AIB in payout Bonanza for mortgage defaulters

KyussBishop

Idbatterim wrote: »

KyussBishop are you for real, you are telling me that my mother isnt better off having 150,000 written off her mortgage?! (maybe not if there were onerous terms, but unless I hear to the contrary, this sounds like a win / win) At this moment in time it isnt worth what they paid for it, its a roof over their heads, who cares what its worth on paper, obviously their ability to repay what THEY committed to has now changed. but when it surpasses what it was purchased for a in a few years, will the taxpayer be quids in? no need to answer that one.

That's not what I said - and we are unlikely to (as a nation) fully pay off all debts that people default on, as the earlier article I linked, basically shows that overall, debts (private and national) won't be sustainable:
http://www.telegraph.co.uk/finance/financialcrisis/10548104/IMF-paper-warns-of-savings-tax-and-mass-write-offs-as-Wests-debt-hits-200-year-high.html

KyussBishop

jmayo wrote: »

Here is where your semantics come into it.
Correct no one is giving them money, but neither are they now looking for some money back off them.
Their debt has been cut.
How someone can't see that as benefical is frankly either being facetious or moronic.

Only an idiot thinks that is 'giving them money' - the developer who sold an overpriced asset got the money.

Quote me saying a debt-writedown is not beneficial. You can't, because I didn't; you're setting up a straw-man now.

jmayo wrote: »

Their fooking debts have been cut.
That is benefical to them.
At the same time as they have had some of their debts cut they get to still enjoy their property and will get the benefit of it in the future.
No repossession, no shared ownership, no future liens on the property.

Here you go: You're not replying to my argument here, you're replying to the straw-man you setup.

They now have a mortgage that is more in line with the value of their house; the developer who sold an overpriced asset benefited, not the buyer - an asset which the banks directly helped in overinflating the value of, i.e. the banks screwed over the homeowner in the first place, by creating a housing bubble, that inflated the homeowners debt (at the benefit of the developer, and the bank staff who benefited through salaries/bonuses/perks).

jmayo wrote: »

I think some debts will never be paid off, but that doesn't mean that someone can still enjoy use and future ownership of their assets.
So your idea is to bailout people in unsustainable debt, all the while they get to continue having the benefit of the underlying asset, at the expense of everyone else.
Ultimately this is a transfer of wealth from future generations to current generations.

It's not at the expensive of anyone: The debt will not be paid anyway (not even the national debt that it may get added to - mass writedowns are an inevitability, since they are so unsustainable).

There is no transfer of wealth either, because the debts will not be paid anyway - this is why it is idiotic to look at a reduction of debt, as 'giving people money'.

The transfer of wealth already happened, it was from the banks to the developers.

Repaying a debt, is a transfer of wealth from the person in debt, to the bank, and you want the person who is in debt to transfer far more wealth, in exchange for an asset far less than it is worth - and to punish them when that is not possible.


Basically what you want to do, is to wipe out all the wealth the homeowners have invested so far, by repossessing the house, and give that to the bank; that's a transfer of wealth, from the homeowners to the bank, with nothing to show for it.


This is why you use the English language properly, and don't deliberately use plain wrong descriptions, of how things are - like conflating reducing debt with 'giving people money' - totally idiotic, and it attempts to cover over the bigger picture of what has happened.

Idbatterim

the developer who sold an overpriced asset benefited, not the buyer

That was the market price at the time though. Also yeah the developer, might have been making nice profits, but when the sh*t hit the fan, they had most if not all of their wealth tied up in land or developments that were under way. How many actually predicted it and go out at the right time? The vast majority of them foundered...

KyussBishop

bbam wrote: »

This is a reoccuring theme in posts...
The whole push should be to draw a line under these unsustainable debts... not have a half deal that might still fall back onto people...

These need to be done and dusted, close the files and move on...


