Local authorities to offer low paid €300k mortgages

Who says they're going to lend money to people who can't afford it? Get off the band wagon. The credit crunch has meant people who can afford it cannot get a mortgage.

meditraitor wrote:

This is a great idea. It gives hope to a big section of our tax paying residents who are not earning enough to buy a house at the moment because the banks deam them unworthy.

And being a tax payer entitles you to a loan how exactly? Banks are not obliged to loan to you.

A couple earning 55-60k with about 10-15 grand in the bank would be laughed out of the office if they applied for a 295k mortgage but does that mean they cannot afford the repayments????

Banks assess risk and allocate capital. That is the purpose of the bank as an intermediary. If they deem you to not be eligible for a loan, tough.

A couple with one earner making 40k and 2 kids wouldnt even get 200k. What do they do?????

Rent, buy somewhere lower on their list of preferences, wait.

No, it means the fucking banks are cnuts and only look after themselves.

Again, banks are not obliged to loan money to anyone. Banks have shareholders and must consider that when evaluating risk. Banks are not the public service. Self interest is an axiom of the market, I’m not saying it’s always efficient, though.

The government is not a business and is supposed to what it can for the people.

They’re going to draw people into a property market that is still correcting to reasonable levels. I don’t know where you get the idea that the government is obliged to lend to citizens.

IE Making it easier for low to middle income families to own their own home.

People don’t have a human right to own a home.

So what if 1-2% forclose? This is the first decent attempt Ive seen by the present government to help low - middle income families and I believe it would add some confidence to the ecnomy as there are a hell of a lot of us around.
And we'd be delighted to be buying our own houses instead of paying 1300 or 1400 a month renting a crap apartment of some greedy money grabing leech who was lucky enough to buy early in the economical boom.

Stick it to the man, dude.

Mediatraitor, i'm in sympathy with your views that it the governments role to champion the peoples interest, but i'm not sure helping them buy over-inflated property is the way to go about it.

Why have we let it come to pass that property has become a get rich quick scheme ? It just leaves ordinary people, who aren't in on the boom (i.e the next generation), in financial servitude to a vast debt.

Given that it should be the governments role to help everyone own property, why didn't we go the route of using tax to make it very unattractive to own houses purely for investment/speculation - then we wouldn't have had the price inflation so ordinary people would have a chance of owning lower priced homes without the government loaning them money.

Actually while we are on the topic of the government acting in the interests of ordinary people rather than property speculators by propping up the market, there are many reasonable measures it could take.

How about granting planning permission to land that can only be used for houses sold at cost + reasonable profit (less than 10% ROI).

Would be very easy to do. Why are we all stuck with the myopic view that we have to pay extortionate prices to own a home.

You did indeed see a post 12, it was probably deleted by the poster. I still have it quoted on my screen when I was away from the computer so I'll reply to it anyway.

meditraitor wrote:

Exactley, so why not make it easier for low-middle class income residents access the property market? Because some plonker in a bank with his "how much can I fleece this gentleman for" calculator decides that they cannot afford it?

Because you don’t have a right to a mortgage. The government has no place in providing mortgages. The GSEs in America are what you’re arguing for, quite ironic really, considering you’re calling everyone in the system idiots (different word to what you used below). You seem to think that bank’s are required to lend money to everyone because they deem themselves eligible.

Tough? thats the attitude! Im glad I dont have to deal with people like you everyday

Life isn’t fair. If a bank won’t give you a loan, moaning and displaying ignorance of the current economic climate won’t help. You obviously are dealing with people like me if you’re continually being refused a loan.

I do rent, 1400 a month and comfortable paying it. Nice car which I own and 3 holidays a year. How can a bank decide that I cannot afford to pay an extra 3-5 hundred a month to pay a mortgage when it is quite obvious to me and mine that we can.And why should they be the only ones to decide this?

Who do you think should be the ones to decide the allocation of bank’s capital? You? I don’t really care what your personal circumstances are, if you were refused a loan then c’est la vie. Keep trying and, honestly, good luck.

The government has shareholders and they need to be happy. Self interest is the axiom of the selfish

Everyone displays self-interest in every action they take. Without exception, there are no self-less acts. Do you own a specified share in the government? Corporate responsibilities require banks to be prudent in times of financial turbulence. Your comment is akin to the type of thing I read in After Hours.

