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Scale of Irish mortgage default is unprecedented
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I don't ever recall anyone saying it was your patriotic duty to buy property.
And what type of adult believes a word from a politican, nevermind a lying backstabbing two faced gimp ?
Oh yeah those who are bloody gullible and/or greedy.
What are you on about ?
What is this cr** about patriotically buying houses ??
Are you trying to say that people who bought property at silly prices were somehow more patriotic than those who had the cop on to know it was a bloody massive bubble ?
For every much put upon first time buyer that we always hear about looking for a family HOME, there was some eejit wantabee landlord, someone who thought they should have a Southfork sytle house with stables.
A lot of people bought houses out of greed and also keeping up the with Jones.
Except the Jones often were buying the lifestyle with some ones elses money as well.
There was a major mindset at play.
"Shure hasn't Willie's house down the road doubled in value so it is time to get on the ladder, hasn't Mary got two investment properties already that have doubled in value, hasn't uncle Jimmy just remortgaged to add 1000 sq metres of decking with a hot tub, hasn't someones sister wice removed remortgaged twice to buy pads in Bulgaria and Cape Verde whereever the hell that is. "
There was a lot of sheer lunacy about.
Dream on boy.
No matter how much you wish for it, we can't begin the cycle again.
We cannot create another bubble to get us out of the current fallout form the last one.
We have lost multiple banks, the foreign ones are trying to get out and the indegenous ones are sucking at the teat of the taxpayer.
Oh and there is no source of cheap credit world wide willing to give money to the Irish.
So do some borrowers.
Shure the Gards had to buy more property seen that the taxi business was deregulated.
Ah well doesn't matter, debts are going to be written down anyway AIB have said they're going to write down the debt.
http://www.thejournal.ie/aib-split-mortgage-debt-write-off-1300195-Feb2014/
On the news last night they're going to do it for at least 10 thousand, this is the start of it.
Like I said from the beginning debts will be written down.0 -
The Spider wrote: »Ah well doesn't matter, debts are going to be written down anyway AIB have said they're going to write down the debt.
http://www.thejournal.ie/aib-split-mortgage-debt-write-off-1300195-Feb2014/
On the news last night they're going to do it for at least 10 thousand, this is the start of it.
Like I said from the beginning debts will be written down.
I saw that on the news last night alright.
I suppose the lesson to be learnt here is never be prudent in this country as you will not be asked to live with your responsibilities. So just go out and borrow as much as you can regardless of your ability to re-pay.
The rest of us tax payers will pick up the tab though, whilst these people are allowed to live in houses they can't afford. Where is the incentive for neighbour A to pay their mortgage when neighbour B is getting part of their split mortgage written off?
Ireland is a great little country!0 -
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Its only for split mortgage customers- who have a hope of repaying a lower amount, have made full disclosures to the bank- and the debt write down is a portion of the parked (delayed) portion of the mortgage, providing all terms and conditions of the first loan are adhered to.
Aka- its a tiny subset of customers- and not likely to be extended beyond this small group.
Its also predicted that of those who qualify for this limited offer, many will decide the terms associated with it are too onerous to make it a viable option.
Essentially- you'd be subject to pretty much the same rules as you would under a Personal Insolvency Plan- only the bank would be the sole lender involved. Many people may just say- 'bugger this for a lark- lets go the whole hog, and avail of a PIP instead'.0 -
I saw that on the news last night alright.
I suppose the lesson to be learnt here is never be prudent in this country as you will not be asked to live with your responsibilities. So just go out and borrow as much as you can regardless of your ability to re-pay.
The rest of us tax payers will pick up the tab though, whilst these people are allowed to live in houses they can't afford. Where is the incentive for neighbour A to pay their mortgage when neighbour B is getting part of their split mortgage written off?
Ireland is a great little country!
Simple fact is all boom time mortgages will be written down to their current value, this is being put out as a few customers, but eventually it'll go to everyone.
People can talk about moral hazard all they want, but the fact is, in the boom everyone was encouraged to buy property, from the government, the media and the banks.
Most people aren't on the internet looking at property sites, and even less were on it in 2002-2007, broadband was non existant, either were smartphones, so the only information the vast majority went on, was what they were being told from the pillars of society and they all said buy property.
The debts will be written down, and that's that.0 -
The_Conductor wrote: »Its only for split mortgage customers- who have a hope of repaying a lower amount, have made full disclosures to the bank- and the debt write down is a portion of the parked (delayed) portion of the mortgage, providing all terms and conditions of the first loan are adhered to.
