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

Mongfinder General

bjork wrote: »

Perhaps they need to stop paying and jump on this gravy train?

BINGO!

Dwalsh58

on_my_oe wrote:

If you can't restructure your mortgage and its unsustainable, you lose your home and you rent.

on_my_oe wrote:

Every time I think Ireland can't find a new way to screw over the decent and hardworking, I'm surprised and disappointed. I lived in an apartment where the landlord didn't pay the mortgage for over five years, pocketing the rent money. We then lost our security deposit in the repossession process. We now own and pay a higher variable rate because of those on tracker mortgages and we don't benefit from any mortgage interest rebates. We struggle hard to pay our mortgage, so why the should I now pay someone else's too?

on_my_oe wrote:

If you can't restructure your mortgage and its unsustainable, you lose your home and you rent.

Nice to have the tracker mortgages people to blame for the high variable rate, I take it you couldn't get one.
What happens when the rent is higher than the mortgage that couldn't be paid in the first place ? Also what happens when there's not enough rental properties, it makes more sense to keep people in their homes.
And I have always paid my mortgage and have no arrears but don't begrudge people who are in difficulty being helped.
What's your answer to the problem.

Eugene Norman

Dwalsh58 wrote: »

Nice to have the tracker mortgages people to blame for the high variable rate, I take it you couldn't get one.
What happens when the rent is higher than the mortgage that couldn't be paid in the first place ? Also what happens when there's not enough rental properties, it makes more sense to keep people in their homes.
And I have always paid my mortgage and have no arrears but don't begrudge people who are in difficulty being helped.
What's your answer to the problem.

Kick strategic defaulters out. Do not subsidise house owners so they can profit at the expense of renters by giving them a council bailout and then let their house appreciate keeping renters out of the market.

If you have paid your mortgage then you should not welcome the fact that you didn't have to.

on_my_oe

Actions have consequences - if you don't pay for something, you don't get it for free.

And actually I did have a mortgage, just not in Ireland and I paid it back (at higher rates than here).

My answer is to cut your cloth to your bank balance. What about all those who had to rent? Should they get an equal amount handed to them by the government? My landlord got over €60,000 tax free because he didn't pay the mortgage and he didn't declare he was a landlord. He just pocketed the cash.

RecordStraight

Dwalsh58 wrote: »

Also what happens when there's not enough rental properties, it makes more sense to keep people in their homes.

How about renters who stop paying? Doesn't it make sense to keep them in their homes too?

And why do you think there would not be enough property to house people? Are the repossessed houses going to be knocked down? Are there not tens of thousands of empty properties already in the country?

Thoie

My initial response was a sick feeling in my gut, like many here. "Here I am, dutifully paying my mortgage and my taxes and my property tax and my utility bills and, and, and... when other people just say feck it and don't bother. What's the point?"

Then I started thinking about what do you do with 30,000 households if you repossess their homes tomorrow. If all of them can afford to rent, that glut of people suddenly looking to rent would push the prices up. While there may be some of them with plenty of money who just can't be arsed paying, the likelihood is that the majority can't pay. Yes, they were stupid and reckless and borrowed beyond their means, and yes, you'd like to travel back in time and give them a smack, but we are where we are.

If that majority can't pay their mortgage, they're probably not going to be able to pay much for rent either, and would essentially be looking to the State for housing, one way or another.

I still object to the fact that they'll get a "free" house out of all of this when I keep doing my best. I'm stuck in the negative equity trap - would love to move elsewhere, but have no interest in becoming an accidental landlord, and can't afford to move otherwise.

So how about the government, instead of giving the individuals a "top-up", just takes over their mortgage completely, and their house is now a council house that they can stay living in, paying rent to the council at standard council house rates for the area. However, if they move out, the council keeps the house, and can use it to house other people in need of social housing. The original "owners" come out with a clean slate, but no equity. They can move on to another rented premises elsewhere, or they can start saving from scratch to buy somewhere else.

