State intervention on mortgages - Proposal

Hagar

The State/Taxpayer/Homeowners seems to be bailing out all the big movers in the proerty/banks fiasco everbody except the homeowners who were suckered into taking out massive loans to pay the inflated prices. No before anyone says they didn't have to buy them please think about where they were supposed to live if they didn't. The alternative was to rent a property whose rent was indexed off the high property price anyway so wasn't going to be a cheaper alternative. A bit of a Hobson's choice there.

Anyway what is done is done and high-horse attitudes will not solve anything. What's needed now is a solution going forward not smarty-pants "I told you so" by people who in truth were just lucky not to find themselves in the same situation. Needing a home and buying it just before the bubble took off does not make you a financial wizard so spare us all your false wisdom.

Now I have a proposal for discussion that applies only to principle residences, not investment or rental properties. My idea is that the State sets up an independent valution body that can give a realistic current market value for any home. Then the State takes over any mortgage amount above that value leaving the owner with an effective 100% mortgage on a property worth exactly what is owed. This will end the horror for the many thousands of householders who are in a massive negative equity situation and are suffering wage cuts etc. There would be a clawback clause effective for 10 years that states "Any profit on the sale of the house above the official calculated value at the time of State intervention would be refundable to the State."

This proposal is probably far from perfect but it is better than what the Govt have come up with so far which is precisely feck all.

Opinions on a postcard please.

ilovelamp2000

If this idea ever comes to fruition I'm leaving the country. People need to pay for and learn from their own mistakes.

KerranJast

Rosco1982 wrote: »

If this goes idea ever comes to fruition I'm leaving the country. People need to pay for and learn from their own mistakes.

This. You gambled and lost. There's no way in helll I'm bailng out the smug "renting is dead money" gang.

helimachoptor

Rosco1982 wrote: »

If this idea ever comes to fruition I'm leaving the country. People need to pay for and learn from their own mistakes.

You mean like the banks paying for their own mistakes:rolleyes:

Hagar

Where is the "own mistakes" and "you gambled and lost" rhetoric coming from? People get married need a home and buy one. They were not reponsible for the inflated market, the devolopers/builders/banks were.

IrishTonyO

69 wrote: »

Where is the "own mistakes" and "you gambled and lost" rhetoric coming from? People get married need a home and buy one. They were not reponsible for the inflated market, the devolopers/builders/banks were.

People need a home, but they can rent instead of buy. Owning your own home is not a right, it is a luxury

Hagar

The rent would have been propotional to the cost of the property so would not have been any cheaper.

I don't know about it being a right but I would certainly say owning someone else's home, as a landlord, is a luxury.

IrishTonyO

69 wrote: »

The rent would have been propotional to the cost of the property so would not have been any cheaper.

I don't know about it being a right but I would certainly say owning someone else's home, as a landlord, is a luxury.

Yes but if they rented, now they would not have a mortgage to pay and could rent a property considerable cheaper at the moment. It is a person's choice to purchase property and it is a gamble at all times. The prices could go up or down, people in Ireland seemed to think property only ever went up.

silverharp

OP, it has no merit. A bailout of this type would be a major moral hazzard and would create plenty of opportunities for corruption. Assuming people still have their jobs the only way to get through it is to accelerate their mortgage payments and cut back on the 2nd cars, multiple holidays,€30K weddings and other avoidable costs.
If people generally have the house they can raise a family in , there isnt really a problem, they will own them outright in 30 years or so. If couples are stuck with crappy 1 bedroom apartments, then maybe they need to start looking to their families for help or findings ways of renting the space they need and renting out their own properties.

ei.sdraob

helimachoptor wrote: »

You mean like the banks paying for their own mistakes:rolleyes:

they shouldnt have been given a cent or taken over via nationalization

2 wrongs don't make a right mister :mad:

Hagar

Just for the record I have no axe to grind. I have no mortgage and am self employed. I'm just putting forward an idea for discussion. There are an awful lot of people out there in dire circumstances and the State should make as much effort to help them as it did to help the golden circle who caused it. IMVHO.

