Mortgage Arrears Problem in Ireland.

jpb1974

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

No problem there Luke. I'll say no more.. no more fuel.

Duke Leonal Felmet

jpb1974 wrote: »

No problem there Luke. I'll say no more.. no more fuel.

You never had any to begin with.

jpb1974

You never had any to begin with.

Well I see that as I type this at least one person has thanked me for my contributions... that's enough for me

westendgirlie

Isn't it all about the cost of living at a certain time?

I mean, in 2006 the cost of a house was affordable as income levels made it so.

Therefore, if you are looking to buy a house right now at current market value, who is to say that in a few years time things get even worse. More unemployment, higher taxes, even greater pay cuts. Would YOU not be in the same position in the future as the people you're giving out about presently ???

The bottom line is there has to be focus on jobs. I have an 18yr old who tries her every week to get a part time job. She can't even get babysitting as people don't have money to go out. She can't sign on as she is a student and she is still waiting for her grant.

I don't care if i'm living in negative equity, I don't plan on leaving anytime soon. I do care that more and more of my wages is going to pay for the mess that I didn't make. But you's blame me then when I struggle to pay my monthly bills

Monty Burnz

westendgirlie wrote: »

Isn't it all about the cost of living at a certain time?

I mean, in 2006 the cost of a house was affordable as income levels made it so.

No, it's not. It's about buying something for far more than it is worth by any metric. You can get an idea of how much a house is worth economically by figuring out how much you can rent it for, and then valuing that income stream. As I already stated above, I was renting a house for a third of the price it would have cost to buy it. That is ridiculous, and an extremely clear sign that it was massively overvalued, like all other property in Ireland.

westendgirlie wrote: »

Therefore, if you are looking to buy a house right now at current market value, who is to say that in a few years time things get even worse. More unemployment, higher taxes, even greater pay cuts. Would YOU not be in the same position in the future as the people you're giving out about presently ???

I'm not giving out about anybody! I feel sorry for people who went and bought in the middle of the biggest and most obvious asset bubble in Irish history. I'm just opposed to people being rewarded for bad decisions.

Incidentally, I'm not buying now. Why? Because I think we are a long way off the bottom yet. But if I did buy and prices fell you wouldn't hear a peep out of me.

westendgirlie wrote: »

I don't care if i'm living in negative equity, I don't plan on leaving anytime soon. I do care that more and more of my wages is going to pay for the mess that I didn't make. But you's blame me then when I struggle to pay my monthly bills

Who is blaming you for paying bills? Nobody!

Duke Leonal Felmet

jpb1974 wrote: »

Well I see that as I type this at least one person has thanked me for my contributions... that's enough for me

And you have thanked me. Thanks for the appreciation. Anyway, you said you were done...

jpb1974

Anyway, you said you were done...

Just watching in the wings now Luke... enjoying the outlook from the part-time, non-profit, semi-hobbiest economists who seen it all before it unfolded.

Monty Burnz

jpb1974 wrote: »

Just watching in the wings now Luke... enjoying the outlook from the part-time, non-profit, semi-hobbiest economists who seen it all before it unfolded.

Those people do exist you know. And it was more a matter of applying common sense than any brilliant economic insights.

Here's a post I made about the bubble bursting back in 2006...

But whether or not someone was right or wrong about the bubble is irrelevant - we are talking about how to deal with the consequenes of the bubble now.

jpb1974

we are talking about how to deal with the consequenes of the bubble now.

Actually, the predominant bone of contention in this thread is the idea that people will have their mortgage debt written off and the tax payer will have to foot the bill.. and then all the bitterness that goes with this notion is rising to the surface.

When in fact I think I've summed up what I think most people want in some of my previous posts.

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.

I actually agree with this concept as an option.

I think people need options that are fair to all concerned and make sense for more than just economic reasons.

Dannyboy83

jpb1974 wrote: »

For how long?
Houses don't depreciate in the same way cars do. Houses prices are typically a multiple of car prices. You can't compare like for like here.