Aka- its a tiny subset of customers- and not likely to be extended beyond this small group.
Its also predicted that of those who qualify for this limited offer, many will decide the terms associated with it are too onerous to make it a viable option.
Essentially- you'd be subject to pretty much the same rules as you would under a Personal Insolvency Plan- only the bank would be the sole lender involved. Many people may just say- 'bugger this for a lark- lets go the whole hog, and avail of a PIP instead'.
Yeah at the moment, this is called flying a kite, eventually it'll be brought out to all other customers, it's either write down the debt or people can declare themselves bankrupt, and then the bank gets very little.
Guy from new beginning was on George Hook last night saying going bankrupt was the right thing for the vast majority as they'd get to keep the family home, unless it was a massive trophy house, if that happens the banks'll get even less.
The bankrupt route would allow the economy to reboot.0 -
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The Irish Times have an excellent worked example here:
http://www.irishtimes.com/business/sectors/financial-services/aib-to-write-off-debt-for-some-homeowners-in-arrears-1.1679593
Essentially:
Say a borrower has outstanding mortgage obligations of €300,000 but the current value of their property is assessed at €200,000, that €200,000 figure becomes the first tranche, the balance of €100,000 parked for repayment.
It is understood that AIB will, in addition, write off up to 20 per cent of the first tranche.
That means up to €40,000 of the €200,000 in the example above will be written off by the bank immediately – leaving troubled homeowners servicing a mortgage of €160,000, nearly half the €300,000 outstanding.
Those who meet the terms of the new mortgage payments for the first five years will also receive a 5 per cent write off on the balance.
If they continue to meet the terms of the loan for another five years, they will be given a 5 per cent write off on the warehoused portion of the loan.
Its thought that there is potentially 1,100 possible customers who may qualify for this product- in addition to around 430 current split mortgage customers who are in good standing- just over 1,500 customers in total.0 -
The Spider wrote: »People can talk about moral hazard all they want, but the fact is, in the boom everyone was encouraged to buy property, from the government, the media and the banks.
Most people aren't on the internet looking at property sites, and even less were on it in 2002-2007, broadband was non existant, either were smartphones, so the only information the vast majority went on, was what they were being told from the pillars of society and they all said buy property.
This is irrelevant. People need to take responsibility for their actions. Blaming the government etc is typical immature Irish reaction when something goes wrong for some one in this country. People borrowed the money, now I have to help pay it back for them!
What's the excuse going to be for the people who are paying way over the odds at the moment in Dublin? They have broadband and access to information. I'm sure they will find some one else to blame next time. I wonder who it will be then? The message they are receiving now is that it is ok not to honour your commitments. How can we have a functioning system when that's the message?The Spider wrote: »The debts will be written down, and that's that.
I hope this is not the case, but with the way things are going I wouldn't be surprised.
I just think it is wrong that you can have debt written off whilst maintaining ownership of the asset, added to that, the tax payer is on the hook for the debt that is written off. I.E. I will have to pay a portion of the mortgage for some one who is living in a house I cannot afford to buy!0 -
This is irrelevant. People need to take responsibility for their actions. Blaming the government etc is typical immature Irish reaction when something goes wrong for some one in this country. People borrowed the money, now I have to help pay it back for them!
What's the excuse going to be for the people who are paying way over the odds at the moment in Dublin? They have broadband and access to information. I'm sure they will find some one else to blame next time. I wonder who it will be then? The message they are receiving now is that it is ok not to honour your commitments. How can we have a functioning system when that's the message?
I hope this is not the case, but with the way things are going I wouldn't be surprised.
I just think it is wrong that you can have debt written off whilst maintaining ownership of the asset, added to that, the tax payer is on the hook for the debt that is written off. I.E. I will have to pay a portion of the mortgage for some one who is living in a house I cannot afford to buy!
Sorry disagree, they should never have been given that level of debt in the first place, the general population are not financial experts, they used to trust that if the bank gave them that amount then it must be ok, it's incumbant on the banks who lent too much, to sort it out that's the banks business model not the guy in the street.
Now with this AIB have realised that they'll never get back what's owed and if their customers go bankrupt, they'll get nothing, the other banks'll follow suit.
As for the people paying over the odds in Dublin, it's been said on this site over and over that they're cash buyers, so what's the problem?
