Mortgage Arrears Problem in Ireland.

Yitzhak Rabin

Why do people feel its their "right" to own their home?

I rent my home as I can't afford to buy one. Whats the problem? I have about 50k in savings, and in a few years I may buy a home I can afford. In the meantime, I'll continue to save for one. It is completely unfair for me to have to subsidise someone who jumped face first into buying a home they cannot afford. If your mortgage is unpayable, then you should forfeit your home. Its not your neighbours fault that your house is too expensive for you.

Irish people seem obsessed with owning their house. In Switzerland for example, only 22% of people own their home.

BluePlanet

Dempo1 wrote: »

Very constructive, get rid of the House, hmmm thats going to be easy. Complete nonsense.

It's called reality.
What's your advice to him?

Make a big stink about it, take no personal responsibilty and moan to the government for handouts?

Tea drinker

citizenofeire wrote: »

I will give my No.1 vote to any political party who will bring in legislation to help the vast amount of citizens of Ireland who are in arrears with their mortgages through no fault of their own.

In Feb. 2010 a Special Group was set up by the Government to provide some solutions to this very huge problem in Ireland. I would imagine these people were paid very well for their services.

At the end of 2010 the Group came up with a number of recommendations, which quite frankly, were of little help to those facing the threat of re-possession.

With mortgage interest rates rising there will be many more Irish people falling into mortgage arrears.

I am calling on all candidates, who are seeking election, to make the mortgage arrears problem in this country one of your top priorities.

If there is any support out there for my very strong feelings on this problem, please let me know.

The money is gone, the banks have it. What did these people do to stop FF bailing out the banks? The only alternative to the banks paying back, and the only one who CAN pay for this it's people who were wise to the spin. But why would they pay?

As you already linked your vote to someone supporting this. Lets go further and say assistance will be denied to anyone who voted FF in the past 16 years. Suely they are responsible for their own vote? If people don't learn the consequences of voting wrong they will never vote right.

jester77

bmel wrote: »

Why the negative equity is soley on the shoulder on the buyers?

The buyer was happy paying the price at the time. They obviously thought it was worth what they were paying for it and that they could afford it. Otherwise I'm sure they wouldn't have made the purchase!!

jpb1974

Monty Burnz wrote: »

I think you'll find that they do. They've depreciated about 40% in 3 years.

So if something is more expensive than a car, it can't depreciate?
Good news for yacht owners I guess.

Houses have fallen in value, but that doesn't mean they can't rise in value.

You'll find that your car probably won't rise in value (assuming it is a standard non-collectable vehicle).

Houses and Cars are not the same thing (and not solely for the obvious reasons).

Comparing a car loan to a mortgage is not a valid comparison unless all you're talking about is purely money and not taking into consideration the livelihood of citizens of this country.

Monty Burnz

jpb1974 wrote: »

Houses have fallen in value, but that doesn't mean they can't rise in value.

I didn't say that they couldn't. Cars can rise in value too. They are all just assets.

jpb1974 wrote: »

You'll find that your car probably won't rise in value (assuming it is a standard non-collectable vehicle).

True. It depends on market conditions, supply and demand etc.

jpb1974 wrote: »

Houses and Cars are not the same thing (and not solely for the obvious reasons).

Comparing a car loan to a mortgage is not a valid comparison unless all you're talking about is purely money and not taking into consideration the livelihood of citizens of this country.

They are both assets. You don't need to own either of them (at the momment I don't). I don't see how your livelihood is affected if you live in a rented house rather than in a house you can't pay the mortgage for.

jpb1974

A lot of people seem to thinking that by renting instead of buying that they've not contributed to the bigger issue.

The fact is that renting eliminates debt issues for the tenant but in many cases it is still indirectly fueling mortgages, many of which were taken out during the boom years. So the debt is still there... just in different hands.

The big issue here is the amount of mortgage debt in this country vs. drastically decreasing employment levels, pay cuts,the possibility of increasing interest rates and increased taxes/levies etc.

