Repossessions

pawnacide · 28-03-2012 9:05am

shangri la wrote: »

Pawn, you still haven't explained what you mean by working with mortgage holders.

I'm quite content with the current procedures and line being taken by Government and the Irish banks, It's the dissenters here that I'm arguing with. Those who insist that free market principles be applied and any stay in that process is causing a false property market to the detriment of whatever it is they call society.

The_Conductor · 28-03-2012 9:25am

Market economics- and the betterment of society- are seldom walking hand-in-hand. The betterment of society- while a laudable aim, if taken as the predominant force in devising policies for dealing with situations (in this instance- the property market and the lack of lending)- is a moniker for a socialist utopian dream. Market economics are not just financial in nature- there are other costs and benefits accruing. Recapitalisation of the Irish banking sector was intended to inject liquidity into the system- alongside providing a cushion against realised and future loses. We had net outflows of approaching 60 billion before the recapitalisation programme was sold (to the markets). Why would an international investor leave their money in Ireland- if there is no indication that the government is willing to put its hand where its mouth is? We have an over-reliance on international investors in Ireland- alongside a lack of innovation and entrepreneurial endeavour. This is a road we designed for ourselves- and one with many benefits- but also with unintended consequences.

We now are in a situation of incredibly limited resources and have to focus on where to apply these limited resources. My argument is that programmes specifically targetting those who left school early to enter the building trade- and equipping them with skills and qualifications that give them a sustainable future- are more important than bailing out those who over-extended themselves. If resources were not limited (and they are)- I still think there should be some measure of self responsibility to recognise the risks that people took on when they overborrowed- however, I do agree that the banks, the media, the government- and society in general- all acted as encouragement to people to borrow as much as possible. That people didn't have the intelligence to sit down and work out what effects a shock in the system would have on their finances- is the shortcoming of that person though..........

We have a mess. We do not have the means to bailout borrowers. That is the stark assessment.

pawnacide · 28-03-2012 10:34am

smccarrick wrote: »

Market economics- and the betterment of society- are seldom walking hand-in-hand. The betterment of society- while a laudable aim, if taken as the predominant force in devising policies for dealing with situations (in this instance- the property market and the lack of lending)- is a moniker for a socialist utopian dream. Market economics are not just financial in nature- there are other costs and benefits accruing. Recapitalisation of the Irish banking sector was intended to inject liquidity into the system- alongside providing a cushion against realised and future loses. We had net outflows of approaching 60 billion before the recapitalisation programme was sold (to the markets). Why would an international investor leave their money in Ireland- if there is no indication that the government is willing to put its hand where its mouth is? We have an over-reliance on international investors in Ireland- alongside a lack of innovation and entrepreneurial endeavour. This is a road we designed for ourselves- and one with many benefits- but also with unintended consequences.

We now are in a situation of incredibly limited resources and have to focus on where to apply these limited resources. My argument is that programmes specifically targetting those who left school early to enter the building trade- and equipping them with skills and qualifications that give them a sustainable future- are more important than bailing out those who over-extended themselves. If resources were not limited (and they are)- I still think there should be some measure of self responsibility to recognise the risks that people took on when they overborrowed- however, I do agree that the banks, the media, the government- and society in general- all acted as encouragement to people to borrow as much as possible. That people didn't have the intelligence to sit down and work out what effects a shock in the system would have on their finances- is the shortcoming of that person though..........

We have a mess. We do not have the means to bailout borrowers. That is the stark assessment.

Market economics are what we and our public representitives say they are. There seems to be this notion floating around that we are powerless in the face of this unseen onslaught from the 'markets'. It is deregulation of these markets that lead us and the world down this path and yet regulation is fought tooth and nail. I would hardly call the imposition of regulations on the financial markets a socialist utopian dream. However I would call the international sale of derivatives, knowingly, largely made up of subprime lending criminal .

In relation to our national debts, our bonds and banks debts were most likely sold and re-sold again and again by their holders between the start of this mess and final payment day. I'll bet the final holders of these bonds and bank debt couldn't believe their luck the night the morons guaranteed them. I can see the virtue of paying the national debt but bank debt in full without even trying to negotiate some write down ? ..oh please.

I completely agree that we concentrate our resources where they will do the most good in the medium and long term and it is short term thinking that got us in the mess that we're in today .. but I have yet to hear how mass house repossessions will be of any use whatsoever.

Bank repossesses house bought for 500k and sells it for 250k .. how does that help anyone, including the bank .. If you were to be completely pragmatic about it, it would actually make more sense to actually reduce the mortgage to 250k assuming the owners can meet those new repayments.

Zamboni · 28-03-2012 10:36am

pawnacide wrote: »

Bank repossesses house bought for 500k and sells it for 250k .. how does that help anyone, including the bank .. If you were to be completely pragmatic about it, it would actually make more sense to actually reduce the mortgage to 250k assuming the owners can meet those new repayments.

I went to Cheltenham last week with 500k in borrowings.
I lost 250k. In your fantastic world will the bank reduce the amount I owe them too? I can meet repayments on 250k.

pawnacide · 28-03-2012 10:58am

Zamboni wrote: »

I went to Cheltenham last week with 500k in borrowings.
I lost 250k. In your fantastic world will the bank reduce the amount I owe them too? I can meet repayments on 250k.

I didn't say that this will or should happen but we are at our core a consumer society, as a former exec at RTE once said to a friend while pointing at the main RTE building "All this is about selling soap powder" and that was in the 70's. Forget about socialist utopian dreams, as a consumer society we must have the power to consume and the transfer of that power from one individual to another is of no benefit to society as a whole.

And btw this is exactly what they did in relation to the bank debt so maybe the utopian ideal isn't that out of the question.