Thats my point, In a years time Id like to be able to go to the corperation or whoever and get a mortgage when I believe house prices have become reasonable. I dont need to suffer because some gob**** analyst believes that severe restrictions should be placed on loans because his brother gobshits f ed up on a different continent.

Yes, everyone is an idiot but you. What a revelation, what an outlook. There’s too much idiocy being displayed there to even know where to begin. You’re not ‘suffering’; you were refused a loan, not tortured.

The government is a social mechanism to provide comfort and security for its citizens, if that means sidetracking private enterprise to give this comfort then so be it.

The government is not a mechanism to give loans to people for houses. The government has a sole monopoly on the use of force. The government protects the vulnerable in society with social housing – from what you’ve posted about your personal financial position then you don’t fall into this bracket.

Fixed that for you because you just couldnt come out and say it, no gahones

That wasn’t what I said, thanks for the display of vulgarity – it really adds weight to your argument.

In my opinion the government are attempting to do two things with this move.
1 They are trying to encourage banks to start lending again by giving a government security on part of a mortgage. The banks have stopped even lending to each other. However the government are also gambling that the housing bubble has been burst and that we are at the bottom. Many economists still think that prices need to reduce by another 40% till they are at the bottom. If the economists are correct then defaults could be a lot higher than 1-2% and the Government(irish tax payers) will have to repay the banks.
2 They are bailing out developers who paid too much for land banks.
Did anyone else think Cowan was trying to slightly distance himself from this move? 'Taoiseach Brian Cowen insisted the Government would not intervene to “artificially inflate” house prices. It would use Mr Gormley’s proposals instead.'

IMHO both measures are reinflating(puting more air in the bubble) an already inflated overvalued housing market.
*The comments above are the opinion of a person with very little formal monetary studies(I do have a general business degree). However they do not have any vested interests either.

10goto20 wrote: »

But they always have. This is not new. All they've done is increase the amount from 185K to 300K. They're not meddling in the market, they're just helping people like the good socialists they are.

No they are not. They are hoping to keep prices up to an artificial level to 'help' people take on more debt than they can afford to.
Taxpayers are paying for this money which alot of it ends up into the pocket of the developers.
Best thing ifor the govt is leave the housing market alone, cheaper prices benefits those who cannot afford to buy now.

Question is, have they even costed this because tens of thousands if not hundreds of thousands in this country cannot afford to buy and they will apply in the con thats its helping them when its not.

Theirs a protest being organised for this property developer bailout

http://www.thepropertypin.com/viewtopic.php?f=4&t=13513

meditraitor wrote: »

I deleted the post after I realised this was the economics forum.

How can someone not know what forum they're posting in? It shows it quite clearly on the screen.

I have a long held view that economists are nothing more than modern snake oil salemen and on a level with Psycics and clairvoyants so I deleted it as soon as realised my err. Im glad you decided to scroll back and take a shot a me for an opinion that is maybe not as educated as your own because you only really enhanced my opinion of economists and wannabe's like yourself.

If you're going to post an opinion then expect it to be critiqued - the purpose of the forum. 'I'm a victim, I'm a victim - evil economists' :rolleyes:

Your opinion of economists is based on sound knowledge of the field so I have taken that into account and given it due notice.

Im an after hours type guy so along I go back to the unwashed masses and leave you and yours to look into your crystal balls.

Mark

Buh bye. My crystal ball tells me... I will have Chinese for dinner.

A couple earning 55-60k with about 10-15 grand in the bank would be laughed out of the office if they applied for a 295k mortgage but does that mean they cannot afford the repayments????

Well then they should wait. 60K is more than the average household income ( which is in for a fall in the next fews years anyway) and close to twice the median industrial wage. Eventually median house prices will fall to the level that people on 60K can easily afford. Think about it? If banks dont lend to middle income earners then what is going to hold the market up?

So wait. Go into a bank in two years and get that house for 180-200K ( if that).

The logic on this is simple. This loan is like giving money free, or cheap. If the government were to give everybody 100K to buy a house then all prices across the board would increase by 100K ( by the way in that scenario were prices not falling the original couple would still need a loan of 295K as the house would now cost 395K).

Think about what is happening here. It is a transfer of money from taxpayer to sellers and developers. If you want a house, and cant get credit, wait until houses fall in price until you they fall within your dredit range; it is precisely because credit is tough that this has to happen.

The government scheme is a scam.