McWilliams at it again

silverharp

RTE radio seem to be trying to undermine the financial regulator at the moment. This morning they had Matt Cooper on in favour of a bailout for borrowers and now have just heard McWilliams say the same thing. his "logic" being that if they get bailed out they will spend money.

No questioning about where this fairy dust money will come from but I assume higher taxes as there are no sane ways to target savers or sensible borrowers directly at this point

So are all you renters or sensible borrowers/home owners happy to have spending power taken away from you so that the reckless can spend your money instead.? How does this "single entry" accounting even make sense as any so called stimulus will only be short term and would most likey create greater long terms problems

jimmycrackcorm

silverharp wrote: »

So are all you renters or sensible borrowers/home owners happy to have spending power taken away from you so that the reckless can spend your money instead.? How does this "single entry" accounting even make sense as any so called stimulus will only be short term and would most likey create greater long terms problems

I'm as happy about it as I am, as a taxpayer, about paying the huge social Welfare bill.

Permabear

This post has been deleted.

Tora Bora

jimmycrackcorm wrote: »

I'm as happy about it as I am, as a taxpayer, about paying the huge social Welfare bill.

Matt Cooper knows as much about economics as he does about football, and that's not saying much He's probably in negative equity;)

SoulTrader

In my opinion, a bailout for borrowers makes no sense whatsoever. Even the administrative nightmare of calculating a bailout percentage / allowance for every existing home loan in the country, and communicating this to individuals homeowners would cost millions surely.

And why bailout borrowers because they unfortunately bought at the top end of the market? What about the people who have seen their shareholdings in AIB and BoI slashed by 90% because they bought their shares at the top end of the market? Should they be bailed out too? No, unfortunately for them. If you start out to bail people out for making bad / ill-timed home purchases, that creates a moral hazard - in the future, people will be even more encouraged to borrow recklessly, knowing that the Government (taxpayer) will bail them out if they can't make good on their repayments.

Nidot

If I hear this nonsense about bailing out for borrowers once more I think I'll scream.

Yes people were convinced to borrow more money then they could afford, and yes it is now unfair that people are paying more on their mortgages than what they are worth, but guess what you can't get your money back after you buy something.

There seems to be this misconception in this country that house prices should only rise, that when they fall that it is somewhat wrong. It is not.

House's to an extent are an investment, and like all investments they can rise aswell as fall. We need to start thinking of houses more alongthe lines of how we think of cars, in that the value of the car falls over time as it becomes less in demand.

At the moment house's are not in demand from consumers, so yes the price will inevitably fall. The lack of demnd will continue until economic activity in this country grows to such a level as the investment return in a property outweighs its cost.

If the government are to rescue these borrowers we might aswell all call ourselves Jack and Kate, because this ship Titanic is going down.

The only way we can help people who are not paying their mortgages at the moment is to encourage economic activity. This could best be done through large scale emoployment opprotunities which can be completed now at a much lower cost then they were previously available for.

Examples of such opportunites would include upgrading of road networks throughout Ireland, increases in the motorway routes available, laying of fast fibre broadband to all areas of the country, clearing of waste areas in our cities to create more public ammenities, upgrading of our school infastructure throughout the country and improvement of current areas of aesthetic appeal.

All these examples would involve large numbers of employment, whether they be accountants to price the and control costs of the projects, architects to design the projects, engineers to construct the projects, tradesmen to build the projects, food companies to supply the food for the workers and all teh Irish ancilliary companies involved.

These projects could be contracted in such a way as they would favour Irish suppliers over foreign due to delivery requirements which would be structured in the contracts.

This would overall encourage economic activity in the country and improve it for generations to come.

The increased employement as a result would be massive. We can estimate that from the number of people who would be employed in such projects there would be roughly 3 - 4 people employed by other companies to meet the increased demand.

The new increased employement would allow people who are currently having problems paying their mortgages to gain new employment and thus meet the demands which they face from the banks to pay ther mortgages.

I m not saying this would solve all our problems, but by doing this, and not giving money to people in the hope that they will then go out and spend it, we will avoid a retail driven boom which is unsustainable in the longterm and instead create a country of which we can be proud.