If they're cash buyers then they don't have mortgages?0 -
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The Spider wrote: »Yeah at the moment, this is called flying a kite, eventually it'll be brought out to all other customers, it's either write down the debt or people can declare themselves bankrupt, and then the bank gets very little.
Guy from new beginning was on George Hook last night saying going bankrupt was the right thing for the vast majority as they'd get to keep the family home, unless it was a massive trophy house, if that happens the banks'll get even less.
The bankrupt route would allow the economy to reboot.
Its hardly kite-flying, its a small subset of customers, who qualify for split mortgages- in return for signing up to somewhat onerous conditions, there is a financial incentive for the customers to follow the agreement to the letter of the law.
In addition- there is a scheme to write-off a portion of the parked amount- should the borrower come into an inheritance or win the lottery (aka come into a lumpsum they could use to retire a portion of the parked loan).
The lender continues to hold the parked loan amount, they have far greater control over the first loan tranche than they would otherwise have, and they don't have to write-down anything other than the initial inducement to get the borrower to sign on the dotted line.
Assuming all 1,500 eligibly borrowers signed up to it (which they won't- the terms are quite severe)- it would be an initial cost to the lender of 50-60m in exchange for vastly enhanced control over the secured property- and the finances of the borrowers.
I don't see how you imagine this is a first step to a roll-out of blanket debt forgiveness- especially when the approval panel in the bank themselves, don't see a many eligible customers as being happy to sign on the dotted line.
Its an exercise in kicking the bucket down the road- with an inducement to the borrower, in exchange for tight monitoring of their expenditure, other than their mortgage expenditure.
Most sane borrowers- might imagine a PIP to be preferable- at least they'd get their unsecured debt cleared too, using that mechanism.0 -
The_Conductor wrote: »Its hardly kite-flying, its a small subset of customers, who qualify for split mortgages- in return for signing up to somewhat onerous conditions, there is a financial incentive for the customers to follow the agreement to the letter of the law.
In addition- there is a scheme to write-off a portion of the parked amount- should the borrower come into an inheritance or win the lottery (aka come into a lumpsum they could use to retire a portion of the parked loan).
The lender continues to hold the parked loan amount, they have far greater control over the first loan tranche than they would otherwise have, and they don't have to write-down anything other than the initial inducement to get the borrower to sign on the dotted line.
Assuming all 1,500 eligibly borrowers signed up to it (which they won't- the terms are quite severe)- it would be an initial cost to the lender of 50-60m in exchange for vastly enhanced control over the secured property- and the finances of the borrowers.
I don't see how you imagine this is a first step to a roll-out of blanket debt forgiveness- especially when the approval panel in the bank themselves, don't see a many eligible customers as being happy to sign on the dotted line.
Its an exercise in kicking the bucket down the road- with an inducement to the borrower, in exchange for tight monitoring of their expenditure, other than their mortgage expenditure.
Most sane borrowers- might imagine a PIP to be preferable- at least they'd get their unsecured debt cleared too, using that mechanism.
It'll gradually be loosened up, it may be severe now, but it recognises the inevitability of writing down debt. It will be made more attractive to people over time.
It's better for the banks than bankruptcy, because under that they'll get nothing, and cases are going through the courts now.
Three years and your out of it and you'll get to keep the house (more than likely) and all your debt is written off from mortgage to credit card, writing down debts is a no brainer for the bank if they or the taxpayer want to get some money back, because if the banks get nothing from someone declaring themselves bankrupt either does the taxpayer, even money owed to revenue is written off.0 -
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The Spider wrote: »Sorry disagree, they should never have been given that level of debt in the first place, the general population are not financial experts, they used to trust that if the bank gave them that amount then it must be ok, it's incumbant on the banks who lent too much, to sort it out that's the banks business model not the guy in the street.
No-one is going to argue that they shouldn't have taken on that level of debt in the first place- what people are arguing is that you can't simply point your finger at the bankers and go 'Nah, nah, nah- it was all your fault, catch me if you can'.........
Most borrowers were greedy- and those who weren't- allowed themselves become enmeshed in the herd mentality and bought into the propaganda sold by various vested interests.