I have made this point before, the mortgage contract is between both parties. Sentament here puts all responsibility onto the homeowners. While the banks who had trained financial professionals handing out unsustainable loans seem to be seen as unfortunite partners in these cases.
Anyone who knows bank employees working during there era will well know that everyone in the branch was on commission and bonus payments based on getting mortgages signed and out the door, proper scrutiny was not applied and often people with no financial skills were approved for loans that they should never have been given, my sister was one such empoyee and had told me of instances where managers approved loans based on "cash" non taxed income... Debt forgiveness makes the banks take responsibility for their portion of the problem that was created..

Exactly. The banks are liable for reckless lending, which both professional financial criminologists and whistleblowers have noted as fraudulent, and when the state took ownership of these banks, the state took ownership of their likely criminal liabilities as well - and homeowners deserve compensation as a result, of being victimized by banks reckless lending, that seemingly deliberately inflated a housing bubble.

This is likely why there is zero investigation or prosecution of fraud in banks: It would expose the state to massive liabilities, where homeowners would have to be compensated enormous amounts of money, and with mass-debt-writedowns.

KyussBishop

Idbatterim wrote: »

That was the market price at the time though. Also yeah the developer, might have been making nice profits, but when the sh*t hit the fan, they had most if not all of their wealth tied up in land or developments that were under way. How many actually predicted it and go out at the right time? The vast majority of them foundered...

It's not about the money invested in projects, it's about the salaries and bonuses + perks that they rewarded themselves (as justification for 'doing a good job' - a job which ultimately crippled our economy) - a number of people, got very very rich through this.

benway

I would be shocked if these deals didn't include a claw back provision in terms at least as onerous as the 20 year provision for PIAs under s.130 of the Personal Insolvency Act (plain(ish) English explanation).

mikeym

bbam wrote: »

A perfect example of a post stupidly ignoring can't pay from won't pay.

You have to take responsibility for your own actions especially when taking out a huge mortgage on a house.

You face eviction if you cant keep up with the repayments its in the contract.

So Im not that stupid after all.

KyussBishop

mikeym wrote: »

You have to take responsibility for your own actions especially when taking a huge mortgage on a house.

You face eviction if you cant keep up with the repayments its in the contract.

So Im not that stupid after all.

As another poster said earlier, there are two sides to a contract, and by (arguably fraudulently and deliberately - with the backing of professional criminologists and whistleblowers, like William K. Black and Jonathan Sugarman) inflating the price of houses, that doesn't put the banks on good standing, from their side of the contract.

bbam

mikeym wrote: »

You have to take responsibility for your own actions especially when taking out a huge mortgage on a house.

You face eviction if you cant keep up with the repayments its in the contract.

So Im not that stupid after all.

Wait now..
you were pushing the notion of deciding to stop paying the mortgage and saying the result was the same as for people who couldnt pay their mortgage.
Your notion was that "Can't pay" & "Won't pay" were to be treated the same. There is a huge difference in the two and from a forensic accounting perspective its quite easy and basic to tell the difference.

Just to clarify.. I didn't say you were stupid, you brought that possibility to the table.
My comment was that the post was stupid (attack the post and not the poster) But its a prime example of the way that people look at a situation or read a post and see what suits whatever narrow minded view point they wish to peddal forward.

everdead.ie

KyussBishop wrote: »

Only an idiot thinks that is 'giving them money' - the developer who sold an overpriced asset got the money.

Quote me saying a debt-writedown is not beneficial. You can't, because I didn't; you're setting up a straw-man now.


Here you go: You're not replying to my argument here, you're replying to the straw-man you setup.

They now have a mortgage that is more in line with the value of their house; the developer who sold an overpriced asset benefited, not the buyer - an asset which the banks directly helped in overinflating the value of, i.e. the banks screwed over the homeowner in the first place, by creating a housing bubble, that inflated the homeowners debt (at the benefit of the developer, and the bank staff who benefited through salaries/bonuses/perks).


It's not at the expensive of anyone: The debt will not be paid anyway (not even the national debt that it may get added to - mass writedowns are an inevitability, since they are so unsustainable).

There is no transfer of wealth either, because the debts will not be paid anyway - this is why it is idiotic to look at a reduction of debt, as 'giving people money'.