And you know what this would take from our politicians, only that they encourage it through the passage of legislation which allows these projects to proceed at a fast pace rather than being bogged down for years in planning and evaluation phases, which as we have seen from the construction of the Dublin metro, costs millions.

Finally let me say this, we should not look at this economic downturn as the end, but merely as the beginning. The beginning of a time when we can truely transform this country into one which we can be proud to call our own

ei.sdraob

Sigh this nama for reckless craic again

fairplay to the regulator for shooting it down!

THERE will be no easy way out for those who cannot meet their mortgage payments. The Financial Regulator yesterday effectively rejected calls for some sort of state aid for borrowers in difficulty.

He stated the inescapable fact that the taxpayer cannot be expected to foot the bill for a bailout for mortgage defaulters: "In seeking to assist households in difficulty, we need to recognise that the cost of any support will be borne by those neighbours who avoided excessive borrowing themselves or are gritting their teeth and meeting their obligations."

He echoed the Minister for Justice's recent rejection of a 'NAMA for the people'.

article here

The sentiments expressed by Mr Elderfield will come as a relief to those who have taken a conscious decision to rent in anticipation that the collapsing housing market will make property extremely cheap.

These people are waiting for further price falls before they buy, but they fear a bailout for cash-strapped mortgage holders will stop house prices falling.

Another large group who are furious with any suggestion that the State provide a "NAMA for the little people" are those who only borrowed what they could afford to repay.

They resent being asked to stump up for those who borrowed, as they see it, recklessly.

People who continually topped up their mortgages to pay off credit cards, or buy a second property, are indeed the last people who should be helped.

queue "we cant have people ending up on the street" posts

Nidot

I think people need to get away from the argument that people be held responsible for the decisions they made, I know it's very hard to do. I myself don't feel this would be fair atall. I do believe why should we bailout those who couldn't be responsible with their borrowing.

My argument that by following such a path we would not correct any of the economic troubles affecting this country, i.e. lack of employment, poor infastructureand high costs.

donegalfella

donegalfella wrote: »

This post has been deleted.

Nama for the little guy if I were boss would mean the above example could hand over the keys of his house and for an indefinite period [arbitrary] has an entry in his icb file suggesting no mortgage allowed.

People are doing this unofficially as it is anyway.
The taxpayer is unofficially paying for it aswell anyway so the regulators crib's are moot.

The only difference would be I'd legislate that such a person would be entitled to a small limit [say sub 2k] credit card and perhaps a small car loan but no more than that even if he has the means to take it on.

dan_d

House prices are also tied to wages, not just demand......people's wages have dropped. They can only spend so much a month on a mortgage.They are not going up any time soon.If ever.

Permabear

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20Cent

In the absence of a law to allow homeowners to post the keys back to the bank something needs to be done. If we get large numbers of defaults in the near future we will have big problems economically and socially.

danbohan

20Cent wrote: »

In the absence of a law to allow homeowners to post the keys back to the bank something needs to be done. If we get large numbers of defaults in the near future we will have big problems economically and socially.

and if we allow homeowners post key back who picks up balance ? with maybe 40% in negative equity why should anybody bother ?, we are in big bother either way and all of this is before intreast rates reach levels of 6%+ which they will

Scofflaw

20Cent wrote: »

In the absence of a law to allow homeowners to post the keys back to the bank something needs to be done. If we get large numbers of defaults in the near future we will have big problems economically and socially.

These are the same banks we're already bailing out? Jingle mail is just a way of allowing people who can't pay back what they borrowed to stiff the rest of us. Nein danke.

negatively,
Scofflaw

RichardAnd

Mcwilliams and Cooper are to economists as Fall out Boy are to musicians. They just spew out what people want to hear so that they can flog their TV series and books.

The Financial Regulator was on the radio yesterday and he made the very good point that if a bail out was offered for those in arrears then we would quickly have 90% of mortgage holders in arrears, no surprises why and he also mentioned how blatantly unfair it would be to ask people who were sensible with money to pay for the mistakes of those who were not.

This is why I like that regulator, he tells the truth. Cooper and his DMW tell people what they want to hear just like FG, labour and all the other quack parties that are springing up like mushrooms on a cow pie.