Zamboni · 28-03-2012 11:01am

pawnacide wrote: »

I didn't say that this will or should happen but we are at our core a consumer society, as a former exec at RTE once said to a friend while pointing at the main RTE building "All this is about selling soap powder" and that was in the 70's. Forget about socialist utopian dreams, as a consumer society we must have the power to consume and the transfer of that power from one individual to another is of no benefit to society as a whole.

And btw this is exactly what they did in relation to the bank debt so maybe the utopian ideal isn't that out of the question.

You talk in a lot of meaningless hyperbole. A lot.

Spiritofthekop · 28-03-2012 11:05am

pawnacide wrote: »

Market economics are what we and our public representitives say they are. There seems to be this notion floating around that we are powerless in the face of this unseen onslaught from the 'markets'. It is deregulation of these markets that lead us and the world down this path and yet regulation is fought tooth and nail. I would hardly call the imposition of regulations on the financial markets a socialist utopian dream. However I would call the international sale of derivatives, knowingly, largely made up of subprime lending criminal .

In relation to our national debts, our bonds and banks debts were most likely sold and re-sold again and again by their holders between the start of this mess and final payment day. I'll bet the final holders of these bonds and bank debt couldn't believe their luck the night the morons guaranteed them. I can see the virtue of paying the national debt but bank debt in full without even trying to negotiate some write down ? ..oh please.

I completely agree that we concentrate our resources where they will do the most good in the medium and long term and it is short term thinking that got us in the mess that we're in today .. but I have yet to hear how mass house repossessions will be of any use whatsoever.

Bank repossesses house bought for 500k and sells it for 250k .. how does that help anyone, including the bank .. If you were to be completely pragmatic about it, it would actually make more sense to actually reduce the mortgage to 250k assuming the owners can meet those new repayments.

:rolleyes:

Holy Jaysus!...Of course you would say that.

How about this...

I consider my Lexus Jeep I bought a few years ago my pride and joy, I treat it like a house. It cost me 70,000 I got a huge loan for it as its all I ever wanted. Nobody told me that a recession would hit us and the banks never warned me, its a 4 liter and my road tax has gone up & insurance has gone up too, the value of the car is now under 20,000 ive lost upwards of 50,000. I really think the bank should just write this off as no one warned me the car market would crash and road tax would go up on my big 4 ltr dream car. I want to keep this car but no way am I paying for it anymore as I cant afford the repayments and tax and insurance anymore.

I really think the tax payers who cycled to work or drive there mums car while saving up there own hard worked money for a day when they could afford the car of there dreams should cough up and pay for my big car so I can keep on driving around in it.

pawnacide · 28-03-2012 11:17am

Zamboni wrote: »

You talk in a lot of meaningless hyperbole. A lot.

and you pick snippets from posts and attach your own meanings to them. We all have our failings, not always necessary to point them out though. As for hyperbole in my previous post i don't see it. Your entire argument seems to me to be based on the idea that houses should be repossessed coz thats the way the world works. So change the way the world works. The current economic systems are the result of centuries of economic, ethical and philosophical debate and not some incontravenable universal truth. In fact it would not require a sea change in economic thinking, businesses write down and re-negotiate debt day in day out and continue to do business with the same people. In fact I would go so far as to say the Banks themselves would probabbly prefer to reduce debt for individual mortgage holders than repossess & resell houses as it woud be cheaper .. but the societal outcry and implications for the future will prevent them from doing so. My naivity has some bound and I would like to point out again that I am quite happy with the current systems of engagement by the banks.

pawnacide · 28-03-2012 11:28am

Spiritofthekop wrote: »

:rolleyes:

Holy Jaysus!...Of course you would say that.

How about this...

I consider my Lexus Jeep I bought a few years ago my pride and joy, I treat it like a house. It cost me 70,000 I got a huge loan for it as its all I ever wanted. Nobody told me that a recession would hit us and the banks never warned me, its a 4 liter and my road tax has gone up & insurance has gone up too, the value of the car is now under 20,000 ive lost upwards of 50,000. I really think the bank should just write this off as no one warned me the car market would crash and road tax would go up on my big 4 ltr dream car. I want to keep this car but no way am I paying for it anymore as I cant afford the repayments and tax and insurance anymore.

I really think the tax payers who cycled to work or drive there mums car while saving up there own hard worked money for a day when they could afford the car of there dreams should cough up and pay for my big car so I can keep on driving around in it.

ok, so please explain how reposessing and reselling a house helps either the bank or society .. apart from teaching those bad bad people who bought houses from oh lets say 2002 to 2007 a badly needed lesson. Look I know it's not going to happen but it would be the pragmatic approach. Again I'll point out what I said in a previous post .. most arguments I hear against it seem to have examples similar to you're own involving high end Lexus and trips to Cheltenham. I can only assume this implies that you believe the majority of those in arrears are living in 'salubrious' mansions and the houses of their dreams .. I seriously doubt this is the case. The majority of houses I see coming on the market at auctions and daft labeled bank sales are bog standard apartments and 3 bed semis. Hardly the stuff of dreams.

daltonmd · 28-03-2012 12:02pm

Spiritofthekop wrote: »

:rolleyes:

Holy Jaysus!...Of course you would say that.

How about this...

I consider my Lexus Jeep I bought a few years ago my pride and joy, I treat it like a house. It cost me 70,000 I got a huge loan for it as its all I ever wanted. Nobody told me that a recession would hit us and the banks never warned me, its a 4 liter and my road tax has gone up & insurance has gone up too, the value of the car is now under 20,000 ive lost upwards of 50,000. I really think the bank should just write this off as no one warned me the car market would crash and road tax would go up on my big 4 ltr dream car. I want to keep this car but no way am I paying for it anymore as I cant afford the repayments and tax and insurance anymore.

I really think the tax payers who cycled to work or drive there mums car while saving up there own hard worked money for a day when they could afford the car of there dreams should cough up and pay for my big car so I can keep on driving around in it.

I don't agree with your Lexus analogy. I do agree with Pawnicide and whatever people may feel about mortgage debt writeoff - it is happening.

