[Mr. Presentable]

And of course she doesn't have a house, nor the likelihood to buy one for the next who knows how long.

[Spiritofthekop]

As long as the keys to the house are handed back & the house is sold on in the current market at value for money price to the public & the person's who signed for the big loan's credit rating is stored so any future mortgage application be banned for 10/15 years & they must go through a severe stress test & a block on any future loans. I've no problem with it.

[Rojomcdojo]

Originally Posted by Mr. Presentable

And of course she doesn't have a house, nor the likelihood to buy one for the next who knows how long.

And we all know that not owning a house can be fatal.

[Gurgle]

Something smells a bit off here:

The deal means that instead of repaying the outstanding €170,000 owed, she will pay just €18,000 at a rate of €250 a month for six years.

Bank of Ireland subsidiary ICS took legal action against Ms White in 2010 relating to the €245,000 it lent her to buy the house in Coolock, Dublin.

If she borrowed €245k and never made a repayment, then the house was sold for €75k? That's pretty damn cheap, even for Coolock in a recession.

At auction?
Private sale?
To the bank manager's son / brother / mistress?

Or possibly the €170k 'shortfall' included penalties and (punitive) interest.

I'd like to see the real figures, i.e. what did she pay for the house, what did she repay off her mortgage and what did they actually sell the house for?

Then the €18k settlement could be considered in proper context.

[Forest Demon]

I am so sick of the government interfering in the property market. With the transfer of tracker mortgages to Anglo now and NAMA controlling the market and now debt forgiveness.

Wait and see that the only people that can grantee future income and get a right down will be public sector workers. Same situation as getting a mortgage at the moment.

Lets see how the private sector and self employed get on.

Are we ever going to know the true value of property in Ireland and will a home ever be an obtainable purchase for the private sector tax payer?

If houses where allowed to hit their true value then we it might be an incentive for low to middle earners to take a job and build a decent credit rating.

I am sick to death of listening to this rubbish about keeping people in their homes when its really about keeping the debt with them and off the governments books.

What about people who have no hope of getting a job or home due to the crap economy caused by reckless lending AND BORROWING?

[Monty Burnz]

Originally Posted by bobbysands81

Great news, delighted for her. Hopefully many similar stories to come as it seems that mortgage holders are taking the brunt of very poor decisions made by management within banks (For the record I think shareholders and employees also carry a large burden whilst the actual bank is getting off scot free).

I'd suggest the banks' owners took the brunt of the poor decisions by their management teams, but to be fair they were responsible for the management they chose...

[Monty Burnz]

Originally Posted by bobbysands81

Just remember that banks will turn profitable again one day and all the losses of the last few years can be written off against future profits so they'll make back everything they've lost.

Not really. Work out the net present value of the future (risky, uncertain) profits of the banks and set it against the recapitalisation cost - I think you'll find the state ends up as a loser. And if you are thinking of tax write-offs - where do you think that tax would be going were it not written off?

[Thedogsgone]

If I could get a 90% write down and the only punishment is a ban on borrowing for 6 years I would bite the banks hand off...

I'm struggling but have always managed the mortgage but I am giving serious consideration to stopping payments altogether after this precedent.

[Monty Burnz]

Originally Posted by Solair

The problem as I see it is that the banks actively sold and missold these mortgages to people who anyone with a basic maths ability should have been able to see could not pay them back.

How were they mis-sold exactly? You hear this a lot, but I've never heard anyone actually back it up.

Perhaps in future people should have to do a simple exam on personal finance and compound interest before they are entitled to borrow?

[Rabidlamb]

Originally Posted by Thedogsgone

If I could get a 90% write down and the only punishment is a ban on borrowing for 6 years I would bite the banks hand off...

I'm struggling but have always managed the mortgage but I am giving serious consideration to stopping payments altogether after this precedent.

Therein lies the rub.

[Forest Demon]

Originally Posted by Thedogsgone

If I could get a 90% write down and the only punishment is a ban on borrowing for 6 years I would bite the banks hand off...

I'm struggling but have always managed the mortgage but I am giving serious consideration to stopping payments altogether after this precedent.

But the government want to help you stay in your home

[Gurgle]

Originally Posted by Forest Demon

What about people who have no hope of getting a job or home

'They' should be training at something that will give them a hope of getting a job.
There really isn't much benefit to spending their days on boards whinging about the public sector. It doesn't add anything to the CV.