The transfer of wealth already happened, it was from the banks to the developers.

Repaying a debt, is a transfer of wealth from the person in debt, to the bank, and you want the person who is in debt to transfer far more wealth, in exchange for an asset far less than it is worth - and to punish them when that is not possible.


Basically what you want to do, is to wipe out all the wealth the homeowners have invested so far, by repossessing the house, and give that to the bank; that's a transfer of wealth, from the homeowners to the bank, with nothing to show for it.


This is why you use the English language properly, and don't deliberately use plain wrong descriptions, of how things are - like conflating reducing debt with 'giving people money' - totally idiotic, and it attempts to cover over the bigger picture of what has happened.

The transfer of wealth from the banks to the developers never really happened as they are all in debt to the banks and then to Nama etc. I can't think of any developer who came out on top and it certainly wasn't the norm.

No one came out of the boom with money in hand except those that sold their house and didn't buy again until after the bust.

Paper increases in value created a lot of on paper wealthy people neither the banks, the developers nor the people had any real increase in wealth as it was all spent poorly on assets which quickly deprecated in value.


IMO In reality there was no wealth to transfer.

Just another couple of points

1) The banks didn't create a bubble they contributed to it but they didn't create it.
2) Who says the house was a new build their may have been absolutely no developer involved in this cases at all.
3) Repossessing the house is not a transfer in wealth in reality it is a transfer of debt as the bank now has no way of making back the money original lent it can only get market value for the house.

Glenbhoy

KyussBishop wrote: »

Exactly. The banks are liable for reckless lending, which both professional financial criminologists and whistleblowers have noted as fraudulent, and when the state took ownership of these banks, the state took ownership of their likely criminal liabilities as well - and homeowners deserve compensation as a result, of being victimized by banks reckless lending, that seemingly deliberately inflated a housing bubble.

This is likely why there is zero investigation or prosecution of fraud in banks: It would expose the state to massive liabilities, where homeowners would have to be compensated enormous amounts of money, and with mass-debt-writedowns.

I don't think any judgements have been made on that, regardless, what you are talking about is a miniscule amount of the lending that went on. Reckless yes, but fraudulent - extremely unlikely to be have been on the bank side of things.

People entered into large financial transactions without properly assessing the risks on their side of the transactions. Truth is, with interest rates at their current levels, if people have maintained employment, then their repayments are significantly below what they signed up to, yes, they're in negative equity, but that doesn't affect repayment capacity.

Glenbhoy

benway wrote: »

I would be shocked if these deals didn't include a claw back provision in terms at least as onerous as the 20 year provision for PIAs under s.130 of the Personal Insolvency Act (plain(ish) English explanation).

Very possibly and it wouldn't be in the interests of IMHO to publicise that - that's why we need transparency.

johnb25

Glenbhoy wrote: »

I don't think any judgements have been made on that, regardless, what you are talking about is a miniscule amount of the lending that went on. Reckless yes, but fraudulent - extremely unlikely to be have been on the bank side of things.

People entered into large financial transactions without properly assessing the risks on their side of the transactions. Truth is, with interest rates at their current levels, if people have maintained employment, then their repayments are significantly below what they signed up to, yes, they're in negative equity, but that doesn't affect repayment capacity.

This assumes they are on trackers, which not all are. In fact those on variable rate mortgages are subsidising those on trackers. How many of the people on here complaining about write-offs are benefiting from the higher rates paid by variable rate mortgage holders?
Interest rates are not the only factor impacting ability to pay; we now have USC, higher VAT, higher fuel costs & car tax, property tax etc. that were not there when many of these mortgages were taken out.

KyussBishop

For a short(ish) video from an expert criminologist (William K. Black), on the likely template of our own property bubble, and the nature of the fraud involved, this is a very good watch:

https://www.youtube.com/watch?v=-JBYPcgtnGE

It's basically a "how-to" for committing massive economy-destroying fraud - and getting away with it; what he describes - how the fraud has been constructed, comitted, allowed to happen and also what needs to be done to stop it - you can nearly directly apply to Ireland as well.

