OK the banks screwed a lot of people but

Fighting Irish

you and you alone should be responsible for your finances

Example:
Some chick on newstalk this morning was giving out about banks because she re-mortgaged her house a few years back and now her and the husband have lost their jobs and the bank wants to take the house in 6 months or something and its the banks fault?

Sand

Did she or her husband lose her job because they were incompetent or otherwise bad at their jobs?

Darragh29

Fighting Irish wrote: »

you and you alone should be responsible for your finances

Example:
Some chick on newstalk this morning was giving out about banks because she re-mortgaged her house a few years back and now her and the husband have lost their jobs and the bank wants to take the house in 6 months or something and its the banks fault?

Yeah, the logical conclusion of your argument is that we will should all live in trailer parks or campsites, except obviously folks like yourself who have parents who can throw you the deposit off the end of their hoops and throw more of their retirement cash at you when you get into difficulty paying the mortgage. This is the problem with Ireland, people like yourself who have been inbred with generational wealth who have a superior attitude with regard to the position of others in society...

Look at the stupidity of your argument. A woman and her husband lose their jobs. If they never remortgaged and bought a 1 bed apartment and still lived there, they would have the same problem with the bank. CTFOUGB.

galwaydude

Here here darragh. Very insensitive of the OP. Yes we are responsible for our finances but what happens when an unforseen event happens like loosing your job happens. Have some cop on.

Darragh29

galwaydude wrote: »

Here here darragh. Very insensitive of the OP. Yes we are responsible for our finances but what happens when an unforseen event happens like loosing your job happens. Have some cop on.

Of course it is insensitive. It has to be because the argument being made cannot stand up. Did the subject of this discussion, the couple with a house that remortgaged, be blamed for the change of circumstances that led to them defaulting??? No they can't, no matter how you window dress the argument. So if we agree with the OP, none of us should invest in more than a matress, for fear that circumstances may change!!!

It's all well and grand being smug when "mummy and daddy" are paying the bills and you give in a protected little bubble where you don't have to take on the risk of investing in more than a matress and you can have the luxury of starting threads as stupid, wooded headed and irrational as this one.

According to the logic extended by the OP, we should all buy tents and go live up in the Dublin mountains, because we should never dream of exposing ourselves to risk. That's a grand opinion to have when you're down in the UCD/TCD canteen where mammy and daddy are paying for your lunch, but fast forward a few years when the OP graduates and can't get a job, (unless of course some of his financially inbred relatives can fast track him into a job, which I suspect is the case here), we can expect a different, more humble attitude to emerge.

fergalr

While I wouldn't agree fully with the OP, and while I have the deepest sympathies for anyone struggling under the weight of debt, I do think there's merit to some of the sentiment in the OPs post.

Many people in Ireland clearly got into more debt than the should have. Getting a mortgage is to some extent making a bet on the future value of the property you buy, and on your future earnings.

If you take large mortgage and keep your job, and houses go up, well, you make a lot more money than you would have if you had conservatively rented until you could afford to buy, always saving for a rainy day.

Taking out a large mortgage is a gamble on your future earning power, and the future value of your property. A lot of people took high risk gambles, and these have not worked out for them. This is sad, but we must be very careful helping these people out financially.


We would not be fast to help out someone that lost money on the stock market, or lost money on the horses.

The people that took out big mortgages, and took a high risk, increased the property prices in the market for everyone else. Fundamentally, they took a gamble on continued increases in house prices.

If house prices had continued to increase, and the economy remained bouyant, would we compensate those who were more conservative, and did not make money by taking out a big loan to put into a property investment (ie, a mortgage?). Would we compensate those who didn't buy into the increasing property market, and who instead saved up in case they lost their jobs?

No, we probably wouldn't.
And similarly, we must be very careful compensating those who lost money when the market went down.

Now, the government and banks did not encourage responsible borrowing to buy property. They were irresponsible.

But this whole monetary system we are in only works, to some extent, if you are responsible for your own financial affairs. Otherwise, you could just make lots of gambles, profit when they went your way, and claim ignorance when they didn't.

I have huge sympathy for anyone caught up in the falling property market, but it's very hard to know how much help to give them.
But borrowing money is always a risk. And there wasn't much sympathy going around in 2003 for those that hadn't bought property a few years earlier.
Borrowing money is always a risk.

Yeah, the logical conclusion of your argument is that we will should all live in trailer parks or campsites, except obviously folks like yourself who have parents who can throw you the deposit off the end of their hoops and throw more of their retirement cash at you when you get into difficulty paying the mortgage

Darragh, I don't think that's a logical conclusion at all. The OP just says people should be responsible for their own finances. Clearly, it's easy to look back and see that people were borrowing more than they should have. And equally, it was hard to see at the time. But that doesn't mean the only other option was to get a deposit from parents. I know people who didn't buy because they were worried that if something bad happened they wouldn't have enough to survive. They didn't have parents rich enough to pay for them. They continued to save, and rent. And all through 2000-2004 they lost out on the year-on-year gains property made - if they had taken a 100% mortgage they'd have gotten those gains.
It's quite a complex scenario, but it's not fair to say the only choices were:
1. Take huge mortgage with huge risk 2. Get money from parents. 3. Buy caravan.
There was also:
4. Rent, scrimping and saving until you can afford a smaller mortgage with less risk.