Your lexus tanked in value as soon as you left the forecourt. It was always expensive to run, now it's more expensive.
Would you sell your house to keep it running? Because people are selling their cars to repay their mortgages, mortgages that are becoming more and more difficult to repay.

I disagree with pawnicide in the delay and pray tactics the banks are taking - this kicking the mortgage problem down the road, as if by some miracle we're going to have massive job creation or massive house price rises - it won't happen.

If people are in serious trouble, then they should be helped back on their feet - not dug further into the ground.

Spiritofthekop · 28-03-2012 12:12pm

daltonmd wrote: »

I don't agree with your Lexus analogy. I do agree with Pawnicide and whatever people may feel about mortgage debt writeoff - it is happening.

Your lexus tanked in value as soon as you left the forecourt. It was always expensive to run, now it's more expensive.
Would you sell your house to keep it running? Because people are selling their cars to repay their mortgages, mortgages that are becoming more and more difficult to repay.

I disagree with pawnicide in the delay and pray tactics the banks are taking - this kicking the mortgage problem down the road, as if by some miracle we're going to have massive job creation or massive house price rises - it won't happen.

If people are in serious trouble, then they should be helped back on their feet - not dug further into the ground.

I really think that writing off debts and letting people keep the asset is setting a really bad example for future generations.

If people know its possible they will ALWAYS find ways and holes to manipulate loans & debt just so they can keep the asset and write it off.... if this was to happen.

And you know they will.

daltonmd · 28-03-2012 12:26pm

Spiritofthekop wrote: »

I really think that writing off debts and letting people keep the asset is setting a really bad example for the future.

But look at the alternatives. The bank repossess the house, sells it for 250k and chases the homeowner for the balance. The homeowner is now homeless, can't afford to rent and is now claiming Rent Supplement.

2) Homeowner goes bankrupt, bank loses 250k straight away, now has to sell home - sells it *maybe* for 250k at a higher rate of interest to coer the loss.
Homeowner walks away and rents.
If this happens (and I believe this is what Elderfield fears) in large numbers then the banks are in bigger trouble, which will mean more money from the taxpayer.

Spiritofthekop wrote: »

If people know its possible they will ALWAYS find ways and holes to manipulate loans & debt just so they can keep the asset and write it off if this was to happen.

And you know they will.

Ok, there will always be those people,just like there were the greedy in this situation. But I wouldn't tar everyone with the same brush. I believe that if the BANKS wrote down mortgage debt for those in serious trouble, who have no hope of repaying it then ths would ultimately save the taxpayer.

Of course there would be conditions applied - you can't sell your home. A lien on the property of some kind (not for the full amount but a partial payment). It goes on your credit record.

But forcing people into bankruptcy when they maybe can pay the mortgage on what the house is worth now - is a crazy situation in my opinion.

I don't think making one mistake should be punishable by a lifetime sentence.

CiaranC · 28-03-2012 12:26pm

daltonmd wrote: »

I don't agree with your Lexus analogy. I do agree with Pawnicide and whatever people may feel about mortgage debt writeoff - it is happening.

Great, so is it free houses for everyone then? I cant afford a house either!
Where do I apply for mine.

daltonmd · 28-03-2012 12:29pm

CiaranC wrote: »

Great, so is it free houses for everyone then? I cant afford a house either!
Where do I apply for mine.

Did you get that translation on Google or make it up all by yourself?

By the way I said Write-Down

And just for you I am posting the definition - when you find the word FREE let me know.

"Definition of 'Write-Down'
Reducing the book value of an asset because it is overvalued compared to the market value. A write-down typically occurs on a company's financial statement, when the carrying value of the asset can no longer be justified as fair value and the likelihood of receiving the cost (book value) is questionable at best.

Read more: http://www.investopedia.com/terms/w/writedown.asp#ixzz1qPUfyB5R"

Zamboni · 28-03-2012 12:31pm

Moral hazard illustration

Couple A
Admin €35,000
Labourer €60,000
Combined Earning €95,000
House purchase in 2006 €600,000

Now

Admin €32,000
Unemployed €9,776
Combined Income €43,776

House Value €300,000 and mortgage repayments not being met.

Couple B
Admin €35,000
Admin €35,000

Rent €1,000 per month on house value €450,000

Now

Admin €32,000
Admin €34,000
Combined Income €66,000

Rent €880 per month on house value €225,000

I accept its rough math but bear with me.

Couple B who have greater combined earnings now than couple A and pay more in taxes, have worse accomodation than Couple A.

Any write down of debt for couple A punishes couple B.

You can nitpick about the numbers if you wish but either way the repossession moratorium is punishment for people who rented.

Victor · 28-03-2012 12:48pm

Folks, I've had a complaint. Can people remain civil to each other?

It is just as well the person removed the insult before I got here.

daltonmd · 28-03-2012 12:58pm

Zamboni wrote: »

Moral hazard illustration

Couple A
Admin €35,000
Labourer €60,000
Combined Earning €95,000
House purchase in 2006 €600,000

Now

Admin €32,000
Unemployed €9,776
Combined Income €43,776

House Value €300,000 and mortgage repayments not being met.

I want to draw you out on that:

When they earned 95k they had a gross monthly income of almost 8k per month, now they have a gross monthly income of 3,648pm. They pay 2,370 which leaves them with 1,278pm. Now, unless the unemplyed person gets a similiar job with a similiar wage then this is a hopeless case.

It isn't about moral hazzard - when this couple bought their home they could afford it.

http://www.bankrate.com/calculators/mortgages/amortization-calculator.aspx

Zamboni wrote: »

Couple B
Admin €35,000
Admin €35,000

Rent €1,000 per month on house value €450,000

Now

Admin €32,000
Admin €34,000
Combined Income €66,000

Rent €880 per month on house value €225,000

Rough figure I know. They have taken a pay cut, or pay more taxes - without any debt writedown and their rent has reduced?