This would also help with the social inclusion we hear so much about - social housing would be spread across locations, rather than densely packed into small areas.

What pitfalls am I missing?

bjork

Thoie wrote: »

My initial response was a sick feeling in my gut, like many here. "Here I am, dutifully paying my mortgage and my taxes and my property tax and my utility bills and, and, and... when other people just say feck it and don't bother. What's the point?"

Then I started thinking about what do you do with 30,000 households if you repossess their homes tomorrow. If all of them can afford to rent, that glut of people suddenly looking to rent would push the prices up. While there may be some of them with plenty of money who just can't be arsed paying, the likelihood is that the majority can't pay. Yes, they were stupid and reckless and borrowed beyond their means, and yes, you'd like to travel back in time and give them a smack, but we are where we are.

If that majority can't pay their mortgage, they're probably not going to be able to pay much for rent either, and would essentially be looking to the State for housing, one way or another.

I still object to the fact that they'll get a "free" house out of all of this when I keep doing my best. I'm stuck in the negative equity trap - would love to move elsewhere, but have no interest in becoming an accidental landlord, and can't afford to move otherwise.

So how about the government, instead of giving the individuals a "top-up", just takes over their mortgage completely, and their house is now a council house that they can stay living in, paying rent to the council at standard council house rates for the area. However, if they move out, the council keeps the house, and can use it to house other people in need of social housing. The original "owners" come out with a clean slate, but no equity. They can move on to another rented premises elsewhere, or they can start saving from scratch to buy somewhere else.

This would also help with the social inclusion we hear so much about - social housing would be spread across locations, rather than densely packed into small areas.

What pitfalls am I missing?

How about not giving them a free house? How about giving the state ownership of the house. Why should they get to keep ownership?

on_my_oe

Now that's something I could go along with, with some exceptions
1) higher valued properties, where funds would be better spent acquiring two lower cost properties instead of one
2) properties with more space than required eg couple and one child in a 4 bedroom house
3) properties in negative equity are excluded - straight out 'vacant and sell up' policy

There would need to be a maximum tenancy period (5?10? years)

RecordStraight

Thoie wrote: »

My initial response was a sick feeling in my gut, like many here. "Here I am, dutifully paying my mortgage and my taxes and my property tax and my utility bills and, and, and... when other people just say feck it and don't bother. What's the point?"

Then I started thinking about what do you do with 30,000 households if you repossess their homes tomorrow. If all of them can afford to rent, that glut of people suddenly looking to rent would push the prices up.

People seem to keep missing the point: houses are not going to disappear. What will happen is that people who currently rent will be in a position to buy - freeing up rentals. And those who are currently sitting in nice houses and not paying their mortgage would be repossessed, so they would move into the rental properties.

No property is going to disappear. And there are still tens of thousands of empties out there all over the country.

(except now of course the government wants to take the tax money of renters who are priced out of the market and give it to 'owners' who are not paying their way)

Thoie

bjork wrote: »

How about not giving them a free house? How about giving the state ownership of the house. Why should they get to keep ownership?

That's exactly what I was saying. The state keeps the house (taking over the mortgage), and the current occupants stay there as tenants, paying the normal social housing means tested rent. When/if the tenant leaves, the state still owns the house.

RecordStraight

Thoie wrote: »

That's exactly what I was saying. The state keeps the house (taking over the mortgage), and the current occupants stay there as tenants, paying the normal social housing means tested rent. When/if the tenant leaves, the state still owns the house.

And if they owe hundreds of thousands more than the house is worth, the taxpayer pays that?

on_my_oe

At that stage the occupiers move out into the rental market, the bank sells and the write off occurs.

bjork

RecordStraight wrote: »

And if they owe hundreds of thousands more than the house is worth, the taxpayer pays that?