There's no point in harping on about the average joe that wanted to put a roof over his family's head. The problem is here & now and harping on about what we could have and should have done isn't going to cure it.

Monty Burnz

jpb1974 wrote: »

A lot of people seem to thinking that by renting instead of buying that they've not contributed to the bigger issue.

The fact is that renting eliminates debt issues for the tenant but in many cases it is still indirectly fueling mortgages, many of which were taken out during the boom years. So the debt is still there... just in different hands.

The renter opted out of the asset ownership market, and instead participated in the asset rental market. Prices in the asset rental market are set totally separately from prices in the ownership market (hence I was renting a house for a third of what it would have cost to buy).

To blame people in one market for debts incurred in another market seems invalid and - frankly - perverse. I can see a case where you could have a point if renters bid rents way above the cost of buying - this would fuel demand for the asset as the people tried to cash in on these high rents. But this did not occur during the bubble.

jpb1974 wrote: »

There's no point in harping on about the average joe that wanted to put a roof over his families head. The problem is here & now and harping on about what we could have and should have done isn't going to cure it.

Agreed. But for many people, the idea of rewarding those who made bad decisions and punishing those who made good decisions goes against logic, justice and common sense.

jpb1974

Well let's not forget that many of these people either currently are tax payers or were tax payers.

I paid circa €20K in taxes and levies last year. I've paid similar amounts since I joined the workforce back in 1996. If I were to lose my job tomorrow I'd like to think that as someone who has made their contributions there would be something the Government could do to help me. I would not like to think that because I lost my job after 15+ of employment that all of a sudden I'm classed as some sort of welfare leech.

I'd imagine that for the majority of people none of them want to lose their job, none of them want to not be able to pay their mortgage and none of them expect to have their debts written off. We're talking about assistance here, not a bail out.

All most people want is help... help to get along with life and the ability to provide a decent livelihood for their family... and that isn't wrong. It is a sin to want to own your own home, it never was and it never will be.

Duke Leonal Felmet

yekahS wrote: »

Why do people feel its their "right" to own their home?

I rent my home as I can't afford to buy one. Whats the problem? I have about 50k in savings, and in a few years I may buy a home I can afford. In the meantime, I'll continue to save for one. It is completely unfair for me to have to subsidise someone who jumped face first into buying a home they cannot afford. If your mortgage is unpayable, then you should forfeit your home. Its not your neighbours fault that your house is too expensive for you.

Irish people seem obsessed with owning their house. In Switzerland for example, only 22% of people own their home.

All sensible, and the Switzerland statistic is true. They have the highest GDP per capita in the world, and yet 1/5 of it's population are homeowners.

Food for thought.

Duke Leonal Felmet

jpb1974 wrote: »

The fact is that renting eliminates debt issues for the tenant but in many cases it is still indirectly fueling mortgages, many of which were taken out during the boom years. So the debt is still there... just in different hands.

Talk about this some more, I don't believe you have given this much thought.

bmel

jester77 wrote: »

The buyer was happy paying the price at the time. They obviously thought it was worth what they were paying for it and that they could afford it. Otherwise I'm sure they wouldn't have made the purchase!!

Ok, then what is role of the bank as a financial institution? If someone has no asset and no income what can the bank do to get the so called hypethetical negative equity? put then behind the bars? how many more prisons would be needed to house all these people.

On another note, can anyone confidentally say the Irish government is going to pay back the debt it owns at the moment? don;t you think without a major portion of this debt is written off, Ireland can survive. What if the state default the loans? Is ireland too far from defaulting?

Yitzhak Rabin

bmel wrote: »

Ok, then what is role of the bank as a financial institution? If someone has no asset and no income what can the bank do to get the so called hypethetical negative equity? put then behind the bars? how many more prisons would be needed to house all these people.

On another note, can anyone confidentally say the Irish government is going to pay back the debt it owns at the moment? don;t you think without a major portion of this debt is written off, Ireland can survive. What if the state default the loans? Is ireland too far from defaulting?

No one suggest people going to prison (unless of course someone is not paying debts when they have an ability to pay)

If you find yourself with a debt and zero assets, you file for bankruptcy.

