Government to pay mortgage arrears *Mod Note in Opening Post*

bluesteel

hopgog wrote: »

What about if the family that are on a €1600 mortgage but can pay €1000, the new family buying will end up with a mortage of €1000 cause the current value of the house is lower, should the original family not be allowed to restructure the mortage to the €1000 amount.

why should they?

It's like a child hogging a treehouse - "I got here first"

your figures are way off anyway - or pulled out of thin air to support your case

hopgog

NewDirection wrote: »

Why is it not viable? Do peoples positions not change?
If there is restructuring there has to be the hope that your position changes in the future to go back to capital+interest payments.

I don't think anyone here expects the government to chip in with paying off the capital of anyone's mortgage.

If the capital doesn't come down the bank won't get back the money they lent once it sells and the owner is not any better when they sell, more the 2-3 years interest only is unviable and a repossession is needed in that case.

Calina

Cushie Butterfield wrote: »

Exactly, & with people living to a ripe old age compared to the past their home can be used as a security against their nursing home care should they eventually require it as happens now through the Fair Deal Scheme. Planning for the future instead of taking the easy option of renting all their lives without a care in the world & expecting to be looked after when the time comes.

Cushie Butterfield wrote: »

That isn't what I said. The bit of my post that you snipped out was part of a larger one that was in agreement with another poster, whose post highlighted the importance of paying a mortgage to have a home when you retire. (Note I said paying a mortgage & not having it paid by someone else!)

The point is, this thread is not about paying a mortgage. In fact, it is about having a mortgage or part of it paid for you.

Other countries manage the rental side of things with a sensible regulatory framework and they expect that people who are not paying their mortgages vacate their houses.

I'm not sure how you think the country has been facilitated by people buying houses they can't afford and the only thing that will make that a long term viable option is serious inflation.

Which cuts into savings and is not a good thing.

hopgog

bluesteel wrote: »

why should they?

It's like a child hogging a treehouse - "I got here first"

your figures are way off anyway - or pulled out of thin air to support your case

Cause I know a family that if repossessed with 80k debt, the plan is bankruptcy, social and council house at 40 they cannot restart and will be better off on the dole

NewDirection

hopgog wrote: »

If the capital doesn't come down the bank won't get back the money they lent once it sells and the owner is not any better when they sell, more the 2-3 years interest only is unviable and a repossession is needed in that case.

Inflation should come into play here.
The distressed mortgage holders interest only mortgage payment is not affected by inflation. The only variable would be the mortgage rate (which is a whole different can of worms). If that stays relatively constant, so do their repayments.

In the meantime inflation is closing the negative equity gap, so the bank year on year is less exposed.

Also rent prices are going up year on year, so the relative saving between the interest only mortgage and rent is getting bigger every year.

**(In theory)**

Calina

NewDirection wrote: »

Inflation should come into play here.
The distressed mortgage holders interest only mortgage payment is not affected by inflation. The only variable would be the mortgage rate (which is a whole different can of worms). If that stays relatively constant, so do their repayments.

In the meantime inflation is closing the negative equity gap, so the bank year on year is less exposed.

Also rent prices are going up year on year, so the relative saving between the interest only mortgage and rent is getting bigger every year.

**(In theory)**

ECB has a mandate to limit inflation to 2%. It was 0% for the last couple of months in the UK as well.

There has been an assumption in this country that inflation would be the same as it was 30 years ago and take care of high debts. This is not a safe assumption.

hopgog

hopgog wrote: »

Cause I know a family that if repossessed with 80k debt, the plan is bankruptcy, social and council house at 40 they cannot restart and will be better off on the dole

Blackmail, is it? "Give me an asset worth hundreds of thousands or I'm going to my room and staying there!"

If you think that argument will fly with anyone, you're mistaken.

hopgog

NewDirection wrote: »

Inflation should come into play here.
The distressed mortgage holders interest only mortgage payment is not affected by inflation. The only variable would be the mortgage rate (which is a whole different can of worms). If that stays relatively constant, so do their repayments.

In the meantime inflation is closing the negative equity gap, so the bank year on year is less exposed.

Also rent prices are going up year on year, so the relative saving between the interest only mortgage and rent is getting bigger every year.

**(In theory)**

It's too much of a gamble, with capital reducing also the bank should realise they will get the money they loaned back. Interest only payment there is a chance it won't happen. 2-3 years is the max interest only should be offered and most burned through that.

If restructuring with capital and interest and a montly viable payment cannot be reached then repo is needed in that situation. Banks just have to allow the years increased to be more then they want.

Like the couple I know that are 40 they have ten years left 80k neg equity, they want to increase the loan to 30 years all the bank would offer was to increase it to 20 year and remove their tracker .

In the end it saved them no money on the monthly payment, they asked for 35 years and go on the 3.55 rate but where also declined

hopgog

Sergio Georgini wrote: »

Blackmail, is it? "Give me an asset worth hundreds of thousands or I'm going to my room and staying there!"

