Mortgage Arrears Problem in Ireland.

Unrealistic

Jaysoose wrote: »

Its hard to prove that your generalised statements may opr may not be true about a tiny percentage in that group, it doesnt mean your opinion is correct just that it cant be proved incorrect.

Why dont you provide some individual case studies with figures to back up your sweeping statements? bet you cant.

I didn't ask you to prove that anything I said was untrue. I just asked you to point out which parts you thought were untrue and then I can try to justify them. I'm happy to back up any of my arguments. Please just let me know which parts you dispute and why.

Unrealistic

fliball123 wrote: »

the 600k is an estimate for the end of the year.. house prices are continuing to dwindle which means the figure is going up on a daily basis.

Who estimated 600k in negative equity by the end of the year? The latest estimate I have seen was 250k to 300k now.
http://www.independent.ie/national-news/up-to-300000-homeowners-in-negative-equity-2507456.html
It is inevitable that the number will increase but a 100%+ increase seems extreme, no?

fliball123 wrote: »

These figures do not bring into account people who have not paid for the first 6 months of being unable to pay. They also fail to bring in people who have gone interest only

I think you're mixing that up with number of people behind on their mortgages, which is not the same thing. People can be in negative equity but still paying their mortgages and people can be struggling to pay their mortgages even if they are not in negative equity. Whether a mortgage is being paid or not is not a factor on whether it should be included in negative equity statistics (although if it is not being paid it is more likely to slip into negative equity).

ferike1

dearg lady wrote: »

I still think it's pretty shocking to have never held a job at 23.
I;m not suggesting he shoudln't have an opinion, merely that someone at age 23, who has never worked, has a limited, or maybe skewed view of the world, is probably not in a position to look down on others for their 'foolish' decisions.
Give it some time, there's a chance he'll make similar mistakes.

I have had part time jobs before, but now I am working full-time (I was 22 when I started on my full time contract, if you must know and have been working for almost a year). Also why is it shocking that I got an education before going to work? Many people who are in their late twenties still live at home, do you find that shocking too? This isn't the 80's when people left home at 18 and got married when they were 21.
I am sure I will make my own mistakes (not the same as many people during the boom) but looking down on someone purely because they are young is also easy to do, you are tarring me with exactly the same brush as you accuse me of tarring others.
I still have a lot to learn about the world that is true. If only I was as smart and wise as Brian Lenihan and Bertie Ahern, they are much older than me and did such a smashing job with the country.

fliball123

well no point attacking people in trouble the majority on here are trying to find ways to either walk away without the debt following them or to keep their house but pay less at this point in time when they are losing jobs and wages and yet no one has responded to the fact that the bank seem to be able to walk away from these mortgages even do they also signed up on the dotted line...

Can I assume that if the banks were not now the tax payer that the bank should of taken a loss on these just trying to find out if this is a case of protecting yourself or trying to feck over home owners in trouble

dearg lady

ferike1 wrote: »

I have had part time jobs before, but now I am working full-time (I was 22 when I started on my full time contract, if you must know and have been working for almost a year). Also why is it shocking that I got an education before going to work? Many people who are in their late twenties still live at home, do you find that shocking too? This isn't the 80's when people left home at 18 and got married when they were 21.
I am sure I will make my own mistakes (not the same as many people during the boom) but looking down on someone purely because they are young is also easy to do, you are tarring me with exactly the same brush as you accuse me of tarring others.
I still have a lot to learn about the world that is true. If only I was as smart and wise as Brian Lenihan and Bertie Ahern, they are much older than me and did such a smashing job with the country.

I'm not looking down on you because you are young, I understood you to mean you hadn't worked at all. I am goin to generalise here, but I find people who haven't worked at all by age 23 have a skewed view of the world. You have cleared up the misunderstanding.

I still believe it's easy to suggest you would never have made these mistakes, when you would never have had the chnace to.

sparkles77

Having read tons of threads like this over the last two years I just thought I would mention that it was people who bought houses that funded the economy during the boom due to our ridiculous tax system so the drop in income tax rates from 28% to 20% and 48% to 41% was due to house purchasers

Monty Burnz

sparkles77 wrote: »

Having read tons of threads like this over the last two years I just thought I would mention that it was people who bought houses that funded the economy during the boom due to our ridiculous tax system so the drop in income tax rates from 28% to 20% and 48% to 41% was due to house purchasers

To some extent, definitely. Not as much as you think though (or I thought before I saw the figures).

