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

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12357…14

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    #122
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    fliball123 wrote: »
    The problem there is they can now prepare for it..a nice 6 months to a year of ignoring the banks letters that they have not paid the mortgage..in the mean time..get a few loans out from differing banks and institutions and max out a few credit cards...


    Yeah because banks right now are throwing around unsecured loans and credit cards willy nilly....

    your sorely mistaken if you genuinely believe this is a plausible strategy for somebody. Your also sorely mistaken if you think that banks are stupid enough not to identify the difference between a strategic and genunie default.

    you also fail to understand that to ge ta deal like this couple got there will be plenty of other things what will have fallen into place outside of that published somethign that somebody couldnt replicate as such.

    What your suggesting would not be a very advisable path for somebody to go down.


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    #123
    Ash.J.Williams
    Registered Users Posts: 21,036 ✭✭✭✭Ash.J.Williams


    Michael54321 wrote: »
    People made sound decisions at the time based on their wages. The banks looked at the house price and the couple's wages and agreed to lend them the money based on those figures. If the couple have taken big wage cuts like most of us or taken jobs with much lower wages then they cannot be expected to keep up repayments based on their high wages.
    If they were evicted how much would it cost for the local authority to house them, I would say it was a cheaper option on the tax payer to write off the 150k.
    As regards the kids, they are there now, you can't give them back, so what's your point ? should they be thrown out on the street of given some standard of living ?.
    Many many many people were assisted by mortage advisors that massaged the incomes of people and told outright lies to secure mortgages.


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    #124
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    Ash.J.Williams wrote: »
    Many many many people were assisted by mortage advisors that massaged the incomes of people and told outright lies to secure mortgages.

    P60, wage slips and bank accounts cannot be massaged.

    If fake documents were presented its fraud and all involved should be jailed.

    If additional "income" rent a room yada yada yada was put down on the application form and the bank took it for what it is then they were in deriliction of their duty but because we dont offer non recourse loans in this country the onus ends up back on the borrower.

    End of the day if they were happy to take the money they have to be prepared to pay it back end of story.


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    #125
    ferike1
    Registered Users Posts: 1,785 ✭✭✭ferike1


    D3PO wrote: »
    Im not arguing they will recoup it all certainly not. However the process of cleaning up the balance sheets will in a large part be offset by future gains when unwinding their position.

    Functional banks and international perception of the housing arrears crisis weather its just a paper cleanup or not will also have the rating agencies swoon re Ireland Inc. Meaning cheaper bond sales for the NTMA.

    re the second point they are already recouping these losses with all the BS bank charges they are making us pay, they have been doing so for a few years now prior to these writeoffs so its not something thats direclty dictated to the writeoffs but the overall shoddy financial position they find themselves in.

    weather they repo or writeoff they will take a hit (in the most part) so as such the recouping of these losses will happen regardless.

    The point Im making is that whilst at an individual level a lot of these things can be seen as a negative they have positive knock on effects for the banks and governments and weather we like it or not the mess we are in will not be fixed until the coutry and its financial infrastructure are fixed.

    some people win and some people will lose. Its not fair (I pay a heap of tax I never miss a mortgage payment I didnt over extend myself in the boom) but cest la vie we cant turn back the clock and have to deal wirth the here and now as fair or unfair as it is.

    So you don't think the banks will increase their rates even more as a direct impact of these write-offs?

    Some people win and many will lose.

    I am not saying throw the people on the street but debt forgiveness without any consequences is a dangerous precedent for moral hazard.


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    #126
    fliball123
    Registered Users Posts: 7,450 ✭✭✭fliball123


    D3PO wrote: »
    Yeah because banks right now are throwing around unsecured loans and credit cards willy nilly....

    your sorely mistaken if you genuinely believe this is a plausible strategy for somebody. Your also sorely mistaken if you think that banks are stupid enough not to identify the difference between a strategic and genunie default.

    you also fail to understand that to ge ta deal like this couple got there will be plenty of other things what will have fallen into place outside of that published somethign that somebody couldnt replicate as such.

    What your suggesting would not be a very advisable path for somebody to go down.