Zamboni wrote: »

I accept its rough math but bear with me.

Couple B who have greater combined earnings now than couple A and pay more in taxes, have worse accomodation than Couple A.

Any write down of debt for couple A punishes couple B.

How do couple B have worse accomadation?

Plus, they always have the freedom to move and far from Couple A punishing coule B - It's couple B who will benefit when they are able to buy a cheaper house.

Zamboni wrote: »

You can nitpick about the numbers if you wish but either way the repossession moratorium is punishment for people who rented.

No, the refusal of the government to force the banks to deal with unsustainable mortgages is what is stalling the market. Debt write down is not an alien concept - it is common and normal in other countries.

pawnacide · 28-03-2012 1:18pm

Zamboni wrote: »

Moral hazard illustration

Any write down of debt for couple A punishes couple B.

You can nitpick about the numbers if you wish but either way the repossession moratorium is punishment for people who rented.

Apart from the numbers which I realise are only for illustrative purposes the concept of 'moral hazard' only comes into play when one of the parties either knowingly misleads the other or they may not do all in their power to live up to their side of the contract. Banks are not that free and easy in their negotiations with those in arrears and are well practiced at ensuring they are getting the max. I fail to see how you can consider this a 'punishment' for couple B .. in the example above .. maybe it may seem unfair .. but as you said yourself the figures aren't really indicative of the what's actually happening.

In your example couple A, if house is repossed, now have a personal loan of 300,000, and must now rent a home. They are completely f****d. Labourer can go to college, retrain till the cows come home but they'll never get out from under their cloud of debt .. I believe the societal, moral and economic benefits of leaving couple A in their home outweigh the percieved 'moral hazard' of the outraged couple B.

pawnacide · 28-03-2012 1:21pm

CiaranC wrote: »

Great, so is it free houses for everyone then? I cant afford a house either!
Where do I apply for mine.

Your local bank.

Spiritofthekop · 28-03-2012 1:30pm

Zamboni wrote: »

Moral hazard illustration

Couple A
Admin €35,000
Labourer €60,000
Combined Earning €95,000
House purchase in 2006 €600,000

Now

Admin €32,000
Unemployed €9,776
Combined Income €43,776

House Value €300,000 and mortgage repayments not being met.

Couple B
Admin €35,000
Admin €35,000

Rent €1,000 per month on house value €450,000

Now

Admin €32,000
Admin €34,000
Combined Income €66,000

Rent €880 per month on house value €225,000

I accept its rough math but bear with me.

Couple B who have greater combined earnings now than couple A and pay more in taxes, have worse accomodation than Couple A.

Any write down of debt for couple A punishes couple B.

You can nitpick about the numbers if you wish but either way the repossession moratorium is punishment for people who rented.

But some people just cant see it Zamboni....very well put by the way.

Its like the renters who saved for a day when they could afford something always come last in every situation with the media. Its like they dont matter...

while...

The investors, auctioneers & first time buyers, landlords always have this attitude that they deserve first dibs on everything and the people who stayed out of it all but saved & want in now dont get any say in it.

Its like they are saying well property has fallen a lot from a false peak so you should be happy.... so sh-t up looking for real value, the property market is still vastly over- priced in most situations!

The renters who saved for a better day out there get no exposure or any help from the powers that be.

pawnacide · 28-03-2012 1:43pm

And here I was bothering to try and explain why I believe what I do.. I realise now thats not really necessary. In future I think I'll just keep restating the same point without reason or argument. I like circles .. Do you like circles ?

Spiritofthekop · 28-03-2012 1:46pm

Whats the percentage of repossessions in the UK compared to Ireland?

pawnacide · 28-03-2012 1:57pm

Stats here

http://namawinelake.wordpress.com/2012/02/17/one-in-14-irish-mortgages-is-more-than-six-months-in-arrears-latest-statistics-show/

Fighting Irish · 28-03-2012 2:02pm

Victor wrote: »

It is just as well the person removed the insult before I got here.

:pac:

Spiritofthekop · 28-03-2012 2:03pm

pawnacide wrote: »

Stats here

http://namawinelake.wordpress.com/2012/02/17/one-in-14-irish-mortgages-is-more-than-six-months-in-arrears-latest-statistics-show/

Massive difference, seems the UK dont beat around the bush if you cant repay the loans you signed for.

Spiritofthekop · 28-03-2012 2:04pm

Taken from the property pin.

http://www.irishexaminer.com/opinion/letters/renters-future-owners-left-in-the-dark-187762.html

Renters, future owners left in the dark
Wednesday, March 21, 2012

There are so many voices advocating for the interests of property owners that another even more sizeable group in our society is completely ignored.

We are the renters and future home buyers. No one ever appears in the media to speak for us. We don’t have the Irish Property Owners Association, Irish Mortgage Brokers, New Beginnings or any of the vested interest economists to advocate on our behalf. And what are our interests? We wish to see house prices continue to fall and for the banks to finally begin repossessions.

Here’s why. We will reach the bottom faster and become a more competitive society, more of our people will be able to buy their own homes without being inordinately indebted, and those people who are overburdened will bite the bullet and finally move on with their lives.

This may sound callous, but is it any more callous than dragging out a house crash in slow motion over a decade and encumbering future generations with unsustainable debts to prop up a fantasy that there are no consequences for poor decisions?

Is it any more callous than asking people who rent to subsidise those who cannot pay their mortgage, making it impossible for them to ever aspire to home ownership?

Please bear us in mind. We are out here and there are many more of us than there are property owners.

Malahide
Co Dublin

Read more: http://www.irishexaminer.com/opinion/letters/renters-future-owners-left-in-the-dark-187762.html#ixzz1qPqKuigu

pawnacide · 28-03-2012 2:34pm

How many times are you gonna post that nonsense in the same thread ?

