in TAKE ACTION.

Why do so many people confuse responsibility with blame?

Because its part of the definition, Responsible - Being the primary cause of something and so able to be blamed or credited for it.

In the case of a natural disaster (not that negative equity is one) outside of insurance companies nobody has an obligation to take action. People and states do for various reasons but there's no obligation to do so.

gaius c

SBWife wrote: »

Relax, I'm not looking for a handout. I've no problem paying the remaining few years of my significantly shorter mortgage off, and if I had I'd sell my current home and use the equity I've built up to buy another less well situated dwelling, or if my circumstances changed to rent out my place and rent elsewhere. I'm one of those boring farts who never overextended themselves.

Fine, just getting sick of folk who want to lose the debt but keep the asset.

The Corinthian

KELTICKNIGHTT wrote: »

most people got a mortgage to buy or build a home,

Actually not true. If you actually check your facts, the majority if mortgages were not down to first-time buyers. In fact, first-time buyers managed to to hit a high of a whole 23.3% of the mortgage market just after it had popped. Hardly "most people", is it?

Not everyone over stretched themselves , that includes me.

Doesn't look like it - at least from what you've told us.

To begin with you likely bought at the tail end of the bubble, given the percentage of negative equity, at a time where people were resigning themselves at best for a 'soft' landing, so not the most clever time to make an investment.

Then somehow (according to you earlier) it didn't occur to you that a slowdown in the all-important property market, that employed 12% of the Irish workforce, might just result in a slowdown of the economy, God forbid a recession. And governments never increase taxes when they have a budget shortfall, of course.

Or that a recession might be possible anyway in the future and that you (having gone into self-employment) might see a serious drop in revenue.

Added to this, you now hint at trying to offload your property pretty quickly when things turned bad (on the market for years and banks still not loaning out) - it didn't take you long to go into the red, did it?

So no, you did clearly overstretch yourself; you just didn't realize you did because you didn't appear have put much effort into checking.

i don't , many don't , just make it a little easier for use to pay,
so to make it simple for you, I'm not looking for a hand out . just better options to pay off over time , till maybe i can sell it .

That's fair enough, as long as you realize that there will likely be a stiff price to pay for you.

i can tell you not all banks are helping people get through this .

Who on Earth expects a bank to help anyone? Banks only 'help' someone when there's something in it for them.

KELTICKNIGHTT wrote: »

THATS YOUR OPINION ONLY

Actually it's maths. Really basic inter-cert maths.

With a 60% negative equity, it is almost certainly down to it having been bought late during the bubble. Unless there's some other explanation you'd care to proffer.

clairefontaine

SBWife wrote: »

Because its part of the definition, Responsible - Being the primary cause of something and so able to be blamed or credited for it.

In the case of a natural disaster (not that negative equity is one) outside of insurance companies nobody has an obligation to take action. People and states do for various reasons but there's no obligation to do so.

No that is not what it means.

It means taking stock of how you got into your circumstances, looking at your circumstances regardless of who caused them, and deciding on an appropriate reaction and attitude to your circumstances without the blame and shame tactics.

SBWife

clairefontaine wrote: »

No that is not what it means.

Well you better get on to the editors of the OED and tell them that they're wrong ASAP.

KELTICKNIGHTT

The Corinthian wrote: »

Actually not true. If you actually check your facts, the majority if mortgages were not down to first-time buyers. In fact, first-time buyers managed to to hit a high of a whole 23.3% of the mortgage market just after it had popped. Hardly "most people", is it?

Doesn't look like it - at least from what you've told us.

To begin with you likely bought at the tail end of the bubble, given the percentage of negative equity, at a time where people were resigning themselves at best for a 'soft' landing, so not the most clever time to make an investment.

Then somehow (according to you earlier) it didn't occur to you that a slowdown in the all-important property market, that employed 12% of the Irish workforce, might just result in a slowdown of the economy, God forbid a recession. And governments never increase taxes when they have a budget shortfall, of course.

Or that a recession might be possible anyway in the future and that you (having gone into self-employment) might see a serious drop in revenue.