No, they ownership of the loans stay with the person who took them out

Riverireland

This suggestion is rediculous. As a tax payer I'm all for building 3 bed semis for homeless people, first time buyers an those trading up/down. No way am I happy to keep people in trophy homes. I reckon many of our politicians have massive negative equity property portfolios which we hear nothing about!

RecordStraight

Riverireland wrote: »

I reckon many of our politicians have massive negative equity property portfolios which we hear nothing about!

Indeed. I think you'll find that the number of TDs with more than one property - some with mini-empires - is astonishingly under-reported, especially as these people have a clear conflict of interest in government. Cheap property is good for Irish people and the Irish economy, but expensive property is good for many of our legislators.

Riverireland

RecordStraight wrote: »

Indeed. I think you'll find that the number of TDs with more than one property - some with mini-empires - is astonishingly under-reported, especially as these people have a clear conflict of interest in government. Cheap property is good for Irish people and the Irish economy, but expensive property is good for many of our legislators.

I suppose if the media are not prepared to bring out this information then the only thing to do is ask the on the doorsteps, shouldn't be long now.

_Kaiser_

If this goes through, the Irish obsession with property ownership has reached farcical levels!

As I've said before here, I got the offers of (almost) "free" money and mortgages every fortnight in the Good Times too but I restrained myself to a small car loan that come rain, hail or shine I always paid as agreed.
When I was made redundant in late 2009 my first call was to the bank to restructure the payments - not fun but it had to be done, and they still got something. I was raised that you pay your bills first so that's what I did.

Now several years and changed personal circumstances later as a single guy I find myself priced out of the property market entirely (well unless I want to live in the middle of nowhere away from any job prospects - I work in IT), shafted for tax with no return, and Enda and Co are proposing to use my money to pay for those who took on mortgages they couldn't/can't afford?? - and all so they can buy the next election!!

This country is a joke!

Renegade Mechanic

They need to remove the whole thing about still having to pay your mortgage if youve been kicked out of your house. I have no problem with something being taken off you if you can't afford to pay for it, but I do have a problem with you still having to pay for a house you can't live in.

Mortgage a house in '07 for 300k

Lose it in '10 through eviction and youve only paid off 50k.

Bank only manages to sell it for 130k

You will still be dragged through the courts for the remaining 120k while the new family lives in your families house for a fraction of the cost.

I think it's high time people started getting angry at the people and mechanisms that allow this shafting. By all means lose everything you can't cough up for, and be blacklisted from ever loaning again but that should be the end of it.

Riverireland

_Kaiser_ wrote: »

If this goes through, the Irish obsession with property ownership has reached farcical levels!

As I've said before here, I got the offers of (almost) "free" money and mortgages every fortnight in the Good Times too but I restrained myself to a small car loan that come rain, hail or shine I always paid as agreed.
When I was made redundant in late 2009 my first call was to the bank to restructure the payments - not fun but it had to be done, and they still got something. I was raised that you pay your bills first so that's what I did.

Now several years and changed personal circumstances later as a single guy I find myself priced out of the property market entirely (well unless I want to live in the middle of nowhere away from any job prospects - I work in IT), shafted for tax with no return, and Enda and Co are proposing to used my money to pay for those who took on mortgages they couldn't/can't afford??

This country is a joke!

I think it is important that where ever possible people do own their own homes or have council properties as the other Solution. You can't rely on private landlords for a home for life, they can sell up at any time, very insecure imo.

cursai

I'm assuming this is just a proposal. This will surely never get through the Dail. It is ridiculous. People all over the country would just quit their jobs the next day.

Manach

Please God tell us this was article to be run April 1st.

qo2cj1dsne8y4k

soccercrew wrote: »

Isn't this just a way of helping struggling families. You people always go on about the government not helping families but when they do, you go on another rant- but what about me! Listen, were all in a fcuked up situation, live in a capitalist society so you just have to take the rough with the smooth. I bet you people never ranted when you got your wee slice of the cake!