    The banks so far have shown me nothing but incompetence and a blinding indifference to anything other than lining their own pockets..they couldnt give a flying phuck once they get their bonuses. The other side of the coin here is the people picking up the tab..the tax payer we are already over burdened with debt..Why was this not a factor when transfering even more debt onto them?

    If you are paying your mortgage and have a solid income and go for a loan of say 5 /10 k for a car they will 9/10 give you that cash..If you duplicate this to the 4/5 banks, post ofice and the credit union..aswell as having a few credit cards you could easily within a month have 50k..stop paying everything..and put the money under your matress...How long before you get a deal if your in neg equity..The bank wont recoup their losses if they sell your house and if you threaten to go bankrupt in England? Its Checkmate..except when you get your deal from your debtors you have your 50k under the matress interest free and have less to pay on your debts..Sounds pretty phucking sweet to me.


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    #127
    Michael54321
    Registered Users Posts: 8 ✭Michael54321


    Ash.J.Williams wrote: »
    Many many many people were assisted by mortage advisors that massaged the incomes of people and told outright lies to secure mortgages.

    I totally agree with you, a lot of so called professionals were involved. The house also had to get an independent valuation by an agent of the banks choosing.
    More people than just the mortgage holders are accountable


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    #128
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    ferike1 wrote: »
    So you don't think the banks will increase their rates even more as a direct impact of these write-offs?

    Some people win and many will lose.

    I am not saying throw the people on the street but debt forgiveness without any consequences is a dangerous precedent for moral hazard.

    I think we have hit the crest of the wave, thats not to say that there may not be another move by banks to increase rates as a direct impact.

    Some people win and many lose yes and I agree with your point re moral hazard but Ive yet to see somebody provide a costed valid alterantive.

    Repo 80 - 100 thousand homes ?
    How long will that take ?
    How much will that cost ?
    What impact will that have to the overall economy ?
    What damange will it do to our international standing ?
    What will you do with the 80 - 100 thousand families ?
    What social housing provisions woudl need to be put in place to manage it ?

    etc etc etc.

    People dont seem to think of the overall picture. You canot isolate the arrears crisis and expect that the situation shuld be dealt with in a silo.

    Actions cause reactions.

    Ultimately in 20 - 30 years time the Irish arrears crisis will be most likely a large chapter in global economics books and will be discussed ad nausem in Universities all over the world.

    The situation is unprecedented and it will take more than black and white thinking to see a positive outcome be acheived.


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    #129
    username123
    Closed Accounts Posts: 7,484 ✭✭✭username123


    D3PO wrote: »
    P60, wage slips and bank accounts cannot be massaged.

    If fake documents were presented its fraud and all involved should be jailed.

    If additional "income" rent a room yada yada yada was put down on the application form and the bank took it for what it is then they were in deriliction of their duty but because we dont offer non recourse loans in this country the onus ends up back on the borrower.

    End of the day if they were happy to take the money they have to be prepared to pay it back end of story.

    Falsified documents and "massaged" accounts were rampant.

    I clearly remember one "friend" giving me a particular mortgage brokers number telling me he would falsify a P60 no problem.

    People were transferring loans from parents from credit unions into bank accounts and claiming it was their own savings.


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    #130
    fliball123
    Registered Users Posts: 7,450 ✭✭✭fliball123


    Michael54321 wrote: »
    I totally agree with you, a lot of so called professionals were involved. The house also had to get an independent valuation by an agent of the banks choosing.
    More people than just the mortgage holders are accountable

    Yeah the big bad banker stood there with a gun to the mortgage holders head and said sign or else...This is a very flaky argument..So if I go and shoot 100 people and say the voices in my head said I should do it..Should I get off scott free?


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    #131
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    fliball123 wrote: »
    If you are paying your mortgage and have a solid income and go for a loan of say 5 /10 k for a car they will 9/10 give you that cash..If you duplicate this to the 4/5 banks, post ofice and the credit union..aswell as having a few credit cards you could easily within a month have 50k..stop paying everything..and put the money under your matress...How long before you get a deal if your in neg equity..The bank wont recoup their losses if they sell your house and if you threaten to go bankrupt in England? Its Checkmate..except when you get your deal from your debtors you have your 50k under the matress interest free and have less to pay on your debts..Sounds pretty phucking sweet to me.