If you imagine that the whole population are stupid and didn't know what they were doing- you are doing a disservice to a large portion of the highly intelligent people who bought into the hype- many of whom saw it as a lottery- they just had to know when to step out of the dance. Unfortunately- after several false calls- the dance was allowed continue- and it became expedient to imagine it would never stop.The Spider wrote: »Now with this AIB have realised that they'll never get back what's owed and if their customers go bankrupt, they'll get nothing, the other banks'll follow suit.
They're never going to get back what they're owed in full, from a significant cadre of borrowers. They are maximising their possible return- by tightening a straightjacket on borrowers- and controlling their expenditure to remarkable levels, akin to those that would be prescribed under bankruptcy proceedings.
AIB always has call on the asset, come what may- it is a secured debt after all (unlike a credit card debt, over-drafts etc).
If the customer declares bankruptcy- AIB get the asset back. Using this mechanism- they discount its current market value by 10-20%, park up to 50% of the original loan amount- and end up with possibly between 85-90% of the original principal, only with strict terms on the borrower- in exchange for the limited debt forgiveness. Depending on how badly someone wants to keep their family home- bankruptcy sounds quite appealing, in lieu of using this carrot and stick approach.The Spider wrote: »As for the people paying over the odds in Dublin, it's been said on this site over and over that they're cash buyers, so what's the problem?
They're not all cash buyers. And in any event- how do recent purchasers of PPRs in Dublin- factor in this equation? Different lending rules have governed any mortgages approved since 2008- so presumably any of the borrowers eligible for this scheme are pre-bust clients? So we're comparing apples with oranges.The Spider wrote: »If they're cash buyers then they don't have mortgages?
Plenty of cash buyers have mortgages. Just because you have cash, doesn't mean you don't also have debts. We've seen improbable amounts of cash materialise from under people's mattresses etc- doesn't mean the self same people don't have mortgages.........?0 -
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The Spider wrote: »It'll gradually be loosened up, it may be severe now, but it recognises the inevitability of writing down debt. It will be made more attractive to people over time.
It's better for the banks than bankruptcy, because under that they'll get nothing, and cases are going through the courts now.
Three years and your out of it and you'll get to keep the house (more than likely) and all your debt is written off from mortgage to credit card, writing down debts is a no brainer for the bank if they or the taxpayer want to get some money back, because if the banks get nothing from someone declaring themselves bankrupt either does the taxpayer, even money owed to revenue is written off.
Under bankruptcy the bank gets nothing?
Really?
Unsecured debtors get nothing.
Banks are secured debtors.
Under bankruptcy- they get the house.
Your mortgage is not written off- your assets and liabilities are wiped, you do not get to keep the house, but your overdraft and your credit card are cleared (not that you'll ever qualify for credit ever again).
Why do you have this notion that in bankruptcy the bank gets nothing- they get all the secured assets- which in this instance, is the house.
The benefit of this scheme for the bank- is the parked portion of the mortgage remains intact- and not due for reconsideration for 10 years. Its the parked portion of the mortgage that the bank are looking at- and its this that they are going to give the biggest incentives to people to clear- you'll find 30-40% write-offs on the parked portion of mortgages- where people use lumpsums they come into to write down the parked portion (providing they keep with all terms of the initial part of the loan.
Its really quite easy to follow- and you can see why it makes sense for the bank- however they are reliant on borrowers wanting to hold onto their PPR at all costs- which is something that is ingrained in the Irish psyche.0 -
I heard a BOI add on the radio this morning. Today FM.
They were banging on about the fact that it's cheaper to purchase than rent and encouraging people to get out of renting to buy houses.
Sounded like an ad from 2006/2007.
It seems the madness is never far off in this country.0 -
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I heard a BOI add on the radio this morning. Today FM.
They were banging on about the fact that it's cheaper to purchase than rent and encouraging people to get out of renting to buy houses.
Sounded like an ad from 2006/2007.
It seems the madness is never far off in this country.
Hopefully people have learnt something this time round- though I have to say, its quite unusual just how fickle people are- this isn't our first burst, nor will it be our last.
Maybe BOI are just trying to drum up some business- their lending rules are a lot more stringent than many other lenders- and indeed, of all the major financial institutions, they uniquely remained out of majority state ownership, as the quality of their loans wasn't nearly as bad as the other incumbents.0 -
The_Conductor wrote: »Under bankruptcy the bank gets nothing?
Really?
Unsecured debtors get nothing.
Banks are secured debtors.
Under bankruptcy- they get the house.