Interesting though that you would try and portray the defense of ordinary people in ordinary jobs being allowed to keep their ordinary homes as somehow being a money making plot by vested interests. Talk about turning things on their head. All I can say is WOW.

Perhaps it's time you looked beyond your own vested interest.

Spiritofthekop · 28-03-2012 2:59pm

pawnacide wrote: »

How many times are you gonna post that nonsense in the same thread ?

Interesting though that you would try and portray the defense of ordinary people in ordinary jobs being allowed to keep their ordinary homes as somehow being a money making plot by vested interests. Talk about turning things on their head. All I can say is WOW.

Perhaps it's time you looked beyond your own vested interest.

Its only nonsense to you Mr Property owner/auctioneer/Investor.

Im only talking up a falling property market cause thats what it is & I want to see a natural bottom occur so I can finally see some value for money. Im not trying to pretend anything, if property was not falling I would not be talking about it and pretending its not happening. Just like if there was a boom I would be talking about it too.

Its the media who started all the propaganda and vested interest years ago and got away with it. See how much damage it did.

People can see through the BS now and are willing to take them on at there own game.

pawnacide · 28-03-2012 3:11pm

Spiritofthekop wrote: »

Its only nonsense to you Mr Property owner/auctioneer/Investor.

Im only talking up a falling property market cause thats what it is & I want to see a natural bottom occur so I can finally see some value for money. Im not trying to pretend anything, if property was not falling I would not be talking about it and pretending its not happening. Just like if there was a boom I would be talking about it too.

Its the media who started all the propaganda and vested interest years ago and got away with it. See how much damage it did.

People can see true the BS now and are willing to take them on there own game.

erm ..ok, I think.

The_Conductor · 28-03-2012 3:38pm

Ok guys- we keep rehashing the same luke warm nuggets again and again here. If you have something new to say- rather than simply sniping at one another- please be my guest, otherwise, this thread gets closed.

pawnacide · 28-03-2012 4:05pm

K, but before the thread gets closed I'd really like to hear just how repossessing and selling houses in the current market makes financial sense to the banks and the country and somehow alleviates the debt burden on future generations. As far as I can see it simply leaves the same amount of outstanding debt and probably at a higher interest rate.

daltonmd · 28-03-2012 4:06pm

Spiritofthekop wrote: »

But some people just cant see it Zamboni....very well put by the way.

Its like the renters who saved for a day when they could afford something always come last in every situation with the media. Its like they dont matter...

while...

The investors, auctioneers & first time buyers, landlords always have this attitude that they deserve first dibs on everything and the people who stayed out of it all but saved & want in now dont get any say in it.

Its like they are saying well property has fallen a lot from a false peak so you should be happy.... so sh-t up looking for real value, the property market is still vastly over- priced in most situations!

The renters who saved for a better day out there get no exposure or any help from the powers that be.

I disagree with you - it's well put only if you agree that when the couple took out their mortgage in 2006 that they had an income that meant they could repay this mortgage.

Where is the reckless borrowing? They both worked? Where is there crime.

Now I agree with you and Zamboni on a lot of issues, I respect your posts and respect you as posters - but in this issue we will have to agree to disagree.

I rent as well - I am not an investor, a landlord, an EA or a developer. I have no vested interest. What I see is a major problem dowm the road is this issue isn't addressed properly.

I am not advocating giving people free houses, I am not advocating allowing greedy property moguls to walk away and start again. What I am saying, using the above example, is that couples like this, who bought property based on earnings that they had, that they may never have again, should not be financially ruined forever.

It's not going to helo this country in the long run - we are paying for the boom, we will continue paying for the boom, but I think that it's time that we treated working taxpayers with the same courtesy that we treated the banks, the bondholders and the big developers - whose lifestyles have not changed one bit.

Regards.

Spiritofthekop · 28-03-2012 4:37pm

I'll take the mods advice and leave it at that then but I stand by what I say though!

Nobody gave two sh#ts about the renters & young people during the boom when we were being priced out of everything so most choose not to take up big loans they knew that they might not be able to handle in the future & I still feel its the same attitude now towards the renters looking to get on the property market. No one is offering free money for a head start like the way they are talking up writing off the debt people signed off on so they can keep the houses.

Anyway we will have to agree to disagree.

Regards

daltonmd · 28-03-2012 4:49pm

Spiritofthekop wrote: »

Massive difference, seems the UK dont beat around the bush if you cant repay the loans you signed for.

Not quite the full story -In 2010 29,000 people were declard bankrupt in the UK.

In 2011 it was 41,845.

In Ireland. 29 people were declared bankrupt in 2010 - including Sean Fitzpatrick. No stats for 2011.

The UK have a "friendly" bankruptcy regime, under certain criteria you are discharged from your debt in 12 months.

You are inadvertantly advocating for this.

Spiritofthekop wrote: »

Nobody gave two sh#ts about the renters & young people during the boom when we were being priced out of everything & chose not to take up big loans they knew that they might not be able to handle in the future & I still feel its the same attitude now towards the renters looking to get on the property market. No one is offering free money for a head start like the way they are talking up writing off the debt people signed off on so they can keep the houses.

You think they give a s*** now? You think they'll reduce the interest rate for us? Will they heck. I'm in the middle of changing bank accounts because I'm being treated as some kind of bank - by a bank.

Don't think that those in dire straits did this - they were well aided and abetted by the government, by the banks, the central bank, and the media.

Either way you and I will pay for this - through taxes, through stealth taxes, lower standard of living, lower services - but the banks will be ok.

Zamboni · 28-03-2012 5:07pm

daltonmd wrote: »

Now I agree with you and Zamboni on a lot of issues, I respect your posts and respect you as posters - but in this issue we will have to agree to disagree.

Reciprocated.

daltonmd wrote: »

Where is the reckless borrowing? They both worked? Where is there crime.

