Positive Equity housing being repossesed

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.

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.

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?

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_ 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"?

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.

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 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.

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...

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

Eldarion wrote: »

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

Renting is unstable and not really suitable as a long term plan for most. People can only stay out of the market so long if they want to buy too.

_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!

So, you think that its correct or at least okay for:
the State/Taxpayer to bail out our Banks, then the Banks repossess houses and evict families, who then have to be re-housed by the State/Taxpayer. So the State/Taxpayer get a double hit (re-finance the Banks and re-house unfortunate families)
Surely and simply, it would have been wiser for the State to take the mortgage housing stock as collateral on the bail-out money. If/when people have financial issues, they could be given a 1 or 2 year moratorium on mortgage repayments (affordable payments or rent payments). By agreement or after the defined period the State take ownership of the house.

All this while Banking CEO's and directors are getting huge bonuses, fees and salaries for running Businesses which have lost "billions".

The obvious solution is as always SCREW THE SMALL PERSON
If your rich and mix in the right circles - your only guilty if your caught and then you will only get a slap on the wrist, no that would be too harsh, community service would be better.

I'm speaking from personal experience here - trying to deal with a Bank for the last 3 years. House value has plummeted to 30% of its 2008 value and under 50% of its construction cost. With a lot of effort managed to pay 63 of 69 monthly payments at a 5+% interest rate. Have virtually begged them to do a review/reconstruction, they have never replied to any of my letters. However I got a letter last week saying they have now appointed a receiver.
Only one person going to make money on it now - The receiver.
Of course, a new purchaser will probably get a good bargain.

But that's the way they operate, if they had done a deal to let me sell the house and give the proceeds, I can guarantee an extra 15K - 20K in proceeds

stevedublin wrote: »

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

Give me your money or else you can't have a place to live.
It's working very effectively to extract cash out of renters and wannabe FTB's and plug the holes on bank balance sheets. On the other hand, if you have a mortgage, not paying it is not such a big deal. You can stay there for years before anything happens to you.

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.

I know a labour party canvasser and she said that what they really got it in the neck about on doorsteps in the recent elections was the way rents are increasing for the people least able to afford them and she admitted that these under 30's are the ones who are drifting towards the shinners. It was a bit of a shock to her organisation because like most Irish political organisations, they are heavily geared towards attracting the votes of older people and assumed that younger people will simply vote the same way as their parents.
To make matters worse, the old folks gave them stink about it too because their little Johnnies & Marys are the ones struggling to pay for accom.

And that's before you consider MNC's viewing a resumption of our rising cost base with considerable alarm.

Bravobabe wrote: »

So, you think that its correct or at least okay for:
the State/Taxpayer to bail out our Banks, then the Banks repossess houses and evict families, who then have to be re-housed by the State/Taxpayer. So the State/Taxpayer get a double hit (re-finance the Banks and re-house unfortunate families)
Surely and simply, it would have been wiser for the State to take the mortgage housing stock as collateral on the bail-out money. If/when people have financial issues, they could be given a 1 or 2 year moratorium on mortgage repayments (affordable payments or rent payments). By agreement or after the defined period the State take ownership of the house.

All this while Banking CEO's and directors are getting huge bonuses, fees and salaries for running Businesses which have lost "billions".

The obvious solution is as always SCREW THE SMALL PERSON
If your rich and mix in the right circles - your only guilty if your caught and then you will only get a slap on the wrist, no that would be too harsh, community service would be better.

I'm speaking from personal experience here - trying to deal with a Bank for the last 3 years. House value has plummeted to 30% of its 2008 value and under 50% of its construction cost. With a lot of effort managed to pay 63 of 69 monthly payments at a 5+% interest rate. Have virtually begged them to do a review/reconstruction, they have never replied to any of my letters. However I got a letter last week saying they have now appointed a receiver.
Only one person going to make money on it now - The receiver.
Of course, a new purchaser will probably get a good bargain.

But that's the way they operate, if they had done a deal to let me sell the house and give the proceeds, I can guarantee an extra 15K - 20K in proceeds

No one forced you to leverage yourself up to your eye balls with high interest credit to invest in the property market. If you can't afford the repayments you are not holding up your end of the agreement that you signed with the bank. The bank is perfectly entitled to exercise its rights in this case.

Would you give a 2 year moratorium to one of your tenants if they got into financial difficulty? How many of those 63 monthly repayments would you have made had you had €0 rent received for 2 years?