Dob74

sarumite wrote: »

No one "had" to pay over the odds...those chose to. Furthermore, if you borrow money, you should pay that money back. If the price of your house increases, I doubt you would hand that extra money to the bank so I don't think the reverse should be the case either.

If your house goes up in value you dont get any extra money.
Banks have had too much power in deciding how much a house is worth. Prices followed bank lending policy, if you are willing to lend money to someone to overpay for an asset you deserve to take the pain as well.

Jenna

In Libya the leader would sentence you to death if you revolted against him. In North Korea the leader would send your entire family to a concentration camp if you disagreed with him. People have died to empower you with the ability to carry out the one simple act of writing a number next to a name on a piece of paper and placing that piece of paper into a box. If you 'aren't bothered' then you have not yet realised how powerful you are and how powerful your vote is. So no matter what you do this Friday, please please please vote.

ardmacha

If your house goes up in value you dont get any extra money.

If your house goes down in value you don't lose any extra money.
Either way nothing happens until you sell the house.

Unrealistic

Dob74 wrote: »

Banks have had too much power in deciding how much a house is worth. Prices followed bank lending policy, if you are willing to lend money to someone to overpay for an asset you deserve to take the pain as well.

Prices also followed house buyer's borrowing policy. Nobody is forced to borrow the maximum the bank will lend them.

Two points on the banks taking pain.
1) A back of the envelope calculation would suggest that the non-payment/renegotiation of mortgages has already cost the banks about €800m.
2) The banks are not some superhuman entities. In the end the pain you want the banks to take has to be borne by individual human beings. Logically you would think it should be borne by those who owned the banks and those who managed the banks at the time. Those who managed the banks at the very top have already been turfed out although we should still be looking to clear at the layers of management just below them. We should be taking civil or criminal legal action against certain bank owners as a deterrent to others who might think about behaving that way in the future but suing them is not going to generate much cash. Those who owned the banks have already lost everything and effectively don't own the banks any more. We own the banks now. We are the ones keep them afloat by pumping money in. So any pain you want to inflict on the banks now has to be borne by us, by you and me, as we will have to pay for it.

By all means let's devise a way to help people in trouble, but let's not make it a no strings handout but force people to recognise their own responsibility by, for example, giving up some of the equity in their homes in exchange for support received. And let's stop pretending that we can pin the cost of this help on 'the banks'. We are the banks now and we have to pay for any help given.

Monty Burnz

Dob74 wrote: »

Banks have had too much power in deciding how much a house is worth. Prices followed bank lending policy, if you are willing to lend money to someone to overpay for an asset you deserve to take the pain as well.

That's the law of supply and demand for you I guess. Do you have a way that this can be prevented at all?

Jaysoose

Monty Burnz wrote: »

That's the law of supply and demand for you I guess. Do you have a way that this can be prevented at all?

Yeah there should have been some sort of goverment body overseeing the banks and monitoring the lending policy, a regulatory body or financial regulator if you will.

DJLJ

http://www.eveningecho.ie/news/ireland/figures-show-major-rise-in-mortgage-arrears-495444.html

Figures show major rise in mortgage arrears

New figures show a major increase in the number of mortgages in arrears last year.

At the end of 2010, just over 44,500 accounts were in arrears for more than 90 days.

It compares with 28,600 at the same time the previous year.

It means that 5.7% of the total residential mortgage accounts in the country were over three months in arrears at the end of last year, with more than €8.5bn owed on them.

The figures from the Central Bank also show mortgage lenders held 585 repossessed residential properties at the end of December.

These seems to be the latest figures released.

JJJJNR

ardmacha wrote: »

If your house goes down in value you don't lose any extra money.
Either way nothing happens until you sell the house.

I thought this was about arrears and not negitive equity ?

Monty Burnz

Jaysoose wrote: »

Yeah there should have been some sort of goverment body overseeing the banks and monitoring the lending policy, a regulatory body or financial regulator if you will.

I laughed at that, well put

Another OG for Fianna Failure, huh? And they let the moron who was supposed to prevent exactly this walk away with a 6 figure pension and and a 600k golden handshake...

ilovesleep

Monty Burnz wrote: »

I laughed at that, well put

Another OG for Fianna Failure, huh? And they let the moron who was supposed to prevent exactly this walk away with a 6 figure pension and and a 600k golden handshake...

I find everything happening is very complex. So much names to keep track off, etc.

Who is this man - the regulator? Whats his name? Why in the holy name of god hasn't he been locked up for negligence?

feicim

Duke Leonal Felmet wrote: »

Great. So people make innumerable stupid decisions and those who play life carefully suffer. Sorry, you are trying to compare this to real welfare, where people are born into hardship and require some assistance. This is nothing of the sort, and it is highly disingenuous of you to suggest otherwise. You are fooling no one but yourself with that line.

