Do you personally know anyone who.

Monty Burnz

tsoparno wrote: »

there's a new needy out there called the workers and if their not helped the bill for dole and social housing will be even greater.
which will be greater i don't know

So we tax the workers more?

Monty Burnz

jackiebaron wrote: »

Fair enough Monty. I just think the bank staff should all be fired and shot at dawn too. Just shareholders getting stiffed, while fair, seems inadequate :pac:

Certainly the staff senior enough to make these stupid lending decisions and those who were supposed to be in charge of risk management could do with a good hiding.

tsoparno

Monty Burnz wrote: »

So we tax the workers more?

its going to happen either way if they get help tax's rise,if they default and get social housing tax's go up

Monty Burnz

tsoparno wrote: »

its going to happen either way if they get help tax's rise,if they default and get social housing tax's go up

If we pay off people's debts, taxes will go up much more for reasons I've outlined several times already. And if we don't share the debts, we benefit from more realistically priced property with all the good that that brings.

rodento

The only reason for the government to procrastinate on allowing for mass eviction is because it doesn't want a proper property crash

Blame Nama

tsoparno

Monty Burnz wrote: »

If we pay off people's debts, taxes will go up much more for reasons I've outlined several times already. And if we don't share the debts, we benefit from more realistically priced property with all the good that that brings.

point taken, but i feel the government BS around and leaving uncertainty is whats driving these arguments like i said nobody has the answers and even if someone does we can rest assured the government won't adopt it.

Zubeneschamali

tsoparno wrote: »

point taken, but i feel the government BS around and leaving uncertainty is whats driving these arguments

I have heard absolutely no hint from the government that any kind of blanket forgiveness scheme is even slightly, tiny, a little bit possible.

The BS is all emanating from the meejah, and what's driving this argument is a consensus that negative equity is bad news for journalists, pundits and their social circle.

Spiritofthekop

Zubeneschamali wrote: »

I have heard absolutely no hint from the government that any kind of blanket forgiveness scheme is even slightly, tiny, a little bit possible.

The BS is all emanating from the meejah, and what's driving this argument is a consensus that negative equity is bad news for journalists, pundits and their social circle.

100% CORRECT.

tsoparno

Zubeneschamali wrote: »

I have heard absolutely no hint from the government that any kind of blanket forgiveness scheme is even slightly, tiny, a little bit possible.

The BS is all emanating from the meejah, and what's driving this argument is a consensus that negative equity is bad news for journalists, pundits and their social circle.

i never said anything bout blanket scheme but noonan has spoken on it but left it vague which created these hypothetical arguments
http://www.independent.ie/business/personal-finance/property-mortgages/noonan-weighs-in-again-on-mortgage-debt-promising-help-2862039.html

AltAccount

mariaalice wrote: »

I don't know if this it the right place for this.

Part of the objection to mortgage forgiveness seems to be based on the belief that people used the equity in there house to fund a lavish lifestyle because interest rated were low, or that people were silly to pay the prices they did for there house.

But do you personally know anyone who behaved like that I am not talking of the anecdote we all here about someones friends cousins who re mortgaged and got a BMW, had the kitchen gold plated, and brought a holiday home in Spain.

I personally don't know anyone who behaved like that and I come from a large family and would know a large amount of people.

I think the vast majority of people who are experiencing difficulty are there because of under employment or unemployment or wage cuts.

Not many people answering the OP's question with experiences of friends who may have lived lavish lifestyles, or maybe nobody willing to admit it.

I know of a couple of instances that deserve discussion:

Friends A: These friends are currently missing morgage payments. They've spoken to the bank and gotten a "deal" on reduced payments, but missed payments on the "deal" and so now are getting letters from the bank.
Same friends have been to Glastonbury and Electric Picnic as well as travelling to the continent for a break this summer. Obviously paying the mortgage isn't that high of a priority.

Friends B: Released €40k in equity from their house to pay for a fancy wedding, flat screen TV, entertainment system etc.

Aquaintance A: Released equity in his home in 2007 in order to fund lifestyle spending including a brand new Audi Q7 (€80k+).


