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

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    #122
    RecordStraight
    Closed Accounts Posts: 3,292 ✭✭✭RecordStraight


    The_Conductor wrote: »
    Just where are these tens of thousands of vacant homes that several of you have referred to?
    RecordStraight wrote: »
    Nationwide. There were 300k empty at the last census. Some were holiday homes, of course.

    http://www.thejournal.ie/14-5-per-cent-of-dwellings-in-ireland-vacant-in-census-2011-400231-Mar2012/
    14.5 per cent of dwellings in Ireland vacant in Census 2011

    Over one in five vacant properties were holiday homes, while the majority of the remainder were concentrated on rural areas in the west.

    Mar 29th 2012, 12:34 PM 5,248 Views 22 Comments
    Share5 Tweet26 Email6


    THERE WERE 289,451 vacant dwellings around Ireland at the time of Census 2011 – 14.5 per cent of all housing stock in the state.
    Of these, over 59,000 were holiday homes.


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    #123
    Eugene Norman
    Closed Accounts Posts: 5,191 ✭✭✭Eugene Norman


    RecordStraight wrote: »
    http://www.thejournal.ie/14-5-per-cent-of-dwellings-in-ireland-vacant-in-census-2011-400231-Mar2012/

    I too have wondered where all these houses went to.


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    #124
    bjork
    Closed Accounts Posts: 2,554 ✭✭✭bjork


    DARK-KNIGHT wrote: »
    I didn't say I needed 15000 to survive.....

    I misread you comment as "the 15,000 I need to survive"


    but I understand now the 15,000 was the arrears and you would be willing to let them keep it if you could earn a living wage
    firstly lads i am opposed to this tbh.....

    i would much prefer the govt make more efforts in relation to employment and education than to further handout to people trying to screw the system... they can keep the 15,000 i want a job paying what i can afford to survive...


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    #125
    Eugene Norman
    Closed Accounts Posts: 5,191 ✭✭✭Eugene Norman


    Dwalsh58 wrote: »
    Who do you think will be put into the repo houses only people who were evicted, vicious circle, costing more money. And ask yourself why are there tens of thousands of empty properties in the country already?

    Empty houses and increasing rent. Things not computing here.


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    #126
    Mr. teddywinkles
    Registered Users Posts: 2,181 ✭✭✭Mr. teddywinkles


    KomradeBishop wrote: »
    Yes because everyone benefiting from this new policy is living in a mansion, right? :rolleyes:

    Some maybe prove me wrong.


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    #127
    Calina
    Registered Users Posts: 8,219 ✭✭✭Calina


    Eugene Norman wrote: »
    Empty houses and increasing rent. Things not computing here.

    Location, location.

    There seems to be this illusion that empty houses are within a reasonable vicinity of most of the available jobs.

    This is not actually the case.


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    #128
    Eugene Norman
    Closed Accounts Posts: 5,191 ✭✭✭Eugene Norman


    Dwalsh58 wrote: »
    So the evicted homeowners can swap with the renters and the "tens of thousands of empties" will still be empty. Also plenty of houses have disappeared, they have been demolished.

    Yes. And that's good. Rather than penalise people in the rental sector who were prudent penalise the people who were imprudent.

    In any case the people in arrears are deliberately not paying anything nor paying interest only nor any restructuring.

    The proposal is to bail them out indefinitely is also irregardless of their future earnings nor does the state get any equity. It's corrupt and a form of moral hazard.


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    #129
    Eugene Norman
    Closed Accounts Posts: 5,191 ✭✭✭Eugene Norman


    Calina wrote: »
    Location, location.

    There seems to be this illusion that empty houses are within a reasonable vicinity of most of the available jobs.

    This is not actually the case.

    It was still 10% in Dublin then.


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    #130
    RecordStraight
    Closed Accounts Posts: 3,292 ✭✭✭RecordStraight


    Calina wrote: »
    Location, location.

    There seems to be this illusion that empty houses are within a reasonable vicinity of most of the available jobs.

    This is not actually the case.
    The fact is that cheap property is there if you are willing to do a perhaps unpleasant commute. It should be the people who aren't paying for their property who do this commute, not the people who are.


