Anyone else pi$$ed of at subsiding tracker mortgages?

BeardyFunzo

Luck has nothing to do with this issue.

BostonB

eamo12 wrote: »

That's exactly the point - but one thing is for sure, there would be no government guaranteed golden tracker rate.

You're not answering the question. What do you think would happen to variable rates in the same scenario?

waffleman

pointless thread - banks gave out tracker contracts - whine at them if you must

also anyone who thought Irish banks would act responsibly compared to the EU rate setters is nuts - they will carve money from people however they can get it

either way in the bigger scheme of things when EU rates go up a few percentage points wont make much difference - defaults will go nuts and we'll all be paying for it

eamo12

Sesshoumaru wrote: »

It's already been explained to you what would happen to those trackers even if the banks weren't state owned and had been let go bust. You clearly don't understand or don't want to understand. You come across as a stereotypical Irish begrudger.

I don't begrudge anyone their success - quite the opposite. I do begrudge people profiting at the expense of others (against their will) because of government interference in the markets. Big difference.

BostonB

That trackers are a better deal have got nothing to do with the Govt.

jaykay74

and as others have pointed out variable could (and has been in the past) a cheaper repayment option than tracker. In that scenario, what then OP, what then

eamo12

seamus wrote: »

So if the contract is null, then there is no contract and the mortgage holder now owes nobody anything. Wahey!

I don't think you understand how contract law works. A contract is an agreement between two parties. That contract cannot be amended by either party without the agreement of the other. If one party wishes to transfer the contract to another party, they can do so without amending the contract but the new party to the contract is still bound by the original.

It doesn't matter if one party is a multi-billion euro bank or the United States, the law still applies.

You're pissed that the government has taken on a loss-making loan. I don't see how that's the tracker holders' problem?

OK - if one party is broke (banks) what happens to the lenders who owe money? If you say that "the mortgage holder now owes nobody anything", thats another debate - maybe you could enlighten us. But at least in that scenario, we would all suffer/benefit together. But because of government interference, one group had th odds artificially rigged against the other.

What I'm asking, and what no one has tried to answer here, is WHAT WOULD HAVE HAPPENED TO THE TRACKERS IF THE GOVERNMENT DID NOT BAIL THE BANKS OUT?

Again, no problem with anyone making a financial profit, I applaud it. But when you profit because of government stupidity and at the expense of others epically when we hear a lot about "sharing the burden", is that fair?

problemchimp

BaZmO* wrote: »

Huh?

She lost her job the useless wagon

eamo12

jaykay74 wrote: »

and as others have pointed out variable could (and has been in the past) a cheaper repayment option than tracker. In that scenario, what then OP, what then

I'll keep repeating the question - say the Government interfered with the markets resulting in Tracker mortgages being 2% more expensive than variable (BTW costing you 180 euros per 100K per month), would you be as smug about your 'contract' then?

BostonB

eamo12 wrote: »

...What I'm asking, and what no one has tried to answer here, is WHAT WOULD HAVE HAPPENED TO THE TRACKERS IF THE GOVERNMENT DID NOT BAIL THE BANKS OUT? ....

Why answer your questions. Your not answering anyone elses.

The tracker was a better deal before the Govt did anything. Thats not changed by the Bank bail out.

jaykay74

eamo12 wrote: »

I'll keep repeating the question - say the Government interfered with the markets resulting in Tracker mortgages being 2% more expensive than variable (BTW costing you 180 euros per 100K per month), would you be as smug about your 'contract' then?

I dunno. I emigrated so unless it was the swedish govt up to something I wouldn't give a damn about Enda and the rest.

seamus

eamo12 wrote: »

OK - if one party is broke (banks) what happens to the lenders who owe money?

I don't understand your question. If the bank is broke, it can't afford to pay money to the people it owes money to.

WHAT WOULD HAVE HAPPENED TO THE TRACKERS IF THE GOVERNMENT DID NOT BAIL THE BANKS OUT?

I've already answered it (I think).

If the government didn't bail the banks out, another bank or institution would have come in and bought their loan books, meaning that the trackers would still be trackers, just paid to a different bank.

There's a theoretical question in what would have happened if no-one bought the loan books, but that wouldn't happen. Someone would always have bought the loan books, at some kind of price.

problemchimp

eamo12 wrote: »

I'll keep repeating the question - say the Government interfered with the markets resulting in Tracker mortgages being 2% more expensive than variable (BTW costing you 180 euros per 100K per month), would you be as smug about your 'contract' then?