SpodoKamodo

Yeah, that sounds great. Maybe the government should pay us back all the money we overpaid in rent durIng the boom as well:rolleyes:

the banks have taken a hit on the value on their loan books. Granted, they are receiving a definate amount from Nama, but it is still a loss. Developers are left with houses half finished and unsellable, again a loss. So why are homeowners who bought during the boom so deserving of a rescue plan where their losses would be eliminated?

ei.sdraob

SpodoKamodo wrote: »

Yeah, that sounds great. Maybe the government should pay us back all the money we overpaid in rent durIng the boom as well:rolleyes:

the banks have taken a hit on the value on their loan books. Granted, they are receiving a definate amount from Nama, but it is still a loss. Developers are left with houses half finished and unsellable, again a loss. So why are homeowners who bought during the boom so deserving of a rescue plan where their losses would be eliminated?

because we are swimming in money and we can bail everyone out

@69 as self employed are you happy that your taxes are going to pay people/organizations for them making bad mistakes, while infrastructure, healthcare and public services are a shambles?

the state is bankrupt, it wont be the government paying for any bailouts, its you and me and everyone (yes that also includes future generations) via direct and indirect taxation that will have to pay for this

Hagar

Nothing new there, a huge proportion of my taxes have always been wasted.

ei.sdraob

69 wrote: »

Nothing new there, a huge proportion of my taxes have always been wasted.

so because its being wasted, alot more needs to be wasted

yes yes i see :rolleyes:

if any sort of "home-owner" bailout does occur, ill be on the first plane to Switzerland and make sure I never pay any direct taxes here ever again out of spite,
seeing my hard earned money being taken away and being pissed down large holes is bad enough as it is, your idea would be "taking the piss" altogether at anyone who remained sensible and kept their head on

this whole bailout culture has opened a pandoras box, now everyone wants their "NAMA" :mad:

why do people want something for nothing? omg im actually getting mad thinking about it :eek:

Hagar

ei.sdraob wrote: »

so because its being wasted, alot more needs to be wasted

Wasn't that the FF Slogan? Sorry, it was "a lot done, a lot more to be done" Spooky isn't it?

rasper

I personally can't see how the taxpayer can take over any more losses, I reckon it'll have to come from the bank routes such as allowing people in negative equity to trade up to family homes and extending out existing loan terms to reflect the drop in incomes .
It is in the banks and states interests not to have thousands of home owners throw the keys and and either look to the state for accomodation or leave the country for good(yes I know debt follows but lots will take their chances on not being found or how good the bankruptcy laws are in their new country)

kippy

To those saying they would leave the country if something like this ever happened.....well....ye'd want to get yer tickets ASAP (and give yerselves plenty time to get passports), the interest relief scheme and indeed the bailout of the banks etc are all doing pretty much what ye dont want to see happening already.

ei.sdraob

kippy wrote: »

To those saying they would leave the country if something like this ever happened.....well....ye'd want to get yer tickets ASAP (and give yerselves plenty time to get passports), the interest relief scheme and indeed the bailout of the banks etc are all doing pretty much what ye dont want to see happening already.

many many threads are here about people being unhappy about any bailouts

once again we dont need more bailouts! :mad:

actually we cant afford any more bailouts, never mind the existing ones

all this would do is take more money away from what little productive companies/people left and give them to the reckless, that might just be the straw that breaks the camels back

helimachoptor

ei.sdraob wrote: »

they shouldnt have been given a cent or taken over via nationalization

2 wrongs don't make a right mister :mad:

I agree, I'm just saying the 2nd poster says people should sort out their own mistakes yet the Government bailed out the banks which has left us in a massive hole and they aren't lending. All the massive profits the banks made in the last 5-10 years, where has this money gone!!

Eliot Rosewater

69 wrote: »

the State should make as much effort to help them as it did to help the golden circle who caused it. IMVHO.

The reason, or rationale, for bank bailout schemes is not to "help" those who are in control at the institutions. Obviously in Ireland theres also a bit of the helping ones friends mentality (such as with Anglo) but in general banks are saved to avoid a systematic financial crisis. It done for the betterment of the economy as a whole.

"Bailing" out those people who made bad personal decisions during the boom and paying for their mortgages helps no one but the home-owner in question. It doesn't benefit the taxpayer at all, and its basically sticking up two fingers to those who were rational and smart enough to purchase carefully, or to rent.

Buying a house is a big transaction, its a luxury as others have said, and it should be made with utmost caution. The possibility of losing your job and being unable to make payments must factor in. As we saw though, people were happy to swallow what the banks and Government told them, buy buy buy, and then when it blew up in their face blame everyone except themselves.

One of the main reasons we are in this mess is because of a lack of personal responsibility by a vast amount of people, and the scheme you propose would only reward those who make the irresponsible choices.

ei.sdraob

helimachoptor wrote: »

I agree, I'm just saying the 2nd poster says people should sort out their own mistakes yet the Government bailed out the banks which has left us in a massive hole and they aren't lending. All the massive profits the banks made in the last 5-10 years, where has this money gone!!

any sort of homeowner bailout wont be paid for by bankers it be paid for by you

be careful what yee wish for

helimachoptor

ei.sdraob wrote: »

any sort of homeowner bailout wont be paid for by bankers it be paid for by you

be careful what yee wish for

Sorry I should clarify my position, home owners shouldn't get a bailout but neither should the banks have.