Your mortgage is not written off- your assets and liabilities are wiped, you do not get to keep the house, but your overdraft and your credit card are cleared (not that you'll ever qualify for credit ever again).
Why do you have this notion that in bankruptcy the bank gets nothing- they get all the secured assets- which in this instance, is the house.
From here, and Charlie Weston said the same thing.
http://www.newbeginning.ie/faqs/bankruptcy#6-what-happens-to-my-family-home-under-bankruptcy
6. What happens to my Family Home under Bankruptcy?
When a person becomes bankrupt the OA will consider what the reasonable living expenses are for the person and his or her family based on the guidelines issued by the Insolvency Service.
As part of this, the Official Assignee will allow sufficient money for accommodation and will consider how much will be allowed for reasonable mortgage repayments.
The Official Assignee has said that the family home is the last asset that he will choose to deal with.
Additionally, the Official Assignee may not sell the family home without obtaining permission from the High Court. Where the Official Assignee seeks this permission, the High Court may postpone the sale of the family home having regard to the interests of creditors and the interests of the bankrupt’s spouse and dependents.
Finally, if the family home is in negative equity (the mortgage is greater than the value of the property) there is no benefit to the assignee is selling the property.
And I'd reckon all houses going the bankrupt route are in negative equity.0 -
Its not mentioned enough that in any debt write off situation the house should be returned to the bank/taxpayer on the death of the borrower.0
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Thats a complete misrepresentation of facts- and where you're quoting from only adds credence to people looking very sceptically at what you're saying- its a selective representation of facts, and not even current facts, as many have been superceded by recent legislative changes, which firmly puts the ball bank in the lender's court. Quoting Charlie Weston- and New Beginnings as fact.......... sigh.........
The official assignee decides the house as the final asset to be disposed of- fine.
How you make out that the lender gets nothing- is beyond me- they are a secured debtor- the unsecured debtors get nothing. In the event of a property being in negative equity- the lender gets the current market value for the property- should it sell- not the mortgaged amount- and the mortgaged amount, then, as an unsecured debt, gets wiped at the elapse of the insolvency.
Its quite a reasonable concept.
The only sticking point is the permission of the High Court to dispose of the family home- but even this was watered down in the recent legislation- its not really a sticking point any longer.
AIB's scheme relies on people wanting to stay in their family home and retain ownership of it. Parking that portion of the mortgage that they cannot afford- while tying them up in financial constraints, akin to those of a PIP- is a good deal for the write-off they are willing to offer on the *current market value* of the property. The parked portion of the mortgage remains parked- and may be discounted at some future point- if/when the mortgator comes into a lumpsum.
Its a good deal for the bank- and its reliant on the borrower not throwing in the towel and wanting to stay in their PPR- which wouldn't work in any other country, other than Ireland.0 -
The_Conductor wrote: »Its only for split mortgage customers- who have a hope of repaying a lower amount, have made full disclosures to the bank- and the debt write down is a portion of the parked (delayed) portion of the mortgage, providing all terms and conditions of the first loan are adhered to.
Aka- its a tiny subset of customers- and not likely to be extended beyond this small group.
Its also predicted that of those who qualify for this limited offer, many will decide the terms associated with it are too onerous to make it a viable option.
Essentially- you'd be subject to pretty much the same rules as you would under a Personal Insolvency Plan- only the bank would be the sole lender involved. Many people may just say- 'bugger this for a lark- lets go the whole hog, and avail of a PIP instead'.
There's one important bit that didn't get reported and that's that they lose their tracker as well thus negating the value of the write-down.0 -
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There's one important bit that didn't get reported and that's that they lose their tracker as well thus negating the value of the write-down.
Of course they loose their tracker. Would anyone imagine they'd keep it? Its a millstone and an ongoing cost around the bank's neck. The write down- is a recognition of this- and the borrower signing up to their 'PIP-Lite' scheme (actually, it would be nice if AIB called it this- as this is essentially what it is).0 -
The Spider wrote: »Sorry disagree, they should never have been given that level of debt in the first place, the general population are not financial experts,
If they are not financial experts then perhaps they shouldn't have been investing. Anyway, at least they learned a valuable lesson: "Sheep are for fleecing".0 -
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The_Conductor wrote: »Thats a complete misrepresentation of facts- and where you're quoting from only adds credence to people looking very sceptically at what you're saying- its a selective representation of facts, and not even current facts, as many have been superceded by recent legislative changes, which firmly puts the ball bank in the lender's court. Quoting Charlie Weston- and New Beginnings as fact.......... sigh.........
