Council mortgages not being paid

handlemaster

http://m.independent.ie/business/personal-finance/property-mortgages/one-in-six-council-mortgages-not-paid-in-a-year-34980636.html



If you cant get a mortgage from a private bank there is a reason. Was never à good idea to give people of low income and low credit rating public money to buy private property.

The_Conductor

Just wow........
So- they couldn't qualify for a loan from a traditional lender- went and made a case for public money- and then couldn't be arsed repaying a mortgage at 1.5% under going rates........
Just wow.........

Gatling

The_Conductor wrote: »

Just wow........
So- they couldn't qualify for a loan from a traditional lender- went and made a case for public money- and then couldn't be arsed repaying a mortgage at 1.5% under going rates........
Just wow.........

I'm actually not surprised at all I know several people who are not interested in repaying sdcc while swaning around on expensive holidays and out every weekend

Roger Mellie Man on the Telly

The_Conductor wrote: »

couldn't be arsed repaying a mortgage

Perhaps some of them are in financial difficulty, in the same way as some with traditional lending arrangements?

OfflerCrocGod

Roger Mellie Man on the Telly wrote: »

Perhaps some of them are in financial difficulty, in the same way as some with traditional lending arrangements?

They shouldn't have been given a mortgage in the first place, the banks didn't deem them safe enough. I don't mind helping people out via taxation but this is ridiculous. We have to accept that some people won't own a house, it's a toxic obsession in this country.

newacc2015

The_Conductor wrote: »

Just wow........
So- they couldn't qualify for a loan from a traditional lender- went and made a case for public money- and then couldn't be arsed repaying a mortgage at 1.5% under going rates........
Just wow.........

The biggest question that has to be asked why is a borrower who is seen as unattractive by a traditional lender getting a sweetheart loan rate? The opposite would happen in any other country, high risk equals high mortgage interest rate.
The rates on these loans should be a few percent above a prime lender to compensate the lender for the extra risk

Mrs OBumble

Indeed.

Not at all surprising.

What proportion of council rental properties do you suppose are in rent arrears? I don't have figures, but am sure that many people would be surprised at just how many consider rent payment to be optional.

newacc2015

Mrs OBumble wrote: »

Indeed.

Not at all surprising.

What proportion of council rental properties do you suppose are in rent arrears? I don't have figures, but am sure that many people would be surprised at just how many consider rent payment to be optional.

IMO I dont think housing should be owned by the council. It should be owned by an independent trust with the sole purpose of providing affordable housing. There should be no political pressure on it from parties and it would stop housing being pawned off by the council when they need to buy votes. Having a trust would reduce pressure from councillor reluctant to evict non-paying tenants. A trust would be immune to the cycle of the economy, as it would be funded from its own rental income and will not effected from the council having to tap rental income to fund general services in a down turn

athtrasna

Plenty of threads about council rentals, this is about council mortgages thanks.

Mod

mariaalice

First off they would not have a had bad credit rating why would anyone think that, they would have too low income to qualified be for a traditional mortgage, the councils should be pressuring them for outstanding arrests, why is there such a variance between difference councils?.

How many are mortgages to lone parents or those who have separated or divorced, a far higher % that in normal lending.

Social housing is the devil because they are all getting it for 'free', but if you can't get a traditional mortgage because of a low income don't be looking for help from the council either because according to the great and the good here you cant afford it.

I have never had help from the council or anyone always paid my own way, I pay a huge amount of tax yet I don't resent those who need help.

L1011

mariaalice wrote: »

First off they would not have a had bad credit rating why would anyone think that

Because many of the people who got council mortgages were refused by commercial banks for credit reasons, that's why

These loans have nothing to do with social housing, and as a result there is unlikely to be any major change in demographics. These were loans to people who had bad credit or realistically couldn't afford a loan and that - coupled with councils being unwilling to be seen to be hounding someone - is why there's such a high default rate.

The scheme only existed because a government that had a vested interest in house building and buying wanted to get more people to buy rather than build more social housing. It was a bad idea from the start.

mariaalice

L1011 wrote: »

Because many of the people who got council mortgages were refused by commercial banks for credit reasons, that's why

These loans have nothing to do with social housing, and as a result there is unlikely to be any major change in demographics. These were loans to people who had bad credit or realistically couldn't afford a loan and that - coupled with councils being unwilling to be seen to be hounding someone - is why there's such a high default rate.

The scheme only existed because a government that had a vested interest in house building and buying wanted to get more people to buy rather than build more social housing. It was a bad idea from the start.

I will defer to your better knowledge, I though the applicant had have a good credit record but was turned down because of having an income too low for a traditional mortgage.

athtrasna

mariaalice wrote: »

I will defer to your better knowledge, I though the applicant had have a good credit record but was turned down because of having an income too low for a traditional mortgage.

This is the case. It's for people whose income is too low to qualify for a bank mortgage but too high to qualify for social housing.

mariaalice

athtrasna wrote: »

This is the case. It's for people whose income is too low to qualify for a bank mortgage but too high to qualify for social housing.

Isn't it interesting how the OP conflated a bad credit rating with the issue.

Note people should be paying their council mortgages.

L1011

athtrasna wrote: »

This is the case. It's for people whose income is too low to qualify for a bank mortgage but too high to qualify for social housing.

That's the Home Choice Loan scheme, which was brought in during the crash. There are very, very few people with those.

The older council mortgages basically required you to turn up with refusal letters. Why you were refused was irrelevant. People who would have only got a sub-prime mortgage were given one, at rates vastly below the sub-primers.

athtrasna

L1011 wrote: »

That's the Home Choice Loan scheme, which was brought in during the crash. There are very, very few people with those.