Taxipete29

danbohan wrote: »

and if we allow homeowners post key back who picks up balance ? with maybe 40% in negative equity why should anybody bother ?, we are in big bother either way and all of this is before intreast rates reach levels of 6%+ which they will

People need to wake up to a harsh reality, more and more homeowners are going to just walk away from their houses. You cant lock them up and you cant get blood from a stone. The best case is banks get a small monthly payment and should the debtor ever come into money, the bank gets it then. Worst is person has no job, can afford no payments and all bank gets is what it can sell the house for.

I am not in favour of a bailout. The idea that "they made their bed let them lay in it" is all very well until you realise there really isnt a whole lot you can do to someone who posts back their keys and tries to walk away. Reality is long-term some sort of scheme like the negative equity loan scheme proposed a couple of weeks ago will have to be put in place.

People walking away from debt = taxpayer bailing out the bank.

In other words like it or not we are going to be bailing out the little guy. Its more to do with us( taxpayers) getting a good deal or just getting shafted as usual.

danbohan

Taxipete29 wrote: »

People need to wake up to a harsh reality, more and more homeowners are going to just walk away from their houses. You cant lock them up and you cant get blood from a stone. The best case is banks get a small monthly payment and should the debtor ever come into money, the bank gets it then. Worst is person has no job, can afford no payments and all bank gets is what it can sell the house for.

I am not in favour of a bailout. The idea that "they made their bed let them lay in it" is all very well until you realise there really isnt a whole lot you can do to someone who posts back their keys and tries to walk away. Reality is long-term some sort of scheme like the negative equity loan scheme proposed a couple of weeks ago will have to be put in place.

People walking away from debt = taxpayer bailing out the bank.

In other words like it or not we are going to be bailing out the little guy. Its more to do with us( taxpayers) getting a good deal or just getting shafted as usual.

ok fair point , so whats a good deal for taxpayer then ?.because as you say either which way hes going be paying for other peoples mistakes/greed/stupidity/

Pot Noodle =

Are you all Bankers and FF on here and no i am not in negative equity either ,
I realy feel sorry for these people and something should be done for them end off

Taxipete29

danbohan wrote: »

ok fair point , so whats a good deal for taxpayer then ?.because as you say either which way hes going be paying for other peoples mistakes/greed/stupidity/

A good deal for the taxpayer would be not having to pay at all for the mistakes/greed or stupidity of others.

danbohan

Taxipete29 wrote: »

A good deal for the taxpayer would be not having to pay at all for the mistakes/greed or stupidity of others.

fully agree , but you know and i know that sooner or later we will , whatever form that takes, strange that an economist like mcwilliams would come out in support of such an idea , but then if you wanted a dog he would grow a tail

20Cent

McWilliams has been right more often than most. Negative equity is a timebomb that is going to explode maybe causing another crash. Best to do something about it.

Spudmonkey

20Cent wrote: »

McWilliams has been right more often than most. Negative equity is a timebomb that is going to explode maybe causing another crash. Best to do something about it.

By having everyone else pay for these houses?

P. Breathnach

Scofflaw wrote: »

... Jingle mail is just a way of allowing people who can't pay back what they borrowed to stiff the rest of us....

No, it's potentially worse than that. It also allows people who are in negative equity but who can pay back what they borrowed to stiff the rest of us.

fontanalis

Pot wrote:

Are you all Bankers and FF on here and no i am not in negative equity either ,
I realy feel sorry for these people and something should be done for them end off

What should be done?
Negative equity only effects people who are selling and were dependingon their houses value going up. If people can afford to pay their mortgage and have a secure job there is no issue, they just can't brag about what their house is worth.

fontanalis

20Cent wrote: »

McWilliams has been right more often than most. Negative equity is a timebomb that is going to explode maybe causing another crash. Best to do something about it.

Negative equity isn't the time bomb, defaulting is!

hinault

I have a lot of sympathy for people who have fallen behind in their owner occupied house mortgage repayments

I have zero sympathy for those people who bought houses in order to rent them out - and who cannot now rent out those houses and cannot meet their mortgage repayments.


The notional price of all property has fallen from the highs.
And people here are quite correct to suggest that negative equity only affects those trying to sell houses which have dropped from their original purchase value.