KyussBishop

everdead.ie wrote: »

The transfer of wealth from the banks to the developers never really happened as they are all in debt to the banks and then to Nama etc. I can't think of any developer who came out on top and it certainly wasn't the norm.

No one came out of the boom with money in hand except those that sold their house and didn't buy again until after the bust.

Paper increases in value created a lot of on paper wealthy people neither the banks, the developers nor the people had any real increase in wealth as it was all spent poorly on assets which quickly deprecated in value.


IMO In reality there was no wealth to transfer.

Just another couple of points

1) The banks didn't create a bubble they contributed to it but they didn't create it.
2) Who says the house was a new build their may have been absolutely no developer involved in this cases at all.
3) Repossessing the house is not a transfer in wealth in reality it is a transfer of debt as the bank now has no way of making back the money original lent it can only get market value for the house.

Yes, that transfer of wealth to the developer (or previous owner) did happen: When the homeowner bought the property from the developer, using the money from the bank.

Everyone who got paid a large salary + bonuses + perks, through participating in the pumping of the property bubble, came out on top, had a real increase in wealth, and walked away with cash in hand.

See the video in my previous post, for an excellent description of how it worked.

On your three points:
1: Banks did create the bubble, by lending recklessly,
2: The person selling the house pocketed the difference,
3: The person in debt has been transferring wealth to the bank, every time they repay a portion of their debt, and when the banks completely takes the asset they have been investing in, that means the person has been transferring a huge amount of wealth to the bank (typically making up many years, if not decades, of their working life), in order to receive nothing in return.


Remember also that banks create money from nothing when they make loans.

KyussBishop

Glenbhoy wrote: »

I don't think any judgements have been made on that, regardless, what you are talking about is a miniscule amount of the lending that went on. Reckless yes, but fraudulent - extremely unlikely to be have been on the bank side of things.

People entered into large financial transactions without properly assessing the risks on their side of the transactions. Truth is, with interest rates at their current levels, if people have maintained employment, then their repayments are significantly below what they signed up to, yes, they're in negative equity, but that doesn't affect repayment capacity.

No judgments will be made on that, because if government start investigating it, they are going to open the banks up to massive lawsuits and homeowners will start getting legal judgements providing massive writeoffs - making banks even more insolvent.

Fact is, there are people who have blown the whistle on (likely fraudulent) breaches of regulations, and who then got implicitly threatened by central bank regulators, that they (the whistleblower) would be reported to the police, if they informed the regulators, and expert criminologists who have studied our crisis and are of the opinion that it required massive accounting fraud, in order to have blown a bubble so large.

You don't have massive economic bubbles, making bankers/financiers/developers (among more) ridiculously rich, which just-so-happen to destroy much of the economy when they blow, without fraud; you have all the indicators needed to suspect it having happened on a huge scale.


Also, lets remember it is the responsibility of the banks to ensure the sustainability of loans - and as the video above explains, banks seeking fraudulent profits, have no reason to care if the loans they make are unsustainable - that is in fact, what enriches those participating in the bubble, the most.

johnb25

KyussBishop wrote: »

Yes, that transfer of wealth to the developer (or previous owner) did happen: When the homeowner bought the property from the developer, using the money from the bank.

Everyone who got paid a large salary + bonuses + perks, through participating in the pumping of the property bubble, came out on top, had a real increase in wealth, and walked away with cash in hand.

See the video in my previous post, for an excellent description of how it worked.

On your three points:
1: Banks did create the bubble, by lending recklessly,
2: The person selling the house pocketed the difference,
3: The person in debt has been transferring wealth to the bank, every time they repay a portion of their debt, and when the banks completely takes the asset they have been investing in, that means the person has been transferring a huge amount of wealth to the bank (typically making up many years, if not decades, of their working life), in order to receive nothing in return.


Remember also that banks create money from nothing when they make loans.