SpodoKamodo

helimachoptor wrote: »

I agree, I'm just saying the 2nd poster says people should sort out their own mistakes yet the Government bailed out the banks which has left us in a massive hole and they aren't lending. All the massive profits the banks made in the last 5-10 years, where has this money gone!!

A failed banking system helps no one. And regarding your point re: banks not lending, this is not true. Banks are lending, and I think it's a good thing that they are not giving out loans to every tom, dick and harry that turns up at their door. It was that practice that got us here in the first place

ei.sdraob

helimachoptor wrote: »

Sorry I should clarify my position, home owners shouldn't get a bailout but neither should the banks have.

agree

some people think that because the banks got bailed out now everyone else can be bailed out using that bottomless pit of money we have

helimachoptor

SpodoKamodo wrote: »

A failed banking system helps no one. And regarding your point re: banks not lending, this is not true. Banks are lending, and I think it's a good thing that they are not giving out loans to every tom, dick and harry that turns up at their door. It was that practice that got us here in the first place

They are not lending at all, a friend of mine was left his house when his mother died, it's a nice house in a nice area. He's got a pretty steady job earning 35-40k. He wanted to extend the house and do a few bits with it. His only debt is a car loan with about 2k left on it but that can be gone in a couple of months if it was an issue. He applied for 70k.. turned down by AIB,BOI, PTSB and NIB i think, 50k... same again, he asked could he release equity in his house, told no.

Off he went to the credit union. In my view banks have go to the other extreme of 2 years ago, not lending at all.

changes

I understand where your coming from OP. Although i wouldn't be comfortable with the idea of bailing out anyone, banker, developer or people in negative equity.

The rules of capitalism as i understood them growing up have been stretched quite a bit during this finincial crisis out of a nessessity to avoid the whole western economic system from collapsing.

The precedent has been set by the bank bailouts and what appears to be the big property dealers getting an easy exit strategy from their mistakes.

I think anyone who loses their house now and ends up in debt should be at the governments door looking for social housing until they are on their feet again. Its the least the government could do for bluffing thousands of young people into jumping on the ladder (and they did).

As the OP said its down to luck really, the people who happened to be at the age where they were moving out of home and needed a house ended up buying at the top of the boom. They were no different to any other irish generation who wanted a roof over their head the irish way (i.e. not renting from some gob****e who wouldn't fix anything and could turf you out on a whim).

SLUSK

If you bought a house an now cannot afford to pay the mortgage you have to sell the house and start renting. Why should others bail you out?

danbohan

Rosco1982 wrote: »

If this idea ever comes to fruition I'm leaving the country. People need to pay for and learn from their own mistakes.

hear hear !!, where do these guys get their ideas , and this is supposed to be our brightest generation !

baalthor

OP, your proposal goes even further than NAMA in that it pays everyone's mortgage whether they are in financial difficulty or not. NAMA is restricted to banks that are actually in trouble.

Do you have any idea how much your proposal would cost?

BurnsCarpenter

Another article about this in the Sunday Independent.

http://www.independent.ie/opinion/analysis/the-banks-have-nama-but-who-is-there-to-help-homeowners-like-us-2106184.html

Edit: this as well - http://www.independent.ie/opinion/analysis/this-blight-on-all-of-our-futures-must-be-tackled-2106181.html

Looks like it's becoming a campaign. Seeing as the Sindo normally tends towards the right, I can only assume this position is purely down to Brendan O'Connor and others being directly affected.

I take no pleasure in seeing people in negative equity - I have friends in the same boat - but it takes some nerve to argue that you that you deserve to be bailed out.

kippy

Social Housing FTW.

BurnsCarpenter

kippy wrote: »

Social Housing FTW.

Not sure what your point is - are you comparing the two?

In theory at least, social housing is for people who can't afford to live anywhere else. This campaign is for the people "trapped" in the very houses they chose to buy.

I don't think that anybody would argue that these people shouldn't avail of the same social housing benefits were their homes to become repossessed.

BurnsCarpenter

BurnsCarpenter wrote: »

Not sure what your point is - are you comparing the two?

In theory at least, social housing is for people who can't afford to live anywhere else. This campaign is for the people "trapped" in the very houses they chose to buy.

I don't think that anybody would argue that these people shouldn't avail of the same social housing benefits were their homes to become repossessed.