The official assignee decides the house as the final asset to be disposed of- fine.
How you make out that the lender gets nothing- is beyond me- they are a secured debtor- the unsecured debtors get nothing. In the event of a property being in negative equity- the lender gets the current market value for the property- should it sell- not the mortgaged amount- and the mortgaged amount, then, as an unsecured debt, gets wiped at the elapse of the insolvency.
Its quite a reasonable concept.
The only sticking point is the permission of the High Court to dispose of the family home- but even this was watered down in the recent legislation- its not really a sticking point any longer.
AIB's scheme relies on people wanting to stay in their family home and retain ownership of it. Parking that portion of the mortgage that they cannot afford- while tying them up in financial constraints, akin to those of a PIP- is a good deal for the write-off they are willing to offer on the *current market value* of the property. The parked portion of the mortgage remains parked- and may be discounted at some future point- if/when the mortgator comes into a lumpsum.
Its a good deal for the bank- and its reliant on the borrower not throwing in the towel and wanting to stay in their PPR- which wouldn't work in any other country, other than Ireland.
When I say the bank gets nothing, under bankruptcy, the negative equity portion of the debt is written off and the bank gets the sale price, so that leaves the bank in the red in other words if 400'000 is owed on a house and it sells for 200'000 then the bank is in the red by 50% and lets not forget interest the bank would have earned if the repayments had gone on over the years.
If the bank writes down a portion of the debt, it will make more money over the long term, bar trackers of course, but that could change if interest rates rocket in the future.0 -
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The Spider wrote: »When I say the bank gets nothing, under bankruptcy, the negative equity portion of the debt is written off and the bank gets the sale price, so that leaves the bank in the red in other words if 400'000 is owed on a house and it sells for 200'000 then the bank is in the red by 50% and lets not forget interest the bank would have earned if the repayments had gone on over the years.
If the bank writes down a portion of the debt, it will make more money over the long term, bar trackers of course, but that could change if interest rates rocket in the future.
Aka (using your example) they get 200k today, in lieu of (for arguments sake) 350k over the next 15 years, a significant portion of which is parked at 0% interest (though they do loose the tracker on the tranche 1 part of the loan).
If you use fundamental discounting techniques- they're probably better off taking the 200k and running- than tying themselves up in knots with the borrower over a 10-15 year period, and still having the parked sum to deal with, at some future point in time- the only reason not to do this- is to stop the loss being crystalised on their balance sheet.
Aka- my reading of all of this would be- its actually in the banks interest to bankrupt their customers, claim the PPRs, and crystalise their losses today- rather than boot them down the road.
On top of all of this- if the loan is called in, and the realisable value is below that of the o/s mortgage- they can write this off against tax (if/when they have a taxable profit to offset it against- BOI do now, AIB will at some stage).
Its in their interest to bankrupt the customer- or push them into a PIP- rather than giving them a write-down (or if they do give a write-down, to make the terms of it so onerous, as to limit the appeal to a small subset of people- as indeed AIB have done).
I can't see this being a toe-dipping in the water exercise, like you're suggesting- when their parked mortgage product (which most lenders have in any event)- with its 0% interest on the parked sum, would appear to be at least as attractive a deal for most customers.
Its an interesting development- and it may be a lifeline for 1,500 odd customers- but they have other options- as do the bank, and doubtless some of them will exercise other options (indeed the banks own assessment suggests that they expect a significant number of eligible customers to turn this down- as they'd have similar terms to a PIP imposed on them, only they don't get to wipe their unsecured debt- and the parked portion of the loan is the bogeyman who has been booted down the road to be dealt with whenever.........0 -
The Spider wrote: »Ah well doesn't matter,
I love the way you dismiss being called up on the all the pure waffle and bull you posted about people being asked to fulfill their patriotic duty and buy a house. :rolleyes:The Spider wrote: »debts are going to be written down anyway AIB have said they're going to write down the debt.
http://www.thejournal.ie/aib-split-mortgage-debt-write-off-1300195-Feb2014/
On the news last night they're going to do it for at least 10 thousand, this is the start of it.
Like I said from the beginning debts will be written down.
Better tell the shareholders and owners of NIB, Rabo, Ulster and even BOI that they are writing off all these detbs that are owed to their companies.