Remember that a portion of the spending on housing in the boom went to the state in the form of stamp duty, VAT, development levies etc. This is what paid for our motorway network and other amenities built during the boom. So there has also been a transfer of wealth from house buyers to the state/taxpayers already.

FullblownRose

everdead.ie wrote: »

Loop hole in the law you basically can't reposes a family home/primary residence buy to lets are getting repossessed however.

I think mortgages after a new law in 2009 was passed can be repossessed as well now but the law can't be retrospectively applied.

Really? Would love a bit more information on that if anyone can provide a link please?

I know of plenty of people who are living in dread of that happening to them!

Morrisseeee

This guy poses an interesting Q, if he's right about Securitization !

The Q is:

How did the banks all arrive in Government Buildings in 2008, saying they needed to be bailed out overnight or the country would go bust, when their mortgages were all already paid in full?

A gooogle of Securitization yields the following, Competition & Crisis in Securitization.

One of the points raised here is that bankers know that the taxpayer is going to pick up the tab, so they are free to take risks.

Zamboni

BONANZA!!!

http://www.rte.ie/news/business/2014/0319/603254-aib-mortgage-write-offs/

efb

I paid 40% less for my house than my neighbour, should I whinge if he gets a 20% writedown????

efb

100, how many mortgages with AIB???

_Kaiser_

efb wrote: »

I paid 40% less for my house than my neighbour, should I whinge if he gets a 20% writedown????

Yes you should, because now YOU (and everyone else!) gets to pay his mortgage for him as well as your own/rent

I am sick to death of this nonsense being peddled on this site that all these homeowners are blameless victims who were cajoled, goaded, lured into signing agreements for ridiculous sums of money!

No-one is saying the banks and politicians are blameless for fanning the flames/inflating the bubble, but no-one FORCED the above people to sign up for this "free money" either (and in a lot of cases deliberately fudging the figures to get it!) - despite the idea that they were nearly held at gunpoint according to some posters.

Bottom line: Despite the Irish obsession with property, NO-ONE is "entitled" to own a house or apartment. If you want it, YOU pay for it - not me, not any other taxpayer, and certainly not our kids.

efb

Kaiser2000 wrote: »

Yes you should, because now YOU (and everyone else!) gets to pay his mortgage for him as well as your own/rent

I am sick to death of this nonsense being peddled on this site that all these homeowners are blameless victims who were cajoled, goaded, lured into signing agreements for ridiculous sums of money!

No-one is saying the banks and politicians are blameless for fanning the flames/inflating the bubble, but no-one FORCED the above people to sign up for this "free money" either (and in a lot of cases deliberately fudging the figures to get it!) - despite the idea that they were nearly held at gunpoint according to some posters.

Bottom line: Despite the Irish obsession with property, NO-ONE is "entitled" to own a house or apartment. If you want it, YOU pay for it - not me, not any other taxpayer, and certainly not our kids.

The reality is I'd rather be servicing a mortgage write down than a widows pension and social housing for his wife and kids.

Valetta

Kaiser2000 wrote: »

Yes you should, because now YOU (and everyone else!) gets to pay his mortgage for him as well as your own/rent

I am sick to death of this nonsense being peddled on this site that all these homeowners are blameless victims who were cajoled, goaded, lured into signing agreements for ridiculous sums of money!

No-one is saying the banks and politicians are blameless for fanning the flames/inflating the bubble, but no-one FORCED the above people to sign up for this "free money" either (and in a lot of cases deliberately fudging the figures to get it!) - despite the idea that they were nearly held at gunpoint according to some posters.

Bottom line: Despite the Irish obsession with property, NO-ONE is "entitled" to own a house or apartment. If you want it, YOU pay for it - not me, not any other taxpayer, and certainly not our kids.

But you will pay, one way or the other.

If not indirectly through mortgage writedowns then it will be by way of social housing, rent suplements, etc.

You're naive if you think otherwise.

Zamboni

Valetta wrote: »

But you will pay, one way or the other.

If not indirectly through mortgage writedowns then it will be by way of social housing, rent suplements, etc.

