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Mortgage debt forgiveness is here, Dublin nurse gets €152k debt write-down

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  • Closed Accounts Posts: 12,455 ✭✭✭✭Monty Burnz


    Bannasidhe wrote: »
    I am paying my debts as I took them on and so will pay - they ain't getting my tracker though. ;)
    So it's ok to renegotiate some deals to the disadvantage of the bank and the taxpayer, but not yours which is to your personal advantage?


  • Registered Users Posts: 8,184 ✭✭✭riclad


    Thats the point where the regulator should have stepped in ,person buys house for 150k, it supposedly goes up in value to 300k, so she gets a remortage ,borrows another 90k.
    SO now shes left with 240k loan on a house thats now worth 140k.
    The banks were simply loaning too much money ,without proper regulation or risk management.


  • Moderators, Society & Culture Moderators Posts: 19,219 Mod ✭✭✭✭Bannasidhe


    Gurgle wrote: »
    I don't follow the maths here.
    Presumably she had to buy her partner out of 50% of the equity, did they own it free and clear at the time of the break-up?
    Why did she borrow the full value to pay him half the equity?

    She bought the house for cash - but shortly afterwards the drainage system caved in causing severe subsidence plus other problems related to dodgy building practices - so to pay for essential repairs she took out a manageable mortgage - her ex was unemployed at the time. When they separated, her ex insisted on 50 % of market value - so she had no choice but to take out a 'new' mortgage.

    The point is that the bank manager in First Active was pushing her to remortgage to 10 x her annual income rather then the 7 x she needed.


  • Closed Accounts Posts: 12,455 ✭✭✭✭Monty Burnz


    Bannasidhe wrote: »
    She bought the house for cash - but shortly afterwards the drainage system caved in causing severe subsidence plus other problems related to dodgy building practices - so to pay for essential repairs she took out a manageable mortgage - her ex was unemployed at the time. When they separated, her ex insisted on 50 % of market value - so she had no choice but to take out a 'new' mortgage.

    The point is that the bank manager in First Active was pushing her to remortgage to 10 x her annual income rather then the 7 x she needed.

    So she basically bought half a house from a guy who didn't even own half of it? :confused:


  • Moderators, Society & Culture Moderators Posts: 32,278 Mod ✭✭✭✭The_Conductor


    RoverZT wrote: »
    Doesn't seem fair to me at all.

    Going rate for a nurse in the big cities is 20 euro+ an hour.

    Friend of my sister is getting 22 euro a hour in nursing home in co.limerick.

    She says they are always short staffed and she often does 50 hour week.She gets a shift allowance as well of 150 euro a week.

    Her basic salary is 22 x 39 hours + 150 shift = 1008 euro a week

    Plus overtime say 5 hours a week, 5 x 33 euro = 165 euro a week

    60k a year.

    Poor nurses :rolleyes:

    If you have an issue with nurses pay or their employment conditions- take it elsewhere. Any more discussion on this and you'll get a ban from here. Regards, SMcCarrick


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  • Posts: 23,339 ✭✭✭✭[Deleted User]


    The bank is losing the interest on the money over 20yrs. The principal will be paid back ffs. The bank may lose a bit. Think this through ffs.

    :confused:

    what?

    She borrowed €245K, the bank sold the house in 2010, she's paying them €18k over the next 6 years. There is no way that the payments made to date, the sale of the house and the €18k will total €245K, where do you get the idea the principal will be paid????

    You might break it down for us, seems as you've thought it through and all ;)


  • Moderators, Society & Culture Moderators Posts: 19,219 Mod ✭✭✭✭Bannasidhe


    So it's ok to renegotiate some deals to the disadvantage of the bank and the taxpayer, but not yours which is to your personal advantage?

    I knew nothing about Trackers until my bank manager told me all about them. They offered it to me. I recognised a good deal and took it.
    You can't have it both ways - either the banks are responsible for the repercussions of their lending decisions or they are not.

    You, and others here, who believe people made a decision and agreed to a set of terms and conditions so should abide by them cannot now complain when people took a package offered to them by the bank that turned out to be disadvantageous to the bank.
    I didn't set the terms - AIB did. I didn't ask for a tracker - they offered me one. I am fulfilling my part of the deal.