What's the difference between someone who is 'trapped' in their home and someone who is 'living' in their home?
Seems to me the only people who are 'trapped' are the people who figured they'd be able to trade up in a few years having made a healthy profit on their home, and are now aghast that they find themselves stuck in their 3 bed semi in the outskirts of Dublin.


I feel the best way for the government to rectify the situation is to rework bankruptcy and mortgage laws to be similar to the US, however these laws must only apply to new mortgages.

AARRRRGH

The government should have offered a fixed rate loan to householders instead of NAMA.

The NAMA money would have been so much more useful used in that way.

People currently with loans could transfer their loans to the government at a fixed rate. say 3.5% for 20 years. This would allow them some stability and insulate them against interest rate rises. It would also put a cap on what the banks can raise their rates to, because people will just transfer over to the government mortgage.

New mortgages should not be in this scheme. The banks can compete for the business.

I know some people have the attitude that anyone who bought a house should be punished for buying a house. But thats a bit of a self defeating attitude. They should be concerned with getting Ireland back on track, instead of trying to make themselves feel good at other peoples expense.

AARRRRGH

Rojomcdojo wrote: »

What's the difference between someone who is 'trapped' in their home and someone who is 'living' in their home?
Seems to me the only people who are 'trapped' are the people who figured they'd be able to trade up in a few years having made a healthy profit on their home, and are now aghast that they find themselves stuck in their 3 bed semi in the outskirts of Dublin.


I feel the best way for the government to rectify the situation is to rework bankruptcy and mortgage laws to be similar to the US, however these laws must only apply to new mortgages.

Id say the people who are "trapped" are the ones who bought a house, now cant raise enough from it to clear their debts, and have lost their jobs.

Its only a problem if you cant pay your debts and live.

yoshytoshy

After reading some of the replies about renting ,I wonder what people who rent do ,when they are in retirement ?

To me ,buying a home means that as you get older ,cost of living decreases. If you rent ,you have a life long necessity to pay your way.
I don't think anyone that bought a house to live in,at anytime ,was acting wrecklessly.

Fighting Irish

69 wrote: »

Where is the "own mistakes" and "you gambled and lost" rhetoric coming from? People get married need a home and buy one. They were not reponsible for the inflated market, the devolopers/builders/banks were.

by buying into the "sure it's only €300K" they infact were also responsible for inflating the market

Fighting Irish

yoshytoshy wrote: »

After reading some of the replies about renting ,I wonder what people who rent do ,when they are in retirement ?

To me ,buying a home means that as you get older ,cost of living decreases. If you rent ,you have a life long necessity to pay your way.
I don't think anyone that bought a house to live in,at anytime ,was acting wrecklessly.

lol

people need homes, but getting a loan of money and hoping things will always be dandy is wreckless

yoshytoshy

Fighting Irish wrote: »

lol

people need homes, but getting a loan of money and hoping things will always be dandy is wreckless

lol .. ,

I know of plenty of people who worked very hard to get deposits ,bought houses and work hard to pay for them.
They seen their parents in the family home ,with no mortgage and the freedom to enjoy life.
I very much doubt ,people like this worked hard so they could be wreckless. Theres been twenty nine suicides related to mortgage debt lately ,have a lol at that.

Pittens

After reading some of the replies about renting ,I wonder what people who rent do ,when they are in retirement ?

Nobody is suggesting renting for life is good.

A possible solution. American bankruptcy laws now. Or even more.

The owner can declare bankruptcy, but not without actual surrendering all liquid assets ( we can except 10K maybe). House is held by bank ( effectively owned by the bank owner) and owner can rent back the same house for standard rental price. Or move on. He cant take a mortgage for 10 years ( which will exclude some for life as they will be too old). Rental laws will change to protect the renter, and be enforced. Renting becomes more common, as in the Continent. The house is up for sale by the banks at any time.

Two things happen here.

1) House prices collapse more fully, dragging more people into the net. They can also declare bankruptcy.
2) Mortgages and rents become cheaper.
3) Domestic demand increases.

Pittens

I very much doubt ,people like this worked hard so they could be wreckless.

The did however recklessly buy a house in the boom.

BTW if anything like the OP's proposal goes through I assume that if house prices rise the government takes 100% of all profits.

yoshytoshy

I really don't take nama serious at all ,it's just playing politics with our finances ,so we survive the capitalist storm. At most it's a fingers crossed exercise.

We should be concerned about morale in the country aswell ,for our own well being. We can't keep kicking joe public down.

Thats my concern with all this.