I'd fancy my chances with repossessions and social housing route please.

Larbre34

Zamboni wrote: »

I'd fancy my chances with repossessions and social housing route please.

Homes repossessed by the bank and only saleable at a loss does not equate to income available to the Govt to fund social housing. Nonsense argument

anncoates

Larbre34 wrote: »

Homes repossessed by the bank and only saleable at a loss does not equate to income available to the Govt to fund social housing. Nonsense argument

It's pointless to point out the inaccuracies.

S(he)'s an advocate of the AH model of debate whereby you merely keep repeating your assertion - no matter how factually wrong - until you "win".

KyussBishop

Kaiser2000 wrote: »

Yes you should, because now YOU (and everyone else!) gets to pay his mortgage for him as well as your own/rent

I am sick to death of this nonsense being peddled on this site that all these homeowners are blameless victims who were cajoled, goaded, lured into signing agreements for ridiculous sums of money!

No-one is saying the banks and politicians are blameless for fanning the flames/inflating the bubble, but no-one FORCED the above people to sign up for this "free money" either (and in a lot of cases deliberately fudging the figures to get it!) - despite the idea that they were nearly held at gunpoint according to some posters.

Bottom line: Despite the Irish obsession with property, NO-ONE is "entitled" to own a house or apartment. If you want it, YOU pay for it - not me, not any other taxpayer, and certainly not our kids.

It's not 'free money', the only people who got money out of this were the developers, and the people within banking/finance who rewarded themselves lavish salaries/bonuses/dividends, based on unsustainable/fictional 'profits' - no money ever went into the homeowners hands, they got the heavily-overvalued house.


Arguably, the banks knew they were inflating an asset bubble (which would be fraud) - and at the very least, the banks are responsible for not doing adequate risk-checking when giving people loans - this puts the mortgage contract in question, and this is why you're never going to see investigation of fraud in banks (it could result in a massive compensation and debt-writedown scheme, as they get sued by everyone who was harmed financially by the bubble they created).

When the state took ownership of the banks, the state took on liability for their fraud as well.


Quote one poster saying mortgage holders were 'held at gunpoint', or that people are 'entitled' to a house/apartment: That is utter bullshít and you know it, you're just making shít up for rhetorical effect now.

You're paying for the profligacy of developers and the banks - who likely defrauded the entire population with a property bubble; these homeowners could pay their way despite that, until they lost their jobs because of these same developers/banks, who tanked the economy.

KyussBishop

Larbre34 wrote: »

Homes repossessed by the bank and only saleable at a loss does not equate to income available to the Govt to fund social housing. Nonsense argument

Homes repossessed by banks, also means robbing homeowners a second time: At this stage, many homeowners have put more than a decade of their working lives and money into the home, and will have nothing to show for that, once it's repossessed.

Lets remember, the banks inflated this property bubble, arguably through fraud (though no hope you'll ever see this investigated) - and this would make them liable for the difference in the houses "inflated value - real value" (thus, since it was likely achieved through fraud, there's a legal argument for writing off that portion of the debt, should fraud ever actually be investigated); a liability the government has inherited, by taking ownership of the banks.

Zamboni

Larbre34 wrote: »

Homes repossessed by the bank and only saleable at a loss does not equate to income available to the Govt to fund social housing. Nonsense argument

In your blinkered conditions, yes, it would seem nonsensical.
Have you factored in all other potential implications?
Here is one for example; repossessed homes sold drive residential property prices down, allowing next generation to buy, resulting in less people renting, thus driving down rental price, resulting in the Dept of Social Protection make savings on rent allowance.

take everything

efb wrote: »

The reality is I'd rather be servicing a mortgage write down than a widows pension and social housing for his wife and kids.

Are you saying widow's pension/social housing is the only other option?
Can't people who can't service their mortgage just rent a place they can afford.

sheeper

I can't wait till the politicians come knocking for vote !!!