Move into a house they can afford? This is ****ing outrageous

RecordStraight

Riverireland wrote: »

I suppose if the media are not prepared to bring out this information then the only thing to do is ask the on the doorsteps, shouldn't be long now.

It's actually freely available in the Dáil register of interests, but the media don't seem interested in pointing out the blatant conflict of interest.

Geniass

Some observations.

SVR interest rates are not high. Compared to the historical trend they are low. They are high compared to ECB rate, but that's a dysfunctional rate.

If this plan is implemented then those applying for payments will be means tested. And the government might think that will ring fence those in need getting the benefit. However, if someone is currently managing their mortgage, but struggling or not even struggling that much would you change your lifestyle? I imagine some people would increase their spending, new car, new house extension, more holidays to ensure the drop down into a bracket where they qualify for support.

Lastly, I can see what the government are trying to do. If all the people in trouble DO get repossessed then what to do with them. Set them up in council houses. There's not enough.

As I said, these are observations.

mickdw

I would have thought the solution was obvious.
We have a Situation where people cant pay and will lose their houses. That will likely end with council providing housing to large numbers of additional families and government paying rent allowance to others etc.
Wouldn't it make sense for government to take 50 percent ownership of any house in trouble and for that 50 percent work out a deal with the bank to pay down the mortgage by an amount that would be equal to that at today's market value. This would leave a significantly reduced mortgage payment for families that could stay in their home. When things improve, you buy back from government at sensible figure or allow government take profit or loss on open market.
Nobody would be getting anything for nothing. People would be allowed stay in their homes in many cases and the government would be getting an asset for any funds they put forward.

_Kaiser_

cursai wrote: »

I'm assuming this is just a proposal. This will surely never get through the Dail. It is ridiculous. People all over the country would just quit their jobs the next day.

No they wouldn't.. for the same reason as IW is now law despite massive opposition, people whinge but pay their property taxes, accept their salary being stripped by "temporary" taxes like USC and continue to vote for career politicians whose only aim in life is to enrich themselves, their families and their mates.

Why? Because the average Paddy and Mary voter doesn't give a toss about anything beyond their own gate unless it's to gaze suspiciously/enviously at what their neighbour has, and because "the system" is so stacked against change or even "something different" (and I don't mean a bunch of one-issue left-leaning types) the cycle that has continued since pretty much the foundation of this State won't be changing anytime soon.

RecordStraight

Geniass wrote: »

Some observations.

SVR interest rates are not high. Compared to the historical trend they are low. They are high compared to ECB rate, but that's a dysfunctional rate.

They are double the rates of other Eurozone countries.

galljga1

In this proposal, there is also a clause absolving qualifying households of the need to pay water charges.

Renegade Mechanic

LexieOnRale wrote: »

Move into a house they can afford? This is ****ing outrageous

I agree, It's sickening.

But.

It's a drop in the ocean compared to the bailouts of previous, that we'll be dead before paying. This is probably the first bailout that isn't specifically there to help "the boys".
Then again, given how much of the banks are owned by the public now, It's really no different to the bank taking the house and saying "Oh! We have to be paid for this house, we can't take the hit on it!" Which we all know is exactly what will happen anyway

cursai

_Kaiser_ wrote: »

No they wouldn't.. for the same reason as IW is now law despite massive opposition, people whinge but pay their property taxes, accept their salary being stripped by "temporary" taxes like USC and continue to vote for career politicians whose only aim in life is to enrich themselves, their families and their mates.

Why? Because the average Paddy and Mary voter doesn't give a toss about anything beyond their own gate unless it's to gaze suspiciously/enviously at what their neighbour has, and because "the system" is so stacked against change or even "something different" (and I don't mean a bunch of one-issue left-leaning types) the cycle that has continued since pretty much the foundation of this State won't be changing anytime soon.

'Baaaaa' say the sheep. This idea is hysterical though. But your convincing me that it might get through.