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    #131
    KomradeBishop
    Closed Accounts Posts: 4,981 ✭✭✭KomradeBishop


    The_Conductor wrote: »
    Only a small minority are- however, there are people who have the means, but are deliberately not paying their mortgages, because hitherto, there has been no implications for them to not paying their mortgages. These free-loaders will be treated in an identical manner to those unfortunates- whose situations have changed and who now find themselves in difficulty. Meanwhile- those who have scrounged and borrowed- sometimes tens of thousands, to keep ontop of their mortgages- will not see any benefit from this- on the contrary- their promised mooted cuts in tax- won't transpire......

    If there was a proposal to strip these people of ownership of the property- and allow them to rent it back at open market rates- if they were in a position to do so- or if they were not- to give them support at the max of the scale to rent elsewhere- I don't think anyone would have any issue with it. It would also free up property for people who are in a position to buy- but because of supply constraints, they have been unable to do so.

    At the end of the day- there will be the same number of houses out there- and the same number of people to be housed. How these people are housed- will vary.

    Giving a subsidy to this subset of borrowers- when others who have been prudent- or have manipulated their scarce finances so they haven't defaulted on their mortgages- is very unfair- and I don't think its going to fly when the government get feedback on how many people are going to actively boycott the government parties, if they pursue this scheme.........

    There is a mess out there. Any solution to the mess- has to be seen as equitable to all taxpayers- and those who have gone to massive lengths not to default. Giving a dig out to people to live in, and eventually own, property they cannot afford- is imprudent- and an insult to the intelligence of the majority of the Irish people.
    Ya I agree that those strategically avoiding mortgage repayments, should not receive any help - though I'm not sure how hard it would be to identify them.

    The policy in its current form can't really be fair - personally, I don't think there is any fair way to do it, except by doing a 'debt jubilee' in the manner I mentioned here, and that is impossible because it can only be done at an EU level.

    It's going to be unfair, but we've got to do something to sort out this mess - and this is one of the least-worst ways; it will reduce private debt burdens, freeing up more discretionary income, thus increasing aggregate demand and helping to grow the economy more.


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    #132
    KomradeBishop
    Closed Accounts Posts: 4,981 ✭✭✭KomradeBishop


    Eugene Norman wrote: »
    Yes. And that's good. Rather than penalise people in the rental sector who were prudent penalise the people who were imprudent.

    In any case the people in arrears are deliberately not paying anything nor paying interest only nor any restructuring.

    The proposal is to bail them out indefinitely is also irregardless of their future earnings nor does the state get any equity. It's corrupt and a form of moral hazard.
    The idea of penalizing those responsible, went out the window when the banks were bailed out. It's just simplistic moralizing at this stage.

    We need to do what gets the economy back on track now - regardless of how unfair people perceive it to be.

    I mean, look at QE - effectively pissing money at the finance industry and wealthy - and virtually no uproar about it.
    Yet, government giving financially distressed mortgageholders a hand, and there's an uproar?

    People need to get a little more perspective on economic issues.


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    #133
    Eugene Norman
    Closed Accounts Posts: 5,191 ✭✭✭Eugene Norman


    KomradeBishop wrote: »
    Ya I agree that those strategically avoiding mortgage repayments, should not receive any help - though I'm not sure how hard it would be to identify them.

    The policy in its current form can't really be fair - personally, I don't think there is any fair way to do it, except by doing a 'debt jubilee' in the manner I mentioned here, and that is impossible because it can only be done at an EU level.

    It's going to be unfair, but we've got to do something to sort out this mess - and this is one of the least-worst ways; it will reduce private debt burdens, freeing up more discretionary income, thus increasing aggregate demand and helping to grow the economy more.

    It's fairly easy. A good percentage of the arrears are landlords. Let's say half those properties are in Dublin which is having a rental crisis.
    What's the excuse?

    I doubt that most people in arrears are unemployed. Trackers were common in the boom and the repayments have dropped. Negative equity is not a reason to default.