Now that is a separate issue and I do think the bankruptcy laws in Ireland are too punitive and regressive.

JimiTime

Such a divisive issue, when we should be unified as a nation in principal and only differ in application. The blame scenario, be you a 'its the banks fault' or a 'its the stupid peoples fault' person, should probably be left aside for now.

What will effect EVERYONE is what happens from here. In principal I would say that most people (decent people anyway), would not begrudge their neighbour. So the issue seems to be in relation to begrudging ones neighbour once ones own pocket is affected. Fair enough, to a point. I for one don't want my family and I to be homeless. I also don't wish homelessness on others, be it due to their stupidity or not. I also do not think it wise to encourage recklessness etc, so a balance is required. At this juncture, I would accept knowing that if our income takes a hammering by job loss or tax combines with rate rises(God Forbid), that I would lose my home and no more. However, what does society do with all these homeless families? Set up Ghetto's? Provide good social housing? etc? All of which will hit the taxpayer. no matter where you look, the taxpayer is going to be hit.

So the best solution as far as I can see, is enabling people to keep their homes. It needs to be a multifaceted approach though. Government taking equity from home etc seems a fair solution. However, rather than burdening the state, I think enforcing legislation on the lenders would be better. Not burning them, but certainly letting them share the pain, and thus lessening the taxpayers burden. Overall, any 'Tough sh1t' approaches are simply nonsensical and unhelpful. Better pay a little now, that a hell of alot in the future IMO. The TRS idea from Fine Gael does not deal with the problem well enough. It should be burdened on the banks rather than the taxpayer. Rather than more TRS, simply stop the banks from raising interest for those in trouble. The banks will survive if they are forced to reduce interest. They might make a song and dance, but they'll survive.

I can tell you this much, under present circumstance, selling all I own and simply deserting the country (and my house and mortgage with it) is the only solution to our worst case scenario. That works for no-one.

I'm sure many will disagree with the application, but surely we can ALL agree on the principal that its not good for ANYONE in society nor decent, to have families homeless, whether you think it down to stupidity or not. I understand that the state aiding a person to OWN property may stick in peoples craw, and i can empathise with that. I would seek from these people though, a solution to the problem rather than simply the voicing of their own frustration.

Monty Burnz

jpb1974 wrote: »

All most people want is help... help to get along with life and the ability to provide a decent livelihood for their family... and that isn't wrong. It is a sin to want to own your own home, it never was and it never will be.

I want help too. My AIB and BOI shares took a right hammering. I was going to sell them to buy a home.

Where is my NAMA? Is it a sin to invest because you want to buy a home?

BluePlanet

jpb1974 wrote: »

All most people want is help... help to get along with life and the ability to provide a decent livelihood for their family... and that isn't wrong. It is a sin to want to own your own home, it never was and it never will be.

Nobody said it was a sin.
It's a responsibilty, and chief among them is that it's a big financial responsibilty.
If you can't finance your home then you shouldn't keep it.

Honestly, do you think that people that can't afford the payments on a 30,000€ audi should be able to keep it via taxpayer "assistance"?

Monty Burnz

bmel wrote: »

Ok, then what is role of the bank as a financial institution? If someone has no asset and no income what can the bank do to get the so called hypethetical negative equity? put then behind the bars? how many more prisons would be needed to house all these people.

The role of the bank is to sell money.

If someone has no money and large debts they can't service, then they should probably go bankrupt. You can't be jailed for debt in this country.

jpb1974

Well said JimiTime.

Where is my NAMA?

Monty, I don't know, but keep looking.

jpb1974

If you can't finance your home then you shouldn't keep it.

All people really want is some breathing space, time to find employment, get back earning and start making those payments.

Monty Burnz

JimiTime wrote: »

Not burning them, but certainly letting them share the pain, and thus lessening the taxpayers burden.

How does hitting the banks (which we own) lessen the burden to the tax payer?

And in your post you seem to confuse the concept of 'not owning a house' with the concept of 'homelessness'.

They are not the same.