Look at the stupidity of your argument. A woman and her husband lose their jobs. If they never remortgaged and bought a 1 bed apartment and still lived there, they would have the same problem with the bank. CTFOUGB.

Doesn't remortgaging generally involve taking a loan against your property that's already (at least partly) paid off? So, if you didn't take out this loan, and your house was paid off, you wouldn't be in trouble with the bank?
Of course, I wouldn't want to comment on the details of a particular case, maybe these people had to take out the loan for a medical procedure to save their lives or something, in which case, I completely understand. But if they remortgaged to buy more property, I'd have less sympathy.


I don't know, it's a very complex issue - it's awful to see people getting caught. But at the same time, I see the OPs point, in that people do have to try and be held responsible for their own decisions, otherwise things don't work so well in the system.


I sort of subscribe to the idea that a society has to look after it's less fortunate members though...
As a taxpayer I'd probably support the government helping out the people that got caught, particularly the worse cases where peoples backs are up against the wall (less so the property speculators)... would have to be done very carefully though, so not to bring down the system - that's a question for someone with economical and political knowledge...

sceptre

Darragh29 wrote: »

CTFOUGB.

Note: if I could figure out what the GB part of that meant, there probably would be a warning issued. Civility please.

Darragh29

At the end of the day, we were paying what has turned out to be USELESS CORRUPT C*NT'S millions of Euro, not just within the banking system but also within the financial regulatory system, to manage the system to the betterment of us all and our economy and to protect and provide, in strategic terms for our longer term economic interests.

Guess what we have found out now, these OVERPAID CORRUPT C*NTS were too busy representing their own financial interests, instead of doing what we were paying them millions of Euro a year in salaries to do, which was to manage the wider financial system prudently, to provide for our collective current and future financial security and well being.

You can't turn around and blame Mr. & Mrs. Rsecently Unemployed for this complete disaster, because their employer now cannot get access to working capital from the bank, because the bank is using their Tier 1 capital to service non performining developer loans on behalf of developers who cannot even pay interest on these loans now...

I don't know if you ever had such a thing as a Revenue Audit, but I've had one, and this is where the Revenue Commissioners come into your business and examine every cent coming into and departing from, your business. If they even think that you owe them 20 Euro, you will have a demand served on you and if you don't take it seriously, you will have a sherrif at your door with a summons with a commital order attached to it (that means that are taking you to court with a view to petitoning the judge to have you taken into custody/jailed).

This is the threat that every small business operates under. It's either comply, or else sherrif, summons, committal order, Mountjoy, it is as simple as that, it's a four step process. But if you are f*cking up the country by virture of you being paid millions of Euro a year to manage a bank, but Christ if you decide that a couple of million Euro a year is not enough for you and you have to bring the country to the point of bankrupcy in order for you to satisfy your insatiable greed, then there is no oversight, and not only that, the useless c*nt who was supposed to be overseeing you resigns with a 600K handshake. You can do what you want and nurses and firemen and people on shag all money get hit with a 10% "levy" to bail you out...

I could go on, but I won't. When there is a protest, I'll be there because I've had enough of the corruption and paedophile like honour that I associate with the governance of this country. The people running this country are in my opinion lower than paedophiles and I couldn't give a f*ck if I get banned for saying it, that is how I feel.

fergalr

Darragh29 wrote: »

...

I would point out one thing Darragh, we don't directly pay the banking execs money in order that they be socially responsible - they are most directly responsible to their shareholders, and their motivation will generally be to make as much profit as possible, once they act within the law. We can't really expect them to act against that profit motive, in the public good. Perhaps we did, and perhaps that's why we are disappointed.

This setup can cause problems, certainly, but we shouldn't forget that this is how it is - when they do risky things to try and make extra money, we must remember that their reason to be is pretty much to make as much money as possible - unlike our government and civil service who have an explicit responsibility to the national interest, and whose jobs it is to regulate things.

I agree with a lot of what you say though. It seems to me - as an average joe when it comes to banking matters - that things were not at all as regulated and audited as they should be. And so, I'd need a very persuasive argument to convince me that the relevant elected officials and civil servants were doing their jobs properly, in light of what's come out.

Of course, as the electorate of Ireland, when things aren't run properly, we do share some of the blame - it's our country, and we do have some responsibility for how it's run - mustn't forget that. There did seem to be a lot of greed floating around, not just amount the top level bankers, but in the man on the street too.

Darragh29

fergalr wrote: »

I would point out one thing Darragh, we don't directly pay the banking execs money in order that they be socially responsible - they are most directly responsible to their shareholders, and their motivation will generally be to make as much profit as possible, once they act within the law. We can't really expect them to act against that profit motive, in the public good. Perhaps we did, and perhaps that's why we are disappointed.