Added to this, you now hint at trying to offload your property pretty quickly when things turned bad (on the market for years and banks still not loaning out) - it didn't take you long to go into the red, did it?

So no, you did clearly overstretch yourself; you just didn't realize you did because you didn't appear have put much effort into checking.

That's fair enough, as long as you realize that there will likely be a stiff price to pay for you.

Who on Earth expects a bank to help anyone? Banks only 'help' someone when there's something in it for them.

Actually it's maths. Really basic inter-cert maths.

With a 60% negative equity, it is almost certainly down to it having been bought late during the bubble. Unless there's some other explanation you'd care to proffer.

there you go on again with dribble lol
where did i say anything about first time buyers lol

you live in a dream world where you find it more easy to blame people who are in trouble with mortgages , go to mabs as such places, , spend a day there, might open up your eyes,
very easy come out with blame game as can been seen in most your posts,
according to you, its the people who got montages fault, nothing to do with negative value in there property , or rescission or maybe both people loose there job
if it was as easy as you have said, , ireland wouldn't have problems
and before i forget another worthless comment about
when you said
With a 60% negative equity, it is almost certainly down to it having been bought late during the bubble. Unless there's some other explanation you'd care to proffer.
what a load of bull
this statement tells me how much you really know, nothing

clairefontaine

KELTICKNIGHTT wrote: »

there you go on again with dribble lol
where did i say anything about first time buyers lol

you live in a dream world where you find it more easy to blame people who are in trouble with mortgages , go to mabs as such places, , spend a day there, might open up your eyes,
very easy come out with blame game as can been seen in most your posts,
according to you, its the people who got montages fault, nothing to do with negative value in there property , or rescission or maybe both people loose there job
if it was as easy as you have said, , ireland wouldn't have problems

Its a normal part of life for debtors and entrepreneurs to cock things up and get into trouble. A free economy has room to fail.

People need to get of the fault/blame cycle here, its keeping everyone stuck. It benefits everyone to have more people functioning economically.

If others want to see you punished and living in penury and others like you, they too will end up punishing themselves too.

It would serve the government right if everyone in trouble went to the UK or the US and followed their bankruptcy procedure. IF they don't want people to do that, then they should come up with a more competititive bankruptcy route.

KELTICKNIGHTT

clairefontaine wrote: »

Its a normal part of life for debtors and entrepreneurs to cock things up and get into trouble. A free economy has room to fail.

People need to get of the fault/blame cycle here, its keeping everyone stuck. It benefits everyone to have more people functioning economically.

If others want to see you punished and living in penury and others like you, they too will end up punishing themselves too.

It would serve the government right if everyone in trouble went to the UK or the US and followed their bankruptcy procedure. IF they don't want people to do that, then they should come up with a more competititive bankruptcy route.

if banks didnn't get into trouble, then people could sell off there property and be less of a mess , that's not the case, this new insolvency system seems worse but maybe it work, who knows, you see a lot of people going u.k route if they can .

clairefontaine

KELTICKNIGHTT wrote: »

if banks didnn't get into trouble, then people could sell off there property and be less of a mess , that's not the case, this new insolvency system seems worse but maybe it work, who knows, you see a lot of people going u.k route if they can .

You can sell off your property but you would have to find a cash buyer, so you would likely have to look outside of Ireland. At the same time, with the taxes being so unpredictable right now, I know I definetly would not buy when the are figuring out their property taxes and you have no way of predicting what they will be up the road.

Also if you are living in the country, chances are you are on a private water scheme spending a few hundred a year for that and ALSO going to get taxed, so no way would someone want to buy there either.

So it's not just the banks inhibiting purchases, but the government making too unstable a situation with all their adhoc catch as catch can taxes they are inventing.

SBWife

If you are in negative equity you can't sell the property without permission from the bank as the bank holds the deed to the property and won't normally release this until the mortgage is paid off. If the sale is such that the purchase amount (regardless of how it is financed) doesn't over the outstanding principle it's called a short sale and requires permission from the bank who will normally require the seller to find another way to pay off the remaining amount, be it cash, a personal loan or the newer negative equity mortgages.