    There's obvious strategy here. Just look at the people combatting repossession - they are lawyered up.


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    #134
    KomradeBishop
    Closed Accounts Posts: 4,981 ✭✭✭KomradeBishop


    Eugene Norman wrote: »
    It's fairly easy. A good percentage of the arrears are landlords. Let's say half those properties are in Dublin which is having a rental crisis.
    What's the excuse?

    I doubt that most people in arrears are unemployed. Trackers were common in the boom and the repayments have dropped. Negative equity is not a reason to default.

    There's obvious strategy here. Just look at the people combatting repossession - they are lawyered up.
    I'd be up for restricting financial aid to people who have bought a house to live in only, and deny it to those renting out a second non-home property and such; that makes a lot of sense.

    You combat a lack of supply of houses, by building more, not by kicking people out of their homes and selling their houses.


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    #135
    DARK-KNIGHT
    Registered Users Posts: 10,216 ✭✭✭✭DARK-KNIGHT


    bjork wrote: »
    I misread you comment as "the 15,000 I need to survive"


    but I understand now the 15,000 was the arrears and you would be willing to let them keep it if you could earn a living wage




    How is the government taking ownership of your house stopping you from earning a living wage to survive?

    Currently you are paying less than rental rates in the area and you want more concessions.

    I never said I wanted any concessions


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    #136
    Eugene Norman
    Closed Accounts Posts: 5,191 ✭✭✭Eugene Norman


    KomradeBishop wrote: »
    The idea of penalizing those responsible, went out the window when the banks were bailed out. It's just simplistic moralizing at this stage.

    We need to do what gets the economy back on track now - regardless of how unfair people perceive it to be.

    I mean, look at QE - effectively pissing money at the finance industry and wealthy - and virtually no uproar about it.
    Yet, government giving financially distressed mortgageholders a hand, and there's an uproar?

    People need to get a little more perspective on economic issues.

    What was that truism about 2 wrongs?

    We shouldn't have bailed out the bank's but not that we have let's not pour salt on the world's of the prudent and future generations.


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    #137
    Calina
    Registered Users Posts: 8,219 ✭✭✭Calina


    Eugene Norman wrote: »
    It's fairly easy. A good percentage of the arrears are landlords. Let's say half those properties are in Dublin which is having a rental crisis.
    What's the excuse?

    I doubt that most people in arrears are unemployed. Trackers were common in the boom and the repayments have dropped. Negative equity is not a reason to default.

    There's obvious strategy here. Just look at the people combatting repossession - they are lawyered up.

    My last two rental homes were sold because of landlord financial crises. The biggest victims with targeting landlords only are tenants.

    Thank you very much. Been there twice, have the scars. On balance, supporting the support of PPRs and targeting landlords means you are a) getting me to pay for accommodation for people who over extended themselves at a time when I did not and b) increasing the risk of my being made homeless again.

    Target the landlords by all means but make the sales tenancy unaffected. This may also dampen house prices, not a bad thing in this basket case of a property market.


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    #138
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    KomradeBishop wrote: »
    Ya I agree that those strategically avoiding mortgage repayments, should not receive any help - though I'm not sure how hard it would be to identify them.

    The policy in its current form can't really be fair - personally, I don't think there is any fair way to do it, except by doing a 'debt jubilee' in the manner I mentioned here, and that is impossible because it can only be done at an EU level.

    It's going to be unfair, but we've got to do something to sort out this mess - and this is one of the least-worst ways; it will reduce private debt burdens, freeing up more discretionary income, thus increasing aggregate demand and helping to grow the economy more.

    A debt jubilee is something that could be explored. Even the Economist, which would be viewed by most people as more right-wing than socialist in its leanings- was extolling the virtues of giving every single citizen in Europe 1,900 in cash, per month, every month, for the next two years. That is the extent of the QE that the ECB has embarked upon. Instead of supporting the stock markets and the financial institutions- were the citizens of Europe supported instead- the multiplier effect of their action would vastly exceed any possible benefit they may get from their current efforts (whose main achievement thus far- aside from the obvious drop in the value of the Euro, which would happen with QE one way or the other- is the meteoric rise in the stock markets (and the abandonment of the US markets- and consequent difficulties for US firms- particularly those engaged in multinational markets).