I'm sure there are lots more incidences of this kind of thing out there, including people who borrowed 100%+ mortgages and used the surplus to buy stuff for the house (big TV etc). Dunno how many will admit it at this stage though...

fricatus

Monty Burnz wrote: »

But if you've no equity in your home, how exactly do you do a debt for equity swap?

Here's an example:

2006: you buy a house for 350k with a 35k deposit, 315k mortgage
2011: house now worth 200k, you're having difficulties paying the mortgage which has 300k left. You're 100k in negative equity.
Bank agrees to a debt-for-equity swap in which it takes 50% of your house and writes off 50% of the mortgage
2012: you have a much more manageable 150k mortgage. You're still in negative equity, but to the tune of 50k

When the time comes, and you sell the property, you split the proceeds 50:50 (or whatever ratio) with the bank. Now let's say in 2020, you've paid down the mortgage to 100k outstanding.

Negative scenario: 2020 and the property market is still flat. You sell the house for 200k. The bank gets 100k and you pay off the outstanding mortgage, with maybe a couple of shillings left over.

Positive scenario: 2020 and the property market has boomed again (is that actually a positive scenario? :rolleyes:) and the house is worth 400k when you sell it. The bank gets 200k back from its investment (originally a write-off) of 150k. You take your 200k and pay off the 100k mortgage.

Happy days, you can use that 100k as a deposit on 6 investment properties in Vietnam, sold to you by a guy in the RDS!

Monty Burnz

fricatus wrote: »

Here's an example:

2006: you buy a house for 350k with a 35k deposit, 315k mortgage
2011: house now worth 200k, you're having difficulties paying the mortgage which has 300k left. You're 100k in negative equity.
Bank agrees to a debt-for-equity swap in which it takes 50% of your house and writes off 50% of the mortgage

But that's not a debt for equity swap, is it? The bank already has a loan secured against 100% of your property. You have no equity, so you can't swap it for anything.

swampgas

fricatus wrote: »

Here's an example:

2006: you buy a house for 350k with a 35k deposit, 315k mortgage
2011: house now worth 200k, you're having difficulties paying the mortgage which has 300k left. You're 100k in negative equity.
Bank agrees to a debt-for-equity swap in which it takes 50% of your house and writes off 50% of the mortgage
2012: you have a much more manageable 150k mortgage. You're still in negative equity, but to the tune of 50k

When the time comes, and you sell the property, you split the proceeds 50:50 (or whatever ratio) with the bank. Now let's say in 2020, you've paid down the mortgage to 100k outstanding.

Negative scenario: 2020 and the property market is still flat. You sell the house for 200k. The bank gets 100k and you pay off the outstanding mortgage, with maybe a couple of shillings left over.

Positive scenario: 2020 and the property market has boomed again (is that actually a positive scenario? :rolleyes:) and the house is worth 400k when you sell it. The bank gets 200k back from its investment (originally a write-off) of 150k. You take your 200k and pay off the 100k mortgage.

Happy days, you can use that 100k as a deposit on 6 investment properties in Vietnam, sold to you by a guy in the RDS!

I don't think percentages work here - if the debt is reduced by amount X, then the same value X has to be secured against the asset some time in the future.

I would modify that as follows: the bank defers debt by 157k then they are guaranteed the outstanding debt on the mortgage, also that 157k, and also if it sells for enough whatever interest would have been earned by the bank on the 157k in the interim, when the house is sold.


Here's that example again - I hope I get the numbers right - and I'm assuming an interest rate of 4% which I pulled out of thin air.

2006: you buy a house for 350k with a 35k deposit, 315k mortgage

2011: house now worth 200k, you're having difficulties paying the mortgage which has 300k left. You're 100k in negative equity.

Bank agrees to defer 150k of the 300k mortgage.

2012: you have a much more manageable mortgage payments based on 150k. You're still in negative equity to the tune of 100k. However, you are not paying any interest on the deferred 150k - so in effect the bank is giving you an interest free loan of 150k until you sell up and settle up.

When the time comes, and you sell the property, you first have to pay the 150k plus the remaining mortgage. Now let's say in 2020, you've paid down the mortgage to 100k outstanding.