Here is a typical graph of a property bubble:


The unusual thing is that, because of government intervention via mechanisms such as NAMA, property has not readjusted to the correct price.

Based on current* interest rates, incoming property taxes, water taxes and stamp duty - houses realistically need to fall below €100,000 to make them affordable to a person earning €35,000 (which is above 12% over the current industrial average wage).



(ECB rates are at a historical low and Irish rates will probably track ECB rates by least 2:1 for the forseeable future).

Dannyboy83

jpb1974 wrote: »

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.

The people in opposition to this are taking the livelihood of citizens of this country into consideration.

If Person A must pay for the mortgage of Person B through tax, then:
i) Person A will never afford a home themselves
ii) Person B is being rewarded for reckless borrowing
iii) Person A is being punished for responsible borrowing (or for not borrowing recklessly, as the case may be)

jpb1974

If Person A must pay for the mortgage of Person B through tax

Where did I state this?

I never backed the notion of mortgage debt write off in any of my posts on this thread.

Monty Burnz

jpb1974 wrote: »

When in fact I think I've summed up what I think most people want in some of my previous posts.

I think you may have summed up what all of those in negative equity want, or a lot of them. But I doubt it's what most taxpayers want.

jpb1974

I think you may have summed up what all of those in negative equity want, or a lot of them. But I doubt it's what most taxpayers want.

Please explain taking into consideration that I do not back mortgage debt relief.

Monty Burnz

jpb1974 wrote: »

Please explain taking into consideration that I do not back mortgage debt relief.

My bad, I confused you with another poster.

Therefore I WITHDRAW! WITHDRAW SIR.

CiaranC

jpb1974 wrote:

I think you may have summed up what all of those in negative equity want, or a lot of them. But I doubt it's what most taxpayers want.

As someone who didnt buy property in the bubble and has no debts, I am already paying to socialise the gambling losses of our banks and financial institutions. Now you want me to start paying to socialise your "right" to hold on to an asset you cannot afford?

You are talking about penalising the very people who did things right to pay for those who didnt. Thats despicably immoral. It makes me sick to even think about it.

jpb1974

As someone who didnt buy property in the bubble and has no debts, I am already paying to socialise the gambling losses of our banks and financial institutions. Now you want me to start paying to socialise your "right" to hold on to an asset you cannot afford?

You are talking about penalising the very people who did things right to pay for those who didnt. Thats despicably immoral. It makes me sick to even think about it.

How?

Again, based on my posts in this thread please explain?

Now you want me to start paying to socialise your "right" to hold on to an asset you cannot afford?

Eh no, not me personally anyway. I'm paying my mortgage at the moment

westendgirlie

Monty Burnz wrote: »

I think you may have summed up what all of those in negative equity want, or a lot of them. But I doubt it's what most taxpayers want.

I'm in negative equity, i'm a taxpayer and pssst i'm also a single mother so, Monty, please enlighten me as to what I want :rolleyes:

dolphin city

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.

look I don't mean to sound insensitive but really, nobody forced them into buying anything. It was their own choice as adults. THEY ALONE should have contemplated things going wrong.

If they are to be compensated, then the people who acted with a bit more restraint and DID NOT go into an overpriced mortgage because they know that if anything went wrong they could support it should be all getting free houses I say.

so please, yes the country is in dire straits but if you went into a morgage with your eyes closed thats your own fault.

dolphin city

citizenofeire wrote: »

It must feel great to be so smug.

You must be the lucky ones who still have jobs in Ireland.

The majority of people who are in arrears with their mortgage, are those who have lost their jobs or their business.

To generalise this situation is very easy.

Try being in the shoes of those who have lost everything.

dont purchase something if you cannot afford it. When taking a mortgage they should have thought ahead - if anything went wrong what would they do.

Dannyboy83

jpb1974 wrote: »

Where did I state this?

http://www.boards.ie/vbulletin/showpost.php?p=70666054&postcount=55
Not a valid comparison at all. Houses don't depreciate in the same way cars do. Houses prices are typically a multiple of car prices. You can't compare like for like here.

http://www.boards.ie/vbulletin/showpost.php?p=70666269&postcount=66
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.