The older council mortgages basically required you to turn up with refusal letters. Why you were refused was irrelevant.

My parents had an old council mortgage. Criteria were as I mentioned.

Mrs OBumble

There is an entrenched culture of not paying the council: rent, mortgage, business rates all have high non payment numbers.

Because it's the council people believe (often correctly) that they can get away with pretty much anything.

Arguably the problem is that the mortgages are with the council instead of government supported through a real financial institution.

L1011

athtrasna wrote: »

My parents had an old council mortgage. Criteria were as I mentioned.

Obviously a more stringent council that Kildare CC, who would literally hand them to anyone who walked in with refusal letters, a sad face and a councillor 'supporting' them. Their arrears figures reflect that.

Gatling

L1011 wrote: »

The older council mortgages basically required you to turn up with refusal letters. Why you were refused was irrelevant. People who would have only got a sub-prime mortgage were given one, at rates vastly below the sub-primers.

Was it 3 refusals required to get a loan

L1011

Gatling wrote: »

Was it 3 refusals required to get a loan

Sounds right. They did little else at KCC. Zero stress testing. Enforcement as bad as everything else they do.

mariaalice

Mrs OBumble wrote: »

There is an entrenched culture of not paying the council: rent, mortgage, business rates all have high non payment numbers.

Because it's the council people believe (often correctly) that they can get away with pretty much anything.

Arguably the problem is that the mortgages are with the council instead of government supported through a real financial institution.

All social housing including mortgages, should be taken off the council and managed by the like of Cluid or Respond. What arrears do they have in comparison to the council.

L1011

mariaalice wrote: »

All social housing including mortgages, should be taken off the council and managed by the like of Cluid or Respond. What arrears do they have in comparison to the council.

I would have severe reservations about a private organisation controlling social housing - regardless of whether they're non-profit or not. I also don't consider council mortgages social housing.

They should transfer the council mortgages to one of the state-owned financial institutions - AIB or EBS as its likely to be separated - and be done with it. The money that was to be lent should be invested in permanent social housing stock instead, as well as de-stigmatising the idea of living in social housing that has developed since we were all taught to believe in home ownership and demonising social housing.

mariaalice

L1011 wrote: »

I would have severe reservations about a private organisation controlling social housing - regardless of whether they're non-profit or not. I also don't consider council mortgages social housing.

They should transfer the council mortgages to one of the state-owned financial institutions - AIB or EBS as its likely to be separated - and be done with it. The money that was to be lent should be invested in permanent social housing stock instead, as well as de-stigmatising the idea of living in social housing that has developed since we were all taught to believe in home ownership and demonising social housing.

Ownership should stay with the council but the management should go to a not for profit housing organisation.

L1011

mariaalice wrote: »

Ownership should stay with the council but the management should go to a not for profit housing organisation.

Still not something I'd be happy with. While a council can end up ideologically, erm, 'altered' for a while based on the voted in members makeup a private organisation can have its own reasons for doing things forever.

Social housing should always remain with the state - and they should never have tried to be a mortgage bank.

Mrs OBumble

L1011 wrote: »

I would have severe reservations about a private organisation controlling social housing - regardless of whether they're non-profit or not. I also don't consider council mortgages social housing.

There are various voluntary housing associations (Cluid and Respond are the biggest) which control part of the social housing around the country.

I'm not sure if there are any areas where they control all the stock - although at least some of them have aspirations to convince council(s) to enter a deal like this.

It's actually handy to have two providers running social housing in an area: if someone behaves badly they can be evicted by one provider, in the knowledge that the other one will take them. Whereas if there's only the council, then very few judges are prepared to evict someone, no matter how bad their behaviour is, if it would see them living on the streets.

I don't know how the arrears rates compare between council and voluntary housing management: suspect that both have equal difficulty getting paid, for different reasons. ("Its just the council" vs "foreign landlords"). I'd guess it's better for the small local housing trusts where it's likely to be your neighbours who are on the board and so will possibly find out about your rent status.

Subsidised / low-cost state-backed mortgages for low income people are part of the social housing package: if they money wasn't used for these, then it could be used for regular state-owned social housing.

My misgivings about mortgages for people who cannot afford mortgages are more about their long term capacity for home ownership and maintenance. If someone cannot afford to pay a regular mortgage while they are working, it's likely that they cannot pay into a pension large enough to fund significant house maintenance (eg replacing the roof) later in life. (Of course this can be addressed by just not paying your mortgate! )

Skyfarm

mariaalice wrote: »

I will defer to your better knowledge, I though the applicant had have a good credit record but was turned down because of having an income too low for a traditional mortgage.

from my limited knowledge your right..

Chuchote

handlemaster wrote: »

http://m.independent.ie/business/personal-finance/property-mortgages/one-in-six-council-mortgages-not-paid-in-a-year-34980636.html

If you cant get a mortgage from a private bank there is a reason. Was never à good idea to give people of low income and low credit rating public money to buy private property.

A bit of a misapprehension. I don't know the situation now, but historically, Corporation loans, for instance, were given on the basis that a) your income was too low to qualify for a bank loan (or you had other factors like being a single parent or working freelance), and b) in the previous two years you had earned enough to be able to pay the loan if it was granted.

Thousands and thousands and thousands of people got these loans and paid them back; they were not always that cheap – quite often the interest rates were very much higher than those on building society loans.

But yes, the business of the State building homes with the best materials available and to the highest standard of inspection, and then selling these homes off to their inhabitants for a price way below the market value was simply immoral. And while you have to respect the current pols for trying to cut the housing list, giving the job of building to private developers who (as a class) have made a hames of a lot of building in the past few years, well, hmmm…