Positive Equity housing being repossesed

lolosaur

I find it humourous that people who were willing to renege on their mortgage because of negative equity are not being allowed to sell their house and the banks are taking repossession, even though the house is worth more now!

http://www.independent.ie/business/personal-finance/property-mortgages/homes-now-in-positive-equity-risk-repossession-30416883.html

Id be gutted if i was on the other side of the fence. a double slap in the chops. i guess it is karma in some ways for living beynd means. most people didnt see this coming, i dont imagine the banks were prepped for it weither though. there is no way they are smart enough to envisage this scenario! i think it just popped up and they licked their lips with $ signs.

MouseTail

I don't get what is humourous about this?
Also Banks have been anticipating this for years, slapping judgement orders on houses but not moving. It was only really the exiting banks that reposessed and sold in a depressed market.

Eldarion

The banks were very much aware of this. They have been biding their time for years trying their best to keep the ECB off their backs for as long as possible to avoid crystalising losses on their loan books. With artificial restrictions on supply and the banks themselves restricting credit to the construction sector the only possible outcome is for house prices to increase. Now they've finally recovered enough for the asset values to outweigh the outstanding loan and of course they'll close on a non performing loan where there's profit to be recovered.

The canny mcsavvies strategically defaulting all these years better have made good use of that funding, the time to make hay through moral hazardous means looks to be coming to a close.

hmmm

Good. If you can afford to repay your mortgage I don't see why the taxpayer should be expected to pay it for you. Property was never meant to be a guaranteed get rich quick scheme, despite the belief of a lot of Irish people.

Zamboni

I clicked and then I got as far as...
Charlie 'bloody awful journalism' Weston

Zamboni

Eldarion wrote: »

The banks were very much aware of this. They have been biding their time for years trying their best to keep the ECB off their backs for as long as possible to avoid crystalising losses on their loan books. With artificial restrictions on supply and the banks themselves restricting credit to the construction sector the only possible outcome is for house prices to increase. Now they've finally recovered enough for the asset values to outweigh the outstanding loan and of course they'll close on a non performing loan where there's profit to be recovered.

And by artificially restricting supply and constricting lending to purchasers they are recpaitalising using their own depositors wealth against them.
You'd swear all this was unforeseen.
Do we have to draw pictures for people?

stevedublin

Zamboni wrote: »

they are recpaitalising using their own depositors wealth against them.

People have money on deposit in banks by choice.
How are depositor's wealth being used against them?

lolosaur

Zamboni wrote: »

And by artificially restricting supply and constricting lending to purchasers they are recpaitalising using their own depositors wealth against them.
You'd swear all this was unforeseen.
Do we have to draw pictures for people?

I would genuinely argue that they are not that intellegent.

Mainly because they are not intelligent enough to forsee a scenario such as this and see the profit in it. it is more through happenstance then planning.

This would have had to have been planned 5 years ago and lets face it, we have proved we couldnt organise a piss up in a brewery in this country over the last month!!!

Eldarion

stevedublin wrote: »

People have money on deposit in banks by choice.
How are depositor's wealth being used against them?

Asset value can also be considered wealth.

lolosaur wrote: »

I would genuinely argue that they are not that intellegent.

Mainly because they are not intelligent enough to forsee a scenario such as this and see the profit in it. it is more through happenstance then planning.

This would have had to have been planned 5 years ago and lets face it, we have proved we couldnt organise a piss up in a brewery in this country over the last month!!!

How long has NAMA been in operation? 5 years sounds right on the money to me. Call it ballsy, intelligent or just plain dumb luck, it doesn't matter, the plan has paid off and the storm has been weathered.

Rest assured we still won't see a rake of repossessions and by no means will we see any touching of the sacrosanct that is the family home. But the underwater BTLers can't hide behind the bank's best interest anymore as staving off the problem isn't their only course of action now.

MouseTail

lolosaur wrote: »

I would genuinely argue that they are not that intellegent.

Mainly because they are not intelligent enough to forsee a scenario such as this and see the profit in it. it is more through happenstance then planning !

you genuinely don't think Banks understand the economic cycle and the correlation to house prices?

_Kaiser_

Personally I don't give a toss if a property is in positive or negative equity. If you can't/aren't paying the mortgage, you should be put out, the property sold on, and the difference (if any) to be paid by you - the original owner. It should also go on your credit record as a judgement against you - just as it would with any other debt you default on.