You said it is not a fair comparison to compare subsidy of automobiles against subsidy of mortgages.

I'm pointing out that it is more fair than you seem willing to acknowledge.
Your concern for 'the livelihood of citizens of this country' is admirable, but you don't seem to realise that you are screwing one group of responsible people to bail out another group of reckless people.

jpb1974 wrote: »

I never backed the notion of mortgage debt write off in any of my posts on this thread.

You have proposed assistance, here:

http://www.boards.ie/vbulletin/showpost.php?p=70666763&postcount=70

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.

As you are aware, the banks have been nationalised.
Any assistance coming from the bank is therefore extracted from the taxpayer.
And assistance coming from the state is extracted from the taxpayer.

You will have a scenario where responsible people who didn't borrow excessive amounts of money, will be paying high tax and high rent (with no assistance) to 'assist' those who borrowed recklessly.

Let me quote Morgan Kelly

http://www.irishtimes.com/newspaper/opinion/2010/1108/1224282865400.html
Where the first round of the banking crisis centred on a few dozen large developers, the next round will involve hundreds of thousands of families with mortgages. Between negotiated repayment reductions and defaults, at least 100,000 mortgages (one in eight) are already under water, and things have barely started.

Banks have been relying on two dams to block the torrent of defaults – house prices and social stigma – but both have started to crumble alarmingly.

People are going to extraordinary lengths – not paying other bills and borrowing heavily from their parents – to meet mortgage repayments, both out of fear of losing their homes and to avoid the stigma of admitting that they are broke. In a society like ours, where a person’s moral worth is judged – by themselves as much as by others – by the car they drive and the house they own, the idea of admitting that you cannot afford your mortgage is unspeakably shameful.

That will change. The perception growing among borrowers is that while they played by the rules, the banks certainly did not, cynically persuading them into mortgages that they had no hope of affording. Facing a choice between obligations to the banks and to their families – mortgage or food – growing numbers are choosing the latter.

In the last year, America has seen a rising number of “strategic defaults”. People choose to stop repaying their mortgages, realising they can live rent-free in their house for several years before eviction, and then rent a better house for less than the interest on their current mortgage. The prospect of being sued by banks is not credible – the State of Florida allows banks full recourse to the assets of delinquent borrowers just like here, but it has the highest default rate in the US – because there is no point pursuing someone who has no assets.

If one family defaults on its mortgage, they are pariahs: if 200,000 default they are a powerful political constituency. There is no shame in admitting that you too were mauled by the Celtic Tiger after being conned into taking out an unaffordable mortgage, when everyone around you is admitting the same.

The gathering mortgage crisis puts Ireland on the cusp of a social conflict on the scale of the Land War, but with one crucial difference. Whereas the Land War faced tenant farmers against a relative handful of mostly foreign landlords, the looming Mortgage War will pit recent house buyers against the majority of families who feel they worked hard and made sacrifices to pay off their mortgages, or else decided not to buy during the bubble, and who think those with mortgages should be made to pay them off. Any relief to struggling mortgage-holders will come not out of bank profits – there is no longer any such thing – but from the pockets of other taxpayers.

The other crumbling dam against mass mortgage default is house prices. House prices are driven by the size of mortgages that banks give out. That is why, even though Irish banks face long-run funding costs of at least 8 per cent (if they could find anyone to lend to them), they are still giving out mortgages at 5 per cent, to maintain an artificial floor on house prices. Without this trickle of new mortgages, prices would collapse and mass defaults ensue.

However, once Irish banks pass under direct ECB control next year, they will be forced to stop lending in order to shrink their balance sheets back to a level that can be funded from customer deposits. With no new mortgage lending, the housing market will be driven by cash transactions, and prices will collapse accordingly.

While the current priority of Irish banks is to conceal their mortgage losses, which requires them to go easy on borrowers, their new priority will be to get the ECB’s money back by whatever means necessary. The resulting wave of foreclosures will cause prices to collapse further.