Maybe not crime but there was certainly a massive gamble.
If you have to take out a mortgage at many multiples of combined incomes to buy a house than the market is clearly not for you.

daltonmd wrote: »

What I am saying, using the above example, is that couples like this, who bought property based on earnings that they had, that they may never have again, should not be financially ruined forever.

I agree with you but they should not keep the house under any circumstances.

The prudent tax paying renter is facing the following in 2012;
An overinflated property market due to government interference by repossession moratorium.
An overinflated rental market due to government interference by rent allowance/supplement provision.
Paying higher taxes to pay for the reckless lending by banks and reckless borrowing by current defaulters to cover debt write off.
Paying higher taxes to pay towards the welfare system which provides the now unemployed reckless borrowers an income.

And having the displeasure of having to watch all this from rented accomodation instead of being in their own house for choosing prudence over impulse.

daltonmd · 28-03-2012 5:55pm

Zamboni wrote: »

Reciprocated.

Appreciated.

Zamboni wrote: »

Maybe not crime but there was certainly a massive gamble.
If you have to take out a mortgage at many multiples of combined incomes to buy a house than the market is clearly not for you.

But was loaned by a regulated government registered body - there has to be recognition of this. The gamble for most people? That they would lose their jobs and their homes would halve in value? Nobody would have bought if they thought this was on the cards. They were pushed by the government, the media and the general madness that people got caught up in - a classic boom scenario.

Zamboni wrote: »

I agree with you but they should not keep the house under any circumstances.

Absolutely not. If you bought a 1 million Euro home that's now worth 500k and you can only afford 250k - then you leave the house and live somewhere more appropriate for your income. Do you walk away scot free - absolutely not - you carry "some" of the debt, as do the taxpayer now and so should the bank.

Zamboni wrote: »

The prudent tax paying renter is facing the following in 2012;
An overinflated property market due to government interference by repossession moratorium.
An overinflated rental market due to government interference by rent allowance/supplement provision.
Paying higher taxes to pay for the reckless lending by banks and reckless borrowing by current defaulters to cover debt write off.
Paying higher taxes to pay towards the welfare system which provides the now unemployed reckless borrowers an income.

Facing it? We're living it. This won't change - it will get worse because many people will skip to the UK, take the new Irish bankruptcy, leave the country, leave jobs to leave the country - either way this will happen, I just prefer it to happen in a more structured way. Give decent working taxpayers a chance to stay in their modest homes, paying tax, not on SW, not defaulting but paying an appropriate mortgage which fits their means and their home.

Zamboni wrote: »

And having the displeasure of having to watch all this from rented accomodation instead of being in their own house for choosing prudence over impulse.

We will not have a normal property market or banking system until the issue of mortgage debt is dealt with. I would rather watch all this from rented accomadation than buy a home where I am not sure if property will dip further when all these people do default/leave, when I don't actually know what my property tax may be, my income may be or indeed my employment situation may be - I wouldn't swap my rented home for a bought home in a heartbeat and I thank my lucky stars every day.

CiaranC · 28-03-2012 8:22pm

daltonmd wrote: »

I am not advocating giving people free houses, I am not advocating allowing greedy property moguls to walk away and start again. What I am saying, using the above example, is that couples like this, who bought property based on earnings that they had, that they may never have again, should not be financially ruined forever.

Noone would disagree with that. All we are saying is that there is no way they should be allowed remain in a property which they cannot pay for, bankrolled by other tax payers, at the expense of those who didnt buy into the pyramid scheme. That is grossly unfair.

shangri la · 29-03-2012 5:07am

Are there recent official figures available on the amount of money spent annually on rent supplement and the number of people receiving it?

Who is the best source for house price decreases? The rating agencies such as fitch, s&p?

what reliefs are available to people who can't afford their mortgage? Is there a welfare scheme that pays part of a homeowners mortgage?

Have nama released comprehensive figures that show the number of residential homes they have on their books? How many are liveable? How many of the livable houses are inhabited?

daltonmd · 29-03-2012 9:51am

CiaranC wrote: »

Noone would disagree with that. All we are saying is that there is no way they should be allowed remain in a property which they cannot pay for, bankrolled by other tax payers, at the expense of those who didnt buy into the pyramid scheme. That is grossly unfair.

Ciaran, as a renter and hopefully, a future homeowner, there is no way in hell that I would advocate people keeping their homes if they cannot pay a mortgage on the value of it today. Not a chance.

Let's say you bought a home for 350k (which I think is a more realistic example than 600k - no offence Zamboni) and it's now worth 175k, let's say the owners work and due to cuts can only repay that mortgage amount.

I don't see the advantage to anyone to kick the occupants out, put the house on the market where it *may* sell for 175k - the occupiers are now being chased for entire debt - they will never be able to pay any of it because they now have to rent. Instead of 175k being repaid - nothing is, the entire debt is gone.

The main objective should be to keep people in their (bog standard) homes, allowing them to repay the mortgage at todays value - they shouldn't be allowed to move/sell up and some kind of lien should be put on the property to enable to bank to claw back a reasonable part of the debt in the future.

I don't think that homeowners should have debt forgiveness - not at all. They made the decision to buy - they have part responsibility in their own situation but so do the banks and the government.

Zamboni · 29-03-2012 10:04am

daltonmd wrote: »

Let's say you bought a home for 350k (which I think is a more realistic example than 600k - no offence Zamboni) and it's now worth 175k, let's say the owners work and due to cuts can only repay that mortgage amount.

Haha. No worries. It was certainly a realistic and common occurance in South Dublin.

smallerthanyou · 29-03-2012 10:07am

daltonmd wrote: »

Let's say you bought a home for 350k (which I think is a more realistic example than 600k - no offence Zamboni) and it's now worth 175k, let's say the owners work and due to cuts can only repay that mortgage amount.

