Moratorium on house reposessions

Bottle_of_Smoke

A lot of people have lost their jobs and mortgages were given out recklessly over the past few years. Obviously mortgage customers are still responsible but I think these people should be given some support given the circumstances.

So was thinking for a few years - depending on how long the recession goes on - should a temporary ban be implemented on house repossessions where the person is making all reasonable efforts to repay.

So say someone bought a house but is unemployed on the dole or now working in a very low paid/part time job. If they pay 40% of their income per. week toward their mortgage until they get a new job should they be immune to having their home repossessed and paying bank surcharges?

This would expire as soon as national unemployment goes down to an agreed percentage and the normal lending laws would then apply again.

This isn't a solid opinion just an idea. Would appreciate if someone with more knowledge of economics/housing markets or politics etc could point out potential problems

Obviously the 40% figure is just an estimate and could be changed if necessary

Victor

You do realise that there are substantial measures in place?

RichardAnd

It's already extremely difficult to repossess a house in Ireland and this isn't as good an idea as one might think. For many people stuck in worthless houses, reposession might actually be a good, bad option. So many people are so in debt that, realistically, they will never pull themselves out of it so perhaps, for many, it's best to just cut off a gangerous limb.

macannrb

RichardAnd wrote: »

It's already extremely difficult to repossess a house in Ireland and this isn't as good an idea as one might think. For many people stuck in worthless houses, reposession might actually be a good, bad option. So many people are so in debt that, realistically, they will never pull themselves out of it so perhaps, for many, it's best to just cut off a gangerous limb.

I think this is very good advice. A lot of people need to take a step back and see what is best for them. Having said that handing back a house shouldnt be as a result of just not wanting to pay for it any more like this guy http://www.askaboutmoney.com/showthread.php?t=151292

But its definately wise to get some independent advice from a professional, with qualifications

Welease

RichardAnd wrote: »

It's already extremely difficult to repossess a house in Ireland and this isn't as good an idea as one might think. For many people stuck in worthless houses, reposession might actually be a good, bad option. So many people are so in debt that, realistically, they will never pull themselves out of it so perhaps, for many, it's best to just cut off a gangerous limb.

It's not that simple though.. Repossession doesn't remove the debt..

The house is likely sold at below the cost you would have received on the open market, and you are still liable for the outstanding amount of the total mortgage (plus you now have such poor credit rating getting a future loan will be difficult at best)..

th3 s1aught3r

I thought banks had already agreed to have a moritorium on repossessions some time ago, although this may be up now ?
At the end of the day, the banks need to get the loans repaid or reposess and fire sale the assets
Otherwise furthur billions will have to be given to the banks to bail them out