Along with mass mortgage defaults, sorting out our bill with the ECB will define the second stage of the banking crisis.

dolphin city

Dob74 wrote: »

[/B]


So being spiteful towards people who did will help.
The taxpayer has bailed out the lenders.
Just change the law so no one has to pay back more than the house is worth.
That would end banks driving the price of houses.

thats not being spiteful - that is practicing sensible logic - if you cannot afford it don't buy it, just cause everyone else is doing it.

honestly did people really believe that they could get a 100 percent mortgage PLUS extra for furniture without questioning it. Were they that silly. I'm sure lots "manipulated" their earnings to do it - and looked smugly on at the people who wouldn't. So now they want everyone to run to their aid. I don't think so. Pay for your mistakes - its the only way you will learn.

Also if somebody told you that a carton of milk was now a tenner -would you run out and buy it - no so why buy a house when its obvious that the price does not reflect the value.

jpb1974

Danny, I think you are assuming that I am referring to assistance purely in financial terms i.e. 'debt write off' and this is not the case.

I am proposing that people pay back their mortgage debt, I'd just like to see it done in a manner that gives people more time and flexibility and results in less pressure from the banks and more understanding.

If re-structuring a loan or putting it on the back bench for 12 months has a cost associated with it then so be it... but I firmly believe that people want to get back to work, making money and being able to pay their bills. The current climate is not conducive to this but we all hope that there will be some recovery and people are given a chance.

If I lost my job in the morning the bank could have my car, it wouldn't cost me a thought. But I'd be doing my damnest to find a job and scrape the money together to pay for my house.

dolphin city

fliball123 wrote: »

Well let those without sin throw the first stone blah blah blah

As long as my taxes are going to unmarried mothers
As long as my taxes are going to Childrens allowences
As long as my taxes are going to pay unsustainable pensions
As long as my taxes are going to pay ps wages
As long as my taxes are going to give nearly 200 squid to an unemployed person
As long as my taxes are going to Refugees
As long as my taxes are going to banks

I dont see why they should not go to help people who are paying mortgages..

Its a demographic thing . There are well over a million people who owe money to a bank for a mortgage and who are struggling..I do not see the difference

if they are going to people to bail out their mortgages we should call it the "stupid decision" fund. BUT ONLY IF THERE IS A "SENSIBLE THINKER" scheme for people to receive the exact same amount because they DIDN'T purchase a house and practiced sensible thinking.

dolphin city

jpb1974 wrote: »

Actually... what a lot of people did was -

Looked at the situation they were in at the time
Had reason to feel secure in their jobs
Felt they could afford the mortgage
Had no knowledge that a Global Credit crunch was lurking in the shadows
Had no knowledge that the Irish economy was going to fall as flat and hard on it's arse as it has

and that they could manipulate their wages to "afford" their house
And thus opted to take out a mortgage.

Not everyone had a crystal ball at their disposal. You know if everyone planned only for the worst then it's possible that very few would have homes.

nice try

dolphin city

bmel wrote: »

Hi, Would appreciate your opinion on my current situation. I am a foreign national came here about 5 years ago with my family. We bought a house 4 years back and untill now we have been paying the mortgage without fail, though I had lost my job 3 years back (can't get another one due to many reason like work permit restrictions and no job situation). It is on my wife's income(about 2600/month) we were managing since then. Our mortgage itself is about 1070 plus the life insurance 70 Euro. Another 1% interest hike will be added from this month (about 160 euro/month). WE have some personal loans of about 550 Euros (taken for car, etc).

We approached the bank to give a holiday kind of package so that we could have some money for a vacation to our home country. They seem to turn down our suggestions. In the form they gave us to list down the expenditures, we mentioned 800 euros/month for food(for a 4 member family, including 2 children) and he was telling us that was too much.
Now the point is , I am unable to cope up with this depressive state, have started medication for blood pressure and stomach acidity, all because of the stress I am living through. I am just 36, but dunno how my life will be directed in the current situation. At one point I might go back to my country for the sake of my children, for them to have a proper life. I know I am on negative equity but what am I supposed to do. I know at one point in the near term I will crash down.
Guys, any suggestions for me?