I don't see the advantage to anyone to kick the occupants out, put the house on the market where it *may* sell for 175k - the occupiers are now being chased for entire debt - they will never be able to pay any of it because they now have to rent. Instead of 175k being repaid - nothing is, the entire debt is gone.

In your example they pay on today's value of 175k. What happens if in 10 years the house is worth 250k. The mortgage holder has gets to keep all of the upside potential without having suffered any of the downside. That is incredibly unfair and completely against any market principles. Repossessions are tough. Noone likes to see anyone turfed out of what they see as their home but it has to happen in unsustainable cases.

daltonmd · 29-03-2012 10:13am

smallerthanyou wrote: »

In your example they pay on today's value of 175k. What happens if in 10 years the house is worth 250k. The mortgage holder has gets to keep all of the upside potential without having suffered any of the downside. That is incredibly unfair and completely against any market principles. Repossessions are tough. Noone likes to see anyone turfed out of what they see as their home but it has to happen in unsustainable cases.

It's only a benefit to the mortgage holder if they sell though and they shouldn't be able to sell - if they do then the profit goes off their debt.
Repossessions are tough and in some cases that may be the only option.

But again if people are living in a home that's now valued at 175k and they can service that mortgage then why turf them out and risk getting nothing back?

Fighting Irish · 29-03-2012 1:58pm

daltonmd wrote: »

Ciaran, as a renter and hopefully, a future homeowner, there is no way in hell that I would advocate people keeping their homes if they cannot pay a mortgage on the value of it today. Not a chance.

Let's say you bought a home for 350k (which I think is a more realistic example than 600k - no offence Zamboni) and it's now worth 175k, let's say the owners work and due to cuts can only repay that mortgage amount.

I don't see the advantage to anyone to kick the occupants out, put the house on the market where it *may* sell for 175k - the occupiers are now being chased for entire debt - they will never be able to pay any of it because they now have to rent. Instead of 175k being repaid - nothing is, the entire debt is gone.

The main objective should be to keep people in their (bog standard) homes, allowing them to repay the mortgage at todays value - they shouldn't be allowed to move/sell up and some kind of lien should be put on the property to enable to bank to claw back a reasonable part of the debt in the future.

I don't think that homeowners should have debt forgiveness - not at all. They made the decision to buy - they have part responsibility in their own situation but so do the banks and the government.

Some people need to learn the hard way i'm afraid

shangri la · 29-03-2012 2:31pm

daltonmd wrote: »

Ciaran, as a renter and hopefully, a future homeowner, there is no way in hell that I would advocate people keeping their homes if they cannot pay a mortgage on the value of it today. Not a chance.

Let's say you bought a home for 350k (which I think is a more realistic example than 600k - no offence Zamboni) and it's now worth 175k, let's say the owners work and due to cuts can only repay that mortgage amount.

I don't see the advantage to anyone to kick the occupants out, put the house on the market where it *may* sell for 175k - the occupiers are now being chased for entire debt - they will never be able to pay any of it because they now have to rent. Instead of 175k being repaid - nothing is, the entire debt is gone.

The main objective should be to keep people in their (bog standard) homes, allowing them to repay the mortgage at todays value - they shouldn't be allowed to move/sell up and some kind of lien should be put on the property to enable to bank to claw back a reasonable part of the debt in the future.

I don't think that homeowners should have debt forgiveness - not at all. They made the decision to buy - they have part responsibility in their own situation but so do the banks and the government.

you want the taxpayer to pay E175,000 of this persons mortgage?

jmayo · 29-03-2012 3:11pm

pawnacide wrote: »

1999 - 2006 Chef
2006 - 2010 Auctioneer
2011 - 2012 General Dogsbody

You picked the wrong time to change career.
General Dogsbody where though

pawnacide wrote: »

Anything else ya wanna know just ask. House prices are completely irrelevant to what I do now. Up/Down makes no odds. In fact probably marginally better if they go down. But that doesn't mean I wanna see people thrown out of houses.

So if someone cannot repay their mortgage they should get debt writedown/writeoff and be allowed continue to live there and continue to have ownership ?

You do know that with that scenario the taxpayers (including possibly themselves and others who did not buy and may still be renting) are subsidising their lifestyle at their expenses.

pawnacide wrote: »

How many times are you gonna post that nonsense in the same thread ?

Interesting though that you would try and portray the defense of ordinary people in ordinary jobs being allowed to keep their ordinary homes as somehow being a money making plot by vested interests. Talk about turning things on their head. All I can say is WOW.

Perhaps it's time you looked beyond your own vested interest.

And perhaps it is time you looked beyond the vested interests of people who bought property that they can no longer afford.

If the non property owners do not look out for their own interests it is particularly noticable nobody else will. :mad:

You have property owners, property investors/landlords, social welfare advocates (rent allowance and mortgage writeoff proponents), media hacks, auctioneers, developers, politicans, NAMA connected types all trying to ensure that property prices remain at an artifical level and is not allowed reach it's correct market level.

daltonmd wrote: »

Ciaran, as a renter and hopefully, a future homeowner, there is no way in hell that I would advocate people keeping their homes if they cannot pay a mortgage on the value of it today. Not a chance.

Let's say you bought a home for 350k (which I think is a more realistic example than 600k - no offence Zamboni) and it's now worth 175k, let's say the owners work and due to cuts can only repay that mortgage amount.

What a load of bol***.
You are giving them a debt writeoff with no adverse affects to them.
A debt writedown that ultimately has to be covered by the taxpayers of this state. :mad:

This also creates a huge moral hazard.
What about the guy down the road or next door, with the same property type, that can still pay his mortgage ?