    Tell ya what why dont you go for it and come back on here in 2 years time and let us know how you got on ...


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    #132
    yosser hughes
    Registered Users Posts: 3,896 ✭✭✭yosser hughes


    Michael54321 wrote: »
    People made sound decisions at the time based on their wages. The banks looked at the house price and the couple's wages and agreed to lend them the money based on those figures. If the couple have taken big wage cuts like most of us or taken jobs with much lower wages then they cannot be expected to keep up repayments based on their high wages.
    If they were evicted how much would it cost for the local authority to house them, I would say it was a cheaper option on the tax payer to write off the 150k.
    As regards the kids, they are there now, you can't give them back, so what's your point ? should they be thrown out on the street of given some standard of living ?.

    Why should the local authority house them? They both have jobs. They can rent. Let someone who can pay a mortgage move in to their house.


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    #133
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    username123 wrote: »
    I clearly remember one "friend" giving me a particular mortgage brokers number telling me he would falsify a P60 no problem.
    .

    Id find it hard to find anybody who wouldnt agree that this broker should be jailed for this.


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    #134
    fliball123
    Registered Users Posts: 7,450 ✭✭✭fliball123


    D3PO wrote: »
    Tell ya what why dont you go for it and come back on here in 2 years time and let us know how you got on ...

    haha look I am comfortable..I am in neg equity and paying away..I have seen my take home hit continuously by tax...I have a 3 year old who I want to be able to stand on his own 2 feet when he gets older and steer clear of the me-enttitlement attitude...what message does it send to him that his dad can phuck over a cohort of the population in order to increase his quality of living..I would rather he learned that hard work and education can open every door that is locked and in your way. This is the crux of this issue..on one level a simple level it is a solution to a couple to help them out of a bad financial situation..On another level it is a moral conundrum as this couple is basically hoisting there debt onto an already over burdened tax payer. It is basically rewarding this couple for taking a punt and further punishing others who are trying to live the right way.


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    #135
    UnderWater123
    Registered Users Posts: 10 ✭UnderWater123


    Thats like comparing apples and oranges, why not do both? two wrongs don't make a right. This attitude of 'theres worse going on out there' is completely detrimental to a positive and different future. It played a part in the whole greed culture that caused the downfall in the economy. This is, rightly, going to compel thousands of home owners who owe hundreds of thousands to AIB to go and say 'hold on if its good enough for them its good enough for us!' This was wrong and these people should have been moved to a property close to where they bought that fits into the price bracket.


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    #136
    Michael54321
    Registered Users Posts: 8 ✭Michael54321


    yosser hughes wrote: »
    Why should the local authority house them? They both have jobs. They can rent. Let someone who can pay a mortgage move in to their house.

    If they don't get debt written off and the house is sold then they would still have to make payments on the negative equitity which would prevent them from renting, so the local authority would have to house them. Either way the tax payer looses


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    #137
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    yosser hughes wrote: »
    Why should the local authority house them? They both have jobs. They can rent. Let someone who can pay a mortgage move in to their house.

    You need to undestand the system its not as simplistic as you make it out to be.

    Repo the house and leave them with the NE debt, its likely they cannot even afford this NE based on the headline numbers in the reports.

    So what then ?

    They either default on this now unsecured debt (works out the same as them getting a writedown anyway)

    or they go to the council and qualify for things like family hardship grants etc etc.

    Also being reposessed would allow them onto the council housing list so ultimately they woudl end up housed by the council and whilst paying "rent" based on their income it would be a lot lower than market rate with their debts taken into account.