    However....... its not going to happen.


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    #139
    KomradeBishop
    Closed Accounts Posts: 4,981 ✭✭✭KomradeBishop


    Eugene Norman wrote: »
    What was that truism about 2 wrongs?

    We shouldn't have bailed out the bank's but not that we have let's not pour salt on the world's of the prudent and future generations.
    There is no solution that is not 'wrong' here, so no matter what you do, it's going to be morally wrong in some way - unless you can do a debt jubilee.

    In that situation, you pick the least-worst option.


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    #140
    Mr. teddywinkles
    Registered Users Posts: 2,181 ✭✭✭Mr. teddywinkles


    KomradeBishop wrote: »
    Ya I agree that those strategically avoiding mortgage repayments, should not receive any help - though I'm not sure how hard it would be to identify them.

    The policy in its current form can't really be fair - personally, I don't think there is any fair way to do it, except by doing a 'debt jubilee' in the manner I mentioned here, and that is impossible because it can only be done at an EU level.

    It's going to be unfair, but we've got to do something to sort out this mess - and this is one of the least-worst ways; it will reduce private debt burdens, freeing up more discretionary income, thus increasing aggregate demand and helping to grow the economy more.

    So you want others to relieve people of their debts through extra tax so they have more discretionary monies to spend which should really be going to pay their own debts in the first place. Am I readin that right. I totally agree something will have to be done.


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    #141
    Eugene Norman
    Closed Accounts Posts: 5,191 ✭✭✭Eugene Norman


    KomradeBishop wrote: »
    I'd be up for restricting financial aid to people who have bought a house to live in only, and deny it to those renting out a second non-home property and such; that makes a lot of sense.

    You combat a lack of supply of houses, by building more, not by kicking people out of their homes and selling their houses.

    Sure. We need more supply. But you also don't screw the prudent by letting the imprudent off with their non-payments.

    You want a situation where some people who bought recklessly are rewarded, will get concessions on their payments, live in good areas and gain capital increases at the expense of a rental sector which won't, the prudent who bought rationally, and future generations.

    And what happens in the future. Why shouldn't everybody stop paying, particularly if tracker rate increases start to hurt. Stop paying, give Joe a call, point out that the guy down the road is getting subsidises, and you'll get the same.


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    #142
    RecordStraight
    Closed Accounts Posts: 3,292 ✭✭✭RecordStraight


    KomradeBishop wrote: »
    The idea of penalizing those responsible, went out the window when the banks were bailed out. It's just simplistic moralizing at this stage.

    We need to do what gets the economy back on track now - regardless of how unfair people perceive it to be.
    Indeed. And introducing a huge new perverse incentive for strategic default at the expense of the taxpayer is not good for the economy.


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    #143
    KomradeBishop
    Closed Accounts Posts: 4,981 ✭✭✭KomradeBishop


    The_Conductor wrote: »
    A debt jubilee is something that could be explored. Even the Economist, which would be viewed by most people as more right-wing than socialist in its leanings- was extolling the virtues of giving every single citizen in Europe 1,900 in cash, per month, every month, for the next two years. That is the extent of the QE that the ECB has embarked upon. Instead of supporting the stock markets and the financial institutions- were the citizens of Europe supported instead- the multiplier effect of their action would vastly exceed any possible benefit they may get from their current efforts (whose main achievement thus far- aside from the obvious drop in the value of the Euro, which would happen with QE one way or the other- is the meteoric rise in the stock markets (and the abandonment of the US markets- and consequent difficulties for US firms- particularly those engaged in multinational markets).

    However....... its not going to happen.
    Agreed, yes - it would be a much better option, but is unfeasible politically.

    However - one other effect QE has had, is it has greatly reduced the interest rate on government debt, so with government funding the scheme this thread is about, using government debt, QE can be indirectly used to aid this.

    It is far inferior to a proper 'QE for the people' EU-based program, but it is something at least.