This idea that people should be allowed stay in property they can't afford cause:

- we were "bullied"/"pressured" into it
- it's our family home
- the banks/developers/bondholders got THEIR bailout

.. is absolute nonsense. If I can't/don't pay my rent this month, do you think my landlord will be slow to issue an eviction notice? If the rent goes up and I can't pay it, do you think I can just stay there anyway? No, I'll have to move on to somewhere I CAN afford... it's really that simple!

This ridiculous idea that property ownership is a "right" and a "protected" status in this country needs to end. No-one is "entitled" to own a house/apartment. If you can sustainably afford it then by all means work away, but I am sick to death of this crying and whinging by those who expect "someone else" to pay their debts for them, and having my own bills increased as a result.

To borrow a similar phrase, Pay up or GTFO!

lolosaur

MouseTail wrote: »

you genuinely don't think Banks understand the economic cycle and the correlation to house prices?

Im saying i genuinely believe they wouldnt be able to count to 500, so no, i dont think they have a grasp of the economic cycle at all. even the basics of demand and supply are foreign to them.

Remember, these people are idiots. not super villains from a bond film.

Potatoeman

Owners had leverage when the banks didnt want to write off debt or reposes. If thats gone maybe we can get back to a normal system where they reposes as its other mortgage holders that are paying for those not paying through increased rates.

stevedublin

_Kaiser_ wrote: »

If you can't/aren't paying the mortgage, you should be put out, the property sold on, and the difference (if any) to be paid by you - the original owner.

This is not what happened in other countries (e.g. the US). The outstanding negative equity was not still owed if their home was repossessed/foreclosed. If someone can't afford to pay the mortgage, then they wouldn't be able to afford the 10s or 100s of thousands in negative equity if they are kicked out (in addition to the extra cost of finding somewhere else to live).

_Kaiser_ wrote: »

- the banks/developers/bondholders got THEIR bailout

.. is absolute nonsense.

Not nonsense, the banks/developers/bondholders DID get a bailout, but the ordinary middle/working class people got nothing (except the bill for said bailout).

_Kaiser_ wrote: »

If I can't/don't pay my rent this month, do you think my landlord will be slow to issue an eviction notice? If the rent goes up and I can't pay it, do you think I can just stay there anyway? No, I'll have to move on to somewhere I CAN afford... it's really that simple!

True, but you are not comparing like with like - you won't still owe negative equity if you move out of a rented property.

_Kaiser_ wrote: »

This ridiculous idea that property ownership is a "right" and a "protected" status in this country needs to end. No-one is "entitled" to own a house/apartment.

What if someone has paid off their mortgage and owns their home outright, are they to have their home taken off them in your utopia and if they don't like it they are "whingers"?

jay0109

stevedublin wrote: »

What if someone has paid off their mortgage and owns their home outright, are they to have their home taken off them in your utopia and if they don't like it they are "whingers"?

I think your adding 2 + 2 and getting 100 there with that, in order to try and discredit the points Kaiser made

El_Dangeroso

_Kaiser_ wrote: »

Personally I don't give a toss if a property is in positive or negative equity. If you can't/aren't paying the mortgage, you should be put out, the property sold on, and the difference (if any) to be paid by you - the original owner. It should also go on your credit record as a judgement against you - just as it would with any other debt you default on.

This idea that people should be allowed stay in property they can't afford cause:

- we were "bullied"/"pressured" into it
- it's our family home
- the banks/developers/bondholders got THEIR bailout

.. is absolute nonsense. If I can't/don't pay my rent this month, do you think my landlord will be slow to issue an eviction notice? If the rent goes up and I can't pay it, do you think I can just stay there anyway? No, I'll have to move on to somewhere I CAN afford... it's really that simple!

This ridiculous idea that property ownership is a "right" and a "protected" status in this country needs to end. No-one is "entitled" to own a house/apartment. If you can sustainably afford it then by all means work away, but I am sick to death of this crying and whinging by those who expect "someone else" to pay their debts for them, and having my own bills increased as a result.

To borrow a similar phrase, Pay up or GTFO!

Although everything you said makes absolute sense, it's political suicide to implement any legislation based upon it so will never happen.

We will more than likely have a drip feed of repossessions, split mortgages and write-offs, the latter two forming the bulk of resolutions to non-performing mortgages.

Having said that I have a sneaking suspicion the that the current madness will have a shuddering halt and not a soft landing, as we can see that the market is so manipulated that sharp corrections are inevitable.

It may take 2 years or it may take 5, but it will happen.

lolosaur

El_Dangeroso wrote: »

Although everything you said makes absolute sense, it's political suicide to implement any legislation based upon it so will never happen.

We will more than likely have a drip feed of repossessions, split mortgages and write-offs, the latter two forming the bulk of resolutions to non-performing mortgages.