But the issue of arrears on owner occupied property mortgages is real and I believe understated.
I think these people do have a case - whether assistance can be given is debataable.

sinnerboy

Pot wrote:

Are you all Bankers and FF on here and no i am not in negative equity either , I realy feel sorry for these people and something should be done for them end off

No PN I expect they are all smart guys and girls located at a place in the pack that is not at all close to the cliff edge of homelessness . Not so easy to say "Gerinomo" when you see the waves crashing below .

donegalfella wrote: »

This post has been deleted.

Well maybe they just need somewhere to live . Because that's where their life was at in terms of their housing need .

Suppose we follow the Monty Burns logic dominating this thread - how comfortable will most who have posted here be with thousands of homeless families in Ireland ?

Or perhaps the resultant lead zepplelin like plunge in your LTV's would trouble you all more :mad:

JimiTime

What about a personal finance type of IMF? With the power to decide if the bank has been irresponsible. Those who are used to driving their bank rolled BMW's, have some of their assets liquidated, and told to take the bus where possible. IMO, PEOPLE HAVE TO BE HOUSED. Bitch away about, taxpayers etc, but the fact that the banks got bailed out, means that it is wholly immoral to simply say 'TOUGH' to the guy who hadn't a notion about economics etc, and bought a house. The majority of folk are not financial wizards, or really understand how the whole house of cards that is the virtual world of money works. These people work on the premise that the system works. However, the system failed. Well done to all you folk who predicted it would eventually, but some didn't. I know people who thought when prices were around €100,000 it was a collapse waiting to happen. Years later, they're thinking, 'I got it so wrong', as prices breach €200,000. Hindsights a perfect science, all those who said it would collapse finally have their day in the sun. I wish you wouldn't rub others' noses in it though. We have a really genuine socio-economic issue to deal with here. We need alot more than, 'Tough sh!t' for those facing financial ruin or homelessness. Especially when these people see some of the chief instigators of the meltdown walk away with money that THEY paid in tax during the boom years.

We are in a unique scenario, and I wish people would see how we can get a solution for all, rather than just getting p!ssed off about how they 'knew' it was going to happen and the rest are just idiots etc. WHERE WERE YOU WHEN THE BANKS GOT BAILED OUT. Probably saying, its a pain in the hole, but it has to happen etc. Well, why not take a similar line here? Its certainly not an ideal scenario, but stop being so bloody cold about things, some people were duped, others ignorant, others foolish etc etc. Its happened! Its a problem! Lets learn from it, and see if we can help those in need. Maybe some of you could use that crystal ball to tell us what the best thing for all is? Or does that only work with hindsight?

ei.sdraob

JimiTime

our welfare system already do house families/people in trouble (lets ignore near free council housing)

last i checked paying rent supplements are much less than paying a mortgage

god forbid people have to rent (no lack of homes available for rent either) because they made a bad decision

changes

hinault wrote: »

I have a lot of sympathy for people who have fallen behind in their owner occupied house mortgage repayments

I have zero sympathy for those people who bought houses in order to rent them out - and who cannot now rent out those houses and cannot meet their mortgage repayments.

Well whatever happens i couldn't stomach people who bought 2nd, 3rd or even 4th properties being bailed out. If those people stayed out of it during the boom wouldn't be in half the trouble we are in now.

Scofflaw

Scofflaw wrote: »

These are the same banks we're already bailing out? Jingle mail is just a way of allowing people who can't pay back what they borrowed to stiff the rest of us. Nein danke.

negatively,
Scofflaw

I appreciate that but thats life.
Same as you don't get sued by an ambulance chasing lawyer on behalf of his client if you are a man of straw ie no assets.
Theres nothing a bank can do untill you can pay.
A bank should and they do get installment judgements for the balances owing after a house is sold.
In some cases,they actually let people stay in the house on reduced payments.

The bitter pill swallowed by the jingle mailer is his credit rating is gone...not because the icb has him bad for 5 years but because he will have a judgment more than likely against him that will need to be dealt with before he can buy another house.
So there is due pain on their end too.
Personally my advice now to them is chin up and get used to renting,theres some fine rental property out there and shur it's a mindset in germany.