    It's not my fault the bank didn't think it through properly when offering mortgages. Same as you believe it's not the banks fault when individual's didn't think things through properly accepting mortgage offers.


  • Closed Accounts Posts: 12,455 ✭✭✭✭Monty Burnz


    Bannasidhe wrote: »
    I knew nothing about Trackers until my bank manager told me all about them. They offered it to me. I recognised a good deal and took it.
    You can't have it both ways - either the banks are responsible for the repercussions of their lending decisions or they are not.
    Right - and I think you should be entitled to the tracker you signed for. But you think that deals should be renegotiated!


  • Moderators, Society & Culture Moderators Posts: 19,219 Mod ✭✭✭✭Bannasidhe


    So she basically bought half a house from a guy who didn't even own half of it? :confused:

    The courts disagreed - it was their spousal home.


  • Registered Users Posts: 362 ✭✭RoverZT


    smccarrick wrote: »
    If you have an issue with nurses pay or their employment conditions- take it elsewhere. Any more discussion on this and you'll get a ban from here. Regards, SMcCarrick

    SmMcCarrick.

    Topic is about a nurse that got debt forgiveness, her salary pays for the debt.

    It's relevant

    Regards.

    RoverZT


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  • Moderators, Society & Culture Moderators Posts: 19,219 Mod ✭✭✭✭Bannasidhe


    Right - and I think you should be entitled to the tracker you signed for. But you think that deals should be renegotiated!

    I think we are kicking the can down the road and until the mortgage arrears issue is dealt with we will continue to have to recapitalise the banks. Allowing a certain amount of debt forgiveness for individuals would alleviate the pressure on those struggling to meet unmanageable debts - something we have already done for developers via NAMA.

    Either way, we will continue to plough millions of taxpayers money into banks. The current system seems to be dropping those millions into an unfillable black hole while suffocating the economy as people do not have the funds to shop for anything more then the bare essentials. The banks are hoovering up state funds while also not releasing funds to SME's all in an effort to balance their books. The books will not balance while they have bad loans on them and many mortgages are now bad loans. They need to be dealt with.
    We need to get the domestic economy moving - we cannot while thousands of people have a mortgage sword of Damocles over their heads.

    It is pointless to moan about individual people being unprudent 5 years ago - the fact is many were. I don't deny it. But, so were developers - we bailed them out but are expecting those in trouble with their mortgages - who bought overpriced houses from those same developers - to suck it up while also requiring them to fund the bail out of the banks to lent them the money and the developers who speculated.


  • Registered Users Posts: 1,246 ✭✭✭daltonmd


    I've yet to be shown examples where lenders could not have been reasonably expected to make their payments based on the information they supplied to the banks at the time of the loan.

    Lots of talk about it, but no examples. So this is a purely rhetorical point until such examples are forthcoming.


    I simply don't get this monty - according to you the banks acted based on the information that they got from the borrower and this is fine - yet the borrower who took out the loan based on that same information should have foreseen his job loss or his pay cut?

    Again, it's up to the lender ar much as the borrower to see if those figures would survive an extensive stress test - if you believe that no-one force people to borrow - well by the same token no-one forced the banks to lend.


    I'm not going to get railroaded with this - there's plenty of information out there if you care to look - staff were paid commission and performance related bonuses.

    How does a bank pay commission to staff? Through the "sales" of products, a mortgage is a product - pretty simple stuff really.


  • Closed Accounts Posts: 12,455 ✭✭✭✭Monty Burnz


    daltonmd wrote: »
    I simply don't get this monty - according to you the banks acted based on the information that they got from the borrower and this is fine - yet the borrower who took out the loan based on that same information should have foreseen his job loss or his pay cut?
    Nope. But if you do get a pay cut or lose your job, you don't get a free house. As the borrower, you are the one sticking your head into the crocodile's mouth. You don't expect to have it taken off, but should always know it is a risk.

    And I think you'll find I've addressed the awesome power of salespeople a short time ago.


  • Moderators, Society & Culture Moderators Posts: 19,219 Mod ✭✭✭✭Bannasidhe


    Encouraged? As opposed to 'forced'?