Eliot Rosewater

BurnsCarpenter wrote: »

Another article about this in the Sunday Independent.

http://www.independent.ie/opinion/analysis/the-banks-have-nama-but-who-is-there-to-help-homeowners-like-us-2106184.html

A quote from that article: "What we did was buy a house. A crime for which we will spend the rest of our lives paying."

This epitomizes the attitude many people have towards their personal economic woes. They like to create the impression that the banks or the government forced them to take out their mortgage, and constantly insinuate that the situation was totally out of their control. They avoid any hint that they may have been the ones who landed themselves in their current mess, and accuse those who disagree of being heartless.

This persecution complex flies right in the face of the virtues of honesty and responsibility, supposed to have been taught to us when we were little ones.

the_dark_side

yoshytoshy wrote: »

I really don't take nama serious at all ,it's just playing politics with our finances ,so we survive the capitalist storm. At most it's a fingers crossed exercise.

We should be concerned about morale in the country aswell ,for our own well being. We can't keep kicking joe public down.

Thats my concern with all this.

I feel that NAMA is a huge buying-time exercise so that those responsible for the fiasco can be retired or out of the public realm by the time the massive nama bankrupcy arrives... thats all it is, rather than face the dire consequences of defusing the bomb now, they have kicked the entire thing to touch so they can plan their get away... and meanwhile spin rhetoric to the public with advanced formulae and swanky calculations. Postponing the inevitable.
Regarding house prices, I think the country is in limbo for at least another 15 years as a result of the huge payback required to balance the banks loan books... and don't expect any leniency from the banks or the government... the EU have them both over a barrel

yoshytoshy

Eliot Rosewater wrote: »

A quote from that article: "What we did was buy a house. A crime for which we will spend the rest of our lives paying."

This epitomizes the attitude many people have towards their personal economic woes. They like to create the impression that the banks or the government forced them to take out their mortgage, and constantly insinuate that the situation was totally out of their control. They avoid any hint that they may have been the ones who landed themselves in their current mess, and accuse those who disagree as being heartless.

This persecution complex flies right in the face of the virtues of honesty and responsibility, supposed to have been taught to us when we were little ones.

I know plenty of people who bought in the last three years or so and none of them have that attitude.
They do their best to take it on the chin ,but some of them have lost their jobs and things are getting harder.

It's now becoming harder to rent aswell ,I know of someone who has had 60 people look at his house to rent. Rental oppurtunities are down more and more.
We've had an exodus of emmigrants and now even more houses to rent ,because young people are going back to their parents house.

If anything ,we need to take the bite out of all this ,by any means possible.

ei.sdraob

yoshytoshy wrote: »

I know plenty of people who bought in the last three years or so and none of them have that attitude.
They do their best to take it on the chin ,but some of them have lost their jobs and things are getting harder.

It's now becoming harder to rent aswell ,I know of someone who has had 60 people look at his house to rent. Rental oppurtunities are down more and more.
We've had an exodus of emmigrants and now even more houses to rent ,because young people are going back to their parents house.

If anything ,we need to take the bite out of all this ,by any means possible.

theres 300000 empty houses, thats more houses lying empty than there are rented accomodation

now read the above again until it sinks in

high property prices hurt everyone, now that they are falling the ones who thought they were "cute whoors" are getting burned

the writer of that sindo article deservers what she got, i swear i was so mad after reading that article that thinking that "imprisonment" is the least she deserves

yoshytoshy

ei.sdraob wrote: »

theres 300000 empty houses, thats more houses lying empty than there are rented accomodation

now read the above again until it sinks in

high property prices hurt everyone, now that they are falling the ones who thought they were "cute whoors" are getting burned

the writer of that sindo article deservers what she got, i swear i was so mad after reading that article that thinking that "imprisonment" is the least she deserves

Did you even read what I wrote ? ,I wasn't agreeing with that article at all.

Pittens

It's now becoming harder to rent aswell ,I know of someone who has had 60 people look at his house to rent. Rental oppurtunities are down more and more.

it's getting harder to rent because there are more houses available. Did you mean to rent out?

No, you didnt because you know someone who had 60 people look at his house.

Thats the kind of economic illiteracy which got us in this mess.

yoshytoshy

Pittens wrote: »

it's getting harder to rent because there are more houses available. Did you mean to rent out?

No, you didnt because you know someone who had 60 people look at his house.

Thats the kind of economic illiteracy which got us in this mess.

I've no debts sweetheart ,thanks very much.

Pittens

It's now becoming harder to rent aswell ,I know of someone who has had 60 people look at his house to rent. Rental oppurtunities are down more and more.

Good for you. Me neither.

Now back to what you meant about renting being hard.

This thread is not about your debts.