Having said that I have a sneaking suspicion the that the current madness will have a shuddering halt and not a soft landing, as we can see that the market is so manipulated that sharp corrections are inevitable.

It may take 2 years or it may take 5, but it will happen.

wherre do you forsee the sharp tip of the blade for the next Burst.

Potatoeman

stevedublin wrote: »

This is not what happened in other countries (e.g. the US). The outstanding negative equity was not still owed if their home was repossessed/foreclosed. If someone can't afford to pay the mortgage, then they wouldn't be able to afford the 10s or 100s of thousands in negative equity if they are kicked out (in addition to the extra cost of finding somewhere else to live).

Not nonsense, the banks/developers/bondholders DID get a bailout, but the ordinary middle/working class people got nothing (except the bill for said bailout).

True, but you are not comparing like with like - you won't still owe negative equity if you move out of a rented property.

What if someone has paid off their mortgage and owns their home outright, are they to have their home taken off them in your utopia and if they don't like it they are "whingers"?

The bailout should have had conditions but that does not mean every mortgage holder should get debt written off at the expense of the tax payer.

lolosaur

Potatoeman wrote: »

The bailout should have had conditions but that does not mean every mortgage holder should get debt written off at the expense of the tax payer.

Debt should be long term, like the countries debt repayment. extend it over 40 or 50 years. still pay back what you owe. never be allowed to simply walk away.

_Kaiser_

stevedublin wrote: »

This is not what happened in other countries (e.g. the US). The outstanding negative equity was not still owed if their home was repossessed/foreclosed. If someone can't afford to pay the mortgage, then they wouldn't be able to afford the 10s or 100s of thousands in negative equity if they are kicked out (in addition to the extra cost of finding somewhere else to live).

So in effect what you want is a "consequence free" walk-away situation for those people I'm referring to? Except there ARE consequences.. that money owed doesn't just disappear, it'll be added to the bank charges of other customers. If enough people get to walk away then the bank will come looking for the rest of the taxpayers to bail them out again!

Not nonsense, the banks/developers/bondholders DID get a bailout, but the ordinary middle/working class people got nothing (except the bill for said bailout).

So 2 wrongs make a right then is it? "Someone else got away with it so I should too?"

Besides, it's not the case that these people got nothing out of it - after all they still have a roof over their head while many others are being forced to hand over increasingly ridiculous sums in rent, and move further out to do the same - in part BECAUSE these properties aren't being efficiently repossessed and sold on.

What if someone has paid off their mortgage and owns their home outright, are they to have their home taken off them in your utopia and if they don't like it they are "whingers"?

What? If you've paid off your mortgage why would you have it taken off you?

What I want is for people to take responsibility for the choice they FREELY MADE. I have every sympathy for people who are struggling because their "getting on the ladder" didn't work out as planned - but it's not MY job to pay the bill for them no more than you're liable for my credit card bill this month.

Property ownership is (or should be) no different than any other credit agreement like say a Car Finance deal. If you don't hold up your end of it, not only will you lose the asset but you'll still potentially be liable for the balance of the debt.

And this is a GOOD thing.. why? Because maybe then will people stop to think before "going mad" again and ask themselves if they REALLY can afford it, and what they'd do if things go bad.

Y'know, like the adults they are!

Eldarion

lolosaur wrote: »

Debt should be long term, like the countries debt repayment. extend it over 40 or 50 years. still pay back what you owe. never be allowed to simply walk away.

_Kaiser_ wrote: »

So in effect what you want is a "consequence free" walk-away situation for those people I'm referring to? Except there ARE consequences.. that money owed doesn't just disappear, it'll be added to the bank charges of other customers. If enough people get to walk away then the bank will come looking for the rest of the taxpayers to bail them out again!

Given the mess the banks made of it I'm a much bigger fan of non-recourse mortgages now. At least it puts the lender's skin in the game and makes the lender take market analysis, valuations and mortgage approvals seriously.

The money owed very much does just disappear in these cases and the bank must re evaluate their procedures if they get burned too many times.

In any case I'm in full agreement that asset surrender is an absolute must and credit rating take a huge hit.

El_Dangeroso

lolosaur wrote: »

wherre do you forsee the sharp tip of the blade for the next Burst.

If I could predict that I'd be a rich woman.:)

No idea tbh, there's so much manipulation going on behind the scenes that it's impossible to know.