In this world of yours, if I went out and bought a house that I could clearly never afford and then fell into arrears, I should be able to take other peoples money to solve problems that I created for myself. Money from people who acted prudently and had nothing to do with my decisions.

Insanity. Your sense of fairness is completely lopsided.

I don't know what planet you came from, (I suspect maybe planet D4, roish!)but its disturbing that you know so little of this one that you think that welfare is only for people "who are born into hardship".

Jaysoose

ilovesleep wrote: »

I find everything happening is very complex. So much names to keep track off, etc.

Who is this man - the regulator? Whats his name? Why in the holy name of god hasn't he been locked up for negligence?

Because in irish politics you are rewarded regardless of how incompetent/negligent you were at your duties.

MaceFace

I really don't understand why we don't just bite the bullet and agree that anyone who is behind on their mortgage by a certain amount should have their house(s) repossessed.
All this delaying the inevitable is all well and good, but it doesn't solve the problem and is actually stopping us getting to the bottom so we can start rebuilding and put some confidence back into the economy.

fliball123

MaceFace wrote: »

I really don't understand why we don't just bite the bullet and agree that anyone who is behind on their mortgage by a certain amount should have their house(s) repossessed.
All this delaying the inevitable is all well and good, but it doesn't solve the problem and is actually stopping us getting to the bottom so we can start rebuilding and put some confidence back into the economy.

Because one way or the other the tax payer will have to pay the difference..I mean look at both side of this...1/10 people with mortgages are now in trouble with payments .. As reported back in Nov of last year...So this has not taken into account the new taxes imposed.

So lets see on one side we have the people waiting to buy a house and renters..All for let the housing problem correct itself..Even at the cost of putting people out of their houses. Which is one side of the story

So if this is done what is the expense.

Well their is firstly the fact that these people will have to be housed anyway.
The fact that this property will not be sold for the amount owed in the mortgage so another giant loss there.

Or these people get help whether it be that they get a restructured loan or some tax breaks or some way to let them keep their house.

This will keep the debt on the person who bought the house. The person will not need to be housed.

So what is the best solution to the Irish tax payer..I have brought up 3 ideas to try and help but people are determined to get their pint of blood for people who although where a bit foolhardy bought a house to live in. That is their only crime.

Monty Burnz

ilovesleep wrote: »

I find everything happening is very complex. So much names to keep track off, etc.

Who is this man - the regulator? Whats his name? Why in the holy name of god hasn't he been locked up for negligence?

Patrick Neary is his name. What were his qualifications for being the financial regulator, I hear you ask? Well, he was a lifer in the Central Bank, having spent a year studying Latin in Trinity College.

If you want to have a good laugh (or cry) check out his interview on Primetime just before the Irish banks collapsed and had to be saved with the guarantee that bankrupted the country...and perhaps speculate as to how many billions this guy personally cost the Irish tax payer.

https://www.youtube.com/watch?v=UuHRulXfzGA

Here's an interesting article on various others...
http://www.tribune.ie/news/article/2010/oct/03/the-untouchables/

Monty Burnz

fliball123 wrote: »

Well their is firstly the fact that these people will have to be housed anyway.

They don't have to own a property to be housed. They can rent.

fliball123 wrote: »

The fact that this property will not be sold for the amount owed in the mortgage so another giant loss there.

The loss is there already, it just hasn't been acknowledged. A loan that will never be repaid is worthless.

fliball123 wrote: »

Or these people get help whether it be that they get a restructured loan or some tax breaks or some way to let them keep their house.

Perhaps renters can get taxbreaks too so that they can perhaps afford a house in future. Who will pay extra tax to subsidise those getting the tax breaks?

fliball123 wrote: »

So what is the best solution to the Irish tax payer..I have brought up 3 ideas to try and help but people are determined to get their pint of blood for people who although where a bit foolhardy bought a house to live in. That is their only crime.

Buying a house isn't a crime, but nor was buying shares in AIB in 2006. Plenty of people invested their savings (to buy a home in future) or their pensions in the Irish banks. Do you also support a bailout for those people, who may now never be able to buy a home, or may have to live out their lives in poverty?

Unrealistic

fliball123 wrote: »

people are determined to get their pint of blood for people who although where a bit foolhardy bought a house to live in. That is their only crime.