I'm entitled to a house in the area I want to live in and I want a car too and everything is someone else's fault

KyussBishop

Zamboni wrote: »

In your blinkered conditions, yes, it would seem nonsensical.
Have you factored in all other potential implications?
Here is one for example; repossessed homes sold drive residential property prices down, allowing next generation to buy, resulting in less people renting, thus driving down rental price, resulting in the Dept of Social Protection make savings on rent allowance.

Half of the houses are being bought up cash-in-hand:
http://www.independent.ie/business/personal-finance/property-mortgages/cso-dublin-prices-soar-by-106pc-in-a-year-29612587.html

A fair portion of such buyers, are likely to be property speculators/investors - many of whom got rich off the last bubble.

So fúck that, keep houses in the hands of people who we know will actually live in them, instead of wiping out all they've invested so far, and allowing the property market to be transitioned more into a rentier market.

KyussBishop

bluewolf wrote: »

I'm entitled to a house in the area I want to live in and I want a car too and everything is someone else's fault

Quote anyone saying this - or is it just a bad attempt at trolling?

Zamboni

KyussBishop wrote: »

Half of the houses are being bought up cash-in-hand:
http://www.independent.ie/business/personal-finance/property-mortgages/cso-dublin-prices-soar-by-106pc-in-a-year-29612587.html

A fair portion of such buyers, are likely to be property speculators/investors - many of whom got rich off the last bubble.

So fúck that, keep houses in the hands of people who we know will actually live in them, instead of wiping out all they've invested so far, and allowing the property market to be transitioned more into a rentier market.

Cash buyer ratio is high because the next generation are artificially priced out of the market.
If there were normal fire-sales of repossessions, residential and rental prices would drop and private landlords investors would be pulling back.

Why are people so eager to prevent families from downward social mobility?

take everything

bbam wrote: »

This is a reoccuring theme in posts...
The whole push should be to draw a line under these unsustainable debts... not have a half deal that might still fall back onto people...

These need to be done and dusted, close the files and move on...


I have made this point before, the mortgage contract is between both parties. Sentament here puts all responsibility onto the homeowners. While the banks who had trained financial professionals handing out unsustainable loans seem to be seen as unfortunite partners in these cases.
Anyone who knows bank employees working during there era will well know that everyone in the branch was on commission and bonus payments based on getting mortgages signed and out the door, proper scrutiny was not applied and often people with no financial skills were approved for loans that they should never have been given, my sister was one such empoyee and had told me of instances where managers approved loans based on "cash" non taxed income... Debt forgiveness makes the banks take responsibility for their portion of the problem that was created..

Surely banks don't have to worry either way.
So no learning for them, from what i can see.

take everything

KyussBishop wrote: »

Quote anyone saying this - or is it just a bad attempt at trolling?

Seems logical given the precedent set.

KyussBishop

Zamboni wrote: »

Cash buyer ratio is high because the next generation are artificially priced out of the market.
If there were normal fire-sales of repossessions, residential and rental prices would drop and private landlords investors would be pulling back.

Why are people so eager to prevent families from downward social mobility?

Read the article: People are priced out of the market because of the cash-in-hand investors outbidding them.

Your logic makes no sense either: When house prices go down, the cash-in-hand buyers will then stop buying up houses - i.e. they want to buy them high? No, that doesn't make any sense.

KyussBishop

take everything wrote: »

Seems logical given the precedent set.

Describe the precedent you think is being set, and why you think it's logical - it comes across as hyperbole/trolling, without even an explanation saying how it's supposed to be relevant.

efb

take everything wrote: »

Are you saying widow's pension/social housing is the only other option?
Can't people who can't service their mortgage just rent a place they can afford.

And do what with the mortgage????

johnb25

Zamboni wrote: »

In your blinkered conditions, yes, it would seem nonsensical.
Have you factored in all other potential implications?
Here is one for example; repossessed homes sold drive residential property prices down, allowing next generation to buy, resulting in less people renting, thus driving down rental price, resulting in the Dept of Social Protection make savings on rent allowance.

you are defeating your own argument here....the impact above is correct, selling repossessed houses will reduce prices, which reduces the value recovered by the banks. This leaves a bigger balance outstanding on the mortgage which will not be recovered.
If the bank can recover more from lenders, even if less than the full balance, than they can recover by seizing and selling surely it makes financial sense to offer a write-down....unless vindictiveness is clouding your judgement.

