Homeowners in arrears might rent from State

ei.sdraob

RTÉ News has seen details of radical new measures under consideration by Government to help tackle the housing debt crisis.
People facing repossession may be able to rent their homes from the State after they have lost ownership of the properties.
Consideration is also being given to measures to allow people who are already in negative equity to trade up if they can sustain a larger debt

http://www.rte.ie/news/2011/0831/mortgage.html

Well not exactly forgiveness as you have to part with your home and rent from the state...

Welease

It will be interesting to see the details, and more importantly the limitations..

Potentially a great system for those in deep trouble... but as this is Ireland, I'm sure the "can pay, but don't want to pay" brigade will be looking for ways to abuse the system.

ei.sdraob

Welease wrote: »

It will be interesting to see the details, and more importantly the limitations..

Potentially a great system for those in deep trouble... but as this is Ireland, I'm sure the "can pay, but don't want to pay" brigade will be looking for ways to abuse the system.

What happens if they decide not to pay the state? Do they start voting in politicians who "forgive" some more??

Welease

ei.sdraob wrote: »

What happens if they decide not to pay the state? Do they start voting in politicians who "forgive" some more??

I'm thinking more of those who seem to have a problem being in Neg Equity..

Stop paying mortgage, go into arrears... after X months drop into this system.. rent for couple of months then move.. 1 overpriced house quickly disposed of and tax payer picks up bill..

Rinse repeat for all the empty "investment" homes around the country..

Tayla

So the state are going to buy these repossessed homes then are they?

Welease

Tayla wrote: »

So the state are going to buy these repossessed homes then are they?

I would assume (hope) that these would be houses held primarily by the main banks which we (somewhat) own.. So we kinda of own them already..

This system would mean that the occupier would be charged a more affordable rent level than a bloated mortgage payment..

I'm not sure why they don't come up with some sort of generational mortgage arrangements, so people (when their situation corrects itself) can own the property at the end, and the state doesnt end up owning and more importantly (and costly) maintaining even more houses across the country.

Green Mile

I can't see the logic at all. I feel stupid.

If people can't pay their mortgage, how are they going to pay rent. There's no difference in the costs.

Secondly, can people still claim rent relief? If so, there's a massive cost for the Government right there.

Rent allowance is approx 270 per person per month (for those currently on it) and that's for 55,000 people (currently)

BailMeOut

Tayla wrote: »

So the state are going to buy these repossessed homes then are they?

Would assume that State will own most of the properties if repossessed since loans are mostly with nationalized banks.

Tayla

Welease wrote: »

I'm not sure why they don't come up with some sort of generational mortgage arrangements, so people (when their situation corrects itself) can own the property at the end, and the state doesnt end up owning and more importantly (and costly) maintaining even more houses across the country.

It's ridiculous really, all they're doing is buying time, more than likely they will make it even harder for banks to repossess these homes just so that they can delay coming up with a real solution.

Green Mile wrote: »

Secondly, can people still claim rent relief? If so, there's a massive cost for the Government right there.

Rent relief is being phased out isn't it?

Mr.Micro

If these people cannot afford to pay a mortgage, how can they afford to pay rent? A rent one presumes would be in the range of current rents? What if the fall into arrears with rent if they manage to pay? The mind boggles.

johnnyskeleton

Why don't they just make all land free and you can occupy whatever you can hold through force of arms? Its the only fair way

woodoo

ei.sdraob wrote: »

What happens if they decide not to pay the state? Do they start voting in politicians who "forgive" some more??

Move them to progressively dingier houses.

2qk4u

Mr.Micro wrote: »

If these people cannot afford to pay a mortgage, how can they afford to pay rent? A rent one presumes would be in the range of current rents? What if the fall into arrears with rent if they manage to pay? The mind boggles.

My mortgage is €1400 ish , I cant pay it. Im in arrears, Im in negative equity.
I can move into the same size house in my estate and pay rent of €850.
Ive already asked the bank to buy my mortgage/house and I will rent it from them for the going rate in my area, they dont have the problem any more, I dont have my big mortgage any more, no eviction, no legal costs, ect ect...
They told me to **** off !
I would also save due to not having to pay for building insurance or mortgage protection insurance. Therefore I cant afford to buy my house but could afford to rent it.

What about the mortgages taken out with foreign banks?