If you think that argument will fly with anyone, you're mistaken.

No they want to restructure to keep the asset they put 50k deposit into and not be left with 80k debt. The bank are being awkward so if it comes to it they will do what's best for their family and that will be a life on the social after bankruptcy

Calina

hopgog wrote: »

It's too much of a gamble, with capital reducing also the bank should realise they will get the money they loaned back. Interest only payment there is a chance it won't happen. 2-3 years is the max interest only should be offered and most burned through that.

If restructuring with capital and interest and a montly viable payment cannot be reached then repo is needed in that situation. Banks just have to allow the years increased to be more then they want.

Like the couple I know that are 40 they have ten years left 80k neg equity, they want to increase the loan to 30 years all the bank would offer was to increase it to 20 year and remove their tracker .

In the end it saved them no money on the monthly payment, they asked for 35 years and go on the 3.55 rate but where also declined

Negative equity and arrears are not the same thing and strictly speaking, negative equity shouldn't be a motivator for restructuring payments on its own.

hopgog

Calina wrote: »

Negative equity and arrears are not the same thing and strictly speaking, negative equity shouldn't be a motivator for restructuring payments on its own.

But it is a reason some people can't sell and downsize/move to where more jobs are so need to restructure.

bluesteel

hopgog wrote: »

Cause I know a family that if repossessed with 80k debt, the plan is bankruptcy, social and council house at 40 they cannot restart and will be better off on the dole

and why not sell the house to someone currently renting? Have you any concern for the fool currently renting and paying his taxes/

Does it ever occur to you that Council Houses are there for people who cannot afford to buy. You'd prefer that the house is reserved for the person who originally took out the mortgage

hopgog

hopgog wrote: »

No they want to restructure to keep the asset they put 50k deposit into and not be left with 80k debt. The bank are being awkward so if it comes to it they will do what's best for their family and that will be a life on the social after bankruptcy

80k debt is bad, and I would sympathise with them, but it's definitely not the worst I've seen. Are they struggling with repayments? Or are they just looking to rid themselves of negative equity? You haven't been clear on that - the bank obviously feels that they can continue making payments?

By the way you're talking about them, I can assume they are currently working? You will pay close to €1k per month in rent for a one bed apartment in Dublin - how much are they paying per month for this house?

bluesteel

hopgog wrote: »

No they want to restructure to keep the asset they put 50k deposit into and not be left with 80k debt. The bank are being awkward so if it comes to it they will do what's best for their family and that will be a life on the social after bankruptcy

that 50k is goneski!

if they declare bankruptcy they can lose the 80k too. That's fair - what's not fair is wanting to lose the debt and keep the asset

hopgog

bluesteel wrote: »

that 50k is goneski!

if they declare bankruptcy they can lose the 80k too. That's fair - what's not fair is wanting to lose the debt and keep the asset

They don't want to lose the debt they want to restructure it so they can pay it and at retirement have a home. The loan amount will be the same as the day they took it, they don't care the 50k is gone if they get to live in the house. If the bank restructured it they can afford to pay but the bank will on restructure for ten more years and remove the tracker, with that the monthly payment will not really change.

Cushie Butterfield

Calina wrote: »

The point is, this thread is not about paying a mortgage. In fact, it is about having a mortgage or part of it paid for you.

Other countries manage the rental side of things with a sensible regulatory framework and they expect that people who are not paying their mortgages vacate their houses.

I'm not sure how you think the country has been facilitated by people buying houses they can't afford and the only thing that will make that a long term viable option is serious inflation.

Which cuts into savings and is not a good thing.

Yes thanks - I know the thread topic & have read the entire thread. Like so many other threads here on boards the debate develops & other factors come into consideration & are mentioned in discussion of the topic (e.g. you have brought inflation into the equation). Otherwise posters would only post 'I agree'' or ''I disagree'' & that would be the end of the discussion!

As regards other countries managing things sensibly - this is the crux of the matter & why all sorts of proposals are being put forward in the hope that this can finally be achieved in this country, considering the comparatively unique circumstances that led up & contributed to the current mess.

I haven't championed these reported proposals in the slightest. Nor have I stated think the country has been facilitated by people buying houses they can't afford. All I really stated in the thread was that people have never had their mortgages paid by DSP or HSE, that there's currently no state aid available to help people with distressed mortgages whereas there is a system in place for people who rent & are under financial duress, that MARP just papered over the cracks & finally that now that the cracks are resurfacing it's time to come up with some sort of solution - a number of solutions as there is no 'one size fits all'.

You obviously either haven't read the thread or disagree with my opinion - that's the beauty of an internet forum & discussion.

Cushie Butterfield

A lot of posts seem to be hell bent on forcing people to pack up their belongings & go through the physical process of moving out of their homes & straight into another (possibly next door) to claim rent supplement. I fail to see the point in that.