HORSE SH*T. We, the people paying the excessive banking charges, the insane mortgages, the stupid interest rates, are the people who have been paying for this, not the shareholders or the TD's. We've also been paying our tax and this pays for the regulators office and his own crazy remuneration package. Everywhere someone has been f*cking up here, we've been paying for it and now that they have f*cked up beyond their own repair, we are paying fro it again in order to clean up the mess these people have made, on top of having paid them hansomly to prevent a mess like this in the first place. Whatever these people have earned over the last 5-10 years, we should be looking for the lot of it back. We pay TD's to legislate to protect the common good, and by Jesus Christ I can tell you that they are pretty damn well efficient at legislating for it when it comes to the taxation of small businesses.

The only reason they don't legislate for it when it comes to big business is because the c*nts are corrupt beyond redemption.

youcrazyjesus!

Fighting Irish wrote: »

you and you alone should be responsible for your finances

Example:
Some chick on newstalk this morning was giving out about banks because she re-mortgaged her house a few years back and now her and the husband have lost their jobs and the bank wants to take the house in 6 months or something and its the banks fault?

Should we let them starve to death too?

fergalr

Darragh29 wrote: »

HORSE SH*T. We, the people paying the excessive banking charges, the insane mortgages, the stupid interest rates, are the people who have been paying for this, not the shareholders or the TD's.

Certainly, the banks make some of their earnings from the members of the public that are their customers (as well as business to business banking, investing, trading etc.). But we don't pay the staff in the bank on the basis of their social responsibility. We, as customers, tend to use whatever banks give us the best deal on the services we want, rather than the bank that we think is behaving the most responsibly. I didn't see any advertisements saying 'The Most Socially Responsible Bank - We Will Only Loan You 60% Of Your Mortgage'
because that's not what we as individual customers were after...


Anyway, the banking executives are most directly hired and fired by the shareholders, as opposed to the customers of the bank. The shareholders generally care most about maximising profit, and that's all I was pointing out.
The responsibility of the management of the bank, generally, is to profit, not the good of society, and we should not be surprised, therefore, that they maximise profit over social well being.
We can be surprised and cross if they break the law, alright.

And we can definitely be surprised and cross if the state regulators, whose job it is to regulate the banks, fail to do their job. But it's not a surprise that the bank management acted to maximise profit, and share price, in the medium/short term.

We've also been paying our tax and this pays for the regulators office and his own crazy remuneration package. Everywhere someone has been f*cking up here, we've been paying for it and now that they have f*cked up beyond their own repair, we are paying to again in order to clean up the mess these people have made, on top of paying them hansomly to prevent a mess like this in the first place. We pay TD's to legislate to protect the common good, and by Jesus Christ I can tell you that they are pretty damn well efficient at legislating for it when it comes to the taxation of small businesses.

The only reason they don't legislate for it when it comes to big business is because the c*nts are corrupt beyond redemption.

I probably wouldn't take as hard a line as this, but certainly, our TDs and government look like they did not fulfill the responsibility placed in them, similarly our banking regulators have a lot to answer for. I think it's very understandable to be angry at the situation.

But as the electorate, we can't just shirk all the blame.
No one was out protesting for tougher lending conditions or pay cuts to slow the economy down when things were going well.

ArseBurger

Darragh29 wrote: »

It's all well and grand being smug when "mummy and daddy" are paying the bills and you give in a protected little bubble where you don't have to take on the risk of investing in more than a matress and you can have the luxury of starting threads as stupid, wooded headed and irrational as this one.

This doesn't really stand up.

People shouldn't get into debt if they cannot afford it and should accept what happens if they default. It is, after all, their debt. Assuming that people who have this opinion are backed by others is a bit narrow minded, in my opinion. Some of us have been able to manage our debts and income so that we can weather a slump or fall with no external leverage.

Once you become an adult, you are responsible for any and all contracts you enter into. Mortgages are a gamble - and if you sign up assuming that there is no chance of losing out, you're a fool.

fergalr

youcrazyjesus! wrote: »

Should we let them starve to death too?

This is not a fair thing to say to the OP. Saying people should be responsible for their finances does not equate to saying they should be let starve.

For my part, I like the idea of a welfare state, where even if you are totally unable to work, or are totally insolvent etc the state provides you with enough resources to get by, to satisfy your basic needs. This isn't at all incompatible with saying that people should be responsible for their finances, in the context that they shouldn't blame the bank when they cannot repay their mortgage.

Like, the banks were bad to give out more than was responsible to do so, definitely, but the people that borrowed from them can't just blame it all on the banks - they are responsible too, and that doesn't mean anyone thinks they should starve.

If someone came to me and asked me for a loan, and I gave it to them, and they later couldn't repay me, and they said it was all my fault for loaning them the money, I'd be a bit bemused. It's not the same situation with the bank, but it's worth thinking about both ways.

Senna

I have a lot of sympathy for anyone who has lost their job and still have a mortgage, loans etc. But i think a majority of people that re-mortgaging their principal private resident were looking at it as free money, to be used to buy that new car, holiday etc. They were seeing their house rise in value and assumed it would go on for ever.

It wasn't so long ago that peoples objective in life was to 'get the mortgage paid', i couldn't imagine a scenario were my parents would have added to their mortgage, baring some medical bill. This mentality was lost during the boom years and irresponsible lending was to blame.