KELTICKNIGHTT

clairefontaine wrote: »

You can sell off your property but you would have to find a cash buyer, so you would likely have to look outside of Ireland. At the same time, with the taxes being so unpredictable right now, I know I definetly would not buy when the are figuring out their property taxes and you have no way of predicting what they will be up the road.

Also if you are living in the country, chances are you are on a private water scheme spending a few hundred a year for that and ALSO going to get taxed, so no way would someone want to buy there either.

So it's not just the banks inhibiting purchases, but the government making too unstable a situation with all their adhoc catch as catch can taxes they are inventing.

if we in ireland where open to markets like insurances in eu countrys, we get alot cheaper
cash buyer would be nice but don't hold much home of that at moment
new property tax, water charges , plus septic tank charges will make it harder to sell
funny thing, i have my own well which i paid for with treatment system , but i will have to pay water charges too even do i have to pay to maintain it myself , great country, isn't it

KELTICKNIGHTT

SBWife wrote: »

If you are in negative equity you can't sell the property without permission from the bank as the bank holds the deed to the property and won't normally release this until the mortgage is paid off. If the sale is such that the purchase amount (regardless of how it is financed) doesn't over the outstanding principle it's called a short sale and requires permission from the bank who will normally require the seller to find another way to pay off the remaining amount, be it cash, a personal loan or the newer negative equity mortgages.

are you sure about that that the bank wouldn't let me sell it if i could,
Got a news flash for you, they will, o yes, before you say more , i save you time lol
They told me i could.

skafish

clairefontaine wrote: »

The borrowers weren't the only ones who took the risks though, so did the lenders, and let's not forget the role mortgage brokers and real estate dealers played in all of this. The lawyers backed them up too. Where are their consequences? I personally know of two people, locally who put down deposits on land. The same land was then sold to someone else, the realtor took the deposit [having not informed them it was non refundable] as well as commission for the sale to who he ended up selling it too. The local solicitor who deals with land transfers told both these people there was no legal comeback at all. The two people I know ended up losing a lot of money because of it. I have no doubt this is on the tip of the fraud iceberg.

No one is saying that [or at least I am not] that tax payers should prop up struggling mortgage holders, but what I am saying is they don't bear sole accountability here. My impression, and maybe it's the wrong one, that those wagging their fingers at them are suggesting they should bear the full brunt of the consequences.

And don't or didn't all mortgage holders get mortgage relief? Even the ones who are able to pay them? How is that not using the tax payer to prop up prices? Rent allowance? Doesn't that also prop up prices?

Do you not feel that the lenders and the brokers should share some of the accountability?

Why? A purchaser goes to a mortgage provider, appears to meet all the necessary criteria, so gets a mortgage.

Yes, there was a relaxing of the rules during the "boom". I don't think this should have been allowed to happen, but neither do I think service stations and the like should have been allowed to charge €3 for a cup of dirty water masquerading as coffee. But happen it did.

But nobody put a gun to anybody's head and forced them to take on a mortgage. The people who are in difficulty now made choices of their own free will. And yes, I do have a lot of sympathy for some.

HOWEVER, that does not mean I am willing to pay for them to live in a house they cannot afford to pay for, and should probably never have bought in the first place.

"My impression, and maybe it's the wrong one, that those wagging their fingers at them are suggesting they should bear the full brunt of the consequences. "

You are right..... Iam

skafish

clairefontaine wrote: »

How much more taxes and charges can you take before you cant afford your home? If you suddenly had an extra 200 taken from you every month should you expect a lecture from the holier than thous on this board giving you a spanking and talking to you like you are a 5 year old about how you should have seen it coming?

No I would not think the mortgages should be subsidized through taxes. The banks took the risks too, the banks should take some of the slack.

I did see it coming. I am in NE; I can still afford to pay my mortgage, and will continue to do so, even if it necessitates taking on additional work.

However, the most likely destination for your proposed €200 is to pay off someone elses mortgage, a concept I find totally repellant. In fact, if that were to happen, I would probably quit my job, and go down the insolvency route and let other people pay my bills. (And if some of the post on other threads in this forum are anything to go on, I will even get to take my family on holidays.)