[Solair]

Originally Posted by Monty Burnz

How were they mis-sold exactly? You here this a lot, but I've never heard anyone actually back it up.

Perhaps in future people should have to do a simple exam on personal finance and compound interest before they are entitled to borrow?

Well, assuming that the person coming into a bank did not lie and inflate their income, and the bank then lent them a mortgage which was too big for them to reasonably pay back, then the bank missold the mortgage.

In any transaction like that, you have to assume that a normal person is absolutely not a financial expert. The bank however is supposed to be!

If the bank was not doing its job, i.e. making sure that the mortgage they were selling was sustainable, then the majority of the fault rests with the bank, not the consumer.

Business lending to property developers is another story entirely, as you would expect a property developer, particularly the larger ones, to have some business sense and understanding of the market.

The problem,as I see it, is that there was a close relationship in Ireland between the banks, the major developers and the policy makers.

So, the whole thing turned into a pyramid scheme where by the banks were financing the developments based on notional and unrealistic bubble selling prices which they were creating themselves by relaxing lending rules to consumers.

Meanwhile, the state was turning a blind eye to all this as it was getting huge tax revenues on property transactions - all of which was borrowed money!

So basically everything comes back to the banks being utterly reckless with what they were doing and creating a totally unsustainable property market based on cheap money borrowed on the international financial markets.

Even the IMF agrees that a hell of a lot of this will have to be written off, both at the consumer end of the market and also the development loans. They were bad loans, end of story.

The problem is that the ECB & EU seem to be determined to ensure that the banks that idiotically lent to our idiotic banks don't have to write anything off even if it means driving the Irish state into poverty.

Also, the Fiscal Compact Treaty will have zero impact on the Irish situation (and probably not on the Spanish situation either) as the problems there were not the same as Greece, i.e. not created by lavish state spending. They were created by completely out of control bank lending to the property sector which has now landed in the lap of the the Irish and Spanish tax payers.

Austerity budgets are just basically just diverting more and more resources into paying down bad loans made by idiotic, now nationalised, banks.

We absolutely need a huge write down of debt at the banks, and that has to be passed onto the consumers who were missold mortgages and more importantly to the tax payer.

Crippling the state and crippling mortgage holders who were basically conned into biting off more than they can chew, might satisfy some kind of Victorian / German fetish for moral rectitude and moral hazard prevention, but it will drive this economy back to the 19th century, never mind the 1950s.

They need to let the markets take their course. As it stands we are just propping up a totally unsustainable model by state interference.

Banks would normally have to write-off debts like this and they would probably fold and go bankrupt too themselves.

We are in a situation where the ECB/EU and Irish Government are driving forward on this model that is fixing absolutely nothing and is just pouring vast amounts of tax payers money into rescuing banks that are so broken that they shouldn't be rescued.

The system needs to take its losses!

Also, I think this is grossly unfair on banks that were prudent lenders. There are banks in the Eurozone and the EU which are quite well run and did not engage in this kind of nonsense. Why are they being denied market share ? If Bank of Ireland, AIB, Anglo, Dexia, RBS, Hypo Real Estate, Soc Gen, Credit Agricole or whoever made bad decisions, then they should suffer the consequences of those and banks that made correct decisions should prosper and take their market share.

What we are witnessing is absolutely VAST state aid to badly run companies.

We seem to be throwing away the whole idea of a single EU market when it comes to banking.

Also, this isn't capitalism and it isn't socialism either. I'm not quite sure what it is, but it's destroying not only Ireland but Europe too!

[Monty Burnz]

Originally Posted by Solair

Well, assuming that the person coming into a bank did not lie and inflate their income, and the bank then lent them a mortgage which was too big for them to reasonably pay back, then the bank missold the mortgage.

Because the bank has a crystal ball that can forecast job losses? Or health problems?

Originally Posted by Solair

We absolutely need a huge write down of debt at the banks, and that has to be passed onto the consumers who were missold mortgages and more importantly to the tax payer.

I have a sneaking suspicion that you haven't thought this through properly. Who bears the cost of the debt write-downs?

[Snakeblood]

Originally Posted by Solair

We absolutely need a huge write down of debt at the banks, and that has to be passed onto the consumers who were missold mortgages and more importantly to the tax payer.

The tax payer is the bank. How can the tax payer write down a debt to the tax payer?