The ability of credit dictated the price of houses during the boom, it was plain to see but the average person can be forgiven for not seeing it. Banks and financial regulators should have seen it. The push for profits is the reason why banks did nothing only loosen lending criteria, but why did the financial regulator not see this and act in the public interest?

oh well , okay

How many of us over the last decade regularly received pre-approved loans through the mail , just sign on the dotted line there boss .... check's in the post . I had to ring my bank several times and tell them to stop f***ing increasing my credit card limit , and they kept on doing it . I qualified for a modest enough mortgage 5 yrs ago and once I'd gone through the qualification process the bank were on to me with offers of loans wildly over what I had actually qualified for . Every year I receive a mortgage statement and with it I'd receive a phone call inviting me to re-finance , every year I told them to feck off but where's the governance here ? Where's the regulation ? Anglo Irish are handing out hidden loans to directors , propping up the books every year to the tune of billions and doing deals amongst themselves to save one of their own from losing his fortune and we hear about it now , after we've been waltzed into buying the feckin bank.

Their was a property race going on here for the last decade and the builders , the banks , the media and our own government encouraged it at every turn and us gombeen Irish who love to own our homes lapped it all up . Everyone's implicit in it I agree but if (with our money) the government can bail out the banks who bail out the builders who bail out nobody then why should Joe Soap be left pissing himself carrying the can ? Some people got reckless and overnight thought they were Sarah Beeny and fair enough they got caught playing with the big boys but most people just wanted to own their own home . They took out a mortgage with the belief that the boom would only get boomier but sure if the soft landing comes at least I'll have a house over my head .

Fair enough it's their debt but what purpose does it serve to have them evicted , what real value are these houses to the banks in the present climate anyway. If their can be a plan to help bail out the banks , if the banks are trying to accommodate the builders then surely their can be some sort of compromise to the person who's just been made redundant and is about to default on his payments.

To be honest I think the OP's remarks reek of callousness . I would hope they never find themselves in an unexpected change of circumstance .

LoLth

ArseBurger wrote: »

People shouldn't get into debt if they cannot afford it and should accept what happens if they default. It is, after all, their debt. Assuming that people who have this opinion are backed by others is a bit narrow minded, in my opinion. Some of us have been able to manage our debts and income so that we can weather a slump or fall with no external leverage.

What you are saying is true but , when the woman and her husband remortgaged they could afford it. they BOTH lost their jobs! surely this counts as unforeseeable circumstances and should be taken into account by the bank ? perhaps allowing them a deferral of payments to give them time to find new employment ?

I doubt anyone said that they were unwilling to repay their debt and I doubt the woman was complaining that the bank wouldnt wipe their debt off for them. Pretty sure she just doesnt wan the bank to foreclose so soon as she feels there is a chance they will be able to find employment and continue paying off what they owe.

The OPs post is true in so far as yes, we are all responsible for our own debt and finances but it lacks any form of empathy , sympathy or ability to understanding.

Its akin to saying homeless people should know better or people who lose their jobs through economic downturn have only themselves to blame for not being indespensible.

I sincerely doubt that when the couple were taking out the mortgage they considered the possibility of both incomes disappearing. One or the other possibly but I really doubt anyone has made contingency plans for both. (possibly people have now, when things have taken a turn for the worse, but not 5 years or three years ago).

Macha

LoLth wrote: »

Its akin to saying homeless people should know better or people who lose their jobs through economic downturn have only themselves to blame for not being indespensible.

It's nowhere near the same thing. You're taking the argument to the extreme and then attacking that stance - a very easy, but lazy thing to do.

People who cannot afford mortgages should be renting. They're not going to end up on the streets. This bizarre idea that everyone in Ireland is entitled to own a house is what's at the root of a great deal of this mess.

djpbarry

Darragh29 wrote: »

It's all well and grand being smug when "mummy and daddy" are paying the bills and you give in a protected little bubble where you don't have to take on the risk of investing in more than a mattress...

:rolleyes: That’s a mighty big chip you’ve got on your shoulder.

Darragh29 wrote: »

You can't turn around and blame Mr. & Mrs. Rsecently Unemployed for this complete disaster...

If by “Mr. & Mrs. Recently Unemployed”, you mean a substantial chunk of the population of this country, then yes, they do have to share some of the blame for poor management of their personal finances.

Darragh29 wrote: »

We, the people paying the excessive banking charges…

Not too many people pay charges for a current account these days.

Darragh29 wrote: »

…the insane mortgages…

That people chose to burden themselves with.

Darragh29 wrote: »

…the stupid interest rates…

Stupid? As in they were too low? You seem intent on absolving the population of this country of all blame for our current predicament.

Shiny

Fighting Irish wrote: »

you and you alone should be responsible for your finances

Example:
Some chick on newstalk this morning was giving out about banks because she re-mortgaged her house a few years back and now her and the husband have lost their jobs and the bank wants to take the house in 6 months or something and its the banks fault?

I don't think it is their fault or the banks fault either.