But if history has taught us anything, skyrocketing house prices in a country with crippling public and private debt, wage deflation and struggling banks is a really bizarre situation.

stevedublin

_Kaiser_ wrote: »

So in effect what you want is a "consequence free" walk-away situation for those people I'm referring to? Except there ARE consequences.. that money owed doesn't just disappear, it'll be added to the bank charges of other customers. If enough people get to walk away then the bank will come looking for the rest of the taxpayers to bail them out again!

I'm confused, why were the banks bailed out in the first place, where did the billions given to them already, actually go? Why would banks need another bailout again (at mortgage-paying taxpayers expense)?

_Kaiser_ wrote: »

So 2 wrongs make a right then is it? "Someone else got away with it so I should too?"

Besides, it's not the case that these people got nothing out of it - after all they still have a roof over their head while many others are being forced to hand over increasingly ridiculous sums in rent, and move further out to do the same - in part BECAUSE these properties aren't being efficiently repossessed and sold on.

I do not agree with people living in houses they bought with borrowed money for free (i.e. not making repayments but still living in the property).

_Kaiser_ wrote: »

What? If you've paid off your mortgage why would you have it taken off you?

I don't know. I would think it very unfair to take people's home off them when they have fully paid for it. Am I a "whinger"?

_Kaiser_

Eldarion wrote: »

Given the mess the banks made of it I'm a much bigger fan of non-recourse mortgages now. At least it puts the lender's skin in the game and makes the lender take market analysis, valuations and mortgage approvals seriously.

The money owed very much does just disappear in these cases and the bank must re evaluate their procedures if they get burned too many times.

In any case I'm in full agreement that asset surrender is an absolute must and credit rating take a huge hit.

I've nothing against the idea of re-evaluating how we lend/borrow in this country, what products are offered and how "problems" are handled.. indeed it's LONG overdue, but the current game plan still seems to be to push that can further on down the road.

However, for those already affected, it is (and should be!) their responsibility to sort it out. By all means their bank should be FORCED to work with them to ensure repayment terms are in-line with ability to pay and change accordingly as circumstances warrant.. but if it takes them until they retire to clear the debt then that's what should happen.

No-one dragged people off the street and forced them to sign for a mortgage. People were legally and practically obliged to ensure that they were aware of what they were getting into, and if they weren't or took the "ah it'll be grand" view then that's on them really.

As I say, I do sympathise but it's not my job to have myself and my family do without to cover their bills for them.

Eldarion

El_Dangeroso wrote: »

But if history has taught us anything, skyrocketing house prices in a country with crippling public and private debt, wage deflation and struggling banks is a really bizarre situation.

Skyrocketing is a bit strong. House prices are rising for very known reasons, restricted supply versus growing demand.

Factors restricting supply:

• Poor city and zonal planning
  
• NAMA
  
• Banks NOT lending to the construction sector
  
• Large cohort of people "stuck" in their houses unwilling to sell due to negative equity
  
• Older generation/empty nesters unwilling to sell the family home

Factors contributing to demand

• Banks loosening risk tolerance for mortgages gradually
  
• Government and bank incentives backing higher risk FTBers (95%+ mortgages, paying Stamp Duty)
  
• Large cohort of cash buyers currently in the market

GavMan

stevedublin wrote: »

I would think it very unfair to take people's home off them when they have fully paid for it. Am I a "whinger"?

What are you talking about? No one is even suggesting that...

lolosaur

I would edit that if i were you eldarion.

i dont think you are allowed to say the banks made a mess of it.

El_Dangeroso

Eldarion wrote: »

Skyrocketing is a bit strong. House prices are rising for very known reasons, restricted supply versus growing demand.

Would you not call double digit growth skyrocketing? Because I would.

A lot of factors you listed are subject to change.

Additional factors subject to change are:

• International Economic Downturn
• ECB Interest Rate Rises
• Increased budget austerity reducing income

Vested interests are furiously working for house price increases and will try and battle these changes, but in a small open economy like ours they can't control everything.

The_Conductor

lolosaur wrote: »

I would edit that if i were you eldarion.

i dont think you are allowed to say the banks made a mess of it.

If you have a problem with something Eldarion- or someone else posts- either refute it factually- without personalising your post- or bring it to the attention of the forum moderators, by using the report post function, giving a detailed description of the issue you have with the post.

Advising someone to edit their post is back-seat moderating- and is not acceptable.

Regards,

The_Conductor

The_Morrigan

Folks, just as an FYI, lolosaur has lost his posting privileges here so will be unable to respond to any posts directed at him.

Dyr

i recall talking to a guy I knew in banking back during the boom about what would happen if there was a collapse in property akin to england in the 80's. He said banks would keep their powder dry and come to understandings with owners until the property market recovered enough then they would be in like a light to recoup their losses.


Seems like he was