    So taxpayer loses either way, but in scenario 1

    the house of cards that is property prices collapses,
    NAMA aka the taxpayer lose a fortune though that mechanism,
    the country ends up in crisis as banks have to crystalise all their debts via the repos as they aint seieng a penny of the unsecured debt,
    they become illiquid again and international markets wont lend to them.
    A massive crisis ensues as private rentals cannot meet the demand and enough social housing doesnt exist to cater for these families
    The disfunction that is caused caused the country to essentiall collapse under itself.

    actions cause reactions. Anybody arguing that you can reposess 100k properties and think that it wont have negative consequense really have no understanding of basic economic frameworks


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    #138
    fliball123
    Registered Users Posts: 7,450 ✭✭✭fliball123


    Michael54321 wrote: »
    If they don't get debt written off and the house is sold then they would still have to make payments on the negative equitity which would prevent them from renting, so the local authority would have to house them. Either way the tax payer looses

    How do you know..if they had the payments at a very low level it would not impune on them too much...that way the tax payer does not lose. Or an even better idea would be to force them to pay into life insurance and when they die the bank collects


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    #139
    jay0109
    Registered Users Posts: 2,670 ✭✭✭jay0109


    Michael54321 wrote: »
    If they don't get debt written off and the house is sold then they would still have to make payments on the negative equitity which would prevent them from renting, so the local authority would have to house them. Either way the tax payer looses

    Well write the debt off after 3 or so years, but they simply have to hand over the house.
    As things stand, if(when) the house goes back up in value, they get the entire benefit.

    It's like a small lotto win for these people while their neighbour continues to live a frugal life to keep the show on the road in his house.

    This is a complete joke


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    #140
    Zamboni
    Registered Users Posts: 4,305 ✭✭✭Zamboni


    Michael54321 wrote: »
    If they don't get debt written off and the house is sold then they would still have to make payments on the negative equitity which would prevent them from renting, so the local authority would have to house them. Either way the tax payer looses

    I don't think we should automatically assume that it is cheaper to give write downs and allow the retention of assets than it is to repossess and offer council housing.


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    #141
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    jay0109 wrote: »
    Well write the debt off after 3 or so years, but they simply have to hand over the house.
    As things stand, if(when) the house goes back up in value, they get the entire benefit.

    It's like a small lotto win for these people while their neighbour continues to live a frugal life to keep the show on the road in his house.

    This is a complete joke

    There should of course be clawbacks on future value of the asset no doubt. I dont believe there isnt despite what was apparantly claimed on Morning Ireland today ...


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    #142
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    Zamboni wrote: »
    I don't think we should automatically assume that it is cheaper to give write downs and allow the retention of assets than it is to repossess and offer council housing.

    Your right however its also pointless for people to post purely based on the emotive nature of the topic.

    If people were actually to take a step back and consider the situation then there could be a reasonable debate on the merits and or demerits of what occured.


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    #143
    drumswan
    Closed Accounts Posts: 2,592 ✭✭✭drumswan


    jay0109 wrote: »
    It's like a small lotto win for these people while their neighbour continues to live a frugal life to keep the show on the road in his house.

    This is a complete joke
    Nail on the head. Its like a fixed lottery which rewards financial imprudence at the expense of the prudent. Offload the debt to the mugs who didnt overextend, keep the house, restrict supply for those looking to buy and rent in that area, driving house prices up. There is no justice in this country.

    Everybody should have access to bankruptcy processes, but allowing them to keep the asset is unbelievable.


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    #144
    ferike1
    Registered Users Posts: 1,785 ✭✭✭ferike1


    Here is a reasonable point.

    Other people in a similar situation with AIB will now be thinking.

    'Hey, if these guys got away with it, why not me?'

    Moral hazard is definitely an issue.


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    #145
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    ferike1 wrote: »
    Here is a reasonable point.

    Other people in a similar situation with AIB will now be thinking.

    'Hey, if these guys got away with it, why not me?'

    Moral hazard is definitely an issue.

    Moral hazard is an issue yes however I would say these guys "got away with it" that indicates they strategically defaulted.

    People who think hey I can stop paying and get a deal would id suggest

    a) be in the minority
    b) be foolish to do so.

    The banks can tell what is a genuine case of cant pay and what is wont pay. The latter will not get any kind of deal or be shown any level of mercy.

    If your argument is that tens of thousands of people will now decide hey they got a deal Im gonna default so I get one then it really holds no water, when push came to shove people didnt even have the balls to hold off paying the LPT do you really think they could program themselves to deliberatly default ?