I don't think jaykay74 is being smug, merely voicing his opinion just like yourself. However you seem to have a victim complex about the whole issue. I hate to see anybody in trouble with their mortgages but calling people who have trackers "smug" and "middle class" is just stupid.

BostonB

How does the bank bail out effect the tracker any differently to the variable?

Sponge Bob

It may not be fair but it is contractual. Why should 400k persons with a tracker be penalised becuase 100k persons with a variable did something stupid like buy 2008-onwards OR not bother their arses ringing the bank in 2005 or 2006.

Most people on a variable today are paying a stupidity tax. The government cannot make policy to cure stupidity any more than it can legislate for the sun to rise in the west.

Put another way, less than 10% of households are evidently stupid ...which is good Less than 10% voted for Joe Higgins too and nobody will pay any attention to them either.

If an eg ECB+0.5% tracker is with NIB and the state does not own NIB nor will it own NIB, why should that person pay a stupidity tax for not being stupid ?? Why should stupid people get the rules changed when clever people are ignored.

eamo12

BostonB wrote: »

How does the bank bail out effect the tracker any differently to the variable?

It means that the Government (taxpayer) had become lender of last resort so when ppl here talk about suing if their trackers are taken away, then they can sue the government.

Take away the lender of last resort, who can they sue and who's to stop tracker rates moving to a market level where they can be flogged off to another entity?

seamus

eamo12 wrote: »

Take away the lender of last resort, who can they sue and who's to stop tracker rates moving to a market level where they can be flogged off to another entity?

As I've said, I don't think you've thought this through. You're quoting media soundbites like "lender of last resort" completely out of context.

In order for someone to pay a mortgage, there has to be someone to pay the mortgage to. That entity is bound by the contract to apply the tracker rate. If they try to break the contract, the mortgage holder can sue that entity. It doesn't matter who, where or when they acquire the mortgage, they are contractually bound to the tracker rate.

eamo12

Sponge Bob wrote: »

Most people on a variable today are paying a stupidity tax. The government cannot make policy to cure stupidity any more than it can legislate for the sun to rise in the west.
ignored.

No Sponge bob, by ensuring the banks did not fail, the government caused the discrepancies that arose in the rates. Most ppl who took out variable rates did not know that the government decision would mean that they would effectively be subsiding tracker mortgages. As I said earlier, if the govt made a decision that resulted in tracker rates rising to 2% more than variable, then your tune would surely be different.

Again, losing money because of a bad financial market decision is one thing, losing it because of government interference is another.

eamo12

seamus wrote: »

In order for someone to pay a mortgage, there has to be someone to pay the mortgage to. That entity is bound by the contract to apply the tracker rate. If they try to break the contract, the mortgage holder can sue that entity. It doesn't matter who, where or when they acquire the mortgage, they are contractually bound to the tracker rate.

Exactly, my point. So, what if that entity is broke?? What happens then.

BaZmO*

problemchimp wrote: »

She lost her job the useless wagon

Ha, bit harsh. And sure having a job doesn't make you working class per se

Sponge Bob wrote: »

It may not be fair but it is contractual. Why should 400k persons with a tracker be penalised becuase 100k persons with a variable did something stupid like buy 2008-onwards OR not bother their arses ringing the bank in 2005 or 2006.

Many people bought in 2006 and were tied into a fixed rate so couldn't avail of a Tracker. Buying a house in 2008 onwards does (and did) seem crazy though.

leeroybrown

eamo12 wrote: »

Exactly, my point. So, what if that entity is broke?? What happens then.

What you're referring to there is Ireland completely defaulting on sovereign debt AND a complete collapse of our internal financial and legal systems. That's multiple steps beyond even a normal default. Hardly likely...

BostonB

eamo12 wrote: »

No Sponge bob, by ensuring the banks did not fail, the government caused the discrepancies that arose in the rates. ...

The discrepancy was there before that. So it wasn't the Govt.

eamo12

leeroybrown wrote: »

What you're referring to there is Ireland completely defaulting on sovereign debt AND a complete collapse of our internal financial and legal systems. That's multiple steps beyond even a normal default. Hardly likely...

I'll let you make those arguments - not the point I'm making. The government is responsible, not the markets, for the difference between tracker and variable rates. So, back to the original question, why should variable rate mortgage holders subsidize trackers? It's as if tracker mortgage lobby have a direct line to the finance dept.