What about the guy down the road who chose to save a bigger deposit and/or pay off bigger chunks of his mortgage whilst he had the opportunity ?
Where is the reward for him ?
Oh yeah he gets to see the neighbour slide by and end up with the same property has him even though he may not have been as financially prudent. :rolleyes:

If someone gets a debt writedown/writeoff then in return they either get out or relinguish ownership and rent the property back.
No way do they get to fookin sail on as if nothing has bloody happened.
Otherwise it makes a mockery of financial prudience.

daltonmd · 29-03-2012 8:16pm

jmayo wrote: »

What a load of bol***.
You are giving them a debt writeoff with no adverse affects to them.
A debt writedown that ultimately has to be covered by the taxpayers of this state. :mad:.

For the last time - we are already covering the banks losses, writedown of mortgage debt was included in the recapitilisation. They haven't passed this to people who will never be in a position to repay boom mortgages.

You, and others here like you cannot grasp the fact that you cannot get blood out of a stone - if we continue to push people in trouble, instead of writing down a portion of the debt - that is in line with the true value of their homes, then we will recoup nothing.

What's better? repayment of 175k out of 350k or nothing?

jmayo wrote: »

This also creates a huge moral hazard.
What about the guy down the road or next door, with the same property type, that can still pay his mortgage ?.

He can still pay his mortgage today. What about next year? The year after? It's not called the "mortgage timebomb" for nothing. Don't kid yourself into believing that this is a small, short-term problem.

It's a solution for those who CANNOT repay. If you can then you are one of the lucky ones. As I have CLEARLY stated - this should nto be a free ride. There should be sanctions, restrictions and a possible repayment of some of the debt down the road.

jmayo wrote: »

What about the guy down the road who chose to save a bigger deposit and/or pay off bigger chunks of his mortgage whilst he had the opportunity ?
Where is the reward for him ?
Oh yeah he gets to see the neighbour slide by and end up with the same property has him even though he may not have been as financially prudent. :rolleyes:.

So your take is - throw them out, recoup ZERO, have them on SW???

jmayo wrote: »

If someone gets a debt writedown/writeoff then in return they either get out or relinguish ownership and rent the property back.
No way do they get to fookin sail on as if nothing has bloody happened.
Otherwise it makes a mockery of financial prudience.

FFS - are you serious? Where was the financial prudence in AIB, BOI - ANGLO - two words for you jmay (I want to add that I also respect your posts - we agree on a lot but on this we'll have to disagree), BOND HOLDERS.

Look - my take on it is this:

The bondholders got a bailout.
The banks got a bailout - they also got a writedown on debt (NAMA).

It can't be one rule for a section of society and the rest have to suck it up.

The banks got the money - we, the taxpayer are already bailing them out - THEY should pass this on to hopeless cases.

This issue is not going away. It will get worse.

daltonmd · 29-03-2012 8:18pm

shangri la wrote: »

you want the taxpayer to pay E175,000 of this persons mortgage?

It's either that or be on the line for 350k - your choice?

riclad · 29-03-2012 8:54pm

The banks should be made to write down x amount for people in difficulty with their loans, say 35 percent ,eg loan 200k is now just 125k.Probably nothing will happen ,people will wait and see how the new bankruptcy law is put into practice.
I mean this arrangement could be used for noninvestors ,i dont have much sympathy for people who bought houses for 200k to rent out,when even the rental income could never cover the mortgage.
There could be an independent body used like mabs to monitor the new mortrgage agreement for fairness .IF the banks were to suddenly repossess 10ooo homes ,it probably would push down house prices even more ,making the banks worse off than they are now.
Thats whats happening in the usa , many forecloresures in an area ,push down the
price of houses in that area ,or state.

ballyharpat · 29-03-2012 8:55pm

we wouldn't be on the line for 350k. There are frugal out there, like me, that have been saving for a hpuse and will pay 175k, or whatever the market decides the house is worth. What about someone that bought a e1million house and it's now worth only 500k, they can afford the 500k, do they get a writedown of 500k??

daltonmd · 29-03-2012 9:30pm

ballyharpat wrote: »

we wouldn't be on the line for 350k. There are frugal out there, like me, that have been saving for a hpuse and will pay 175k, or whatever the market decides the house is worth. What about someone that bought a e1million house and it's now worth only 500k, they can afford the 500k, do they get a writedown of 500k??

I think the amount of the write down is academic - I think we have to agree that the boom price was a fallacy - whether it's a 100k house or a 1 million Euro house - these prices will not exist again in our lifetime.

The point is that if someone can service a mortgage at todays valuation then they should be helped.

So far in this thread we have used 50% as the mark in price falls - I personally believe that this is optimistic, I think 70% - 80% is what we will really see.

Another poster asked what would happen if the house price rose in 10 years to 250k from 175k (half of boom 350k price).

Here's what I personally see.

Boom 350k

Today - 175k (If owners can service that mortgage well and good)

Over the next 24 months 135k.

Now in order for that house to reach 250k we will have to see the following: I do believe that we are in line for 2 more years of hefty falls.

2013 10% Fall
2014 10% Fall

Price approx 135k in 2014.

A healthy property market rises by approx 3% per year.

(Back of envelope and rounding up figures, but I think you'll get the drift)

2015 3% rise 140k
2016 3% rise 144k
2017 3% rise 147k
2018 3% rise 151k
2019 3% rise 156k
2020 3% rise 161k
2021 3% rise 165k
2022 3% rise 171k
2023 3% rise 176k
2024 3% rise 181k

To get to 250k will take a long time - can anyone see 5% or 10% price rises after a couple of years? I can't.

If a house falls by 50% - it needs 100% increase to get back to the purchase price.

EG:

House 350k falls by 50% - 175k - to return to 350k then that's double or 100% increase.

Many, many mortgages are simply unsustainable - in the next few years many , many people will realise that their homes will never come back to what they paid - it's as simple as that.

For at least the next 3 years we are looking at increasing taxes, water charges, property tax, household charge, higher personal tax, motor tax, insurance, car insurance, petrol prices - lower disposable income.

Todays people who are "coping" won't cope next year, or the year after and the year after that - it is a timebomb.

Repossessions

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