    And Im talkin aboult the rule rather than the exception.


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    #146
    ferike1
    Registered Users Posts: 1,785 ✭✭✭ferike1


    No I don't think people will necessarily strategically default but they definitely won't try as hard to make the sacrifices necessary to make sure they are still paying something.


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    #147
    username123
    Closed Accounts Posts: 7,484 ✭✭✭username123


    D3PO wrote: »
    Id find it hard to find anybody who wouldnt agree that this broker should be jailed for this.

    Of course - but the point is - its too late now, there are thousands of mortgages out there that were begotten on falsified documents or massaged statements or whatever.

    I also think its a bit simplistic to say "people were happy to take the money". My brother in law thought that because the bank would give him a loan of x amount that that meant he was capable of paying back x amount. He isnt any kind of financial whizz - and theres plenty like him. People who asked the bank for money, the bank said yes, and they thought that meant that they were properly stress tested.


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    #148
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    ferike1 wrote: »
    No I don't think people will necessarily strategically default but they definitely won't try as hard to make the sacrifices necessary to make sure they are still paying something.

    I agree and disagree in equal measure. Just as owning your own home appears to be part of Irish DNA so does for the most part paying your debts.

    Of course some people may have that mindset but for the most part I dont think its likely to have an impact.

    They psychology of debt is really something that hasnt been discussed at length on this forum its an interesting topic mind you.


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    #149
    Ash.J.Williams
    Registered Users Posts: 21,036 ✭✭✭✭Ash.J.Williams


    D3PO wrote: »
    Id find it hard to find anybody who wouldnt agree that this broker should be jailed for this.
    it was absolutely mental....2000 was a property goldrush, this was widespread. Lots of blind eyes. I remember thinking it very odd that every gob****e in the country was getting cleared for half a mill....


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    #150
    FirstBass
    Registered Users Posts: 8 ✭FirstBass


    D3PO wrote: »

    the house of cards that is property prices collapses,
    NAMA aka the taxpayer lose a fortune though that mechanism,
    the country ends up in crisis as banks have to crystalise all their debts via the repos as they aint seieng a penny of the unsecured debt,
    they become illiquid again and international markets wont lend to them.
    A massive crisis ensues as private rentals cannot meet the demand and enough social housing doesnt exist to cater for these families
    The disfunction that is caused caused the country to essentiall collapse under itself.

    actions cause reactions. Anybody arguing that you can reposess 100k properties and think that it wont have negative consequense really have no understanding of basic economic frameworks


    I'm not sure your doomsday scenario is accurate. The number of houses in the country will remain the same, so there will be places for people to live.

    But in principle I like the sound of this solution. The economy needs to be re-set.

    The alternative that we are getting is to pretend that 2006 was normal. We have written a cheque for the full cost of the bubble, the national debt is climbing by a billion a month, our cost of living is shooting up again and our competitiveness is being destroyed. We're driving young people away.

    We simply can't cover all the losses from the bubble, so it's going to crash at some point. How much extra is it going to cost to fix residential mortgage debt and SME debt? It's NAMA for everyone!

    When we hit 200% debt to GNP will you still think all of this is a good idea?


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    #151
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    username123 wrote: »
    I also think its a bit simplistic to say "people were happy to take the money". My brother in law thought that because the bank would give him a loan of x amount that that meant he was capable of paying back x amount. He isnt any kind of financial whizz - and theres plenty like him. People who asked the bank for money, the bank said yes, and they thought that meant that they were properly stress tested.

    Ah here now that age old argument trotted out. They are the professionals its their fault.

    You dont need to be a financial whizz to know

    I get X amount of money every month.

    If I subtract x for heating, y for food, z for the mortgage do i have enough to live on assuming something bad could happen to my circumstances.

    Subtraction is learnt in first class in primary school and common sense is a life skill theres no traning in financial services needed to have a bit of cop on.

    And of course is these same people making this argument did so with fudged financials provided how can they honestly say it. "Bank didnt stress test me right" ok I gave them Bullsh1t data to use but still .....


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