    Maybe it's just me, but salespeople routinely encourage me to buy stuff I know I don't need and possibly can't afford. So I don't buy it.

    A salesman will always sell you as much of their product as you let them.

    True - but should a bank manger be a salesman or should he/she be a bank manager?


  • Registered Users Posts: 16,421 ✭✭✭✭astrofool


    We need to have jingle mail here, it will force the banks to value an asset as security properly.


  • Closed Accounts Posts: 12,455 ✭✭✭✭Monty Burnz


    Bannasidhe wrote: »
    True - but should a bank manger be a salesman or should he/she be a bank manager?
    That depends I suppose - is a bank a business or a public service? Is the bank accountable to customers or shareholders?


  • Registered Users Posts: 1,246 ✭✭✭daltonmd


    Nope. But if you do get a pay cut or lose your job, you don't get a free house. As the borrower, you are the one sticking your head into the crocodile's mouth. You don't expect to have it taken off, but should always know it is a risk.

    And I think you'll find I've addressed the awesome power of salespeople a short time ago.


    And the same should apply to the bank - they have to have some responsibilty - or do you disagree? And I dealt with the "free house" mantra many threads ago.

    Awesome power of salespeople - yes, they work hard when they're paid a nice bonus or commission for the amount of products they sell - now what if there was a caveat on the bonus - "This bonus is refundable, with interest, if the customer fails to repay the loan" ?


  • Closed Accounts Posts: 12,455 ✭✭✭✭Monty Burnz


    astrofool wrote: »
    We need to have jingle mail here, it will force the banks to value an asset as security properly.
    I doubt it. All this will be forgotten in 25 years and we'll be doing it all over again - unless we get some sort of awful racial memory of the perils of asset bubbles and debt.

    I was wary of this bubble because I remembered the bust in the UK in the 80s when I was a child. I've never quite understood how so many of my peers seemed to forget it.


  • Registered Users Posts: 1,246 ✭✭✭daltonmd


    Bannasidhe wrote: »
    True - but should a bank manger be a salesman or should he/she be a bank manager?

    Well what was the product in this case? The money or the property? If it's the money then due diligence should have been taken and if it's the house then they should take it back. :)


  • Closed Accounts Posts: 12,455 ✭✭✭✭Monty Burnz


    daltonmd wrote: »
    And the same should apply to the bank - they have to have some responsibilty - or do you disagree? And I dealt with the "free house" mantra many threads ago.
    They do have responsibility. And they have taken that responsibility. This is what people don't seem to realise or accept - the owners of the banks have been completely wiped out (of course, the owners include anyone with an Irish pension, but that's another issue again).
    daltonmd wrote: »
    Awesome power of salespeople - yes, they work hard when they're paid a nice bonus or commission for the amount of products they sell - now what if there was a caveat on the bonus - "This bonus is refundable, with interest, if the customer fails to repay the loan" ?
    I agree entirely that the remuneration and incentivisation of bank staff at every level was a major contributor to the bubble. There have been no moves to address this as far as I'm aware.


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  • Registered Users Posts: 1,246 ✭✭✭daltonmd


    I doubt it. All this will be forgotten in 25 years and we'll be doing it all over again - unless we get some sort of awful racial memory of the perils of asset bubbles and debt.

    I was wary of this bubble because I remembered the bust in the UK in the 80s when I was a child. I've never quite understood how so many of my peers seemed to forget it.

    It's cyclical - but I think the difference in Ireland (as far as I know) is the behaviour of the banks. Did banks in the UK behave like this in the 80's? Because I am pretty sure we would have heard something.

    We could have survived a global recession, we could have survived a house crash, we could have survived a banking crisis - but all three together?

    The perfect storm....


  • Closed Accounts Posts: 12,455 ✭✭✭✭Monty Burnz


    daltonmd wrote: »
    Did banks in the UK behave like this in the 80's?
    I honestly don't know.


  • Moderators, Society & Culture Moderators Posts: 19,219 Mod ✭✭✭✭Bannasidhe


    I doubt it. All this will be forgotten in 25 years and we'll be doing it all over again - unless we get some sort of awful racial memory of the perils of asset bubbles and debt.

