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Borrow €400k from AIB and only pay back €250k

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    #32
    smcgiff
    Closed Accounts Posts: 5,943 ✭✭✭smcgiff


    username123 wrote: »
    Id much rather the drop in mortgage debt tbh. Thats a permanent solution. My salary dropping would be a temporary situation.

    That's a gamble I'd prefer not to take, and I'm in a fairly recession proof friendly industry.

    It's like people getting €150k redundancy but lose their good job and have to settle for less. They're usually not too pleased.


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    #33
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    whomitconcerns wrote: »
    with all due respect to the people involved...surely its not the end of the world if the boy and girl had to share a room in a downsized house....least of their worries..

    sure putem somehere with an outside toilet whilst your at it.

    This isnt the 1950's whilst Im a big cheerleader for cutting down on frivolity if you cannot afford it. I think its fair to give people a certain level of dignity too.

    Lets look at the other option.

    AIB do nothing, arrears grow become unsustainable. Couple either go bankrupt or go into a PIA bank loses out much more than they are with this deal.

    Taxpayer ultimatly lose out more on that deal as we basically own AIB and on top of which we end up housing the family aswell.

    The solution is the best of a bad situation. Its not a silver bullet but each individual case has to be taken on its merits or (least demerits as the case may be)


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    #34
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    Robert McGrath wrote: »
    Rent

    Renting could very conceivably cost them significantly more than the adjusted mortgage payments.


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    #35
    ted1
    Registered Users Posts: 23,534 ✭✭✭✭ted1


    smcgiff wrote: »
    On Morning Ireland this morning. The reporter said the remaining mortgage, which they could afford to pay, was still twice what the house was worth on the open market.

    any idea what type of mortgage they had?

    someone on tracker with a mortgage of 400k over 30 years paying a rate of 1.5% is paying over 30 years has a monthly payment of €1,380

    someone who takes out a mortgage today on a house worth 250k is paying a rate of 4.79% over 30 years is paying €1,310

    there's not really much difference. can the person who paid 250k today as they rented for the past few years get a rebate from the government for what they paid in rent??


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    #36
    smcgiff
    Closed Accounts Posts: 5,943 ✭✭✭smcgiff


    ted1 wrote: »
    any idea what type of mortgage they had?

    No idea, I don't think it was mentioned on Morning Ireland.
    ted1 wrote: »
    can the person who paid 250k today as they rented for the past few years get a rebate from the government for what they paid in rent??

    I think you know the answer to that :)


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    #37
    Zamboni
    Registered Users Posts: 4,305 ✭✭✭Zamboni


    Their next door neighbours who bought at the same time and never missed a payment now ironically owe more to AIB than they do.

    The other next door neighbours who are renting have been waiting for a year for a house in the neighbourhood to come up for sale. They would have paid €30k over market price for that house.


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    #38
    smcgiff
    Closed Accounts Posts: 5,943 ✭✭✭smcgiff


    Zamboni wrote: »
    Their next door neighbours who bought at the same time and never missed a payment now ironically owe more to AIB than they do.

    The other next door neighbours who are renting have been waiting for a year for a house in the neighbourhood to come up for sale.

    You made that up, didn't you.


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    #39
    Zamboni
    Registered Users Posts: 4,305 ✭✭✭Zamboni


    smcgiff wrote: »
    You made that up, didn't you.

    Yes - to illustrate a perfectly reasonable point. Everyone else is being f*cked over to accommodate this crap.


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    #40
    smcgiff
    Closed Accounts Posts: 5,943 ✭✭✭smcgiff


    Zamboni wrote: »
    Yes - to illustrate a perfectly reasonable point. Everyone else is being f*cked over to accommodate this crap.

    Their next door neighbour can afford to pay their mortgage because they deal in drugs*














    * not actually true, just illustrating a point


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    #41
    ArraMusha
    Registered Users Posts: 589 ✭✭✭ArraMusha


    Zamboni wrote: »
    Their next door neighbours who bought at the same time and never missed a payment now ironically owe more to AIB than they do.

    The other next door neighbours who are renting have been waiting for a year for a house in the neighbourhood to come up for sale. They would have paid €30k over market price for that house.

    Ya it comes back to what I posted above ..."Bite off all ya can, don't worry if ya cant swollie it, that's someone elses problem"

    The 'someone else' being the taxpaying (gombeen) neighbours, who are repaying their mortgage or those looking to buy.