I'm definitely not out to get a pint of blood (or a pound of flesh even) but I do think it should be pointed out that we're not just talking about people whose foolhardiness extended to buying 'a house to live in'. Of those 10% of mortgages in trouble we still have not been given statistics as to how many relate to PPRs and how many are buy to lets and second homes. We also don't know in how many of those cases we are talking about mortgages that consist solely of borrowings to buy a PPR and how many were re-mortgaged to fund an apartment in Spain, a new car etc.

I think it is reasonable to help people to stay in their home if they have lost their jobs and can't afford to pay even a reasonable mortgage but if someone has put their home on the line to fund luxury purchases then they deserve no sympathy.

MaceFace

To throw out an anecdote, I know people who have simply stopped paying their mortgage but have done little to cut down on their socialising. They are not paying a penny at all towards it.
I don't know why this is the case, but the apparent ban on house repossessions is certainly not encouraging those who can afford to pay something to go and actually do it.

It seems official policy by the present government to stick ones head in the sand and pretend the problem does not exist.

fliball123

Monty Burnz wrote: »

They don't have to own a property to be housed. They can rent.

The loss is there already, it just hasn't been acknowledged. A loan that will never be repaid is worthless.

Perhaps renters can get taxbreaks too so that they can perhaps afford a house in future. Who will pay extra tax to subsidise those getting the tax breaks?

Buying a house isn't a crime, but nor was buying shares in AIB in 2006. Plenty of people invested their savings (to buy a home in future) or their pensions in the Irish banks. Do you also support a bailout for those people, who may now never be able to buy a home, or may have to live out their lives in poverty?

Well if they can rent great but a number are only able to pay interest only and there will be an absolute clusterfcuk when the Eu up thier rate. In other words they cannot afford the mortgage..and barely able to survive on interest only I dont think they can rent...But there are no figures to back this just the one I mentioned that 1 in 10 had applied for a mortgage holiday, interest only and this before the recent taxes applied..

As for the loss being there...the loss is there for the bank aka the tax payer if these guys do not pay their mortgage..thats the only situation that we the tax payer make a loss.

I aggree with renters getting a tax break..I am currently renting

No but buying shares is different as the value of the share goes down people make a loss. They can sell the share. The difference is that the share is bought usually with tax up front and not a loan. Now if someone bought a share and got a loan for it..Maybe thats simular to a person buying a house. People bought a house and the way I see it. There are a number of options and I will give what I deem to be the result

1 we do nothing

Result
When the ECB goes up by the expected 3% by the end of next year..This problem will have at least doubled.

These people will go to thier lender get a holidy. Then just stop paying..They will get 2 years in the gaff without paying and then hand the keys back..and declare bankrupcy or leave the country.

The tax payer picks up the tab for the 2/3 year free gaff for these people and then have a gaff worth a lot less than its valued.

2 we try to give these people options I outlined 3

Result

I dont think as many people will default

Its simple maths people what will be the cheapest for the tax payer?

Instead of chastising and giving out maybe people on here who soom seem of good intelligence come up with a solution that doesnt cost me the tax payer another shed load of cash

dan_d

Monty Burnz wrote: »

They don't have to own a property to be housed. They can rent.

As a matter of interest. How can they rent??
I assume we're talking about those who end up in arrears/NE and lose their homes.
How can they rent? If they're in arrears, then presumably they're making either not enough money, or no money.So how will they be able to rent? I appreciate that some of them are simply not making enough money to afford huge mortgage repayments. But a lot are people who just aren't making any money and are trying to support families. How is it any different for them to be renting than paying a mortgage? That's like Marie Antoinette's "let them eat cake".Surely they, the banks, and the rest of us would be far better off to let them stay in their house and pay back what they can until they get themselves on their feet again.
There are so many ways to approach this problem, from so many different angles, that don't involve the taxpayer bailing out every home owner in arrears or NE. There's no one correct solution, but a combination of multiple solutions will be needed - and as far as I can see, the taxpayers input can be minimalised.Repeatedly stating that you shouldn't have to pay for it because everyone else was stupid doesn't make the problem go away.

Monty Burnz

dan_d wrote: »

As a matter of interest. How can they rent??
I assume we're talking about those who end up in arrears/NE and lose their homes.
How can they rent?

It's quite simple.

dan_d wrote: »

If they're in arrears, then presumably they're making either not enough money, or no money.So how will they be able to rent? I appreciate that some of them are simply not making enough money to afford huge mortgage repayments. But a lot are people who just aren't making any money and are trying to support families.

The people with money but not enough to pay a jumbo mortgage can rent like I used to. It's not hard. The people with no money who aren't working will join the other tens of thousands who get rent allowance from the state. Half of all rented property in this country is paid for by the state.

dan_d wrote: »

How is it any different for them to be renting than paying a mortgage?