Sand Wedge

eamo12 wrote: »

I'll keep repeating the question - say the Government interfered with the markets resulting in Tracker mortgages being 2% more expensive than variable (BTW costing you 180 euros per 100K per month), would you be as smug about your 'contract' then?

The Government can't interfere with Trackers just like Banks can't interfere with them. They are linked to the ECB rate.

Variable Rates are linked to the Banks own rate and the Bank can change them at any time.

This is why so many people have Trackers because they knew rates will only change when ECB change their rates.

Anyone who took out a Variable Rate Mortgage knew that the rate was decided by their own particular Bank and was open to more manipulation by their Bank.

packiec50

I think the point Eamo is making (badly) is that the currently state-owned banks are trying to get back into profit, so they are raising the rates on all mortgages they can. (as well as increasing charges elsewhere etc.)

They cannot raise the rates on a Tracker mortgage and so they are raising the rates extra on the variable mortgages to compensate for this.

BaZmO*

eamo12 wrote: »

I'll let you make those arguments - not the point I'm making. The government is responsible, not the markets, for the difference between tracker and variable rates. So, back to the original question, why should variable rate mortgage holders subsidize trackers? It's as if tracker mortgage lobby have a direct line to the finance dept.

I think you need to get the idea of Tracker/Banks/ECB, etc. out of your head. The government are simply protecting (although there's nothing they could do anyway) contracts that have been made before the crash even happened. No different to them saying that they will protect a contract between sweet shops and wholesalers.

leeroybrown

eamo12 wrote: »

I'll let you make those arguments - not the point I'm making. The government is responsible, not the markets, for the difference between tracker and variable rates. So, back to the original question, why should variable rate mortgage holders subsidize trackers? It's as if tracker mortgage lobby have a direct line to the finance dept.

It's extremely simple. Those with tracker mortgages are getting what they are contractually entitled to. While our legal system continues to operate nothing overrides this. Regardless of what happened to the banks the loan books would still have been owned by someone who would have to honour this. The ECB rate is incredibly low for reasons of financial stability across Europe. It will rise in time. The variable rate mortgage holders would have been paying high interest rates regardless.

The variable rates are exactly that and are currently high because the banks have lost a massive amount of money in the markets, are finding it impossible to borrow money at any reasonable rate and many of them have securitised their loan books and are still losing money on these mortgages even at the high variable rate. If anything the government have probably been putting pressure on the banks to keep their variable rate as low as they can bear in order to prevent mortgage default. The variable rate had actually been excessively low until it finally began to rise over the course of the crash.

The tax payers as a whole are bailing out the banks so they can honour legally binding commitments, not subsidising individual groups.

eamo12

packiec50 wrote: »

I think the point Eamo is making (badly) is that the currently state-owned banks are trying to get back into profit, so they are raising the rates on all mortgages they can. (as well as increasing charges elsewhere etc.)

They cannot raise the rates on a Tracker mortgage and so they are raising the rates extra on the variable mortgages to compensate for this.

No, that's not the point I'm making. Your right about the banks raising variable to cover their ass from the toxic tracker rates they have to honour. My point, again, is that if the banks were let go (I'm not arguing one way or the other), there would be no one to sue for breach of contract because there would be no assets as the senior bondholders etc. get paid long before the mortgage assets are sold of.

So, a contract has no bearing (legal or otherwise) in circumstances where the banks are simply broke. But for govt interference, tracker rates would simply not stand.

Welease

eamo12 wrote: »

No, that's not the point I'm making. Your right about the banks raising variable to cover their ass from the toxic tracker rates they have to honour. My point, again, is that if the banks were let go (I'm not arguing one way or the other), there would be no one to sue for breach of contract because there would be no assets as the senior bondholders etc. get paid long before the mortgage assets are sold of.

So, a contract has no bearing (legal or otherwise) in circumstances where the banks are simply broke. But for govt interference, tracker rates would simply not stand.

And if Alien overlords took over earth last week a different set of rules would apply...

BUT.. they didn't... and the banks WERE propped up by the government so the contracts DO have bearing!

So what's your point?

prospect

eamo12 wrote: »

My point, again, is that if the banks were let go there would be no one to sue for breach of contract

And there would be no one to pay the mortgage repayments to either, in this mythical circumstance.





Maybe instead of looking at these 'toxic tracker' (as you call them) borrowers to blame for this mess, you should look to all those who borrowed incredulous amounts of money for houses they felt they must own, at any cost.