800 per month for food for two adults and two kids - what are ye eating??? are you joking

BluePlanet

dolphin city wrote: »

800 per month for food for two adults and two kids - what are ye eating??? are you joking

Take-aways, pizza and eating out probably.

dan_d

Harsh.

I agree with jpb1974. I don't want people to have their mortgages paid for them. I DO however want some kind of plan put in place whereby people are given more....freedom (probably not the right word)....should they find themselves in difficulty, such as interest only, restructuring the debt, brief periods of payment holidays (for example, only pay every second month for a year, or no payment for a max of 6 months for example). I'll probably get slaughtered for this, but particular attention should be given to those who have families, as there is absolutely no justification for making children pay for the mistakes of their parents.

There does need to be several requirements for this though.Firstly, did they tell their financial institution immediately they felt they were struggling with monthly bills in order to pay their mortgages? Secondly, are they genuinely job-seeking, have they considered/applied for re-training (and the paperwork needs to be produced - if it's a year's worth of letters/emails of application to jobs, then that's what needs to be shown)? Thirdly, have they been to their bank/MABS or whoever to look at their daily expenses to see what can be changed?

I can't think of any more, but what I'm trying to achieve here is to avoid letting off the the hook those who have a massive mortgage and have been living off social welfare indefinitely (say 3+ years maybe?), because they are getting everything they need there and couldn't be bothered finding work.(among others)

As for the gentleman who is a foreign national....he can probably reduce his food bills a bit, but not by a whole lot. (Let's not get into the "how much we all pay for food every week" debate, it's irrelevant). I would be very surprised at any bank that would give a loan for a holiday, to be honest, under those circumstances, but I have the utmost sympathy for the medical problems. I am unemployed, have a mortgage and am having serious trouble with anxiety, even though I'm not worried about missing payments.I hate to say it (and I shouldn't), but there is very little stopping that man from walking away back to his home country, and leaving the debt here. It wouldn't pursue him, and he need never return here.It's not right, btw, and I'm not suggesting it.

Regardless of how much people preach about "you didn't HAVE to buy", it's just not that simple. And more importantly, they DID buy and this problem NOW exists and has to be solved. Preferably without involving the taxpayer (because personally, I'm in NE, unemployed, and making my mortgage repayments....I don't really fancy having to pay more tax in any new job I might be lucky enough to get to cover someone else's payments....have enough problems without that), but a solution has to be provided.And if not a direct solution, a serious of processes put in place, to minimise the amount of damage both to the banks through defaults, and to people themselves. There's just no point sitting there saying "well it's not my problem, I wasn't involved" from a height. The problem exists in the here and now in today's society, often for people who are quite close to home - nobody has asked anyone for money yet.If you must get involved in the debate, it's better to offer a few intelligent suggestions, rather than preaching at people about how stupid you think they were.

Dannyboy83

jpb1974 wrote: »

Danny, I think you are assuming that I am referring to assistance purely in financial terms i.e. 'debt write off' and this is not the case.

I am proposing that people pay back their mortgage debt, I'd just like to see it done in a manner that gives people more time and flexibility and results in less pressure from the banks and more understanding.

If re-structuring a loan or putting it on the back bench for 12 months has a cost associated with it then so be it... but I firmly believe that people want to get back to work, making money and being able to pay their bills. The current climate is not conducive to this but we all hope that there will be some recovery and people are given a chance.

If I lost my job in the morning the bank could have my car, it wouldn't cost me a thought. But I'd be doing my damnest to find a job and scrape the money together to pay for my house.

If there is a manner to do it without the Person A being screwed to subsidize Person B scenario I referred to earlier, I'm all for it.
I don't believe there is tho.

Since the banks are shattered and nationalised, the only person left is the Taxpayer.

Monty Burnz

westendgirlie wrote: »

I'm in negative equity, i'm a taxpayer and pssst i'm also a single mother so, Monty, please enlighten me as to what I want :rolleyes:

I think you'll find I said 'a lot of them' not 'all of them'.