As was mentioned earlier, they both had jobs when they re-mortgaged the
house. The probability of both of them losing their jobs at the time when
their loan was approved was quite low.

The **** hit the fan all at once and not many people saw it coming and
no one thought it would happen so fast.

K-9

Shiny wrote: »

I don't think it is their fault or the banks fault either.

As was mentioned earlier, they both had jobs when they re-mortgaged the
house. The probability of both of them losing their jobs at the time when
their loan was approved was quite low.

The **** hit the fan all at once and not many people saw it coming and
no one thought it would happen so fast.

No ones fault at all?


That sounds like a FF excuse to me. What part of "your home is at risk if you do not keep up repayments" do people not understand?

Fighting Irish

Darragh29 wrote: »

Yeah, the logical conclusion of your argument is that we will should all live in trailer parks or campsites, except obviously folks like yourself who have parents who can throw you the deposit off the end of their hoops and throw more of their retirement cash at you when you get into difficulty paying the mortgage. This is the problem with Ireland, people like yourself who have been inbred with generational wealth who have a superior attitude with regard to the position of others in society...

Look at the stupidity of your argument. A woman and her husband lose their jobs. If they never remortgaged and bought a 1 bed apartment and still lived there, they would have the same problem with the bank. CTFOUGB.

OK sure tell me my life story :rolleyes:

The stupidity of my argument? They had their house paid for and remortgated it for whatever reason(she said for renovations or something) and now its someone else's fault?

BroomBurner

Ok, before this all gets out of hand, this is another one of those cases that you just can't have a generalised opinion on.

Case 1: OP's couple

That couple remortgaged their house to release equity, as entitled to, and would be able to manage their finances continuously were it not for the fact that they both lost their jobs. If they lost their jobs through lay-offs, etc., then why would anyone want to start laughing in their face about how they can't manage their finances? Only heartless individuals that have never experienced unemployment with mounting debt.


Case 2: Loans to pay loans to pay credit cards to pay credit cards

Anyone that gets themselves in to the situation where they are getting more and more credit to pay off other credit and continue in a lifestyle that requires money that they don't earn, THEY are the people you can justly slag off for not managing their finances.


So, while there is some merit in what the OP is saying, unfortunately they have picked on the wrong people to slag off, making him/her sound like quite a nasty individual that enjoys the downfall of others.

Fighting Irish

galwaydude wrote: »

Here here darragh. Very insensitive of the OP. Yes we are responsible for our finances but what happens when an unforseen event happens like loosing your job happens. Have some cop on.

insensitive maybe, but expecting your job to be a job for life is stupid

Fighting Irish

sceptre wrote: »

Note: if I could figure out what the GB part of that meant, there probably would be a warning issued. Civility please.

I've no problem with it(whatever it means:D ) let him fire as he pleases

K-9

Fighting Irish wrote: »

They had their house paid for and remortgated it for whatever reason(she said for renovations or something) and now its someone else's fault?

That's the part I wouldn't feel sorry for them. Alot of people remortgaged for personal spending or for extensions to keep up with the Jones.

Fighting Irish

youcrazyjesus! wrote: »

Should we let them starve to death too?

So the sensible people should help people who tried to live above their means for years and are now in a hole?

People will never learn unless you let them learn

BroomBurner

K-9 wrote: »

That's the part I wouldn't feel sorry for them. Alot of people remortgaged for personal spending or for extensions to keep up with the Jones.

Maybe they remortgaged so that they could fix up parts of their house that were in disrepair? Would you begrudge them that?

I know it's all hypothetical, but to be happy at someone's misfortune is a bit crass. Smacks of prior jealousy tbh.

Fighting Irish

I just gave that couple as an example, this thread isn't just about them

BroomBurner

Fighting Irish wrote: »

I just gave that couple as an example, this thread isn't just about them

Bad example, IMO

Fighting Irish

BroomBurner wrote: »

Maybe they remortgaged so that they could fix up parts of their house that were in disrepair? Would you begrudge them that?

I know it's all hypothetical, but to be happy at someone's misfortune is a bit crass. Smacks of prior jealousy tbh.

jealousy? i don't think so

Macha

BroomBurner wrote: »

Case 1: OP's couple

That couple remortgaged their house to release equity, as entitled to, and would be able to manage their finances continuously were it not for the fact that they both lost their jobs. If they lost their jobs through lay-offs, etc., then why would anyone want to start laughing in their face about how they can't manage their finances? Only heartless individuals that have never experienced unemployment with mounting debt.

The bold part is where I have a problem. WHY are they entitled to?? You haven't even mentioned what they have released the equity for? Holiday? New car? There is no real distinction between this scenario and case 2.

BroomBurner wrote: »

So, while there is some merit in what the OP is saying, unfortunately they have picked on the wrong people to slag off, making him/her sound like quite a nasty individual that enjoys the downfall of others.