2020: Negative scenario:
The property market is still flat. You think about selling the house for 200k. You would still owe the bank 100k mortgage plus 150k deferred. The interest owed on on the 150k would be written off. Bank takes a hit of 63k (9 years @ 4%), you take a hit of 50k., which you would still owe. Almost even division of pain, yes? Or maybe wait a few more years to pay more off the mortgage and hope prices rise?
(I also think the bank should be able to veto the sale if they think the selling price is too low, to protect against gaming the system.)

2020: Positive scenario:
The property market has boomed again (is that actually a positive scenario? ) and the house is worth 400k when you sell it. The bank gets 100k outstanding mortgage, 150k deferred payment, and as much of the interest on 150k that is available from the selling price. Lets say 4% compounded over 9 years again - total of 100k + 200k + 63k = 363k, leaving you with 57k in hand, and the bank got repaid in full.

Also, to your benefit, for the duration of the mortgage you were paying a lot less in payments, as your payments were half what they should have been, so you shouldn't really complain much either.

A downside for the bank is that if the market remains flat, they are going to take a hit in lost interest on every sale. They also stand to lose a lot more if interest rates rise. And they have a vested interest in another bubble ...

* Edit: I still think this is letting people off too easily ...

fricatus

^^

Yeah my example wasn't meant to be definitive, just illustrative... I have no clue how much of the loan would be written off for how much of the house. Presumably they'd just do a deal and there would be an amount of negotiation.

Monty Burnz wrote: »

But that's not a debt for equity swap, is it? The bank already has a loan secured against 100% of your property. You have no equity, so you can't swap it for anything.

Why not? You're swapping part of the debt you owe the bank for co-ownership of an asset (=equity).

Sure you don't own the asset yet - but you're giving the bank a share in the future equity on the house.

Delancey

The issue of ' Moral Hazard ' must be considered in any discussion of mortgage debt forgiveness.
Why should a family struggle and make sacrifices to pay their mortgage when their next door neighbour did not and as a reward had (say) a hundred grand wiped off their debt ?
The nonsense spouted about a debt forgiveness scheme ignores the certainty that mortage defaults will soar if any ' scheme ' is introduced - defaults can only be handled on a case by case basis.

I think the focus should be on reform of the Dickensian bankruptcy laws.

theTinker

This thread has derailed from the OP and would be better suited to Economy forum now.

Back to OP:
Yes, I know of 2 very extreme cases. Well 2 people in one case!
2 friends I know, bought FOUR properties as investments.

Another friend who was a mortgage broker with a big flashy car advised and secured thier loans. Apparentily they took 2 mortgages out, and time 2 more to be drawn down just after the first 2. That way the forms questioning all thier current finance loans etc were extremely clean and 100% honest..
They now have 1.2 million in loans and are on interest only from what i know. Massive equity lost. I hate it all because i care deeply for one... but He no longer has that smug attitude constantly stating "I've over a million quid in property. I doubt ill notice another 20k"...when refering to a new car he was buying...
I doubt he'll notice any money in his life now...

Its shameful that 2 people on 35k a year could ever get thier hands on this much money...

The disgust then came a year after the crash when the broker who set them up with all this...offered my friend his car for a great price... Hope the snobby broker took a nice release for that one..

jackiebaron

theTinker wrote: »

This thread has derailed from the OP and would be better suited to Economy forum now.

Back to OP:
Yes, I know of 2 very extreme cases. Well 2 people in one case!
2 friends I know, bought FOUR properties as investments.

Another friend who was a mortgage broker with a big flashy car advised and secured thier loans. Apparentily they took 2 mortgages out, and time 2 more to be drawn down just after the first 2. That way the forms questioning all thier current finance loans etc were extremely clean and 100% honest..
They now have 1.2 million in loans and are on interest only from what i know. Massive equity lost. I hate it all because i care deeply for one... but He no longer has that smug attitude constantly stating "I've over a million quid in property. I doubt ill notice another 20k"...when refering to a new car he was buying...
I doubt he'll notice any money in his life now...

Its shameful that 2 people on 35k a year could ever get thier hands on this much money...

The disgust then came a year after the crash when the broker who set them up with all this...offered my friend his car for a great price... Hope the snobby broker took a nice release for that one..

Well that's them two screwed for life.