I agree the banks took risks. However, a mortgage is a legal contract that has nothing to do with changes to the borrowers changing circumstanes.

And, by the way, you do realise, I hope that we the taxpayers now own these self same banks, so if they are forced to take a loss, it will be us, the owners who take the hit.

So both of your proposals would adversly affect those of us who, prudently, borrowed within our means and force us to pay for others peoples homes; in some cases as you suggest above, possibly forcing us into difficulties with our own repayments.
Where is the justice and equality in that?

The Corinthian

KELTICKNIGHTT wrote: »

With a 60% negative equity, it is almost certainly down to it having been bought late during the bubble. Unless there's some other explanation you'd care to proffer.
what a load of bull
this statement tells me how much you really know, nothing

I allowed for the possibility that I was wrong by offering you the opportunity to explain how else this would have occurred, because otherwise that level of negative equity almost certainly could only be because you bought late. So if you have a reasonable and alternative explanation, then by all means let us know - it's not as if you'll need to give away personal information to do so.

Otherwise, as with the rest of your little rant, you're simply and increasingly simply using indignation and dismissal to cover up for your own shortcomings.

clairefontaine

skafish wrote: »

I did see it coming. I am in NE; I can still afford to pay my mortgage, and will continue to do so, even if it necessitates taking on additional work.

However, the most likely destination for your proposed €200 is to pay off someone elses mortgage, a concept I find totally repellant. In fact, if that were to happen, I would probably quit my job, and go down the insolvency route and let other people pay my bills. (And if some of the post on other threads in this forum are anything to go on, I will even get to take my family on holidays.)

I agree the banks took risks. However, a mortgage is a legal contract that has nothing to do with changes to the borrowers changing circumstanes.

And, by the way, you do realise, I hope that we the taxpayers now own these self same banks, so if they are forced to take a loss, it will be us, the owners who take the hit.

So both of your proposals would adversly affect those of us who, prudently, borrowed within our means and force us to pay for others peoples homes; in some cases as you suggest above, possibly forcing us into difficulties with our own repayments.
Where is the justice and equality in that?

Firstly, I wasn't proposing it as a solution. I was putting it forth as a random number to see how someone might stretch their imagination to see how extra taxes and charges might inhibit ones ability to pay, because they already have for many people. There were people who could afford it before all these extra taxes and USC charges were brought in.

The alternative is, let them go bankrupt, get their home reposessed, flood the market with reposessed housing, pushing your house into further negative equity, the family or person if unemployed will end up on social housing or rent allowance [multiply this by as many number of reposessions], your taxes will go up to pay the increased social welfare bill and you then will find it harder and harder to pay for your house that has now gone into further negative equity.

Do I think the tax payer should subsidise this? Not at all, but the government decided to nationalise debt, not me or the people struggling.

The tax payers don't own the banks. The money wasn't given, it was loaned, as in the government will collect interest of the money that was pumped in and the banks have to pay that money back. Tax payer has no say in the running, hiring, directing, policy or life of the banks.

clairefontaine

The Corinthian wrote: »

I allowed for the possibility that I was wrong by offering you the opportunity to explain how else this would have occurred, because otherwise that level of negative equity almost certainly could only be because you bought late. So if you have a reasonable and alternative explanation, then by all means let us know - it's not as if you'll need to give away personal information to do so.

Otherwise, as with the rest of your little rant, you're simply and increasingly simply using indignation and dismissal to cover up for your own shortcomings.

I don't think you can be certain of the amount of negative equity or of using the figure to guess when it was purchased. The current house price estimates are based on asking price, not on getting price, so no one really knows for sure.

The Corinthian

clairefontaine wrote: »

I don't think you can be certain of the amount of negative equity or of using the figure to guess when it was purchased.

Give me an alternative explanation then.

SBWife

clairefontaine wrote: »

I don't think you can be certain of the amount of negative equity or of using the figure to guess when it was purchased. The current house price estimates are based on asking price, not on getting price, so no one really knows for sure.

Not true, the CSO and PIP numbers are based on actual sales price or as you put it the getting price.