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    #42
    ted1
    Registered Users Posts: 23,534 ✭✭✭✭ted1


    smcgiff wrote: »
    I think you know the answer to that :)

    I don't, I used to think that if someone takes a loan they had to pay the agreed amount back or face losing the time the loan is secured against.

    so anything is possible.


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    #43
    OldNotWIse
    Closed Accounts Posts: 12,468 ✭✭✭✭OldNotWIse


    The_Conductor wrote: »
    Renting could very conceivably cost them significantly more than the adjusted mortgage payments.

    Yet it was a good enough option for some people who couldnt afford to jump onto the property ladder like lunatics and mortgage their own as*es off...


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    #44
    smcgiff
    Closed Accounts Posts: 5,943 ✭✭✭smcgiff


    ted1 wrote: »
    I don't, I used to think that if someone takes a loan they had to pay the agreed amount back or face losing the time the loan is secured against.

    so anything is possible.

    If the asset against which the loan is secured against is worth more than the loan, then that will happen.

    It wasn't foreseen that the assets would depreciate so badly.

    In this case the loan as agreed with the couple is twice the value of the asset.

    What was the alternative, bankruptcy and the bank gets nothing?


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    #45
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    Cop-on guys, if you want to go down the road of wild speculation and conspiracy theories- we have a wonderful forum, especially for that.........


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    #46
    ronan45
    Registered Users Posts: 1,584 ✭✭✭ronan45


    Hmmmm I have been paying AIB diligently for years...:eek:

    Time for some strategic defaulting me thinks! ;)

    Wouldnt mind splashing out this year :D


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    #47
    strandroad
    Closed Accounts Posts: 4,676 ✭✭✭strandroad


    The_Conductor wrote: »
    Renting could very conceivably cost them significantly more than the adjusted mortgage payments.

    Unless they rent somewhere else, or downsize, or both.


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    #48
    minotour
    Registered Users Posts: 655 ✭✭✭minotour


    I could probably argue a similar situation to these people, very similar demographics however its possible we earn more. So all i need to do is run up some ridiculous credit cards debts in scale to our earnings then we get a write down on our mortgage?

    Its rewarding failure end of story.........and if it turns out they pulled strings then heads should fookin roll!


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    #49
    username123
    Closed Accounts Posts: 7,484 ✭✭✭username123


    smcgiff wrote: »
    It's like people getting €150k redundancy but lose their good job and have to settle for less. They're usually not too pleased.

    No, but there is nothing stopping that person upskilling or retraining and continuing to look for a better job. It doesnt give the ages of the couple in the article, but if they are in their 30s or 40s they have between 25-35 years of working life left - so there is time for earning power to increase.

    I am sure the case is more that the public sector worker doesnt want to give up their gold plated pension and take their chances in the private sector.

    Plus the value of their property may well go up over the next 20 years meaning that having just had a write off, they can sell for a profit down the road.

    I am not against mortgage forgiveness btw, but I think all people should be treated equally. If they get debt forgiveness, so should I.


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    #50
    ted1
    Registered Users Posts: 23,534 ✭✭✭✭ted1


    smcgiff wrote: »
    If the asset against which the loan is secured against is worth more than the loan, then that will happen.

    It wasn't foreseen that the assets would depreciate so badly.

    In this case the loan as agreed with the couple is twice the value of the asset.

    What was the alternative, bankruptcy and the bank gets nothing?

    the current price has no bearing what so ever on ones ability to pay. as highlighted in my previous post some one paying 250k in todays market has the same repayments as someone who bought in the tiger era.


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    #51
    username123
    Closed Accounts Posts: 7,484 ✭✭✭username123


    smcgiff wrote: »
    In this case the loan as agreed with the couple is twice the value of the asset.

    My mortgage is currently worth twice my property and my income has been slashed. But because I am living a much reduced lifestyle in other ways (no holidays, no extravagances) I am not being forgiven.

    Perhaps I should borrow 20k and go on a credit card spree in a foreign country then come back and hold my hand out for some debt forgiveness.


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    #52
    smcgiff
    Closed Accounts Posts: 5,943 ✭✭✭smcgiff


    ted1 wrote: »
    the current price has no bearing what so ever on ones ability to pay.