I agree that cases can differ in levels of personal irresponsibility but surprisingly enough, that usually is very much in line with the amount of debt people are in: I give you Case 3:

Couple in their 50s, had to emigrate in the early 1980s subsequently moving countries 5 more times in search of employment. Bought a house in Dublin with 30% of value put down as a deposit. Didn't borrow more than they knew they could pay back, despite father later being unemployed for long stretches once back in Ireland. Now no mortage on house, no drawing down of equity, no remortgaging for holidays or cars, no flat screen TVs - no nonsense!

Result? No financial mess, no burden on tax payer and no wailing at everyone else to pay for their mortgage.

Actually, here's case 4: young couple, realise they don't have enough money to buy a house so they rent. End of story.

BroomBurner

taconnol wrote: »

The bold part is where I have a problem. WHY are they entitled to?? You haven't even mentioned what they have released the equity for? Holiday? New car? There is no real distinction between this scenario and case 2.

Entitled to as it was their home, they felt that they could reasonably afford to repay the loan, they were both working, the bank didn't have a problem giving it to them. We don't even know how much was given either, it's all speculation.

For those other cases, I think I might have a couple of rubber medals around here somewhere...

Fighting Irish

the are entilted but its their problem if they can't pay back the loan

K-9

BroomBurner wrote: »

Entitled to as it was their home, they felt that they could reasonably afford to repay the loan, they were both working, the bank didn't have a problem giving it to them. We don't even know how much was given either, it's all speculation.

For those other cases, I think I might have a couple of rubber medals around here somewhere...

So, there should never be repossessions because the banks give people money?

BroomBurner

Fighting Irish wrote: »

the are entilted but its their problem if they can't pay back the loan

Do you honestly believe that they aren't worried about it?
What was the point of your using this couple as an example to make a point?
Surely your thread should really have been about people who extend themselves beyond what they could ever afford, not about people who are now extended beyond what they have because, unfortunately they've lost their jobs.
You wouldn't have anything to write about had they not lost their jobs, so why pick on them now?

Macha

BroomBurner wrote: »

Entitled to as it was their home, they felt that they could reasonably afford to repay the loan, they were both working, the bank didn't have a problem giving it to them. We don't even know how much was given either, it's all speculation.

Ok firstly, the loose lending practices of banks and other lending institutions over the past 20 years have been shocking. I have heard stories of bank managers calling people and telling them they were "underborrowed..!", leaflets through the door, credit limits raised without permission, 100% mortgages, etc. And this was all very reckless BUT nobody put a gun to these people's heads and made them take the money. To lend money, someone has to be willing to borrow it. So I don't take the fact that a bank wanted to give them the loan as any sort of indication that they should have accepted the loan.

As for it being their house, well that's the whole point really - they offered up their house as an asset/guarantee in return for cash. They were bettting that the value of their house was X and the chip they laid on the table was their house. Their choice.

They were obviously wrong in their belief that they could pay it back. That's a risk they took and it backfired. Now they pay for the consequences. Simple.

BroomBurner wrote: »

For those other cases, I think I might have a couple of rubber medals around here somewhere...

Yeah, :P I was just trying to make the point that it was perfectly possible for people not to get into financial trouble and indeed, many haven't.

Fighting Irish

BroomBurner wrote: »

Do you honestly believe that they aren't worried about it?
What was the point of your using this couple as an example to make a point?
Surely your thread should really have been about people who extend themselves beyond what they could ever afford, not about people who are now extended beyond what they have because, unfortunately they've lost their jobs.
You wouldn't have anything to write about had they not lost their jobs, so why pick on them now?

Both had full time jobs, paid off their house, remortgaged their house, lost their jobs and can't pay the mortgage so they obviously saved no money and that isn't over extending?

n rich out and out

Live for today but don't be totally stupid about it

youcrazyjesus!

fergalr wrote: »

This is not a fair thing to say to the OP. Saying people should be responsible for their finances does not equate to saying they should be let starve.

For my part, I like the idea of a welfare state, where even if you are totally unable to work, or are totally insolvent etc the state provides you with enough resources to get by, to satisfy your basic needs. This isn't at all incompatible with saying that people should be responsible for their finances, in the context that they shouldn't blame the bank when they cannot repay their mortgage.

Like, the banks were bad to give out more than was responsible to do so, definitely, but the people that borrowed from them can't just blame it all on the banks - they are responsible too, and that doesn't mean anyone thinks they should starve.

If someone came to me and asked me for a loan, and I gave it to them, and they later couldn't repay me, and they said it was all my fault for loaning them the money, I'd be a bit bemused. It's not the same situation with the bank, but it's worth thinking about both ways.

What about somebody who has lost their job? Or a couple who have both lost their jobs?

Should the banks take the house back or come to some agreement to allow them get back on their feet over 2/3 years?

It suits everybody, the banks, the taxpayer, the owners, the economy for people to be allowed stay in their houses in theses extraordinary times. Given the banks are now relying on the State for survival the Government should lay it down for them and TELL them what's happening.

thebman

If people can't pay the loans or even the interest then the bank should freeze both and rent the property to them until they get back on their feet. Then they can resume paying the loan.

There is probably a downside I'm not seeing though. This does however essentially give the bank temporary ownership of the property until the owners can afford to pay. They just rent it back and pay the bank their rent supplement until they get a job again.

fergalr

youcrazyjesus! wrote: »

What about somebody who has lost their job? Or a couple who have both lost their jobs?