BluePlanet

jpb1974 wrote: »

All people really want is some breathing space, time to find employment, get back earning and start making those payments.

Weren't the banks already prevented from initiating repossession orders for a time?

jpb1974

Honestly, do you think that people that can't afford the payments on a 30,000€ audi should be able to keep it via taxpayer "assistance"?

Cars again... I thought I already said it's not the same. The answer to your question is 'No'.

But they should be given a 'chance' to keep the roof over their family's head in a a manner that is fair, that makes senss and allows people the opportunity to make a recovery.

Weren't the banks already prevented from initiating repossession orders for a time?

Yup... some basic measures have been implemented, I just hope that they expand a bit and something sensible can be worked out.

Monty Burnz

BluePlanet wrote: »

Weren't the banks already prevented from initiating repossession orders for a time?

Yes, for a year. That year has run out for many people.

I'm all for giving people a chance and some time to get sorted out, but if you're still not paying the mortgage after a year, something has to give.

Monty Burnz

jpb1974 wrote: »

But they should be given a 'chance' to keep the roof over their family's head in a a manner that is fair, that makes senss and allows people the opportunity to make a recovery.

There is a mechanism to keep a roof over a family's head. It's called 'renting'. I do it.

Yitzhak Rabin

jpb1974 wrote: »

Cars again... I thought I already said it's not the same. The answer to your question is 'No'.

But they should be given a 'chance' to keep the roof over their family's head in a a manner that is fair, that makes senss and allows people the opportunity to make a recovery.

They can keep a roof over their head. Just not the overpriced one they bought. A much more modest and affordable rented one, which will give them the ability to service any outstanding debt.

BluePlanet

jpb1974 wrote: »

Cars again... I thought I already said it's not the same.

They are the same, they are Assets.

jpb1974 wrote: »

t they should be given a 'chance' to keep the roof over their family's head in a a manner that is fair, that makes senss and allows people the opportunity to make a recovery.

They can rent.
By not paying their mortages they are hurting our recovery.

jpb1974

Renting, as described in this thread by others, is a means of keeping a roof over one's head that works out less than a mortgage on a monthly basis for arguments sake.

Re-structuring mortgage payments to allow people to pay less over a long span would possibly work out the same.

There are lots of different options and I'm sure something will get worked out.

Anyway... I feel like I'm going around in circles here and I doubt that some people actually want to see things without their blinkers on.

I'll leave ye at it. Peace!

Monty Burnz

jpb1974 wrote: »

Renting, as described in this thread by others, is a means of keeping a roof over one's head that works out less than a mortgage on a monthly basis for arguments sake.

Re-structuring mortgage payments to allow people to pay less over a long span would possibly work out the same.

Probably not though. During the bubble, many people were taking out 30-year mortgages. The longer you extend it, the smaller a difference it makes to their monthly repayments. Not to mention the fact that the idea of people still paying off mortgages in their 60s and 70s does not seem very workable. Unless you are talking about multi-generational mortgages?

Having said that, if it's possible to reschedule someone's debt at no great cost to the taxpayer (i.e. the banks), then I'm fine with that.

jpb1974 wrote: »

Anyway... I feel like I'm going around in circles here and I doubt that some people actually want to see things without their blinkers on.

Yup.

Duke Leonal Felmet

jpb1974 wrote: »

Well said JimiTime.



Monty, I don't know, but keep looking.

There isn't a shred of consistency in your argument. Not a shred.

Duke Leonal Felmet

How about this. The government (aka the taxpayer) assists those in arrears. In return, the government (aka the taxpayer) takes part ownership of the dwelling.

For example, if a house is worth €200,000 and the government (aka the taxpayer) helps pay off €10,000 of the debt, the government (aka the taxpayer) owns 5% of the property. When the family get back on their feet, they can either pay back the money, or lose 5% of the sale value of the house.

This is perfectly reasonable. The other option seems to be people having their assets paid off for no reason, which is of course a ludicrous proposition.

Remember now, comparisons with the health service, child allowance are disingenuous, given the keyword asset.

Fly, my pretties. Fly.