Is it a coincidence that the one bank that comes out with this happens to be the major one owned by us smucks the taxpayers ?
Oh and I think others have addressed your hyperbole once again about how they are rolling this out for every mortgage holder in trouble.The Spider wrote: »Simple fact is all boom time mortgages will be written down to their current value, this is being put out as a few customers, but eventually it'll go to everyone.
People can talk about moral hazard all they want, but the fact is, in the boom everyone was encouraged to buy property, from the government, the media and the banks.
So what, Paddy Power is always encouraging us to gamble through radio, web, etc.
It doesn't mean I have to do it, does it.
Guinness is advertised ad nauseum, it doesn't mean we all drink the stuff.The Spider wrote: »Most people aren't on the internet looking at property sites, and even less were on it in 2002-2007, broadband was non existant, either were smartphones, so the only information the vast majority went on, was what they were being told from the pillars of society and they all said buy property.
You didn't need broadband or any web site to tell you an apartment in some village in the ar** of nowhere is not a great idea, that there were nearly more houses for sale in Leitrim than there were people and no matter what the Section 23 advertising blurb is claiming everyone doesn't want to spend their weekends in Dromod nor do they all want an effing boat on a jetty.
Cop on was not invented post 2007 you know nor is it something you get from a website as is quiet evident around here :rolleyes:
Saying all that you have touched on something, some people did shag all research and even fecking were bragging about how they bought property on the way home as shure everyone was doing it.The Spider wrote: »Yeah at the moment, this is called flying a kite, eventually it'll be brought out to all other customers, it's either write down the debt or people can declare themselves bankrupt, and then the bank gets very little.
....
The bankrupt route would allow the economy to reboot.
Yeah the banks will have even more money to loan to business and the taxpayers will be getting a kick back.
Oh wait ...
You may be right that there will be large amounts of debt forgiveness and writeoffs, but contrary to your erie fairie world somebody will have to carry the cost and it will be high.
Ever hear the term "robbing peter to pay paul" ?I am not allowed discuss …
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I love the way you dismiss being called up on the all the pure waffle and bull you posted about people being asked to fulfill their patriotic duty and buy a house. :rolleyes:
Better tell the shareholders and owners of NIB, Rabo, Ulster and even BOI that they are writing off all these detbs that are owed to their companies.
Is it a coincidence that the one bank that comes out with this happens to be the major one owned by us smucks the taxpayers ?
Oh and I think others have addressed your hyperbole once again about how they are rolling this out for every mortgage holder in trouble.
So what, Paddy Power is always encouraging us to gamble through radio, web, etc.
It doesn't mean I have to do it, does it.
Guinness is advertised ad nauseum, it doesn't mean we all drink the stuff.
You didn't need broadband or any web site to tell you an apartment in some village in the ar** of nowhere is not a great idea, that there were nearly more houses for sale in Leitrim than there were people and no matter what the Section 23 advertising blurb is claiming everyone doesn't want to spend their weekends in Dromod nor do they all want an effing boat on a jetty.
Cop on was not invented post 2007 you know nor is it something you get from a website as is quiet evident around here :rolleyes:
Saying all that you have touched on something, some people did shag all research and even fecking were bragging about how they bought property on the way home as shure everyone was doing it.
Yeah the banks will have even more money to loan to business and the taxpayers will be getting a kick back.
Oh wait ...
You may be right that there will be large amounts of debt forgiveness and writeoffs, but contrary to your erie fairie world somebody will have to carry the cost and it will be high.
Ever hear the term "robbing peter to pay paul" ?
I do so look forward to your posts, they are very informative, anyway after all that you agree with me about the debt forgiveness?0 -
sawdoubters wrote: »Scale of Irish mortgage default is unprecedented
http://www.irishtimes.com/business/sectors/financial-services/scale-of-irish-mortgage-default-is-unprecedented-1.1676749
Also predicted by Prof Morgan Kelly, iirc.0 -
If banks were that interested in long term losses being recouped through increased property values then they could establish rental side arm and re-possess the property and then rent it out to the current owner at a more reasonable rate (or anyone else for that matter.) rents are fairly high at the minute. In many (not all) cases they could be getting a very reasonable monthly income. As they would be dealing with a large number of units then there would be huge economies of scale across the scheme.
We have properties in our estate that sat empty for 5+ years BEFORE the bank took them and then sat empty again for another year while they tried to sell them. Its very hard to understand why the owner didn't just rent it out but equally why the bank wont do this as well.