    I was wary of this bubble because I remembered the bust in the UK in the 80s when I was a child. I've never quite understood how so many of my peers seemed to forget it.

    I was an adult living in London during their property bubble and burst. I never forgot it. ;)


  • Moderators, Society & Culture Moderators Posts: 32,278 Mod ✭✭✭✭The_Conductor


    RoverZT wrote: »
    SmMcCarrick.

    Topic is about a nurse that got debt forgiveness, her salary pays for the debt.

    It's relevant

    Regards.

    RoverZT

    The topic is about a bank customer, who happens to be a nurse, who is the first person to be granted a mortgage write-down after surrendering her property and its subsequent sale for less than the principle outstanding on it.

    If you want to turn it into yet another public sector bashing thread- it is not appropriate for this forum, you have been warned, and you will be banned. Quite simple really.

    If you want to discuss Ms. White's employment status- do it elsewhere, or face the consequences.

    The end.


  • Moderators, Society & Culture Moderators Posts: 19,219 Mod ✭✭✭✭Bannasidhe


    I honestly don't know.

    They did.


  • Registered Users Posts: 1,246 ✭✭✭daltonmd


    They do have responsibility. And they have taken that responsibility. This is what people don't seem to realise or accept - the owners of the banks have been completely wiped out (of course, the owners include anyone with an Irish pension, but that's another issue again).

    I agree entirely that the remuneration and incentivisation of bank staff at every level was a major contributor to the bubble. There have been no moves to address this as far as I'm aware.


    I'm sorry, but in the case of shareholders they took a gamble, they were the risk takers, this was part of the frenzy - keep house prices rising, bank profits keep rising, share prices rise, shareholders make money, shareholders happy - the value of your investment etc...

    People bought homes. Not investment products (Am specific here with homeowners, not BTL)


  • Closed Accounts Posts: 12,455 ✭✭✭✭Monty Burnz


    daltonmd wrote: »
    I'm sorry, but in the case of shareholders they took a gamble, they were the risk takers, this was part of the frenzy - keep house prices rising, bank profits keep rising, share prices rise, shareholders make money, shareholders happy - the value of your investment etc...
    ...and they lost it all. Well, I wouldn't characterise it as a gamble, more as an investment. As I said, the biggest shareholders would have been pension funds - not known for their high-rolling and high appetite for risk.
    daltonmd wrote: »
    People bought homes. Not investment products (Am specific here with homeowners, not BTL)
    They bought an asset with borrowed money. Regardless of the future value of the asset, they still owe the money and must pay it back if they can.


  • Posts: 23,339 ✭✭✭✭[Deleted User]


    It seems she was earning €70k/annum when she borrowed the €245k, seems quite reasonable a transaction to be fair. Hardly the banks fault she left the job and had a hankering to live in the West of Ireland.


  • Registered Users Posts: 4,466 ✭✭✭Snakeblood


    daltonmd wrote: »

    People bought homes. Not investment products (Am specific here with homeowners, not BTL)

    Homes are investment products. If they weren't, banks wouldn't be lending people money to get them. They're not lending people money to buy them now because they're not good investments.


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  • Banned (with Prison Access) Posts: 2,202 ✭✭✭Rabidlamb


    Last week I was shocked to learn they are still assessing full joint income for mortgage applications.
    I thought they'd rowed back to 3+1 or 4+1 at a push, nope.

    http://www.independent.ie/business/personal-finance/property-mortgages/prudent-aib-cuts-amount-it-lends-to-home-buyers-by-10pc-3083681.html
    Broker Karl Deeter, of Irish Mortgage Brokers, said that a couple with two incomes of €35,000 each, taking out a 30-year mortgage, would have been approved for €348,000 under the old rules.

    But the new stress-test rules mean that the couple would now be approved for €36,000 less, or €312,000 in total.

    The same couple would end up with more from other lenders.

    KBC Bank would approve the couple for €324,000, if the buyers have a 20pc deposit.

    And ICS Building Society would approve the buyers for €350,000, Mr Deeter said.

    So as long as this generation of home-buyers don't get pregnant, or lose their jobs or split up, everything will be fine.
    That last bunch were a right unreliable shower.


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