Spiritofthekop

theTinker wrote: »

This thread has derailed from the OP and would be better suited to Economy forum now.

Back to OP:
Yes, I know of 2 very extreme cases. Well 2 people in one case!
2 friends I know, bought FOUR properties as investments.

Another friend who was a mortgage broker with a big flashy car advised and secured thier loans. Apparentily they took 2 mortgages out, and time 2 more to be drawn down just after the first 2. That way the forms questioning all thier current finance loans etc were extremely clean and 100% honest..
They now have 1.2 million in loans and are on interest only from what i know. Massive equity lost. I hate it all because i care deeply for one... but He no longer has that smug attitude constantly stating "I've over a million quid in property. I doubt ill notice another 20k"...when refering to a new car he was buying...
I doubt he'll notice any money in his life now...

Its shameful that 2 people on 35k a year could ever get thier hands on this much money...

The disgust then came a year after the crash when the broker who set them up with all this...offered my friend his car for a great price... Hope the snobby broker took a nice release for that one..

Sorry to say it....but it in all honesty it serves them right...greed is a horrible thing.

Spiritofthekop

Delancey wrote: »

The issue of ' Moral Hazard ' must be considered in any discussion of mortgage debt forgiveness.
Why should a family struggle and make sacrifices to pay their mortgage when their next door neighbour did not and as a reward had (say) a hundred grand wiped off their debt ?
The nonsense spouted about a debt forgiveness scheme ignores the certainty that mortage defaults will soar if any ' scheme ' is introduced - defaults can only be handled on a case by case basis.

I think the focus should be on reform of the Dickensian bankruptcy laws.

Strong news/rumours coming through from the powers that be that NO debt forgiveness will be given in any cases....mortgage restructuring for some very severe cases might happen to some families by extending loan time and reducing rates to help until they get their incomes sorted out with new jobs.

Thank GOD common sense prevails.

lmimmfn

Delancey wrote: »

The issue of ' Moral Hazard ' must be considered in any discussion of mortgage debt forgiveness.
Why should a family struggle and make sacrifices to pay their mortgage when their next door neighbour did not and as a reward had (say) a hundred grand wiped off their debt ?
The nonsense spouted about a debt forgiveness scheme ignores the certainty that mortage defaults will soar if any ' scheme ' is introduced - defaults can only be handled on a case by case basis.

I think the focus should be on reform of the Dickensian bankruptcy laws.

not only that what if your neighbours gaff was worth a million in the boom times and your gaff was worth 300k? mr. million gaff has his debts wiped and still ends up liing in his plush pad and youre working like a c**t to keep things ticking over.

My issue is WHY IS THE MEDIA ALL OVER THIS? ok, i understand it sells newspapers, but there is something not right in the over exposure that debt forgiveness is receiving from the media.

I agree with the fact that people in negative equity should be able to move and have the difference as a mortgage on their new place, but not dropping the keys at the bank and having the taxpayer pickup the tab. Couldnt care less if they did that with Ulster Bank mortgages, but not when it affects me, especially with all the crap to come in future budgets.

SafeSurfer

Spiritofthekop wrote: »

Strong news/rumours coming through from the powers that be that NO debt forgiveness will be given in any cases....mortgage restructuring for some very severe cases might happen to some families by extending loan time and reducing rates to help until they get their incomes sorted out with new jobs.

Thank GOD common sense prevails.

So what are you saying? Thank God for rumours from "the powers that be"?

If people can't pay they can't pay. It's as simple as that.

andyjo

I know a tacher who bought a holiday home abroad and an investment property here. She is now in difficulties. Also have a cousin in the Gardai who bought a couple of investment properties during the boom, ...he said at the time it was to suppliment his income when he retires at 50, and all his friends were at it too. Crazy stuff.

Hector Mildew

A friend put down a deposit on an apartment, off the plans, just before things went belly up. When he tried to pull out a few months later as it was clear that the apartments would not be built the developer kept the deposit. Sounds wrong but true.

looky loo wrote: »

Debt forgiveness, no, all adults, its like gambling at the casino, when you lose you dont get your money back.

if that rule was applied fairly and across the board then things wouldn't be so bad..