I'm guessing that the bank just wants shot of the numerical loss. But there could be thousands of high rental yield properties that could over the next 5-10 years provide a degree of steady income before they sell at a higher price.
Anyway, can anyone apply for this magic mark down, even if they have an affordable mortgage?0 -
If banks were that interested in long term losses being recouped through increased property values then they could establish rental side arm and re-possess the property and then rent it out to the current owner at a more reasonable rate (or anyone else for that matter.) rents are fairly high at the minute. In many (not all) cases they could be getting a very reasonable monthly income. As they would be dealing with a large number of units then there would be huge economies of scale across the scheme.
We have properties in our estate that sat empty for 5+ years BEFORE the bank took them and then sat empty again for another year while they tried to sell them. Its very hard to understand why the owner didn't just rent it out but equally why the bank wont do this as well.
I'm guessing that the bank just wants shot of the numerical loss. But there could be thousands of high rental yield properties that could over the next 5-10 years provide a degree of steady income before they sell at a higher price.
Anyway, can anyone apply for this magic mark down, even if they have an affordable mortgage?
But this is the bind they have got themselves into. They've rigged the market to ensure high prices and a glimmer of hope that they might be able to trade their way out of this mess but any attempt to do so will see the carefully constructed house of cards fall down again.0 -
Worked in a building society for a year during the boom, in that whole year we only processed one mortgage where the customers hadn't lied on the form about their income, other loans, credit cards or where their deposit came from.... ONE in hundreds. The banks aren't saints but people lied blatantly and did all sorts to cover it up, knowing that ICB checks wouldn't show up debts in credit unions, pretending to save their deposit while really the money was coming from their parents. People buying apartments counting the rental income from the spare room, for a 30yr mortgage? who is going to have a tenant for 30yrs to help with mortgage? they were all sick of it after two years.... Haven't a clue how it can be resolved and i feel sorry for people stuck in bad positions... grateful everyday i got cold feet about buying....0
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I recall a married couple I knew trying to get a mortgage long before the Celtic Bubble even started. With the help of an accountant friend, they were fabricating evidence to fool the bank. The charade even included faking documents and scrunching them up a bit to make them look a bit older. I'm sure the sums involved, and the level of risk, were far lower at the time than during the bubble when the banks were throwing money at people.
Shortly after we bought our home in 2002, and rising property 'values' seemed to be real for a while, I briefly considered the idea of using the supposed equity to buy another house as an investment. It was a tempting prospect, or so it seemed at the time, but I couldn't see how it would be affordable in the longer term, so I forgot about it pronto. A few people who were much less risk-averse than me thought I was being overly cautious, to say the least.
On the other hand, the drastically altered loan-to-value ratio around that time made it possible to switch to a tracker mortgage. That was a good move.0 -
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The more scary issue coming of late is that the Government are selling off mortgages to foreign investors.
Stephen Donnelly is again, on the forefront of asking the real questions of a potentially disastrous situation, and being stonewalled by the Taoiseach and Noonan.
The Government are splitting mortages into two categories, performing and non -performing, and selling them off in bundles. Without allowing the actual mortgage holders apply to bid for it.
The issue arrives here with mortgages in arrears. The mortgage might have been originally drawn up for 300k, and will be sold for let's say 240k. So there is a writedown there of 60k. But when it's sold to foreign investors, they will seek the full 300k repayment. Hence making 60k profit.
I'd imagine this is something financial and asset managers will jump on. Because they operate foreign, they won't be bound by some of the rules and laws here, and will be able to turn screws into mortgage holders as they recoup the full 300k, potentially ending in eviction and repossession. Asset manager now holds a property, that's price will likely rise in the coming years as supply fails to meet demand.
An example of the REALLY poor performing mortgages, might be a 300k mortgage being sold off at 160k. A bit writedown. But again once taken by the foreign investor, they will continue to seek the full 300k, potentially earning more profits for their clients.
Instead of the sensible thing, allowing in cases for mortgage holders to bid and have an option on the firesale mortgages.
Imagine a family struggling with a 300k mortgage, getting the opportunity to essentially restructure to have it at 160k. It makes perfect sense, however not to Noonan, who feels the only option is to bulk sell to foreign investors, as its "efficient and will make the sales faster".
This is what happens when you provide the task of rebuilding the economy, to former teachers and people with no experience....0
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