    I don't think anyone is disagreeing with you on that point.


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    #53
    smcgiff
    Closed Accounts Posts: 5,943 ✭✭✭smcgiff


    ronan45 wrote: »
    Hmmmm I have been paying AIB diligently for years...:eek:

    Time for some strategic defaulting me thinks! ;)

    Wouldnt mind splashing out this year :D

    You'd probably have to lose your job and get another one paying significantly less.

    Let us know how that works out for you. :P


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    #54
    smcgiff
    Closed Accounts Posts: 5,943 ✭✭✭smcgiff


    username123 wrote: »
    My mortgage is currently worth twice my property and my income has been slashed. But because I am living a much reduced lifestyle in other ways (no holidays, no extravagances) I am not being forgiven.

    Perhaps I should borrow 20k and go on a credit card spree in a foreign country then come back and hold my hand out for some debt forgiveness.

    I imagine this couple are living a much reduced lifestyle and still couldn't pay. It seems you can.

    It's highly unlikely that the bank didn't investigate the couple's lifestyle.


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    #55
    Zamboni
    Registered Users Posts: 4,305 ✭✭✭Zamboni


    I want to offer €300k to AIB/Taxpayer for this house.

    What would the cost of repossession be?


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    #56
    [Deleted User]
    Posts: 18,749 ✭✭✭✭ [Deleted User]


    The_Conductor wrote: »
    It was an unusual case- its a dual income household, one private sector, one public sector, their net income is down over 40% and they've run up massive credit card bills (along with mortgage arrears of just under 40k.

    I'm in the public sector, my income is down in or around the same.
    I don't have huge loans or huge credit card bills.
    I live within my means that I have left AFTER paying my mortgage.

    The only thing that I have learnt from this case is that I'm clearly a fool and should go about splashing the cash like its 2006 again!!!

    Seriously, if this family had fallen on seriously hard times or this was due to illness etc I'm sure people would have more sympathy, it just appears like someone getting 150k for not living within their means.

    Who leaked this case? And why? Perhaps they think there's something wrong too.


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    #57
    smcgiff
    Closed Accounts Posts: 5,943 ✭✭✭smcgiff


    Zamboni wrote: »
    I want to offer €300k to AIB/Taxpayer for this house.

    No you don't. Why would you pay €300k for a house valued at €100k (per morning Ireland).

    If you have €200k to throw away, you might want to consider giving to charity. The CEO will thank you for it in a personalised response.


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    #58
    smcgiff
    Closed Accounts Posts: 5,943 ✭✭✭smcgiff


    bubblypop wrote: »

    Seriously, if this family had fallen on seriously hard times or this was due to illness etc I'm sure people would have more sympathy, it just appears like someone getting 150k for not living within their means.

    Their income has nearly halved. How much more hard times would you want for them?


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    #59
    username123
    Closed Accounts Posts: 7,484 ✭✭✭username123


    smcgiff wrote: »
    I imagine this couple are living a much reduced lifestyle and still couldn't pay. It seems you can.

    It's highly unlikely that the bank didn't investigate the couple's lifestyle.

    Well they have 2 kids - I have no kids, I wouldnt be able to afford them.

    The "house" is a house, Ive only got a tiny apartment.

    Seems like much reduced lifestyle is a subjective notion.


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    #60
    paganji
    Closed Accounts Posts: 15 ✭paganji


    Its easy to see how a story like this strikes a nerve for people who have worked hard to pay a big mortgage while living within their means. Its understandable why people feel that way.

    My hope would be that AIB have done their best to ensure that this couple have no extravagances. If they have 2 big nice cars, sell them both and let them have 1 shared economical car.

    All of their income should be taken into account and every outgoing justified by the bank to ensure they do not go on a fancy holiday, private schools for kids, spa weekends, shopping spree, etc.

    But still give them something to live for, let them have some sort of a life and give them a chance to work hard to repair the damage.


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    #61
    smcgiff
    Closed Accounts Posts: 5,943 ✭✭✭smcgiff


    username123 wrote: »
    Well they have 2 kids - I have no kids, I wouldnt be able to afford them.

    The "house" is a house, Ive only got a tiny apartment.

    Seems like much reduced lifestyle is a subjective notion.

    Presumably they had the kids before they lost their income. Should they hand the kids up for adoption as part of a reduced lifestyle?


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