Well, the first thing to say, is I don't think losing your job is a completely unforeseeable event, that you should never have to plan for.
Speaking generally, people that have lost their jobs in the last few months, and are now unable to pay their mortgages, clearly did not have much money set aside 'for a rainy day' as it were.

Should you really manage your finances in such a way that if you can't work for a few months, you are unable to meet your repayments?

It's an interesting question, but if it's a personal decision we allow people to make, such that they have higher potential from playing it risky (and people that took big loans and big risks on property made shedloads of money between 1995-2005), then there's a limit to how much we can insulate people from the bad times too - otherwise we just encourage crazy borrowing in future.
If we, as the state, were to totally bail out people who got caught, then next time around everyone would be more likely to borrow beyond their means on the basis that they had a safety net.

youcrazyjesus! wrote: »

Should the banks take the house back or come to some agreement to allow them get back on their feet over 2/3 years?

Yes, the banks should totally do that. (come to some agreement)

In my previous post, I even said that perhaps the government should act to financially help them out, to stop them being destitute.
However, for reasons already outlined, this would have to be done very carefully, to not cause a lot of damage, and severely disadvantage those that didn't buy in.

Look at it another way, would you compensate people that spent a lot of money on lottery tickets that didn't win? If you did, it wouldn't be fair on those that didn't buy lottery tickets. Sure the lottery tickets are worth nothing now, but they could have made the people that bought them rich.

I know the levels of risk/reward in both cases are different, but it's just illustrating why any action taken to bail out people has to be done very carefully. No more so than any sort of a 'bail out' - 'bail outs' as are currently doing the rounds are very tricky things, in my opinion.

If the government had come along in 2004 and retroactively imposed a tax on people whose homes had increased in value from 1995-2003, there would be war over the interference with the market system; so we need to be very careful bailing out those whose homes lost value.

But, in a welfare state, we definitely shouldn't see people without their basic needs.

youcrazyjesus! wrote: »

It suits everybody, the banks, the taxpayer, the owners, the economy for people to be allowed stay in their houses in theses extraordinary times. Given the banks are now relying on the State for survival the Government should lay it down for them and TELL them what's happening.

Well, that's a very broad statement.

First off, these times aren't *that* extra ordinary at one level, in that we've had cycles of boom and bust before. Now, from what I'm told, the magnitude of this one is bigger - but every man on the street, knew, during the boom, that boom and bust generally came in cycles, and that there were no everlasting booms before.


You'd have to be very careful saying everyone should be allowed stay in their houses. It's not at all clear that that benefits everybody, as you say.

For example, if everyone that bought 800k of house, and only paid off 100k of it is, by law, allowed stay in their home, regardless of their ability to make payments, what do you think that's going to do to the value of the banks who loaned out that 800k with the house as security? They now have no way of recovering it, and no way of exercising the security.

It's much too simple to say that it's better for the economy that people keep their homes.

I'm not saying I want repossessions - but I'm just saying it's a very tricky situation to not get wrong. And any break given to the people that bought does disadvantage those that did not buy - and so, when discussing a break or bail out of any sort, we have to be very careful about the magnitude of break that's given.


My posts on this thread are not about crucifying people who things haven't worked out for. Believe me, I understand their position. At the same time, I'm saying that as a society, whatever we do to help them out needs to be carefully considered, so as not to totally disadvantage those who didn't buy.

molloyjh

LoLth wrote: »

What you are saying is true but , when the woman and her husband remortgaged they could afford it. they BOTH lost their jobs! surely this counts as unforeseeable circumstances and should be taken into account by the bank ? perhaps allowing them a deferral of payments to give them time to find new employment ?

How do we know they didn't? We only know a small second-hand quote from a phone call made by someone who would obviously have a biased view of the siutation. It is very rare for Irish banks, even in this climate, to repossess because it is such a big deal here in Ireland. The domestic banks will almost always try and work something out. Its not in their interests to take the house straight away anyway as it is probably worth less now than when it was remortgaged.

At the end of the day while I do feel sorry for the couple there is a level of personal responsibility that we all must accept. We can't go around blaming anyone and everyone else for all our woes. In this case it is impossible to say what should/shouldn't happen as we don't know the details.

I would like to take issue with Darragh29s points though....

Banks as private institutions are not here for your good or mine or societies. Like any other private company they are here for the money. To say that they didn't cover our backs is ridiculous. To say that they left themselves open to bad debts in an extremely irresponsible manner would be true, but they "owe" us nothing beyond the services we pay them for.

As for the regulator, well that seems to me to be another great big bandwagon with a lot of people talking about a institution and industry they know next to nothing about.The regulators job is an extremely difficult one in our current set-up. Sure if they were there when the financial institutions were starting off and helped to form our financial system it may have been easier. But now they need to understand every element of every financial institution. Different banks do business differently and to regulate it you need to first understand it. That is nothing short of a mammoth task.