GCU Flexible Demeanour

Welease wrote: »

.... and more importantly (and costly) maintaining even more houses across the country.

I'm glad to see this being raised, as I think it highlights how this pat idea of renting the repossessed house back to the occupant would raise severe practical difficulties.

Plus, indeed, what about people with mortgages with non-Irish lenders? KBC had a substantial enough share of mortgages at one point - something like 10% of the market. Given the EU context, would the State be allowed to discriminate?

superhooper

Seems to me to be great way to rid yourself of your debts and possibly start again. Is it fair to those who can just about pay but will have to stick it out for the rest of their working lives?

hmmm

Where can I sign up for these cheap rented houses?

Will people on rent allowance be able to rent nice houses at subsidised government prices also?

hmmm

superhooper wrote: »

Seems to me to be great way to rid yourself of your debts and possibly start again. Is it fair to those who can just about pay but will have to stick it out for the rest of their working lives?

Of course not, the new renter gets their debt written off by the taxpayer and in return pays a cheap rent on their existing house. It's yet another harebrained scheme dreamt up to allow Sunday Indo types live the Foxrock "lifestyle" they feel entitled to but can't afford.

johnnyskeleton

2qk4u wrote: »

My mortgage is €1400 ish , I cant pay it. Im in arrears, Im in negative equity.
I can move into the same size house in my estate and pay rent of €850.
Ive already asked the bank to buy my mortgage/house and I will rent it from them for the going rate in my area, they dont have the problem any more, I dont have my big mortgage any more, no eviction, no legal costs, ect ect...
They told me to **** off !
I would also save due to not having to pay for building insurance or mortgage protection insurance. Therefore I cant afford to buy my house but could afford to rent it.

Its not correct to say they wouldn't have the problem anymore - in fact you are asking them to buy the house off you and put it on their balance sheet

SafeSurfer

johnnyskeleton wrote: »

Its not correct to say they wouldn't have the problem anymore - in fact you are asking them to buy the house off you and put it on their balance sheet

A balance sheet which has already been propped up by the Irish taxpayer.

murphaph

SafeSurfer wrote: »

A balance sheet which has already been propped up by the Irish taxpayer.

2 wrongs don't make a right.

_Kaiser_

So let me get this straight...

Someone can't manage a mortgage (that - again!! - they CHOSE of their own free will to get into!) and qualifies for this "scheme"

- They stay were they are (presumably indefinitely unlike private renters who are at the mercy of their landlords who might decide not to renew the lease/sell up etc)
- The mortgage is written off/paid for the taxpayer and they pay the lower "going rate" of rent for the area/estate. If they're unemployed will they then qualify for rent allowance too?
- Maintenance of the house is paid for by who? The state? Say the boiler blows up.. who pays to get it fixed?
- They can (presumably) move on whenever they like.. literally walking away from the mess!

No doubt there'll be "reassurances" that there'll be "safeguards" and "commitments required" but this is Ireland so I wouldn't trust whoever is going to be administering this (county councils I'd imagine?) to handle it any better than they have anything else!

I'm sick to my teeth of hearing about being fair to mortgage holders! No one NEEDS to own a bloody house - it's a lifestyle choice!

What about being FAIR to those non-mortgage holders who didn't buy into the frenzy, or who ARE making their replayments .. oh and who will be expected to foot the bill of course!

thebman

This can't be a serious proposal. What department dreamed up this nonsense?

Reads like a what not to do list...

Is this designed to show us once and for all that such a system is unworkable?

Nody

2qk4u wrote: »

My mortgage is €1400 ish , I cant pay it. Im in arrears, Im in negative equity.
I can move into the same size house in my estate and pay rent of €850.
Ive already asked the bank to buy my mortgage/house and I will rent it from them for the going rate in my area, they dont have the problem any more, I dont have my big mortgage any more, no eviction, no legal costs, ect ect...
They told me to **** off !
I would also save due to not having to pay for building insurance or mortgage protection insurance. Therefore I cant afford to buy my house but could afford to rent it.

And that difference in monthly cost (550 + cost of maintenance, insurance etc.) will be paid by the fairies of the bank? Of course they would tell you to **** off, that is a loss deal no matter how you cut it for the bank (the bank has borrowed the money you got from the market, with a very generous mark up they'd still be down hundreds a month).