Local authorities to offer low paid €300k mortgages

utick

so we have a economic crisis caused by people owing more money then they can afford, the governments solution, seems they think will be solved by allowing more people to take out loans they cant afford

http://www.examiner.ie/irishexaminer/pages/story.aspx-qqqg=ireland-qqqm=ireland-qqqa=ireland-qqqid=72618-qqqx=1.asp

i wish governments would just stay out of these situations and let the markets fix themselves

BenjAii

utick wrote: »

i wish governments would just stay out of these situations and let the markets fix themselves

Perhaps one of the lessons of current events is that markets are not capable of fixing themselves. Left completely to their own devices it appears they have in built destructive tendency that needs regulation and manipulation.

utick

BenjAii wrote: »

Perhaps one of the lessons of current events is that markets are not capable of fixing themselves. Left completely to their own devices it appears they have in built destructive tendency that needs regulation and manipulation.

yes but throwing more money to people who cant afford it is not the type of manipulation thats gonna fix anything

would this fit the criteria of sub prime lending?

10goto20

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

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

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

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

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

Économiste Monétaire

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.

abitlonely

While I would like to think that maybe they'd lend me a few quid in a couple of years, I am uncomfortable about any measures that put upwards pressure
on house prices.

BenjAii

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.

mikemac

BenjAii wrote: »

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.

+1
Instead of spending tax money to help people to buy expensive houses we can raise money and help people to buy reasonably priced houses at the same time

Section 50 for student accomadation was possibly a good idea. I'd love to know what Section 23 estates in rural areas are about? Shut that down now if it's not done already.

Not sure about holiday homes but the BTL crowd better be tax compliant. I know the revenue are very competant but the BTL sector is awash with tax fraud.

Finally a renter gets a misreable €350-€400 in rent relief but a mortage payer gets thousands and thousands. Is that realy neccesary?

BenjAii

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.

mikemac

Huh, where did Post 12 go?
I swear I saw it

Économiste Monétaire

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.

10goto20

The world has gone mad with all the negativity. The government is helping those who want to buy a home. If you don't like it, don't use it!

eamonnm79

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

UCD_Econ wrote: »

The government is not a mechanism to give loans to people for houses.

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.

gurramok

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.

derry

Prices in ROI are off the wall compared tio the rest of the EU who also earn Euros

E300,000 euro house in ROI would often be sub 150K in other countries even as low as 30K in some countries

The idea to loan to low income has worked before in the good old bad days when house prices were something normal and increasing at normal 5% or 10% rates

The bottom falling out of the banking world shows that maybe houses in the USA were overvaleued to the tune of 1000%

I suspect we can see falls of 60% innthe suburbs of Dublin like Balbrigan or Greystones

It might hold at 30% drops in prices central Dublin central Cork with some regions of the bigger cities as low as 5%

Some stickville places could see drops of 80%

Thats my best guess

But if the world banking system decides to completly melt down all bets are off everything might fall to 10% of its value or less

In ROI we have lousy protection for flat and house renters compared to germany or France etc

Therefore we are forced by the regime in power to buy houses as they sold thier sols to the land bankers and housing developers

We do have aright to proper laws to protect house and flat renters

We do have a right not to be fleeced with Government regime awash in brown Mana from heaven who ensure land bankers can fleece us if we are forced to buy

We do have rights lots of them but we need to boot the money grabing feckers who run the con game out of power in the next elections

Derry

utyh2ikcq9z76b

Theirs a protest being organised for this property developer bailout

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

Duckjob

utick wrote: »

so we have a economic crisis caused by people owing more money then they can afford, the governments solution, seems they think will be solved by allowing more people to take out loans they cant afford

http://www.examiner.ie/irishexaminer/pages/story.aspx-qqqg=ireland-qqqm=ireland-qqqa=ireland-qqqid=72618-qqqx=1.asp

i wish governments would just stay out of these situations and let the markets fix themselves

Words cannot describe how disgusted I feel with those clowns we call government ministers.

Gormless should be fired for gross incompetence. A five year old could propose sounder economic policy than this.

20goto10

gurramok wrote: »

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.

Why would they give a mortgage to someone who cannot afford the repayments? I mean now, considering everything thats happened? I don't think Irish institutions were ever just dishing out the mortgages willy nilly. I think you're taking the American situation and applying it to Ireland.

I know all the figures and housing prices needed a correction and still have a bit to go. But the further they fall, the more people now find themselves in the situation of being able to afford. For the few that want to move this will help them get a mortgage. Thats all I see here. I see where you're coming from and people can be forgiven for jumping on the band wagon with the negativity.

But if you're not happy, don't take the finance. Whether someone does and that affects the price for you, well thats not really a very sound argument you have there. If I may paraphrase, you're arguing that this has the potential of salvaging the housing sector and you don't want that :rolleyes:

stepbar

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

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

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

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

Wow. I can believe that someone actually sat down and wrote such crap. Sounds like you are looking to get on the ladder and have been refused a mortgage yourself. I'm glad our banks are behaving responsibility and not giving mortgages out willy nilly. Our friends in the US are discovering this on a daily basis. There are a lot of untrustworthy people our there as well who I would lend a euro to, never mind 300k.

So what if 1-2% forclose?

So what? :rolleyes: Every bad loan make mine and yours that little bit more expensive. So yeah it's a big deal.

20goto10

20goto10 wrote: »

Why would they give a mortgage to someone who cannot afford the repayments? I mean now, considering everything thats happened? I don't think Irish institutions were ever just dishing out the mortgages willy nilly. I think you're taking the American situation and applying it to Ireland.

I know all the figures and housing prices needed a correction and still have a bit to go. But the further they fall, the more people now find themselves in the situation of being able to afford. For the few that want to move this will help them get a mortgage. Thats all I see here. I see where you're coming from and people can be forgiven for jumping on the band wagon with the negativity.

But if you're not happy, don't take the finance. Whether someone does and that affects the price for you, well thats not really a very sound argument you have there. If I may paraphrase, you're arguing that this has the potential of salvaging the housing sector and you don't want that :rolleyes:

"salvaging the housing sector" ?????
Its salvaging itself!!!!!!!!
Prices are coming down, this is a good thing, its great. Let them come down without spending tax payers money giving out loans to help keep them up.

This is a bail out of developers pure and simply

meditraitor

UCD_Econ wrote: »

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.


.

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

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

Économiste Monétaire

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.

This is the perfect opportunity to scrap affordable housing altogether and release money for spending elsewhere. There will be no need for it at all when the prices hit the floor.

Any attempt to increase this floor with intervention would do damage to our competitiveness, our future pensions, spending on things like infrastructure and hospitals. And we will have nothing to show for it.:mad:

asdasd

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.