It is quite different.

dan_d wrote: »

That's like Marie Antoinette's "let them eat cake".

No it's not. Either they are earning money and can rent or they are not and can get rent allowance. It's not rocket science.

dan_d wrote: »

Surely they, the banks, and the rest of us would be far better off to let them stay in their house and pay back what they can until they get themselves on their feet again.

Why is that better for the taxpayer, better for me, better for renters? They are tying up houses that they are not paying for, they are keeping properties off the market that should be on it, and thus are distorting the market and slowing the end of the crash and the start of the recovery.

dan_d wrote: »

There are so many ways to approach this problem, from so many different angles, that don't involve the taxpayer bailing out every home owner in arrears or NE.

Such as?

dan_d wrote: »

There's no one correct solution, but a combination of multiple solutions will be needed - and as far as I can see, the taxpayers input can be minimalised.Repeatedly stating that you shouldn't have to pay for it because everyone else was stupid doesn't make the problem go away.

Well, I don't believe I said that, but it is true now that you say it. I agree that all solutions should be considered, but there is no way in hell that somebody who overborrowed and does not pay the mortgage for a couple of years should end up owning the property - even if they are allowed stay in it, it should be on a rental basis.

dan_d

I have yet to master the multi-quote function, so excuse the state of this!:o

Firstly, I wasn't referring to you personally when I said that "you shouldn't have to pay for it..." etc.That was a general "you", as quite a number of posters on the forum have made their thoughts clear on this subject, and seem to feel that's how things should be.I should have clarified that.

Secondly I wholly and completely agree that if you over-borrowed for a mortgage, you should not be given a get-out-of-jail-free card, and have your problems paid for by the taxpayer.The point I (and others) are repeatedly trying to make is that while we don't support that plan, something does have to be done.

Setting aside those in NE who can still pay their mortgages for a moment - deal with those who are in arrears, and who are in arrears and NE, therefore are unable to sell...I'd imagine both groups overlap a good bit....
Let me put this in point format so I can try and make my own thoughts more clearly understood....

• These people owe substantial amounts of money to the bank, which they are now behind on repayments in (which I assume accrues further interest)
• If their houses are repossessed and possibly resold, it will not clear this debt.The houses will sell for less than what they were bought for.That is practically a given, with the way the market is.
• These people then move into rented accommodation (assuming they can afford that), possibly paid for by the State.
• So now you have a situation whereby the taxpayer is paying/subsidising their rent, and there's still a hole in the bank's mortgage books - which the taxpayer ends up paying for.

Your point about them tying up houses and distorting the market - how is that the case? They cannot sell because they are in NE, and can't make up the difference between the price they bought for and the price they would sell for.Therefore they are simply living in their homes.Which is what most people do anyway.House prices are dropping, regardless. Renters payments are governed by their landlords, most of whom need to cover similar massive mortgages.Repossessing their rental properties doesn't change the situation either.They will sell for less than they were bought for. If they are currently distorting the market, then what you are obviously saying is that house prices need to drop much further (which I agree with you, they've a way to go yet). But, in this context, that widens the gap even further between what's owed and what's taken in on the sale.Thereby creating an even bigger hole on the bank's books, inevitably requiring more taxpayer money.

By advocating that people should be thrown out of their homes, etc,etc, all that is being done is moving the debt burden around. It doesn't remove the debt, which surely should be the end point to all of this - clearing as much of the debt as possible.

We need to weigh up the long term benefits of allowing people to stay in their homes and arrange plans to pay back what they can by whatever means possible, vs repossession and sale on the open market by the banks (who will be trying to get as much as possible for the house, surely, and buoy the market even further). This is not a short term thing, they are sums that need to be done for a period of 15-20-30 years.Repossessions here and now might remove the mortgage arrears statistics, but it doesn't make the debt go away.

While I completely agree the taxpayer shouldn't have to be involved in this at all, I still think there are ways around this that don't involve repossessing every property that's in arrears.

sarumite

@ dan_d

use [qte] at the start of a person quote and [/qte] at the end to have multiple quotation. Replace qte with the word quote as if I actually used the word quote it would just put my words in a quotation box

like this

In regards your post, I personally don't want to see anyone thrown out of their home, I just don't believe they still need to own the property to call it their home. There is no reason that they cannot stay in their home by renting it. I would say that if they cannot even afford the rent without government subsidies then I don't really see what hope they would have of making the larger mortgage repayments.