The government should perhaps have put better thought into the Mortgage To Rent Scheme, which by all accounts seems to have been a bit of a red herring with comparatively few people being eligible to even apply.

bluesteel

Cushie Butterfield wrote: »

A lot of posts seem to be hell bent on forcing people to pack up their belongings & go through the physical process of moving out of their homes & straight into another (possibly next door) to claim rent supplement. I fail to see the point in that.

this is a complete red herring. In areas like Dublin there is massive demand for houses and someone going on State housing wouldn't be going next door, they'd be going where the housing was much cheaper -

or do you think that a resident of Foxrock should be entitled to stay in the neighborhood?

hopgog

bluesteel wrote: »

this is a complete red herring. In areas like Dublin there is massive demand for houses and someone going on State housing wouldn't be going next door, they'd be going where the housing was much cheaper -

or do you think that a resident of Foxrock should be entitled to stay in the neighborhood?

Yes so will not have their job in the likes of cavan or longford and be on social housing and the dole.

Cushie Butterfield

bluesteel wrote: »

this is a complete red herring. In areas like Dublin there is massive demand for houses and someone going on State housing wouldn't be going next door, they'd be going where the housing was much cheaper -

or do you think that a resident of Foxrock should be entitled to stay in the neighborhood?

Do you think that everyone lives in Foxrock, or Dublin for that matter?

bluesteel

Cushie Butterfield wrote: »

Do you think that everyone lives in Foxrock, or Dublin for that matter?

what do you think?? :rolleyes:

You're using a simplistic example to argue against any repossessions. Pure Propaganda. Some repossessions will be less productive for banks/the state but some people clearly need top adjust to their new circumstances and downsize.

Entitlement attitude of people like the O'Donnells / Brendan and Asta Kelly makes me sick.

Do you agree the Kellys should have been evicted?

http://www.irishexaminer.com/ireland/evicted-landlords-gone-to-ground-216963.html

hopgog

hopgog wrote: »

Yes so will not have their job in the likes of cavan or longford and be on social housing and the dole.

If they have a job or jobs, why would they be straight over to social housing and the dole? What's your/their aversion to private rentals?

Also, you seem to have missed my questions re: the family you keep using as an example -

Sergio Georgini wrote: »

80k debt is bad, and I would sympathise with them, but it's definitely not the worst I've seen. Are they struggling with repayments? Or are they just looking to rid themselves of negative equity? You haven't been clear on that - the bank obviously feels that they can continue making payments?

By the way you're talking about them, I can assume they are currently working? You will pay close to €1k per month in rent for a one bed apartment in Dublin - how much are they paying per month for this house?

Cushie Butterfield

bluesteel wrote: »

what do you think?? :rolleyes:

You're using a simplistic example to argue against any repossessions.

I think you are reading something in my posts that I haven't actually posted.

What on earth gave you the notion here in this thread or in any thread for that matter that I have argued against any repossessions?

hopgog

Sergio Georgini wrote: »

If they have a job or jobs, why would they be straight over to social housing and the dole? What's your/their aversion to private rentals?

Also, you seem to have missed my questions re: the family you keep using as an example -

One works part time and the other is on the dole, they are in the country, their mortage isn't huge but with the work situation atm they cannot keep with the repayment, they want to restructure so the payments get to around €400 and then overpay once jobs come back to the area.

If they lose the house bankruptcy will clear the debt and will do what's needed for a social house for thekids

hopgog

hopgog wrote: »

One works part time and the other is on the dole, they are in the country, their mortage isn't huge but with the work situation atm they cannot keep with the repayment, they want to restructure so the payments get to around €400 and then overpay once jobs come back to the area.

If they lose the house bankruptcy will clear the debt and will do what's needed for a social house for thekids

Ok, that makes sense. They want it to €400 from..?

hopgog

Sergio Georgini wrote: »

Ok, that makes sense. They want it to €400 from..?

€650 I think

hopgog

hopgog wrote: »

€650 I think

What you have said sounds fair - unfortunately, particularly with legislation as in the original post on the table, it makes less and less sense for the bank to renegotiate if they will get that money from the taxpayer instead.

BoatMad

it amusing to listen to people arguing banks should get their money, when I suspect the same people were probably screaming about the bank bailout

jay0109

Excellent analysis from Seamus Coffey on his blog
http://economic-incentives.blogspot.ie/
and covered in this post from Slasher over on the Pin showing the typical days repossession hearings, this time in Cork
http://www.thepropertypin.com/viewtopic.php?f=10&t=44532&start=3000

Just take a look at the lack of payments below from the snapshop of 16 cases...and people say there is no Strategic Default and the majority should be given debt write downs!!!! Madness

BoatMad

Just take a look at the lack of payments below from the snapshop of 16 cases...and people say there is no Strategic Default and the majority should be given debt write downs!!!! Madness

without a breakdown of what happened in each case , you cannot make such a conclusion

behind all this are ordinary people , struggling to keep a house over their head and sometimes failing