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    #144
    The_Morrigan
    Registered Users Posts: 9,368 ✭✭✭The_Morrigan


    Folks, just a couple of things:
    * can you please keep in mind this is A&P, not the politics or the economics forum, try stay within the remit of this forum.
    * please don't personalise your posts towards others, this is a general discussion so posters own situations shouldn't be jumped on and judged.

    Thanks


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    #145
    Cuddlesworth
    Registered Users Posts: 13,995 ✭✭✭✭Cuddlesworth


    So, to place this in perspective we experienced a recession, like a number of other countries in Europe.

    Our property prices were in a huge bubble country wide, one that had been heavily influenced by government policy leading up to the crash.

    Our government at the time bailed out our banks, turning the banks into public entities. They introduced laws and internal policy's that lead to those banks being unable to repossess property's in default.

    They were warned at the time that such actions would lead to a large number of strategic defaulters and a untenable situation of zombie debt.

    We then had a mortgage default rate far in excess of our actual situation, indicated a large level of strategic default.

    Years later with close to 30k property's well over 2 years with nothing paid and nothing done, our banks start to lodge thousands of court cases for repossession because increasing house prices allow for minimal losses.

    The policy's response is to introduce measures to pay those mortgages in default(therefore stopping the repossessions via the courts).

    At no point does a single person in power think that possibly such action would lead to more strategic defaulters and if another crash happens, what do they think will happen?


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    #146
    _Kaiser_
    Registered Users Posts: 28,867 ✭✭✭✭_Kaiser_


    On a side note, it's interesting that there's no mention at all on the RTE News tonight about this idea...


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    #147
    NIMAN
    Registered Users Posts: 33,637 ✭✭✭✭NIMAN


    _Kaiser_ wrote: »
    On a side note, it's interesting that there's no mention at all on the RTE News tonight about this idea...

    Its not official yet though is it?
    Its only speculation. And speculation is not news.


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    #148
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    Its kite flying by some of the Ministers obviously.
    They do it on a regular basis to get a taste for whether possible policies will fly with the public, or not. Unfortunately you have certain newspapers reporting it as 'fact', when it isn't.


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    #149
    Piriz
    Registered Users Posts: 1,269 ✭✭✭Piriz


    great post Cuddlesworth and great contributions by many people to this thread.

    The 30k in long term arrears is a growing number, many of those with restructured mortgages are not even meeting their new terms and will be added to 30k figure as we go forward.

    Huge numbers will attempt to avail of this bail out including those not currently featuring amongst the 30k.

    If and when ECB interest rates increase on tracker mortgages we will see a significant increase to this 30k.

    So how long should this strategy last? 2 years, 5 years, 10 years - anytime a mortgage holder has difficulty paying all their bills do they apply for and receive a bail out?

    This is a crazy precedent, will new mortgages be eligible for this bail out?

    What will happen to domestic interest rates ? If a lender knows there is no hope of repossession and write offs, interest rate reductions and non-compliance are par for course: what will they set the interest rate at?

    Has anyone attempted to cost this?

    And finally, where on earth during a period of poor public services etc. and "we don't have the money to remove USC or restore public sector pay for new teachers etc" is this money going to come from..


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    #150
    El_Dangeroso
    Users Awaiting Email Confirmation Posts: 5,620 ✭✭✭El_Dangeroso


    This won't happen, I'll bet my deposit on it.:)

    It's mere pandering, but there is no money in an already stretched budget for this and it absolutely will not fly with our European overlords.

    They will kick the can down the road until after the election. I never expect to see mass repossessions en masse, but rather a slow steady trickle staying well below the radar of the media whereever possible. Optics and reality in politics are so rarely the same thing.


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    #151
    bluemartin
    Closed Accounts Posts: 188 ✭✭bluemartin


    The_Conductor wrote: »
    Only a small minority are- however, there are people who have the means, but are deliberately not paying their mortgages, because hitherto, there has been no implications for them to not paying their mortgages.

    Do we know what percentage of people are doing this?
    Are there any houses at all been repossessed in Ireland or are the current numbers very very low. What happened to the guy in Gorse Hill?


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