Zamboni

KyussBishop wrote: »

Read the article: People are priced out of the market because of the cash-in-hand investors outbidding them.

Your logic makes no sense either: When house prices go down, the cash-in-hand buyers will then stop buying up houses - i.e. they want to buy them high? No, that doesn't make any sense.

Read my post again - rental prices will go down and investor yields will decrease resulting in less investor cash purchases.

FutureGuy

I was called a moron for continuing to rent by people who spent 300k on a house now worth 90k.

Wait, now people like them are getting away with blue muder. THEY bought the house, they entered the agreement. Guess I was the moron after all!

Now I'll pay for their mistake. Super.

Another reason to hate this stupid fcuking country.

drumswan

KyussBishop wrote: »

Homes repossessed by banks, also means robbing homeowners a second time: At this stage, many homeowners have put more than a decade of their working lives and money into the home, and will have nothing to show for that, once it's repossessed.

Is this a joke? Plenty of people have put a decade into paying for where they live with "nothing to show for it" (except having somewhere to live...) its called RENTING.

So fúck that, keep houses in the hands of people who we know will actually live in them, instead of wiping out all they've invested so far, and allowing the property market to be transitioned more into a rentier market.

When the houses are repossessed people who were financial prudent can rent or buy them. Thats the way our society is supposed to work, its not supposed to be the savvy providing multi-hundred thousand euro assets to people who overextended themselves.

KyussBishop

Zamboni wrote: »

Read my post again - rental prices will go down and investor yields will decrease resulting in less investor cash purchases.

That won't result in less investor cash purchases, it will result in more, because of cheaper houses on the market.

take everything

KyussBishop wrote: »

Describe the precedent you think is being set, and why you think it's logical - it comes across as hyperbole/trolling, without even an explanation saying how it's supposed to be relevant.

Buy a desirable, expensive house (indeed the more desirable and expensive the better this seems to work)
Can't pay the mortgage any more.
Get debt written off.
Continue to live in house.

What's stopping anyone thinking this is a good way to do things now.

KyussBishop

drumswan wrote: »

Is this a joke? Plenty of people have put a decade into paying for where they live with "nothing to show for it" (except having somewhere to live...) its called RENTING.


When the houses are repossessed people who were financial prudent can rent or buy them. Thats the way our society is supposed to work, its not supposed to be the savvy providing multi-hundred thousand euro assets to people who overextended themselves.

Eh, these people did not rent, did they? No, they were investing in a house.

These people also were financially prudent, because the banks are not supposed to lend to people who can't afford them, so either:
1: They were financially prudent, or
2: The banks breached regulations by lending imprudently, putting the mortgage contract in question.

These peoples finances also got into trouble, because the banks inflated a property bubble which decimated the economy, and lost these people their jobs - as well as saddling these people with far more debt than what they bought was worth (again, because the banks - arguably fraudulently - inflated the cost of the homes they purchased).


The way our society is supposed to work, is that banks don't breach regulations by lending imprudently, and don't (arguably) commit fraud to inflate asset bubbles, and that when they do, they are in breach of mortgage contracts, and homeowners should be compensated for being victims of fraud by the banks.

johnb25

take everything wrote: »

Buy a desirable, expensive house (indeed the more desirable and expensive the better this seems to work)
Can't pay the mortgage any more.
Get debt written off.
Continue to live in house.

What's stopping anyone thinking this is a good way to do things now.

The circumstances of this country, and many families, changed drastically over the past few years. What may have been affordable once is now not for various reasons, loss of income, tax increases etc.

Banks giving write-downs is a last resort for them, after the family living in the house have made all possible cuts, i.e. being left with a minimum of disposable income. That is not an attractive option to most people.