And if/when you do finally understand it you need to draft the regulations and communicate them to the banks, who then need time to update their systems/procedures to reflect new regulations. Banks don't have limitless resources so you can't just dump it all on them at once and expect everything to pan out. It needs to happen in such a way that is realistic for th banks to implement them. Regualtion of an entire industry is a slow and painful process. Sure they could have done things better and yes there were some serious cock-ups in recent times, but the fact that people don't understand the reality of what they do means that their expectations and judgements are unrealistic and flawed.

Fighting Irish

thebman wrote: »

If people can't pay the loans or even the interest then the bank should freeze both and rent the property to them until they get back on their feet. Then they can resume paying the loan.

There is probably a downside I'm not seeing though. This does however essentially give the bank temporary ownership of the property until the owners can afford to pay. They just rent it back and pay the bank their rent supplement until they get a job again.

That would be ideal for the customer, but what happens if in six months the people still aren't back on their feet, the bank then takes the house and has to sell it at a lower cost to what it could sell it for now

Darragh29

K-9 wrote: »

So, there should never be repossessions because the banks give people money?

That's one way of making sure that we NEVER end up in this situation again. Bring in legislation that means the bank cannot repossess a house if you default. That would sort out the reckless lending that has been going on in recent years. They wouldn't be so quick to throw money at people if this was the case...

K-9

Darragh29 wrote: »

That's one way of making sure that we NEVER end up in this situation again. Bring in legislation that means the bank cannot repossess a house if you default. That would sort out the reckless lending that has been going on in recent years. They wouldn't be so quick to throw money at people if this was the case...

So what happens to the defaulter?

Fighting Irish

Darragh29 wrote: »

That's one way of making sure that we NEVER end up in this situation again. Bring in legislation that means the bank cannot repossess a house if you default. That would sort out the reckless lending that has been going on in recent years. They wouldn't be so quick to throw money at people if this was the case...

lol wtf



that might solve reckless lending, but i think the problem is reckless borrowing

murphaph

It's not (directly) the bank's fault that the chick and her mate lost their jobs and it is ultimately their personal responsibility to repay a loan they took out to buy their home. Loans must be repaid folks or the system collapses into anarchy and nobody will touch us with a barge pole. It would be like living in Somalia or somewhere. People must take personal responsibility for their own debt, it is precisely because people didn't that has contributed to the situation we're in now.

HOWEVER! the banks in this country are now reliant on all our money to keep them afloat. Innovative leaseback or interest deferments must be employed to give ordinary joes the very best chance to hold on to their homes, including the banks writing off a certain amount of interest (ie, reducing their profits). The banks must now operate in the national interest and not in their own interests to a certain extent, but they cannot operate as charities or nobody will deposit or buy stock in the banks!!! It's a fine balancing act but in reality of course, in most cases where someone has recently purchased a property, the debt exceeds the current value of the property it's secured upon, so the bank would lose money by repossesing and selling. If at all possible the bank will try to keep the loan going.

murphaph

Darragh29 wrote: »

That's one way of making sure that we NEVER end up in this situation again. Bring in legislation that means the bank cannot repossess a house if you default. That would sort out the reckless lending that has been going on in recent years. They wouldn't be so quick to throw money at people if this was the case...

The law already heavily favours the debtor in this country (believe me, I know). Making it illegal to repossess a house would turn us into the Zimbabwe of Europe. Who would lend anybody any money to buy a house if they knew the person didn't have to repay as there would be no no way to take the asset back? No banking system in the world operates like this. Perhaps bring in legal minimum deposits (savings, remember them anybody?) before mortgages can be drawn down, say 25% deposit minimum? Might also help keep prices down as a side benefit.

Darragh29

murphaph wrote: »

The law already heavily favours the debtor in this country (believe me, I know). Making it illegal to repossess a house would turn us into the Zimbabwe of Europe. Who would lend anybody any money to buy a house if they knew the person didn't have to repay as there would be no no way to take the asset back? No banking system in the world operates like this. Perhaps bring in legal minimum deposits (savings, remember them anybody?) before mortgages can be drawn down, say 25% deposit minimum? Might also help keep prices down as a side benefit.

I'm not saying there should not be a penalty, but a clear message should be sent to the banking system that ultimately if they lend to someone in a reckless manner, then ultimately they will lose, not the homeowner. The master of the High Court has effectively sent this message to the banks yesterday when he said that there is now an avalanche of repossessions being sought by the banks and they needn't think they can automatically rely on the High Court to deal with these applications by way of issuing a repossession order to the bank on foot of an application for one.

Sand

I dont get the OPs point.

The couple could afford the loan they took out when they had jobs.

They could not afford the loan when they both lost their jobs [OP still hasnt provided any detail on why it was their fault they lost their jobs] and had no source of income.

Does the OP consider it foolish to borrow more than you can afford to repay on the dole?

Electric Sheep

Anyone who refinances to "release equity" from their family home is a fool. That "equity" is purely theoretical until you actually sell the house for a price that covers the original purchase price plus the borrowed "equity". It's taking a big gamble with the largest investment most of us with make in our lives, and more importantly - our home.

Yes, I know the banks were pushing it. But it is also up to us to research and make our own risk analysis.