Zubeneschamali

lmimmfn wrote: »

My issue is WHY IS THE MEDIA ALL OVER THIS?

Because the people who decide what goes in the papers or on RTE have mortgages, or their friends and relations do. Their lovely ABC1 demographic, which generates their advertising revenue, is in the same boat.

These people are not unemployed, they are not on social welfare, they do not queue up in A&E waiting for a public bed, their kids go to fee-paying schools. They know about those issues, but they don't feel them personally.

Negative equity hurts them personally in the wallet, so it's more important (to them). So we have to listen to them witter on about it.

Monty Burnz

SafeSurfer wrote: »

So what are you saying? Thank God for rumours from "the powers that be"?

If people can't pay they can't pay. It's as simple as that.

Dead right. And if you can't pay for something, you can't have it. I was taught that when I was about 2.

Armin_Tamzarian

Hector Mildew wrote: »

A friend put down a deposit on an apartment, off the plans, just before things went belly up. When he tried to pull out a few months later as it was clear that the apartments would not be built the developer kept the deposit. Sounds wrong but true.

Sounds like he dodged a bullet TBH.
If the apartment had of been build he'd be way worse off.

HivemindXX

Zubeneschamali wrote: »

Because the people who decide what goes in the papers or on RTE have mortgages, or their friends and relations do. Their lovely ABC1 demographic, which generates their advertising revenue, is in the same boat.

Also if the sort of debt forgiveness that certain people seem to want the media gets to have a second field day after the fact. They will get to turn around and print stories similar to the many given here.

"Couple has 500k house bought at tax payers expense while they holiday for 3 weeks in the bahamas!"

"Outrage as government oversees handout to allow the D4 wealthy to live the high life at our expense!"


If there is no debt forgiveness then we'll be treated to an orgy or stories similar in tone to that recent (dubious) letter in the Irish Times

"Dail sits in luxury while starving children forced to eat cardboard to survive!"

"Farm, in family for generations, lost due to government intransigence. Children forced to live on street!"

I've already read a similar story to that last one. If you actually read the entire article it turns out the poor innocent farmer had mortgaged his generational farm for a couple of million to buy apartments in the baltic.

Hector Mildew

Armin_Tamzarian wrote: »

Sounds like he dodged a bullet TBH.
If the apartment had of been build he'd be way worse off.

I agree, losing €20k was better than the alternative. Sickening though as the developer broke the contract yet kept the deposit (and probably handed it back to a bank).

DublinWriter

jank wrote: »

The Dow Jones Index was at 923 in 1973. In 2007 it was approching 14,000.
Also, nice you to pick the absolute peak in when to sell, the only problem with that though is that you probably bought another property, so your worth is now -40%

I couldn't really help the year that my mother died.

...and no, I didn't buy another property. As I mentioned, I used the funds to put on deposit in my existing offset mortgage so that it would be effectively interest free and paid off seven years early.

AlekSmart

murphaph wrote: »

Btw, you claimed in that 2006 thread that no equity will outperform bricks and mortar but this (at least historically) has been proven incorrect..

.....You made many references to "paying other peoples' mortgages" while renting. If your rent is less than the amount you'd pay in mortgage interest over the life of the loan then renting makes more financial sense for that period. It's simple maths. If we are to talk about security of tenure etc. then that is a different matter, but the broad statement that "rent is dead money" is factually simply incorrect.

Murphaph,this Security-of-Tenure element is,I believe,the single greatest anti rental bogeyman that exists in the Irish phsyche.

Deep inside our Knowledge Based heads we have an image seared like a photo-negative and it depicts an elderly couple standing outside their bothán with the Stovepipe hatted Landlord and the Peelers in attendance......

Those poor Famine-Times people were RENTING :eek:...and just lookit what happened to THEM :eek: :eek:.....No way is that goin to happen to ME

What exercises my feeble mind is what happens to oul Gerrman,French,Italian people ?

Are they thrown out onto the street after they retire ?

How have several hundred years worth of Forriners managed to eke out a life for themselves without actually owning their own home,as we Irish have a RIGHT to do..?

I'm just curious,perhaps you could knock-in to your elderly neighbours there Murphaph and enquire if they're worried about the Baliff callin round ??